Commnr. Of Central Excise, Bhopal vs Minwool Rock Fibres Ltd

2. The assessee had filed the

classification declaration before the adjudicating

authority, under Rule 173 B of the Central Excise

Rules, 1944 (for short `the Rule), inter alia,

claiming that the goods, namely, Slagwool and

Rockwool requires to be classified under Chapter

sub-heading No.6807.10 of Central Excise Tariff

Act, 1985 (for short `the Act') with effect from

09.06.1998.

3. A show cause notice was issued to the

assessee directing them to show cause as to why

the goods in issue should not be classified under

Chapter sub-heading No.6803.00 and duty of 18%

should not be charged and recovered from them

under Rule 9(2) read with Section 11-A of the Act

and as to why penalty should not be imposed under

Rule 173Q of the Rules. After receipt of the show

cause notice, the assessee filed its reply dated

16.11.1998, inter-alia, contending that they are

manufacturing `Min wool' using more than 25% of

blast furnace slag by weight, right from 1993

onwards and they have been filing classification

declarations mentioning this fact and such

declarations so filed prior to 1997-98 are

accepted by the department and, therefore, the

goods in question requires to be classified under

Chapter sub-heading No.6807.10 of the Act.

4. The adjudicating authority, after

accepting the stand of the assessee, passed an

order dated 31.01.2000, inter-alia, holding that

the appropriate classification of the goods in

issue should be under Chapter sub-heading

No.6807.10 of the Act. The revenue, being

aggrieved by the classification so accepted by the

adjudicating authority, had carried the matter by

way of an appeal before the Commissioner

(Appeals), Customs and Central Excise, who by its

order dated 23.01.2002, allowed the revenue's

appeal and, thereby, declared that the goods in

question are to be classified under Chapter sub-

heading No.6803.00 and not under sub-heading

No.6807.10, as claimed by the assessee.

5. The assessee had carried the matter in

appeal before the Tribunal. The Tribunal has

allowed the assessee's appeal by its order dated

22.08.2002 and, thereby, restored the order passed

by the adjudicating authority. It is the

correctness or otherwise of the aforesaid order

passed by the Tribunal is the subject matter of

present appeal.

6. We need to notice the relevant entries

under Chapter 68 of the Act and the sub heading

No.6803.00 and sub-heading No.6807.10 etc. The

same reads as under :

Heading Sub- Rate of Description of Goods No. Heading Duty No. (3) (1) (2) (4)

Slagwool, Rockwool and 18% 6803 6803.00 similar wools

Goods, in which more than 25% by weight of red mud, press mud or blast furnace slag or one or more of these materials, have been used, 6807 68.07 all other articles of stone, plaster, cement, asbestos, mica or of similar materials, not elsewhere specified or included.

Goods, in which more than 25% by weight of red mud, press mud or blast furnace 6807.10 8% slag or one or more of these materials have been used.

7. The rate of duty for the aforesaid goods if it

is classified under sub-heading No.6803.00 is at

18% and if it is classified under sub-heading

No.6807.10, is at 8%.

8. Sub-heading No.6803.00 speaks of Slagwool,

Rockwool and similar wools, whereas sub-heading

No.6807.10 speaks of goods in which more than 25%

by weight, red mud, press mud or blast furnace

slag or one or more of these materials is used.

9. Sub-heading No.6807.10 was introduced after the

Budget of 1997.

10. The period in question of this appeal is after

9th June, 1998.

11. Shri R.P.Bhatt, learned senior counsel

appearing for the revenue would submit that when

there is a specific heading/sub-heading wherein

the goods, such as Slagwool, Rockwool and similar

wools are enumerated, that entry requires to be

applied and not the general entry or a residuary

entry. Learned counsel also brings to our notice

about the Circular issued by the Central Board of

Excise and Customs (for short `the Board') dated

17.09.2001 to substantiate that the Board, after a

detailed consideration of the claim and the

counter claim of the traders dealing in Rockwool

and Slagwool, has specifically classified that the

aforesaid goods requires to be classified under

sub-heading No.6803.00 and not under sub-heading

No.6807.10.

12. Per contra, Shri Alok Yadav, learned counsel

appearing for the assessee, justifies the impugned

judgment and order passed by the Tribunal.

13. We have already noticed the relevant entries

to which we are concerned with in this appeal. No

doubt there is a specific entry which speaks of

Slagwool and Rockwool under Sub-heading

No.6803.00, but there is yet another entry which

is consciously introduced by the Legislature under

sub-heading No.6807.10, which speaks of goods in

which Rockwool, Slagwool and products thereof are

manufactured by use of more than 25% by weight of

blast furnace slag. It is not in dispute that the

goods in question are those goods in which more

than 25% by weight of one or more of red mud,

press mud or blast furnace slag is used. If that

be the case, then, in a classification dispute, an

entry which is beneficial to the assessee requires

to be applied and the same has been done by the

adjudicating authority, which has been confirmed

by the Tribunal. Alternatively, it can be said

that Sub-heading No.6807 is specific to the goods

in which more than 25% by weight, red mud, press

mud or blast furnace slag is used. The heading is

based entirely on material used on composition of

goods. A tariff heading, based on composition of

goods, is also specific heading like a heading

based on commercial nomenclature. Therefore, we

are of the view that the goods in issue are

appropriately classifiable under Sub-heading

No.6807.10 of the tariff entry.

14. The learned senior counsel Shri Bhatt invites

our attention to the circular instructions issued

by the Board. In our view, the departmental

circulars are not binding on assesee or quasi

judicial authorities or courts and therefore, in

that view of the matter, the circular/

instructions issued by the Board, would not assist

them.

15. We may also notice that the Full Bench of the

Tribunal in the case of Commissioner of Central

Excise, Raipur Vs. Punj Star Insulation Fibre Co.

has taken a view that the slagwool and rockwool

would fall under sub-heading No.6807.10 and not

under sub-heading No.6803.00. The judgment of the

Tribunal has attained finality, since the revenue

has not questioned the same before the appropriate

forum. This fact has been noticed by this Court

while disposing of Civil Appeal Nos.60-61 of 2003

in the case of M/s.Rockwool (India) Pvt. Ltd. Vs.

Commissioner of Customs & Central Excise,

Hyderabad decided on 07.05.2008.

16. In view of the above, we are of the opinion

that the Tribunal has not committed any error,

whatsoever, which would call for our interference.

Accordingly, the appeal is dismissed.

C.A.Nos.2504-2505/2004:

These appeals are also disposed of, in

terms of the observations and directions made by

us today in the aforesaid order i.e.

C.A.No.4988/2003.

Ordered accordingly.

...................J. (H.L. DATTU)

...................J. (ANIL R. DAVE)

NEW DELHI;

FEBRUARY 02, 2012