Judgment:
1. Appeal No. E/2808/87-D arises out of findings Of the lower authorities holding that re-assessment of the goods in dispute under T.I. 25 of the erstwhile CET is untenable and therefore rejected the refund claim. Appeal No. 2809/87-D arises because of rejection of refund claim of the Appellants on the ground that the goods are not classifiable under sub-heading 7212.00 but are correctly classifiable under sub-heading 8474.00 of the CETA, 1985. Since the issue for determination in both the appeals is the same namely classification of the product in dispute therefore they are being disposed of by this common order.
2. The facts of the case are that the appellants are engaged in the manufacture of asbestos cement product manufacturing machinery and components and parts thereof. In Appeal No. 2808/87-D the appellants contended that they need not pay duty on corrugated steel sheets, as the same answers tariff description of sheets falling under T.I. 25 in terms of explanation xviii to T.I. 25 after 17-3-1985 due to change in the tariff description of sheets in the Budget of 1985. The appellants also contended that whatever duty they had paid on corrugated template sheets under T.I. 68 after 29-4-1985 need be refunded to them.
3. The Department alleged that corrugated steel sheets in question are in fact template for the manufacture of asbestos cement sheets; that raw paste or mixture of asbestos fibre is pressed between two templates in the machine when corrugated asbestos cement sheet is formed and alleged that templates which have been described as corrugated steel sheets are in fact identifiable parts of asbestos cement product manufacturing machinery; that it has lost its identity as plain steel sheets classifiable under T.I. 25 upto 28-2-1986 and under sub-heading 7212 from 1-3-1986 and has acquired identity of distinguishable components/parts of the asbestos cement products manufacturing machinery and is correctly classifiable under T.I. 68 upto 28-2-1986 and under sub-heading 8474.00 from 1-3-1986. Accordingly show cause notices were issued to the appellants asking them to explain as to why the product in dispute should not be classified under T.I. 68 upto 28-2-1986 and under sub-heading 8474.00 from 1-3-1986 and why refund claims should not be rejected.
4. Shri A.K. Ganguly, Senior Advocate with Shri V.J. Sankaram appeared for the appellants and shri A.K. Agarwal, SDR for the respondent Commissioner.
5. Shri Ganguly, Senior Advocate explaining the facts of the case submitted that the appellants imported "Hot Rolled Steel Sheets"; that sheets were trimmed by cutting; that the excess edges/sides are trimmed; that manufactured plain asbestos cement sheets is merely placed on a steel sheet of similar size for being carried to the drying chamber stacked one over the other with a steel sheet interspersed; that manufacturing of the asbestos sheets was complete before' use of steel sheets; that for manufacturing of corrugated asbestos sheets corrugation box is used; that corrugation is not done by corrugated steel sheets but by vacuumatic process in the corrugation box; that by means of rollers fixed in the box corrugation is provided to the wet plain asbestos cement sheets; that the same are put on a machine by name Press Brake and the sheets were merely corrugated without improving the quality or strength or basic properties of the sheet. It was also argued that these corrugated sheets are not subjected to any further process either by mechanical or by human power; that tariff entry during the material period was under Chapter 25. It was also contended by the appellants that these sheets whether corrugated sheets or plain are known as template; that these sheets are fitted in corrugation box; that corrugation box operates with the help of vaccum and pattern of the sheets to be made whether flat or corrugated is done; that corrugation box holds on the template by moving side-ways etc. It was contended by the appellants that these processes clearly show that it is the corrugation box in the machinery that finally produces flat or corrugated sheet. It was also argued that the plain or corrugated template do not play any role in the process of manufacture of asbestos cement sheets; that their role is confined to hold, the sheets already manufactured by the corrugated box. It was also argued that settled principle of classification is that unless the department can establish that the goods in question can by no conceivable process be brought in a specific entry mentioned in the tariff, only then it can go to residuary item. It was argued that corrugated sheets are specifically mentioned under T.I. 25 and therefore in view of the specific entry under T.I. 25 the product manufactured by the appellants cannot be classified under residuary T.I. 68. In support of their contentions the appellants relied upon the cited judgment of Apex Court in the case of Indian Metals & Ferro Alloys Limited -1991 (51) E.L.T.165 (SC) and Bharat Forge & Press Industries Private Limited - 1990 (45) E.L.T. 525 (SC). It was also argued by the appellants that no new article was produced in their case and that it is well settled principle of law that excise duty become chargeable when new and different article emerges having different name, character and use. In support of their contentions the appellants cited and relied upon the judgment of the Apex Court in the case of Kutty Flush Doors and Furniture Company Private Limited -1988 (35) E.L.T. 6 (SC). It was also argued by the appellants that in the instant case sheets are cut to size, trimmed and corrugated; that limited operation of corrugation did not bring into existence a new commodity different in nature, name and use and therefore there was no manufacture. In support of their contentions the appellants relied upon the decision in the case of Gujarat Steel Tubes Limited -1989 (42) E.L.T. 523 (SC) and Parle Products Private Limited -1994 (74) E.L.T. 492 (SC).
6. On behalf of the respondent Collector Shri A.K. Agarwal, ld. SDR argued that template did not mean plate of tempered steel; that dictionary meaning or definition of 'template' is a mould shaped to required outline from which to execute moulding, "or a thin plate cut to shape required by which a surface of an article being made is marked out", that is a template is essentially a sort of mould on which shape, size, curvature, undulations or protrusions of a surface of an article being made, are clearly marked out. It was argued by the respondent that the admitted position was that the product was template; that templates have distinct name, character and use; that distinct name character and use is defined in the dictionary meaning that templates are in the shape of mould and since they are of distinct shape and size and are put to distinct use therefore they are definitely distinct articles and are not corrugated sheets only. It was also argued that the case law cited and relied upon by the appellants about a specific entry versus residuary entry was not applicable to the facts of this case inasmuch as the goods had acquired specific shape; that since the goods in question had acquired a specific shape, character and use and therefore they were manufactured goods. It was also argued on behalf of the respondent that the process of corrugation by cutting it in definite shape and sized and contour were not for the limited purpose and that completely new article had emerged; that these templates were actually new and different articles and therefore conversion of hot rolled steel sheets into templates was the process of manufacture.
7. We find that the product described as template and corrugated are not plain or corrugated plates of tempered steel, but are in the form of moulds having definite shapes, contours etc. We also observe that explanation xviii is not applicable to the product in dispute inasmuch as it was not corrugate sheets. We also observe that when these sheets were given a different shape and size, they no longer remained plain corrugated sheets. We find that there is force in the arguments of the DR. No evidence has been brought on record to prove that the products in common parlance are bought and sold as corrugated steel sheets and therefore we find that on a plain understanding of the product it has been classified under T.I. 68 of the erstwhile Central Excise Tariff.
We also find that in view of the above, the case law cited and relied upon does not help.
8. On careful consideration of the various contentions as set out above we find that templates are specific products and the process of conversion of hot rolled steel sheets into templates was the process of manufacture. We also observe that templates cannot be classified under T.I. 25 but were classifiable only under T.I. 68 of the erstwhile CET upto 28-2-1986 and were not classifiable under sub-heading 7212.00 but were correctly classifiable under sub-heading 8474.00 from 1-3-1986.
9. Having regard to the above discussions and findings we uphold the impugned order and reject the appeals.