ORDER
K. Sankararaman, Member (T)
1. The appeal is directed against the Order-in-Appeal passed by the Collector of Central Excise (Appeals), Bangalore upholding the order of the Assistant Collector and rejecting the appeal filed by the appellant before him. By his said order, the Assistant Collector of Central Excise, Bangalore had rejected the claim made before him by the appellant for classification of the goods in question under sub-heading No. 7325.10 together with the benefit of Notification No. 275/88. The Assistant Collector rejected this plea and held that the goods were to be classified under Chapter 84 or 85 depending vipon end use. He had, however, held that benefit of the Notification No. 223/88, dated 23-6-1988 would be admissible to them. This order was upheld by the Collector (Appeals) on challenge before him. The present appeal is a sequel to this.
2. Arguing the case of the appellants, Shri Rajesh Chander Kumar, learned Counsel took us through the relevant parts of the adjudication order, particularly the portion where the Assistant Collector had explained the processes carried out by the appellant in the manufacture of the goods in question. Learned Counsel submitted that these processes do not take the products beyond the stage of casting and accordingly the benefit of Notification No. 233/88, dated 23-6-1988 as applicable to sub-heading No. 7325.10 or 7320.00, as the case may be, would be admissible. This, he submitted was without prejudice to their original claim that the goods are eligible for duty free assessment as unmachined casting. It was submitted that the alternative claim would be covered by the Tribunal decision in Shivaji Works Limited v. Collector of Central Excise, Aurangabad 1994 (69) E.L.T. 674 which had been followed in subsequent decisions also, e.g., Paramount Centrispun Castings Limited v. Collector of Central Excise, Nagpur 1995 (77) E.L.T. 705. A further submission made by the learned Counsel was that as they had originally claimed duty free clearance of the goods under Notification No. 277/88 they had not made a specific claim for the benefit of Notification No. 175/86 as a small scale industry. They had, however, disclosed the fact in the classification list that they were registered with the Director of Industries as a small scale unit. After the Assistant Collector had turned down their case for complete exemption under Notification No. 277/88 they had raised this plea for eligibility for benefit of Notification No. 175/86 in their appeal before the Collector (Appeals). This had, however, not been adverted to by that authority and there is no finding by him in the impugned order on this plea. It was pleaded that in any event this exemption should be available to them and even if they are held liable to pay duty with the benefit of partial exemption under Notification No. 223/88, the benefit of Modvat credit may be granted to them and the fact that they had not filed a declaration under Rule 57G at the appropriate time should not be held out against them.
3. The arguments were resisted by Shri M. Ali, learned Departmental Representative. He pointed out that the Assistant Collector had, while rejecting the claim for exemption under Rule 275/86, nevertheless allowed the benefit under another Notification No. 277/88. Shri Ali, however, laid particular emphasis on the point that the processes carried out by the appellant which had been referred to in the adjudication order are of a type which will clearly take the goods beyond the stage of mere castings. They are machined castings. In this connection, he cited the judgment of the Supreme Court in Eastern Die Casting Industry Pvt. Limited v. CCE, Calcutta 1997 (22) RLT 105 where the goods under consideration were held to be classifiable under erstwhile Tariff Item 68 and and not castings under 1A or 27A(ii). Though this judgment related to a case under the old Tariff Item 68 and the competing entries in the present tariff are more specific. The ratio of the aforesaid decision treating such product as not casting would be equally applicable in the present case also, he submitted.
4. The rival submissions have been considered by us. First taking up the judgment of the Supreme Court cited by the Departmental Representative, we find that the products in that case were described as railway overhead equipment and fittings and the processes undertaken in their manufacture consisted of melting of the required metals and casting them into moulds as per railway specifications; the castings so obtained were subjected to operations such as fettling, grinding, dressing, machining and assembling with fasteners. We find that these are clear operations beyond the casting stage which sets this case apart from the present one. Hence we hold that the Supreme Court decision is not applicable to the facts of the present case. We then find that the products in question, while not being mere casting, have nevertheless only undergone the processes that will still keep them within the scope of Notification 223/88 but then this notification is equally applicable to castings falling under Chapter 73 as also products falling under 84 and 85. The appellant had made a claim that the benefit of this Notification should be extended to them as applicable to goods falling under Chapter 73 as castings of iron or steel. Following the decision of the Tribunal in the cases cited by the learned Counsel which we hold squarely cover the present case we hold that the goods in question will qualify for the benefit of Notification No. 223/88 with reference to SI. No. 1 in the Table annexed thereto. While assessing the goods in terms of this classification read with this Notification, the claim for grant of modvat benefit would require to be considered by the jurisdictional officer without disqualifying them on the ground that declaration under 57G had not been filed by them at the assessment stage. It was pointed out by the appellant’s Counsel that they had not filed such a declaration at the assessment stage because their claim then was for the benefit of Notification 277/88 which granted complete exemption from duty subject to the condition that no credit had been availed of in respect of the inputs. Since this classification had been rejected and the need for payment of duty arose only after the classification under a different tariff heading came to be decided, the requirement under 57G should not be a factor for denying the credit once duty is demanded consequent to rejection of the classification claimed and applying a different classification. We hold accordingly.
5. The plea for grant of benefit under Notification 175/86 had been made by the appellant before the Collector (Appeals). This had not been considered by that authority. We note that in the classification list appellant had referred to their being registered as small scale unit.
6. For the foregoing reasons, we allow the appeal partly, holding that the appellant would be eligible for the benefit of Notification 223/88 as applicable to castings and cast articles of iron under Chapter 73. The benefit of Modvat credit as admissible is to be considered on merits notwithstanding the non-filing of the declaration under Rule 57G at the original stage. The matter is remanded to the Assistant Collector of Central Excise for considering the plea for the benefit of Notification 175/86 also. The impugned order is set aside and the appeal is allowed as above.