Indian Metals And Ferro Alloys … vs Collector Of Central Excise, … on 22 November, 1990

           PETITIONER:
INDIAN METALS AND FERRO ALLOYS LTD. CUTTACK

	Vs.

RESPONDENT:
COLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR

DATE OF JUDGMENT22/11/1990

BENCH:
RANGNATHAN, S.
BENCH:
RANGNATHAN, S.
RAMASWAMY, K.

CITATION:
 1991 AIR 1028		  1990 SCR  Supl. (3) 329
 1991 SCC  Supl.  (1) 125 JT 1990 (4)	763
 1990 SCALE  (2)1109


ACT:
     Central Excises and Salt Act, 1944--Section 3 and	First
Schedule  Item Nos. 26AA and  68--Assessee--Manufacturer  of
pipes,	tubes and poles of iron and steel--assessability  to
excise duty--Whether under Item 26AA or 68.



HEADNOTE:
    The	 appellant  is a manufacturer of  pipes,  tubes	 and
poles  made  of	 iron and steel. Tariff Item  No.  26AA	 was
introduced  w.e.f.  24.4.1962 in the First Schedule  to	 the
Central Excises and Salt Act, according to which, the appel-
lant paid the excise duty. Thereafter the Government  issued
a notification dated 1.3.1963, whereby 'telegraph, telephone
and  electric lighting and transmission poles falling  under
Item  26AA"  were exempted from payment of duty	 subject  to
certain	 conditions.  The  appellant having  paid  the	duty
earlier,  applied  for the refund on  10.5.1963	 and  sought
permission  to clear the goods without payment of duty.	 The
Assistant Collector rejected the said request on the  ground
that conditions prescribed in the notification had not	been ï7
3
before	the  Collector of Central Excise who held  that	 the
goods in question were eligible for the exemption  contained
in the notification. As a consequence thereof, the appellant
paid  no duty on the goods and cleared the goods  from	1962
till  1975. On 1.3.1975, the Legislature  introduced  Tariff
Item No. 68 in the First Schedule to the' Act covering goods
not  elsewhere	prescribed. Even  thereafter  the  appellant
filed  classification  lists showing the  poles	 as  falling
under  Item 26AA and those lists were duly approved and	 the
appellant cleared its goods without paying duty till  August
1982.  Earlier on 8.12.1977, the Superintendent	 of  Central
Excise	had taken a view that the transmission and  lighting
poles  were classifiable not under Item 26AA but under	Item
68. The appellant was accordingly asked to furnish a  state-
ment of the goods manufactured and sold earlier and to	file
a  classified list. The appellant objected  contending	that
the poles were covered by Tariff 26AA and it was entitled to
exemption. The Revenue did not accept that contention where-
upon  the  appellant filed a writ petition before  the	High
Court  challenging the communication dated  26.12.1977.	 The
appellant received a further letter on 6.11.1981 whereby  it
was required to pay duty under Item No. 68 in regard to
330
'swaged	 poles" also. The appellant challenged	this  letter
also by means of a writ petition before the High Court.	 The
High  Court  declined  to interfere  with  the	adjudication
proceedings  and dismissed the writ petitions  by  directing
that  the  adjudication	 be made  within  three	 months.  On
31.3.83 the Assistant Collector passed an order holding	 the
goods  classifiable under Item 68. The	Appellate  Collector
affirmed the order of the Assistant Collector. Both  parties
preferred  appeals before the Central Excise and Gold  (Con-
trol)  Appellate Tribunal. The Tribunal lid not	 agree	with
the contention of the Appellant that the goods were dutiable
under  Tariff Item No. 26AA. It however gave certain  direc-
tions restricting the levy of excise duty periodwise.  Hence
these appeals by the appellant under Section 35L of the Act.
Allowing the appeals, this Court,
    HELD: There is some difference in the description of the
goods.	While  item 26AA covers only pipes  and	 tubes,	 the
goods  manufactured by the assessee are called poles. It  is
also true that the poles have to be manufactured by applying
certain processes of heating and forging to pipes or  tubes.
But all this does not so change the commercial character  of
the  goods as to take them away from the scope of  item	 No.
26AA. [336C-D]
    The	 language of tariff item No. 26AA is very  wide.  It
covers	iron and steel products of the description  set	 out ï7
3
    Unless  the department can establish that the  goods  in
question  can,	by no conceivable process of  reasoning,  be
brought	 under	any of the specific items mentioned  in	 the
tariff, resort cannot be had to the residuary item. [339E]
    The	 appellant's contention that the goods	in  question
fall under Item 26AA is well rounded and the Revenue was not
justified  in attempting to levy duty on the basis that	 the
goods fall under Tariff Item No. 68. [334G-H]
    Indian Aluminium Cables Ltd. v. Union, [1985] 3 SCC 284;
Bharat	Forge and Press Industries v. C.C.E., [1990]  1	 SCC
532;  Varghese v. I.T.O., [1982] 1 SCR 629; State  of  Tamil
Nadu  v.  Mahi Traders, [1989] 1 SCR 445; C.C.E.  v.  Andhra
Sugar  Ltd.,  [1989]  (Supp.) 1, SCC 144  and  Collector  of
Central Excise v. Parle Exports P. Ltd.,  [1989] 1 SCC	345,
referred to.



JUDGMENT: