ORDER
K. Sreedharan, J. (President)
1. Appellant herein manufactures “Roladeck” (brand name) panels out of steel sheets/strips purchased from Steel Authority of India Ltd. Steel sheets and strips so purchased are fed into cold forming mill and converted into corrugated sheets. These corrugated sheets are cut into sizes as required by the customers. The customers use the sheets cleared from appellant’s factory in making bodies for light commercial vehicles. Appellant used to declare these goods as flooring panel, side panel, etc. in their classification list falling under Chapter 72 attracting Central Excise duty at the rate of Rs. 365.00 per metric tonne. While the goods were being cleared by the appellant pursuant to this classification list, which was approved by the department, show cause notice dated 13-2-1991 was issued stating that the ‘Roladeck’, flooring panel, side panel, etc. were manufactured according to the customers, specification for use in motor vehicles manufactured by M/s. TELCO, Pune, M/s. Bajaj Tempo Ltd., M/s. Eicher Motors Ltd., etc. and that those panels were used solely and principally for motor vehicles without being subjected to further processes. Consequently, the panels are parts of motor vehicle and are to be classified under Chapter sub-heading 8708.00 as parts and accessories of motor vehicles attracting 20% duty ad valorem. As per this show cause notice, duty amounting to Rs. 1,34,275.00 was claimed under Rule 9 of the Central Excise Rules, 1944 read with proviso to Sub-section (1) of Section 11A of the Central Excise Act, 1944. Appellant was also asked to show cause why penalty under the various provisions of the Act and the Rules, should not be imposed.
2. Detailed objections were raised to the show cause notice. The main contention raised by the appellant was that the steel sheets and strips purchased from Steel Authority of India Ltd. were slit and sheared and fed into cold forming mill. Sections formed after rolling operation are cut according to the required specifications and then despatched to the customers. No other process was carried out and that the sheets so sent were never used as such in motor vehicles. The customers subjected these sheets to further processes like spot welding, adding stiffner sections by welding, welding of chains, locks, lock plates, etc. After carrying out those processes, they built body for the light commercial vehicle and fixed to such vehicle. Only by the additional processes carried out by the customers, a part of automobile comes into existence. Goods cleared from the factory of the appellant were articles, sheets and sections as defined in Chapter Note l(n) to Chapter 72 and thereby rightly classified as falling under Tariff sub-heading 7216.20.
3. Adjudicating authority rejected the plea raised by the manufacturer and by Order-in-Original No.V-Adj (Ch.72) 15-146, dated 29-8-1991 came to the conclusion that assessee was manufacturing the goods as per specifications and so are to be classified as falling under Chapter sub-heading 8708.00. As a consequence of this finding, he confirmed the demand made in the show cause notice and also imposed a penalty of Rs. 25 lakhs under Rule 173Q of the Central Excise Rules, 1944. Under this order, appellant’s land, building, plant, machinery, etc. were confiscated under Rule 173Q of the Rules, but allowed redemption on payment of a fine of Rs. 5 lakhs. Aggrieved by this order of adjudication, appellant has preferred this appeal.
4. This appeal came up before a Bench of two Members. By Misc. Order No. 103/99, dated 30-7-1999 issue relating to the classification of the goods manufactured by the appellant has been referred to a Larger Bench of five Members on account of an apparent conflict in the decisions of this Tribunal in the cases of Tube Investments of India Ltd. v. Collector of Central Excise, Madras, 1994 (71) E.L.T. 171 and Collector of Central Excise, Madras v. Tube Investment of India Ltd., 1994 (71) E.L.T. 291 (decided by a Bench of two Members who were parties to the three Member Bench). While referring the question of classification to the Larger Bench, the question relating to limitation was concluded against the assessee. Assessee did not canvass the question of limitation before the larger Bench.
5. The issue before the Larger Bench is whether the goods manufactured and cleared by the appellant are to be classified under Chapter subheading 7216.20, as contended by the assessee, manufacturer or under Chapter sub-heading 8708.00, as held by the department in the order impugned in this appeal.
6. In Collector of Central Excise, Madras v. Tube Investment of India Ltd., 1994 (71) E.L.T. 291, the question that was considered was whether sections obtained on cold forming which were not subjected to further processes are to be classified under sub-heading 7216.20, as contended by the assessee or under sub-heading 7308.90, as parts of shutters, as contended by the department. The Bench of two Members took the view that sections formed by cold forming have to be worked upon for being used as shutters. Since no such further processes were carried out, when the goods were removed, manufacturer’s contention that they are to be classified under Heading 72.16 was upheld. In Tube Investment of India Ltd. v. Collector of Central Excise, Madras, 1994 (71) E.L.T. 171, one of the questions was whether cold formed sections manufactured were classifiable under sub-heading 7216.20 or under sub-heading 8708.00 as parts and accessories of automobile. The Bench consisting of three members took the view that orders placed by the customers were for supply of different panels as per drawings and specifications and that they were fitted on the load bodies/deck of light commercial vehicles. The goods supplied in that case were found to be parts of light commercial vehicle and that the mere fact that they are required to be painted and some fitment work is required to be done does not make it a mere cold rolled formed section. Consequently, the Bench took the view that the goods manufactured have emerged clearly as part of a motor vehicle and they are understood and identified in commercial parlance as parts of motor vehicle and not as mere cold rolled sections. The correctness of these statements made by the Bench of three Members is in dispute.
