Kosan Metal Products Pvt. Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. in this appeal filed by m/s. kosan metal products pvt. ltd., the issue for our consideration is the proper classification of the products described as stationary tanks by the appellants in their classification list no. 5/86-87. the appellants have sought classification of the stationary tanks under sub-heading no. 8609.00 which covered the following : "containers (including containers for the transport of fluids) specially designed and equipped for carriage by one or more modes of transport".chapter 86 of the tariff covered "railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds." the department classified the said stationary tanks under sub-heading no. 8312.90. heading no.8312 covered the following: containers ordinarily intended for packaging of goods for sale, including collapsible tubes, casks, drums, cans, boxes, gas cylinders and pressure container, whether in assembled or unassembled condition and containers known commercially as flattened or folded containers, of base metal." 3. we have heard shri m. jayaraman, jdr and gone through the facts on record.4. we find that the goods in question had been described by the appellants in their classification list as stationary tanks. they had admitted that these tanks were meant to hold or contain liquids or liquified gases. we are not concerned with the classification of the tanks which are used as road tanks or rail wagons to transport fluid.in these proceedings, we are concerned with the classification of stationary tanks which were meant to store or stock goods at one place.further, we are not concerned with the tariff as was in force prior to 28-2-1986.5. as there is no dispute that the goods under consideration were containers, we have to consider whether they were classifiable under subheading 8609.00 as contended by the appellants or under sub-heading 8312.90 as decided by the department. for classification under heading no. 86.09 it was necessary that the containers should have been specially designed and equipped for carriage. in other words, the containers should be suitable for carrying the goods. in the present case, the containers were stationary and were meant for storage or stocking the goods. they were not meant for carrying the goods. the containers were not designed for carrying the goods but were designed for storing and stocking the goods at one place. in view of the nature of the goods, we consider that their classification under heading 86.09 of the tariff could not be correct.6. under heading no. 83.12 of the central excise tariff, containers of base metal were covered. under heading no. 8312.11 containers ordinarily intended for packing of goods for sale if of aluminium were covered. in sub-heading 8312.12 the containers ordinarily intended for packing of goods for sale of base metal other than aluminium if produced with the aid of power were included. in the entry 8312.19 those containers which were ordinarily intended for packing of goods for sale but were neither of aluminium nor of any base metal other than aluminium, and if of the base metal other than aluminium, when produced with the aid of power, were classifiable. as the stationary tanks were containers of base metal and were not covered by subheading no.8312.11, 8312.12 and 8312.19, they were correctly classifiable under sub-heading no. 8312.90.7. we may also refer that the central excise tariff relating to ferrous and non-ferrous metals prior to 1-3-1986 was based on the customs co-operation council nomenclature, popularly known as brussels tariff nomenclature (btn). with regard to these ferrous and non-ferrous metals no change was effected except the change in the heading numbers when the new tariff came into operation w.e.f. 28-2-1986. it was only w.e.f.1-3-1988 that the non-ferrous metal was aligned with the harmonised commodity description and coding system of nomenclature (hsn). under heading no. 73.22 of the bin reservoirs, tanks, vats and similar containers for any material (other than compressed or liquified gas), or iron or steel, of a capacity exceeding 300 litres, whether or not lined or heat insulated, but not fitted with mechanical or thermal equipment, were covered. it was further explained that such containers differ from the packing and transport containers as they were normally installed as fixtures for storage or manufacturing use e.g., in factories, chemical 5^ works, dye works, gas works, breweries, distilleries and refineries, and to a smaller extent in houses, shops etc. we find that similar matter had come up for consideration before the tribunal in the case of collector of central excise, bangalore v.peenya engg. indus. -1997 (93) e.l.t. 62 (tribunal). paras 8 and 9 from that decision are extracted below : "8. it is thus, seen that before 1-3-1988 the goods in question were classifiable under bin heading no. 73.22. in the central excise tariff, which was patterened on bin, there was no corresponding heading no. 73.22. for the containers of base metal, separate heading no. 83.12 was carved out. under btn, there was no heading 83.12. in other words, for all the containers of base metal a specific heading no. 83.12 was introduced under the central excise tariff, which was in force prior to 1-3-1988. the containers of base metal were divided into two parts (i) containers ordinarily intended for packaging of goods for sale and (2) other i.e. the containers, which were not ordinarily intended for packaging of goods for sale. the description and use of the goods in question makes it clear that while they were containers they were not intended for packaging of goods for sale. under the scheme of central excise tariff, the containers ordinarily intended for packaging of goods for sale, of aluminium were classifiable under sub-heading no. 8312.11; of all base metal other than aluminium if produced with the aid of power were classifiable under sub-heading no. 8312.12 and the containers ordinarily intended for packaging of goods for sale which were neither classifiable under sub-heading no. 8312.11 or sub-heading no. 8312.12 were classifiable under sub-heading no. 8312.19. the containers of base metal, which were neither covered by sub-heading no. [8312.11] or 8312.12 or 8312.19 were classifiable under subheading no. 8312.90. for classification under sub-heading no. 8312.90, there was no condition that the containers should be ordinarily intended for packaging of goods for sale. this was the condition applicable for only sub-heading nos. 8312.11,8312.12 and 8312.19. 9. the ld. collector of central excise (appeals) had observed that as the goods were not containers ordinarily intended for packaging of goods for sale, they were not classifiable under heading no. 8312.90. the view taken by the ld. collector of central excise (appeals) is not correct as the condition relating to the intended use for packaging of goods for sale was not applicable to the containers classifiable under sub-heading no. 8312.90. the respondents in the written submissions before the asstt. collector of central excise have referred to hsn heading no. 7308.90 of the hsn while stating that storage tanks and vessels of iron were classified under the heading - reservoirs, tanks, vats and similar containers for any material under heading no. 73.09 of the hsn. thus, they themselves have agreed that their products were containers. as we have discussed above, the hsn was not relevant for classification of the goods in question before 1-3-1988 and that the goods of the respondents were covered by the heading no. 73.22 of the btn and the central excise tariff for the containers, there was only the applicable heading no. 83.12." 8. the ld. collector of central excise (appeals), bombay, had analysed the tariff entries under heading no. 86.09 and heading no. 83.12 and had held that the goods were correctly classifiable under sub-heading no. 8312.90.9. we have discussed the goods in question and the scope of the relevant tariff entries. in the light of the above discussion, we do not find any infirmity in the view taken by the learned collector of central excise (appeals). there is no merit in this appeal and the same is rejected.

Judgment:
1. In this appeal filed by M/s. Kosan Metal Products Pvt. Ltd., the issue for our consideration is the proper classification of the products described as stationary tanks by the appellants in their classification list No. 5/86-87. The appellants have sought classification of the stationary tanks under sub-heading No. 8609.00 which covered the following : "Containers (including containers for the transport of fluids) specially designed and equipped for carriage by one or more modes of transport".

Chapter 86 of the Tariff covered "Railway or Tramway Locomotives, Rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds." The Department classified the said stationary tanks under sub-heading No. 8312.90. Heading No.8312 covered the following: Containers ordinarily intended for packaging of goods for sale, including collapsible tubes, casks, drums, cans, boxes, gas cylinders and pressure container, whether in assembled or unassembled condition and containers known commercially as flattened or folded containers, of base metal." 3. We have heard Shri M. Jayaraman, JDR and gone through the facts on record.

4. We find that the goods in question had been described by the appellants in their classification list as stationary tanks. They had admitted that these tanks were meant to hold or contain liquids or liquified gases. We are not concerned with the classification of the tanks which are used as road tanks or rail wagons to transport fluid.

In these proceedings, we are concerned with the classification of stationary tanks which were meant to store or stock goods at one place.

Further, we are not concerned with the tariff as was in force prior to 28-2-1986.

5. As there is no dispute that the goods under consideration were containers, we have to consider whether they were classifiable under subheading 8609.00 as contended by the appellants or under sub-heading 8312.90 as decided by the Department. For classification under Heading No. 86.09 it was necessary that the containers should have been specially designed and equipped for carriage. In other words, the containers should be suitable for carrying the goods. In the present case, the containers were stationary and were meant for storage or stocking the goods. They were not meant for carrying the goods. The containers were not designed for carrying the goods but were designed for storing and stocking the goods at one place. In view of the nature of the goods, we consider that their classification under Heading 86.09 of the Tariff could not be correct.

6. Under Heading No. 83.12 of the Central Excise Tariff, containers of base metal were covered. Under Heading No. 8312.11 containers ordinarily intended for packing of goods for sale if of aluminium were covered. In sub-heading 8312.12 the containers ordinarily intended for packing of goods for sale of base metal other than aluminium if produced with the aid of power were included. In the Entry 8312.19 those containers which were ordinarily intended for packing of goods for sale but were neither of aluminium nor of any base metal other than aluminium, and if of the base metal other than aluminium, when produced with the aid of power, were classifiable. As the stationary tanks were containers of base metal and were not covered by subheading No.8312.11, 8312.12 and 8312.19, they were correctly classifiable under sub-heading No. 8312.90.

