TaxTMI 
TaxTMI 
TaxTMI 
1997 (3) TMI 301
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....fit of Notification 101/88-C.E., dated 1-3-1988 at Sl. No. 5 of the Table annexed thereto. (c) the date of taking effect of changes in the Finance Bill, 1988 by way of introduction of Chapter Notes 1(a) and 1(c) to Chapter 76. 2. The brief facts are that the appellants are engaged in the manufacture of aluminium wire rods, in coil form and with cross-sectional dimension exceeding 6 mm, which were classified under sub-heading 7603.10 as "aluminium wire rods" during the period prior to 1-3-1988. Consequent on introduction of the revised definitions under Budget, 1988, for "aluminium and articles thereof" in Chapter 76 of Central Excise Tariff Act, 1985, the appellants filed revised classification list, effective from 1-3-1988 and subsequent classification lists effective from 20-5-1988, 9-8-1988, claiming classification of their product under Heading No. 7604.10 and claiming concessional rate of duty at the specific rate, as applicable to "aluminium wire rods". The Assistant Collector approved the revised classification lists effective from 1-3-1988, classifying the goods in question under sub-heading No. 7605.11, considering them as aluminium wires, after observing that ....
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.... has been decided in the case of Hindalco Industries Ltd. v. CCE, Allahabad (Order No. E/71/96-B, dated 30-1-1996) wherein the Tribunal has relied upon Chapter Note 1(a) of Chapter 76 introduced by the Finance Bill of 1988, so as to completely align the Central Excise Tariff with the HSN wherein the term bars and rods and wires were defined and Note 1(a) defines bars/and rods as "rolled, extruded, drawn or forged products not in coils"; while Note 1(c) defines wires as "rolled, extruded or drawn products in coils" and the Tribunal held that as the definition of wires was contained in the Schedule to the Central Excise Tariff Act, 1985, it would prevail over other aspects viz. trade understanding, common parlance and ISI specifications and upheld classification of properzi rods in coil form as aluminium wire under Heading 76.05. In addition, we see no force in the submission of the learned Counsel that sub-heading 7605.30 would be rendered redundant if properzi rods were also to be treated as wrought metal because wire rods obtained by casting (and without mechanical working such as rolling) would be covered thereunder as wire rods of unwrought aluminium. Since the properzi process ....
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....) and 1(c) to Chapter 76 Prior to 1-3-1988 the rate of duty mentioned in the tariff for sub-heading 7603.10 (wherein according to the Revenue, properzi rods were classifiable) was 50% + Rs. 4000/- per M.T. As per the Finance Bill of 1988, the rate of duty in the Tariff for Heading 76.05 (where the properzi rods are now classified) is also 50% + Rs. 4000/- per M.T. In other words, the rate of duty remained the same in both the tariffs. That being so, the provisions of the Provisional Collection of Taxes Act, 1931 would not apply as the present case would not be one of imposition of penalty or increase in excise duties and for considering the applicability of the above Act in the tariff rates, as contained in the tariffs have to be looked at and not the effective rates read with Notification as evident from a plain reading of Section 3 of the Act and as held by the Tribunal in the case of Ess Ess Metals and Alloys and Another v. CCE, Chandigarh (Final Order Nos. E/54-55/93-B1, dated 18-3-1993 [1993 (68) E.L.T. 423 (Tri.)]. This order in turn relies upon the earlier orders of the Tribunal in the case of Saney Wheels Ltd., Durgapur v. CCE reported in 1986 (24) E.L.T. 350 and CCE v. Pe....
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....' condition. Therefore, the redraw rod mentioned in IS 5047 : 1986 as a coiled rod would, therefore, per se cover only wire rod obtained by properzi process which is a continuous casting and rolling process of obtaining redraw rod in coil form. 11. There is no other redraw rod/wire rod known in the aluminium industry obtained in coil form and which has been obtained only by casting of metal alone and no other process. Therefore, redraw rod/wore rod referred to in IS 5047 : 1986 refers to properzi rods only. Therefore, in terms of this common parlance test as evidenced by the IS the properzi wire rod would be unwrought aluminium wire rod falling under sub-heading 7601.30. 12. If `as-cast' form alone be unwrought aluminium, then there would be no wire rod/redraw rod which can fall in the IS glossary as a category of unwrought metal and consequently under sub-heading 7601.30. 13. Wire rod can also be obtained by extrusion process or by rolling of billets/wire bars. The wire rods obtained by extrusion or rolling process are indeed in wrought metal form. This is recognised by IS 5047 : 1986 vide paras 2.2, 2.2.16, 2.2.16.1, 2.2.16.2. Also see page 28 at page 30 of the ....
