JAWAHAR METAL INDUSTRIES Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THESE are nine appeals -eight appeals filed by assessees as under and one appeal filed by the revenue -involving the issue of classification of Iron and Steel products, namely, side slittings, end cuttings, roughly shaped pieces and trimmings under the schedule to the Central Excise Tariff Acts, Accordingly, all these appeals are being disposed of by one common Order : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

(2.) SHRI J.S Agarwal, Learned Advocate submitted that the Assessees bring duty paid H.R Coils of different width ranging from 1040 mm to 1600 mm; that on account of large width these coils cannot be fed into the cold rolling machines and, therefore, these coils undergo the process of slitting; that during the course of slitting and subsequent processes like chipping, stress relieving, surface cleaning, pickling, trimming, etc., the impugned products side slittings, end cuttings and trimmings are obtained which were classified by them as waste and scrap of iron and steel under Heading No. 72.04 of the Central Excise Tariff; that the Department has classified the side slittings under Subheading 7211.59, and cuttings under Sub -heading 7208.29, Roughly shaped pieces under Sub -heading 7202.90 treating them as flat products of different width and trimmings under Sub -heading 7204.90. The learned Advocate further submitted that the Supreme Court in the case of L.M.L. LTD. v. C.C.E. Kanpur, 1997 (94) E.L.T. 273 (SC), has held that the cut sheets do not fall under the definition of the word "Sheet" as contained in Chapter 72; that these off cuts are of different shapes and sizes and would clearly fall under the Tariff Entry 72.10. The learned Advocate mentioned that the Apex Court had considered the definition of "waste and scrap" as was in operation prior to 1 -3 -1988; that with effect from 1 -3 -1988 the definition of "waste and scrap" was changed and in terms of changed definition as the impugned products were not usuable as such, they have to be classified as waste and scrap only and not as shapes classifiable under Heading 72.10 (now Heading 72.16) as decided by the Apex Court. He relied upon the Larger Bench of the Tribunal's decision in Press Metal Corporation LTD. v. CCE Mumbai, 2000 (38) RLT 650 while contending that ultimate use of the manufactured goods after clearance cannot determine the classification of the goods manufactured. He contended that as all these cuttings are being obtained after slitting of Coil or larger width, these are nothing but waste and scraps and their subsequent use should not be a criterion for determining their classification. The learned Advocate also mentioned that the definition of angles, shapes and sections to Note 1 (n) to Chapter 72 of the Tariff was changed with effect from 1 -3 -1988 and shapes and sections mean "products having a uniform solid cross section along their whole length which do not conform to any of the definitions at (IJ) (K) (1) or (m) above or to the definition of wire" and submitted that the impugned products would, therefore, be not shapes and sections. In respect of Roughly Shaped Pieces, the learned Advocate mentioned that these sheets arose during the cold rolling process of the sheets and wire rejects on account of uneven surfaces, breakages, appearance of holes and cracks, etc., that those were not of uniform size; that these are semi -finished products, as defined in Note 1 (ij)) to Chapter 72 classifiable under Heading 72.07 of the Tariff.

(3.) COUNTERING the arguments, Shri H.K. Jain, learned SDR, submitted that the change in the definition of "waste and scrap" with effect from 1 -3 -1988 has not made any material change in as much as even now the term means "metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usuable as such because of breakage", cutting up, wear or other reasons; that the relevant and material words in definition, are "not usuable as such" and the end cuttings, side slittings, roughly shaped pieces and trimming cannot be termed as "not usuable as such" and they are therefore correctly classifiable under Headings 72.08, 72.09 and 72.11 of the Tariff. He also emphasised that wherever the goods were used as waste, the same has been considered as waste and scrap; that these products satisfy the description of Hat Products as given in Note 1 (k) to Chapter 72. With regard to roughly shaped pieces, the learned SDR further submitted that these are obtained by further working on H.R Coils and as such these cannot be termed as "Semi finished goods"; that any subsequent process of slitting/ cutting etc. cannot make them semi -finished goods and as they are "usuable as such", they have to be classified as flat rolled products only.