7. On the facts before us, the goods manufactured by the appellant are panels which are to be used in the manufacture of body of light motor vehicle. They are manufactured out of steel sheets and strips purchased from Steel Authority of India Ltd. The steel sheets and strips so purchased are fitted into cold forming mill. The sections formed after rolling operations are cut according to the specifications given by the customers who manufacture the body of light motor vehicles. The sections so cut to size are not capable of being attached or fixed to the automobile. They have to be worked upon. In making the body, further processes are being carried out by the customers. The goods manufactured by the appellant could be used for flooring and for side panels. For making the floor, the customer has to place it over a frame and weld it to that frame. Three or four cold formed sections have to be welded to the frame for making the platform. Sections cut to required size for sides, front or rear portions of the compartment have to be strengthened by fixing proper frame. The four sides of these sections have also to be strengthened. Strengthened side panels are then attached to floor made up of floor panels welded to frame with the help of hinges fixed to them. Without the reinforcement and fixation of beams, hinges, etc., no section manufactured by the appellant can be fitted to the light motor vehicle. The goods as they come out of the factory of the appellant are not a part of automobile. It can be used in making the side panel and floor of the body of light motor vehicle. Can such an article be termed as part or accessory of a motor vehicle coming under Heading 87.08 ?
8. Chapter 72 of the Central Excise Tariff Act deals with iron and steel. Note 1 to Chapter 72 gives the meaning assigned to various items dealt with in the said Chapter. Clause (n) gives the meaning of “angles, shapes and sections.” It reads:
“Products having a uniform solid cross-section along their whole length which do not conform to any of the definition at (ij), (k), (1) or (m) above or to the definition of wire.”
This definition applies on all fours to the goods manufactured by the appellant. Chapter Heading 72.16 relates to angles, shapes and sections of iron or non-alloy steel. Sub-heading 7216.20 relates to such angles, shapes and sections not further worked than cold formed or cold finished. This description in the Tariff is based on the process of manufacture. It is also as defined in the Chapter Note. The angles, shapes and sections nanufactured by the appellant by cold formed or cold finished method are not worked upon. Department has no case before us that the sections cleared by the appellant were subjected to further processes before removal from factory.
9. To reduce disputes on question of tariff classification, the Central Excise Tariffs are based on the HSN. So, for resolving any dispute relating to Tariff classification, the safe guide is the internationally accepted nomenclature emerging from HSN. In case of any doubt, HSN is the safe guide for ascertaining the true meaning of any expression used in the Central Excise Tariff Act. According to their Lordships of the Supreme Court [Collector of Central Excise, Shillong v. Woodcraft Products Ltd. -1995 (77) E.L.T. 23], any dispute relating to Tariff classification must, as far as possible, be resolved with reference to the nomenclature enacted by the HSN. This statement was reiterated by the Supreme Court in Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd., 1997 (91) E.L.T. 13 observing that for resolving any dispute relating to tariff classification the internationally accepted nomenclature emerging from the HSN is a safe guide. In view of this statement of law, we may refer to the HSN. Heading 7216.60 of HSN deals with angles, shapes and sections, not further worked than cold formed or cold finished. Note l(n) defines angles, shapes and sections (quoted earlier). It further states that this Heading includes goods which have been cold formed or cold finished and also covers angles, shapes and sections made by forming on a roll type machine or by forming sheets, plates or strip on a press. The products falling under this Heading may have been subjected to working such as drilling, punching or twisting or to surface treatment such as coating, plating or cladding, etc. If they do not thereby assume the character of an article or products falling in other headings, they should continue as angles, shapes and sections. HSN further proceeds to state that lighter products of angles, shapes and sections are used in the manufacture of agricultural implements, machinery, automobiles, fences, furniture, sliding door or curtain tracks, umbrella ribs and numberous other articles. From this Note it can be seen that lighter variety of angles, shapes and sections is used in the manufacture of automobiles. By such user these angles, shapes and sections cannot be treated as parts of automobile or motor vehicles unless further processes as required are carried out. Since there is no evidence of additional processes being carried out in the goods manufactured by the appellant, it cannot cease to be excluded from the category of angles, shapes and sections.
