COMMISSIONER OF CENTRAL EXCISE Vs. STEEL TECH. INDUSTRIES,

JUDGEMENT

(1.) Final Order No. 718 -720/2006 dt. 7/8/06

(2.) THIS appeal is by the department, aggrieved by classification, by the lower appellate authority, of "Receiver" and "Accumulator" (both used as parts of refrigerating machinery) under SH 7326.90 (formerly SH 7308.90) and Sub -Heading 8479.10 respectively. The department wanted both these items to be classified under SH 8418.90. We have heard both sides on the classification dispute and have considered their submissions. The period of dispute is September, 1995 to March, 1996. Heading 8418 covers "refrigerants, freezers and other refrigerating or freezing equipment, electric or other: heat pumps other than air -conditioning machines of Heading No. 84.15." Under this Heading, the complete machines are classified under SH 8418.10 and parts thereof are classified under SH 8418.90. According to the appellant, both "Accumulator" and "Receiver" are parts of refrigerating equipment and, therefore, would be classifiable under SH 8418.90 only. On the other hand, the respondents would say that the "Accumulator", which receives excess refrigerant in the course of the working of the refrigerating equipment is doing a special independent function and, therefore, it would get classified under Heading 84.79 and SH 8479.10. This claim is based on a premise that "Accumulators" used in refrigerating equipment are not specified or included anywhere other than under Heading 84.79 in Chapter 84 of the CETA Schedule. Regarding "Receiver", it is the respondents' case that it would fall under the residual Heading 73.26 (formerly Heading 73.08) "as other articles of iron and steel" and that, amongst the sub -headings thereunder, SH 7326.90 (formerly SH 7308.90) would be most appropriate. Thus, the respondents have preferred to classify both the items rather under residuary entries. Today, learned Counsel for the respondents has endeavoured to show that the classification dispute is non -existent inasmuch as a trade notice issued by the Vadodara Collector of Central Excise, which is claimed to be binding on all Commissionerates, has classified the "Accumulator" and the "Receiver" under SH 8479.00 and SH 7308.90 respectively. This reference made by learned Counsel is to Trade Notice No. 249/86 dated 16.10.1986 of vadodara Collectorate. It is further argued that, in view of the apex court's ruling in Steel Authority of India v. Commissioner of Customs, Bombay, 2000 (115) E.L.T.42 (S.C.), the appellant cannot argue contrary to the above trade notice. Learned SDR submits that departmental instructions or directions which would go to interfere with quasi -judicial powers of officers will not be sustained in law. The power to classify goods is part of the power to levy duty of excise and the same is essentially a legislative function, which cannot be delegated. In other words, the trade notice classifying goods under various entries of the Central Excise Tariff, being one issued by the Collector without delegation, to him, of the Board's power under Section 37B of the Ce ntral Excise Act, cannot be sustained in law. In this connection, reliance is placed on the Delhi High Court's decision in Faridabad Iron and Steel Trade Association v. Union of India, 2004 (178) E.L.T.1099 (Del.), wherein it was held that quasi -judicial functions could not be controlled by executive circulars. Apparently, both the lower authorities chose to follow the trade notice for classifying the goods. May be, it is for this reason that the present debate is focussed on the trade notice and we can't help taking a view in the matter. Learned Counsel has argued that the Collector could guide assessing officers as well as the trade in the matter of classifying the excisable goods listed in the trade notice, in exercise of his powers under Rule 233 of the Central Excise Rules, 1944. The trade notice has a legitimate source of law and the same is binding on the departmental officers concerned. In this view of the matter, the reliance placed by the lower authorities on the trade notice in the matter of classifying the subject goods cannot be faulted. On the other hand, it is the submission of learned SDR is that, as regards classification of excisable goods, the power to guide assessing officers rests with the Board under Section 37B. After examining the provisions cited before us, we find that, under Section 37B, the CBEC has the power to issue orders, instructions and directions to Central Excise officers with a view to bringing about uniformity in classification of excisable goods. It appears to us that the power to guide assessing officers in the matter of classification of excisable goods is exclusively with the Board inasmuch as there is nothing in the Central Excise Act permitting the Board to delegate this power to any Chief Commissioner or Commissioner or other subordinate officer in the department. When identical goods are classified differently in different Commissionerates, it is for the Board to step in and bring about uniformity. We can hardly conceive the idea of a Commissionerate in some part of the country bringing about such uniformity for the whole of the country. Rule 233 ibid empowered CBEC, Chief Commissioners and Commissioners to issue written instructions providing for "supplemental matters" arising out of the Central Excise Rules, 1944. Classification of goods is of paramount importance in the realm of Central Excise law. It is a function which requires to be performed carefully in accordance with law - this expression "law" includes any instructions or guidelines issued by the Board under Section 37B also - as it would go to the root of assessment of goods to duty of excise. It cannot be underrated as a "supplemental matter" within the meaning of this expression used in Rule 233. By no stretch of imagination can this provision be pressed into service for classification of excisable goods, which is a function to be performed by the assessing officer as part of the quasi -judicial function of assessment. As held by the Hon'ble High Court in the case of Faridabad Iron and Steel Trade Association (supra), even the Board cannot interfere in such quasi -judicial function, let alone a Collector/Commissioner. The trade notice in question reads thus:

(3.) IN the nature of the dispute, we set aside the orders of both the lower authorities and remand the case to the original authority to decide the correct classification of the goods in accordance with law, having no record to anything contained in the above trade notice. It goes without saying that the respondents shall be given a reasonable opportunity of being heard.