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...., rods and profiles. It thus appears at first blush that the Tariff has sought to classify wire rods under more than one heading. However, a proper reding of the headings as a whole with the chapter note clearly brings out the scope of the various sub-headings. 18. While wire rod obtained by the properzi process would always fall under sub-heading 7601.30 though it is in coil form, wire rod obtained by extrusion process or rolling process would fall under sub-heading 7604.10 as a species of bars and rods only when it satisfies the statutory definition of bars and rods given in Chapter Note 1(a) of Chapter 76 i.e. when it is not in coil form. Wire rod obtained by rolling or extrusion process, though may be a species of bars and rods generally, if it is in coil form, would by virtue of the statutory definition contained in Chapter Note 1(a) would go outside Heading 76.04 and also consequently from sub-heading 7604.10 but would fall under Heading 76.05. It is submitted that this is the correct reading of the various headings and sub-headings. 19. The definition contained in Chapter Note 1(a) for bars and rods needs to be looked into only for interpreting the expression `ba....
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.... opening portion of this chapter note refers to "whether or not in coils". The later portion of this chapter note is identical to later portion of Chapter Note 1(a). The expression "same form and dimensions" appears in this chapter note also. As already seen the opening part refers to whether or not in coils. The expression same form and dimensions obviously, therefore, cannot refer to whether or not in coils. 27. Though, it is true that it is possible for the Legislature to have artificial definition treating X as Y and vice versa, generally speaking statutory definitions in HSN are more in tune with trade and commercial understanding and definition. Viewed in this light also, it is evident that a product which is bought and sold as wire rod world over would, without any reason, be treated as wire in the HSN. It is submitted that the error is not in the HSN definition but in the interpretation placed by the Revenue of reading the words not in coils appearing in Chapter Note 1(a) in isolation. If later portion of Chapter Note 1(a) is duly considered the wire rod would fall under Heading 76.04. 28. The later portion of Chapter Note 1(a) refers to goods not assuming the c....
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....ly to wire rods falling under sub-heading 7604.10. It not also open to the Department to argue that only products satisfying the definition of `bars and rods' as given in Chapter Note 1(a) can fall under Sl. No. 4 of Notification No. 101/88. This is for the simple reason that Chapter Note 1(a) would apply only when the expression `bars and rods' occurs. When such an expression does not appear in Sl. No. 4 of the notification, Chapter Note 1(a) cannot be looked into. Further, it is well settled that chapter note do not apply to interpretation of words in the notification. Hence, wire rods in question would fall under Sl. No. 4 of Notification No. 101/88 only. See 1987 (29) E.L.T. 68, 1994 (70) E.L.T. 624, 1987 (28) E.L.T. 85. IN ANY CASE THE AMENDMENT TAKES EFFECT FROM 13-5-1988 ONLY 32. The case of the Revenue is that the wire rods in question fall under Heading 76.03 prior to 1-3-1988 and under Heading 76.05 as aluminium wire after that date. The rate of duty mentioned in the Tariff (tariff rate) prior to 1-3-1988 for sub-heading 7603.10 was 15% + Rs. 4000/- per MT. The rate of duty mentioned in the Tariff for Heading 76.05 as per Finance Bill of 1988 is also 50% + Rs. 4000....
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....t as contained in the order-in-original and order-in-appeal and emphasised that it is a fact that `wire rods' were not defined in the Central Excise Tariff during the relevant period but the fact remains that the `goods in question' fall outside the purview of `rods' as defined under Chapter note 1(a) of Chapter 76 w.e.f. 1-3-1988 since they are admittedly in the `form of coils'. On the other hand, the goods in question of the given description fit in the definition of `wire' given in Chapter note 1(c) and the sub-heading No. 7605.11 specifically covers such goods which are of cross-sectional dimension exceeding 6mm. As regards the plea taken by the appellants about ISI specifications, it may be stated that the specifications issued by the ISI are primarily for ensuring quality control and have nothing to do with the classification of the goods under the Central Excise Tariff as has been held by the Hon'ble Supreme Court in the case of Indian Aluminium Cables Ltd. reported in 1985 (21) E.L.T. 3, wherein it has been held by the Hon'ble Court that although there are two separate ISI specifications for `properzi rods' and `wire rods', but for the purpose of classification under the Ce....