10. Heading 87.08 in the HSN is in relation to parts and accessories of motor vehicles. In the Note in the HSN parts and accessories coming under this Heading are enumerated. In paragraph (B) parts of bodies and associated accessories, for example, floor boards, sides, front or rear panels, luggage compartments, etc. of vehicles fall within that category. On this basis, it was contended on behalf of the Revenue that the panels manufactured by the appellant are parts/accessories of the motor vehicle. This argument, according to us, is not tenable. Floor bodies, sides, front and rear panels form parts of the bodies of motor vehicles. That does not mean that the sections manufactured by the appellant which go into the floor body, sides, front or rear panels by themselves constitute parts of motor vehicle. For making a part of motor vehicle, sections manufactured by the appellant should have been subjected to further works. Unless those works like strengthening, welding, fixing hinges hooks, etc. are carried out, it will not acquire the character as a part of motor vehicle.
11. Learned Departmental Representative emphatically relied on the description of the goods manufactured by the appellant as given by the appellant. According to him, the appellant described the goods as front panel, side panel, rear panel and floor panel. When the goods manufactured are described by the manufacturer as panels which are part of body of motor vehicle, the goods must be classified as such. He went on to argue that a common man’s understanding of the goods must govern the issue relating to classification. This argument is quite attractive. But Note l(n) to Chapter 72 gives a definition of angles, shapes and sections. When these words are defined, a common man’s understanding has no part to play in classifying them. The description of the goods is with reference to the process of manufacture. In such a situation their Lordships of the Supreme Court in Collector of Central Excise, Hyderabad v. Fenoplast Pvt. Ltd., 1994 (72) E.L.T. 513 (S.C.) observed :
“If any term or expression has been defined in the enactment, then it must be understood in the sense in which it is defined, but in the absence of any definition being given in the enactment, the meaning of the term in common parlance or in commercial parlance has to be adopted.”
In view of the definition contained in Note 1(n), the goods manufactured by the appellant can only be termed as angles, shapes and sections.
12. As per the Interpretative Rules, the heading which provides the most specific description of the goods shall be preferred to headings providing a more general description. Chapter Heading 72.16 specifically deals with angies, snapes ana sections or iron or non-aiioy steel Sub-heading 7216.20 takes within its ambit no further work than cold formed or cold finished. This is specific description taking note of the process by which they are manufactured. As against this specific item, department wants it to be classified as parts and accessories of motor vehicles which is more general in character. In such a situation, the specific description should prevail over the general one.
13. As stated earlier, the section which is manufactured by the appellant goes into the manufacture of floor and side panels of the body of light motor vehicles. They come into existence only after clearance from the factory. Ultimate use of the manufactured goods after clearance cannot determine the classification of the goods manufactured. This proposition is well settled. It is more so, because the description of the goods in the classification does not refer to its use for a particular purpose. So, the user of the goods manufactured, by the appellant as parts of motor vehicles is immaterial to its classification under the Tariff Act. So also the further processes carried out in the goods manufactured by the customers, namely, motor vehicle manufacturers do not make the goods, parts of motor vehicles even if the appellants had cut their produce to size as required by the customers.
14. It is the admitted case of the manufacturer and the department that the goods, namely, panels manufactured are the result of cold rolled forming. It has got uniform solid cross-section along their whole length. So, they are classifiable under sub-heading 7210.10 prior to 1-3-1988 and under subheading 7216.20 after 1-3-1988.
15. In the decision reported in 1994 (71) E.L.T. 171, this Tribunal took the goods concerned in that case as parts of light commercial vehicle. What this Tribunal observed was:
” It is noticed from these orders of acknowledgement that the orders placed by these parties were for supply of different panels as per drawings and specifications and they were fitted on the load bodies/deck of light commercial vehicles. These were clearly identifiable as specific parts, with specific use and part numbers. They have been found to be tailor-made according to the specific design of each motor vehicle. The users have made known to the appellant that they cannot adopt the design for others, as they are patented. These are parts for light commercial vehicles. The mere fact that they require to be painted and some fitment work is required to be done, does not make it a mere cold rolled formed section. In the case of cold rolled formed sections, the edges are sharped and they are not rounded off. They are not of a design of M.V. part. These items have emerged clearly as a part of a motor vehicle and they are understood and identified in commercial parlance as parts of motor vehicles and not as mere cold rolled sections.”
(emphasis added)
Classification made of the goods dealt with in that case must be understood with reference to the above quoted passage. The facts before us are entirely different. So, the decision in 1994 (71) E.L.T. 171 should be confined to the facts decided therein. In the decision in 1994 (71) E.L.T. 291, this Tribunal has rightly held angles, shapes and sections not worked upon are classifiable under sub-heading 7216.20.
16. Question referred to the Larger Bench is answered as above. Other issues raised in the appeal have been decided by the two-Member Bench in its order, dated 30-7-1999. In these circumstances, appeal is disposed of without any further direction.