Full Judgment
2. Shri Parveen Sharma, learned Advocate, submitted that the Appellants are engaged in the activity of printing and cutting to shape aluminium foil as per requirements of their customers; that the shapes are circular which are being treated by the Department as 'aluminium foil disc' used as seal for avoiding leakage and pilferage of the product packed by their customers; that the product is classifiable under Heading 76.07 only as it is in the nature of foil only in view of Note (d) to Chapter 76 of the Tariff inasmuch as the definition of foil covers aluminium foil cut to any shape including other than rectangular and square. He further, submitted that in trade parlance also the aluminium foil discs are known as such and not as seals; that in other Commissionerate also the product in question is classified under Heading 76.07. He also mentioned that the demand of differential duty for the period when the approved classification list was in force cannot be made and reliance was placed on the decision in the case of C.C.E., Baroda v. Cotspun Ltd., 1999 (113) E.L.T. 353 (S.C.). Finally he submitted that the demand has to be recalculated in the light of the decision of the Tribunal in the case of Srichakra Tyres Ltd. v. CCE, Madras, 1999 (32) RLT 1 (Tribunal).
3. Countering the arguments, Shri R.K. Sharma, learned SDR, submitted that as per Note (d) to Chapter 76 the product to be foil should have two sides which are straight of equal length and parallel and as such Note (d) would not be applicable to a product which is in square shape; that further the product is used as a seal by the customers; that the impugned product is manufactured by the Appellants as per the specifications given by their customers; that the product is understood as seal. He finally submitted that the decision in Cotspun case is not applicable in the present matter as no classification list was being filed by them in 1995; The excise assessees now file only declarations of the products manufactured by them.
4. We have considered the submissions of both the sides. Aluminium foils are classifiable under Heading 76.07. Heading 83.09 applies to stoppers, caps and lids, capsules for bottles, threaded bungs, bung covers, seals and other packing accessories, of base metal. It is admitted position that the Appellants get aluminium foils which are printed and cut by them in circle form as per the specifications of their customers. The Commissioner (Appeals) has given his findings that the products manufactured and cleared by the Appellants is an article specifically manufactured as per design & size of the buyers and has an use as packing accessories which are classifiable under Heading 83.09.
We have seen the sample available on record from which it is apparent that these are placed on the container for the purpose of closing the container and as such merits classification under heading 8309.90 of the Tariff. Note (d) to Chapter 76 does not advance the case of the Appellants which provides that the product should be of rectangular (including square) shape with a thickness not exceeding one tenth of the width or of a shape other than rectangular or square, of any size provided that they do not assume the character of articles or products of other headings. As the product in question assumes the character of articles of Heading 83.09, it can not be classified as foil. We agree with the learned S.D.R. that the ratio of the decision in Cotspun case, supra, will not apply as in the present matter there was no approved classification list. The demand pertains to the period from August, 1995 to December, 1995 and w.e.f. 1-5-1995, the provisions of Rule 173B were changed and in place of classification list the excise assessees files only a declaration showing the description of goods produced or manufactured by him and other particulars. Such a declaration does not need any approval by the Central Excise Officers. This was also observed by the Supreme Court in Cotspun case as under.
"We are informed that the position in law has changed since the year 1995 or there about. We have not considered the altered provisions.
Nothing that we have said in this judgment shall ipso facto apply thereto".
5. We agree with the submission of the learned Advocate for the Appellants that the amount of duty has to be recalculated in the light of decision of the larger Bench in the case of Srichakra Tyres Ltd. v.CCE, supra, wherein it was held that if any further demand of duty is created against an assessee the wholesale price has to be taken as cum duty price for the purpose of higher duty subsequently and total duty proposed to be demanded shall have to be abated from ther the cum duty price actually received and liable to be received as consideration for sale of goods.