7. We may also refer that the Central Excise Tariff relating to ferrous and non-ferrous metals prior to 1-3-1986 was based on the Customs Co-operation Council Nomenclature, popularly known as Brussels Tariff Nomenclature (BTN). With regard to these ferrous and non-ferrous metals no change was effected except the change in the heading numbers when the new tariff came into operation w.e.f. 28-2-1986. It was only w.e.f.

1-3-1988 that the non-ferrous metal was aligned with the harmonised commodity description and coding system of nomenclature (HSN). Under Heading No. 73.22 of the BIN reservoirs, tanks, vats and similar containers for any material (other than compressed or liquified gas), or iron or steel, of a capacity exceeding 300 litres, whether or not lined or heat insulated, but not fitted with mechanical or thermal equipment, were covered. It was further explained that such containers differ from the packing and transport containers as they were normally installed as fixtures for storage or manufacturing use e.g., in factories, chemical 5^ works, dye works, gas works, breweries, distilleries and refineries, and to a smaller extent in houses, shops etc. We find that similar matter had come up for consideration before the Tribunal in the case of Collector of Central Excise, Bangalore v.Peenya Engg. Indus. -1997 (93) E.L.T. 62 (Tribunal). Paras 8 and 9 from that decision are extracted below : "8. It is thus, seen that before 1-3-1988 the goods in question were classifiable under BIN Heading No. 73.22. In the Central Excise Tariff, which was patterened on BIN, there was no corresponding Heading No. 73.22. For the containers of base metal, separate Heading No. 83.12 was carved out. Under BTN, there was no Heading 83.12. In other words, for all the containers of base metal a specific Heading No. 83.12 was introduced under the Central Excise Tariff, which was in force prior to 1-3-1988. The containers of base metal were divided into two parts (I) containers ordinarily intended for packaging of goods for sale and (2) other i.e. the containers, which were not ordinarily intended for packaging of goods for sale.

The description and use of the goods in question makes it clear that while they were containers they were not intended for packaging of goods for sale. Under the scheme of Central Excise Tariff, the containers ordinarily intended for packaging of goods for sale, of Aluminium were classifiable under sub-heading No. 8312.11; of all base metal other than aluminium if produced with the aid of power were classifiable under sub-heading No. 8312.12 and the containers ordinarily intended for packaging of goods for sale which were neither classifiable under sub-heading No. 8312.11 or sub-heading No. 8312.12 were classifiable under sub-heading No. 8312.19. The containers of base metal, which were neither covered by sub-heading No. [8312.11] or 8312.12 or 8312.19 were classifiable under subheading No. 8312.90. For classification under sub-heading No. 8312.90, there was no condition that the containers should be ordinarily intended for packaging of goods for sale. This was the condition applicable for only sub-heading Nos. 8312.11,8312.12 and 8312.19.

9. The ld. Collector of Central Excise (Appeals) had observed that as the goods were not containers ordinarily intended for packaging of goods for sale, they were not classifiable under Heading No. 8312.90. The view taken by the ld. Collector of Central Excise (Appeals) is not correct as the condition relating to the intended use for packaging of goods for sale was not applicable to the containers classifiable under sub-heading No. 8312.90. The respondents in the written submissions before the Asstt. Collector of Central Excise have referred to HSN heading No. 7308.90 of the HSN while stating that storage tanks and vessels of iron were classified under the heading - Reservoirs, tanks, vats and similar containers for any material under Heading No. 73.09 of the HSN. Thus, they themselves have agreed that their products were containers. As we have discussed above, the HSN was not relevant for classification of the goods in question before 1-3-1988 and that the goods of the respondents were covered by the Heading No. 73.22 of the BTN and the Central Excise Tariff for the containers, there was only the applicable Heading No. 83.12." 8. The ld. Collector of Central Excise (Appeals), Bombay, had analysed the tariff entries under Heading No. 86.09 and Heading No. 83.12 and had held that the goods were correctly classifiable under sub-heading No. 8312.90.

9. We have discussed the goods in question and the scope of the relevant tariff entries. In the light of the above discussion, we do not find any infirmity in the view taken by the learned Collector of Central Excise (Appeals). There is no merit in this appeal and the same is rejected.