1. This is an appeal against the order of Collector of Central Excise, Patna. The point for consideration, in this appeal, is whether the bare aluminium strips stated to be of electrical grade manufactured as an intermediate product by the appellants out of aluminium wires for ultimate manufacture of paper covered, aluminium conductor would be assessable under Tariff Item 27(b) of the Central Excise Tariff or not.
2. The learned Collector, after taking into consideration the pleas of the appellants, has held that the goods squarely fell within the ambit of Tariff Item 27(b) applicable at the relevant time. The Tariff entry 27(b), for convenience of reference, is reproduced below: "27(b) - Manufactures, the following, namely, plates, sheets, circles, strips, shapes and sections, in any form or size, not otherwise specified." The learned Collector has also ruled as to the basis of the value to be adopted and has restricted the demand for six months.
3. The learned consultant, for the appellants, at the time of hearing, made his submissions only in respect of the classification of the strips and not on the valuation aspect.
4. The learned consultant pleaded that the starting material for the manufacture of bare aluminium strips, in question, is aluminium wire rods of electrical grade and these wire rods were flatted in flattening machine.
5. He could not, on a query from the Bench, give the details of the flatting machine, but he, however, stated that it was not in the nature of a rolling machine. On, further query, he was asked as to how the flattening could take place unless some rollers were used.
6. He pleaded that his product was described as a strip. He, however, mentioned that at the relevant time, there was no definition of strip as such given in the Tariff and such a definition was introduced only with effect from 1-8-1984. He pleaded that strip, manufactured by the appellants, was not treated as a strip by those who dealt with the aluminium strip. His plea is in trade parlance, the strip manufactured by the appellants could only be considered as an aluminium conductor and not as aluminium strip.
7. He drew our attention in this regard to the definition of aluminium and aluminium alloy strips as given in IS : 5047 (Part 1) -1986. He pleaded that as per this definition, the term 'sheets'/'strip' is defined as under: "2.2.4 Sheet/Strip - Hot or cold rolled product of rectangular section, over 0.15 mm but less than 6.00 mm thick. It may be either in straight length or in coil form." 8. He pleaded that inasmuch as the product, manufactured by the appellants was not as per ISI specification could not be considered as an aluminium strip falling under Tariff Item 27(b) CET. On a query from the Bench, he stated that the goods to look at, appears to be strips but he stressed that in the market these were not known as aluminium strips but as conductors. He, however, conceded that no evidence in regard to the market criteria was produced before the lower authority nor it has been adduced in the appeal before us. He pleaded that strip as defined in ISI could alone be taken as strip and that should be taken as indicative of the market criteria.
9. The learned Departmental Representative for the Department pleaded that the goods were covered by a decision of the Bombay High Court in the case of Shakti Insulated Wires (1982 E.L.T. 10 Bombay para 8). He pleaded that the Hon'ble High Court has held that the so-called conductors before its insulation when it is bare and after insulation, continue to fall under Tariff Heading 27-B as strips. He pleaded that this decision was followed by the Tribunal in the case of Devidayal Industries [1984 E.L.T. (16) 537)]. He further pleaded that the plea regarding the market criteria was not taken by the appellants before the Collector nor there is any evidence produced in this regard. He pleaded that the ISI specifications for the strip had not been adopted in the Central Excise Tariff for the purpose of defining the aluminium strips and pleaded that ISI could not be resorted to unless there was any ambiguity in the tariff entry. He pleaded that the term aluminium strips used in the tariff was without any qualification and therefore, strips of all types would be covered within the definition of the term strips and cannot be said that there was any ambiguity present in the tariff entry.
10. We observe that there is no dispute as to the fact that the strips obtained by the appellants at an intermediate stage were used for making the finished product - insulated conductors and that these strips are made out of electrical grade aluminium. The main contention of the appellants is that since their product is a conductor and this is not a strip as per definition set out in the ISI, the same fell out of the purview of T.I. 27(b). The learned consultant has not been able to show as to how the scope of the entry in the tariff could be restricted by the definition of the term strip as given in the ISI. He has conceded that to look at their product, appears as a strip. He has also not been able to show as in case the product cannot be considered as a strip, then under which other specific heading it will fall and how the appellants in the process would stand to gain. The learned SDR has said rightly that unless there was an ambiguity in the Tariff entry, the ISI cannot be resorted to for the purpose of assessment. It is seen that the appellants in the classification list filed by them, have described their goods as aluminium bare strips. There cannot be any better evidence of how the product is considered in the market than what the appellants who are in the trade, have themselves described.
Further we observe the learned SDR has rightly pointed out that unless it could be shown that there was any ambiguity so far as the term strip is used in the tariff ISI specifications which are primarily for quality control, cannot be pressed in support of the arguments of the appellants.
11. We find that the issue regarding the classification of the insulated aluminium strips of the type manufactured by the appellants came up for consideration before the High Court of Bombay in the case of Shakti Insulated Wires Pvt. Ltd. and Anr. v. Union of India and Ors.
-1982 E.L.T. 10 (Bom.). - The Court held as under - "Even otherwise, it is impossible to hold that the articles manufactured by the petitioners are liable to assessment under Tariff Item 68. The articles would attract duty only under Tariff Item 26A(2). In view of this conclusion, it is not necessary to consider the submission of Shri Andhyarujina that the show cause notice issued by the Department in respect of the job work is illegal.
It is required to be made clear that the insulated copper strips would be liable to duty under Tariff Item 26A(2) while the insulated aluminium strips would be liable to duty under Item 27(b) of the Act."Devi Dayal Non-Ferrous Industries Pvt.
Ltd. v. Collector of Central Excise, Bombay -1984 (16) E.L.T. 537 (Tribunal)) took note of the following three judgments and held as under - "(1) M/s. Shakti Insulated Wires Pvt. Ltd. and Anr. v. Union of India and Ors. (reported in 1982 E.L.T, page 10).
(2) M/s. Devidayal Rolling and Refineries Pvt. Ltd. v. H. V. Nadkami and Ors. in the Misc. petition Nos. 839 of 1979 (Judgment delivered on 16-8-1982).
(3) He also cited the decision of the Tribunal vide order No. D-148/83, dated 30-3-1983 wherein the Tribunal has followed the above judgments of the Bombay High Court.
Though the above judgments were not in respect of the case covering aluminium strips, which is the case under consideration, the ratio of these judgments would cover the aluminium strips as well. The goods in question therefore, would be classifiable under Item 27(b) of the Central Excise Tariff and not Item 68 of the CET as done by the Asstt. Collector and the Appellate Collector of Central Excise, Bombay. The appeal is accordingly allowed in respect of the classification of the goods. The Department would examine and dispose of the claim for refund in the light of these observations and if otherwise in order." 13. We observe that the strips after paper covering have been held under Section 27(b). On the same logic the bare strips would also fall under the same heading. The appellants plea that the strips are of electrical grade and that these are conductors makes no difference so far as the classification of the goods under Section 27(b) is concerned as they have not been able to show that aluminium conductors of the type manufactured by them, fall under any other tariff entry. The tariff entry is specific for aluminium strips and following the ratio of the earlier judgments and in view of what we have said above, we hold that there are no merits in the plea of the appellants and we therefore, dismiss the appeal.