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....ts ratio cannot be applied in the changed circumstances when the tariff itself distinguishes between wire rods from rods and bars on one hand and wires on the other. It is even more significant that the chapter note provides a definition or description of products which do not fall in any of the categories described as rods, bars, wires, plates, sheets, strips and tubes etc. and calls them `profiles' as evident from the Chapter note 1(b). 41. Since the product in question is manufactured by properzi process which admittedly includes both casting and rolling simultaneously, therefore, such wire rods in which an element of working gets simultaneously involved cannot be considered as a variety of unwrought element and cannot be classified under 7601.30. 42. At the same time, they can also not be classified under 7604.10 as they are admittedly in coil form and the tariff covers rolled, extruded or drawn products in coils under the category of wires as per Chapter Note 1(c). In other words, heading 7604.10 covers only such wire rods which were not in coil form in spite of the fact that ISI recognises a form called `wire rods' in coiled form. 43. Further, in may opinion....
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....n would justify its exclusion from 7605 on one hand and from 7601.30 and 76.04 on the other. Hence, it has to be classified under 7604.29 as a `profile'. Therefore, with due respects, I differ from the view taken in the case of Hindalco Industries Ltd. and adopted by my learned colleague in here portion of the order. 46. However, insofar as the date from which the provisions of the Finance Bill came into force is concerned, I hold that it is the date of passing of the Finance Bill i.e. 1-3-1988 which will be the effective date for the purpose of applying the amended provisions. 47. Insofar as the question of relevant notifications is concerned, I would like to mention that in the case of aluminium, some notifications specifically refer to ISI specifications whereas others do not. Thus, for example, Notification No. 150/86 as amended by Notification 203/88 refers to wire rods whether or not in coils conforming to the ISI specifications. However, the notification relevant for our purposes, namely, Notification No. 101/88 does not refer to ISI specifications. Again, while the former does not cover `profiles', the later does cover them. As far as applicability of rates ind....
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....ute is in respect of classification of wire rods manufactured by the appellants by the continuous casting and rolling process. Whether item in question is classifiable under Heading 7601.30 as wire rods of unwrought aluminium or alternately under heading 7604.10 as wire rods of wrought aluminium as claimed by the party or under heading 7605.11 as aluminium wire as per the department. He submitted that party's claim was negatived by both the Members. The Hon'ble Judicial Member has accepted the contention of the Revenue in classifying the item under 7605.11 as aluminium wire. But the Hon'ble Vice President has gone beyond the dispute in deciding the item as `Profile' classifying it under 7604.29. Shri Sridharan said that this was not even the case of the department and not even allegation in the show cause notice in treating the item as `Profile' classifiable under 7604.29. He contended that no material has been placed on record by either side in classifying the item as `profile' and the Hon'ble Vice President has gone beyond the adjudication proceedings. He also contended that this issue was not even urged by the Departmental Representative during the hearing. It was also susbmitte....
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....9 of the judgment, the Supreme Court has clearly held that Section 3 of the Provisional Calculation of Taxes Act, 1931 empowers the Govt. where a Bill to be introduced on its behalf "provides for imposition or increase of a duty of customs or excise", to insert in the Bill a declaration that "any provision of the Bill relating to such imposition or increase shall have immediate effect under the Act." 55. Shri Jayaraman, ld. DR submitted that he has no quarrel with the proposition in classifying the item under 7605.11 as it was proposed by the Member Judicial following the earlier decisions of the Tribunal and since this was the claim of the department. As regards effective rate of duty as prescribed under Notification 101/88 he said that this will come into force from the date of introduction of the Finance Bill and not from the date of assent. He submitted that the change in duty has taken place with reference to the notification and the notification has to be read with the Tariff Entry. Furthermore, in the declaration under the Provisional Collection of Taxes Act, 1931 given at the time of introduction of Finance Bill, 1982 it was declared that provisions of clauses 76, 77,....