WELMELT STEEL CAST (PVT.) LTD Vs. CCE

JUDGEMENT

(1.) THIS appeal arises from Order -in -Original No. 122/92 dated 26.8.1992 holding that the castings in the nature of semi -finished goods manufactured are required to be treated as finished goods by applying Interpretative Rule 2(a) for classifying the same as parts of machines falling under Chapters 84, 85, 86 or 87 as the case may be and not as rough castings under Chapter 73 of the Tariff. Therefore, on that ground, duty demand of Rs. 90,847.37 were confirmed for the period December, 1988 to August, 1989 under provisions of Section 11A of the Central Excise Act read with Rule 9(2) of the Central Excise Rules. A penalty of Rs. 10,000/ - has also been imposed under Rule 173Q(1) and 226 of the Central Excise Rules.

(2.) THE learned advocate submits that the issue is no longer res integra and the Tribunal in the case of Shivaji Works Ltd. v. CCE as took up the very issue of classification of castings and held that they cannot be treated as finished goods for classification under Chapter 84 onwards but they have to be classified under heading 73 unless they have gone beyond proof -machined. He also cites several judgements of Tribunal thereafter which have been confirmed. He relies on the decision of the Tribunal rendered in the case of International Steel Foundry Ltd. v. CCE as , wherein in para 7 it has been held as under: 7. We have carefully considered the submissions made by both the sides and perused the records. The main question that arises for consideration is as to whether the item which is a casting of iron and steel manufactured by the appellants can be considered as an item falling under Chapter Heading 84/86 as parts of machine on the ground that it has acquired the essential character of a complete or finished article classifiable under Chapter 84 to 86 as alleged in the show cause notice. The appellants have been filing regularly classification lists from time to time which has been checked and approved and cleared by the department. The description given in the classification list is articles of iron and steel (all types) manufactured with the aid of electric furnace. They have shown the Chapter Heading 7325.20 in their classification list dated 15.12.1987. This classification list has been checked and signed by the Inspector on 21.12.1987 and Superintendent Customs and Central Excise, Range III, Indore on 7.12.1987 and Assistant Collector on 6.5.1988. Another classification list produced also describes the item as articles of iron and steel castings of alloy steel (other than stainless steel castings) 7325.20 Serial No. 2 of the classification list is showing Heading 7325.30 and Serial No. 3 in the classification list is 'other' castings of iron and steel under Chapter Heading 7325.10. This classification list has been signed by the Inspector on 3.3.1988 and also by the Superintendent and the Assistant Collector respectively. Therefore, it cannot be said that the Department was not aware of the appellants carrying on the activities of manufacturing of alloy steel and articles of iron and steel classifiable under heading 7325.10 to 7325.30. The department has taken a view that after the change of tariff from 1.3.1988 it was incumbent on the assessee to file a fresh classification list. It has been shown by the learned consultant that there has been no material change in the manufacturing process. Even the changed description in the tariff item does not make material change with regard to classification of their product which is casting and which has not undergone any process to become an article of machine or unfinished article of machine or has acquired essential character of such finished product. Therefore, we are inclined to accept the arguments raised by the learned Consultant in this case. There is no suppression or wilful misrepresentation or mis -declaration, fraud or collusion. The fact that the appellants have been filing classification list from time to time which had been approved and that the department had been making various visits and auditing their records squarely shows that there has been no clandestine removal or surreptitious removal to attract either under Rule 9(2) of the Central Excise Rules, 1944 or Section 11A of the Act. Therefore, in the circumstances, the appellants succeed both on merits as well as on limitation. As the facts of the case are quite clear, it is not necessary for us to go into other arguments pertaining to the citations raised by both the sides. However, we have gone through these citations placed before us and we are of the view that rulings placed by the learned Consultant in support of his arguments pertaining to limitation is fully applicable to the facts of the case. In the circumstances, the appeal is allowed with consequential relief. The cross appeal is rejected. He submits that the ratio of this Judgment squarely applies to the facts of the present case and hence the appeal is required to be allowed.

(3.) HEARD learned D.R. who reiterates the departmental contention.