TMI Blog1990 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... el. These products are generally used by the telephone and telegraph departments of the Government of India but can also be used for purposes of transmission and lighting. The question is whether these goods are liable to excise duty under Item 26AA or under Item 68, in the First Schedule to the Central Excises Salt Act, 1944 (hereinafter referred to as `the Act'). 2. Tariff Item No. 26AA was introduced w.e.f. 24-4-1962 in the First Schedule to the Act. Item 26AA reads thus :- Description of goods Rate of duty "26AA. IRON OR STEEL PRODUCTS, THE FOLLOWING NAMELY : Semi-finished steel including blooms, billets, slabs, (i) sheet bars, tin-bars and hoe bars. Three hundred and fifty rupees per metric tonne. Bars, rods, coils, wires, joists, girders, angles other (i-a) than slotted angles, channels other than slotted channels, tees, fiats, beams, zeds, trough, piling and all other rolled, forged or extruded shapes and sections not otherwise specified. Three hundred and fifty rupees per metric tonne. (ii)Plates and sheets (including uncoated plates and sheets intended for tinning, and forms such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult was that the appellant paid no duty on the goods in question and the goods were cleared without either payment of duty or collection of duty from the purchasers right from 1962 till 1975. 4. On 1-3-1975, the legislature introduced Tariff Item No. 68 in the First Schedule to the Act covering "goods not elsewhere prescribed". Even thereafter, the appellant filed classification lists showing the poles as falling under Item 26AA and eligible for exemption under the relevant notification (which had taken the place of the notification of 1-3-1963). These classification lists were approved and the appellant continued to clear its goods without paying duty till August, 1982. 5. Earlier, on 8-12-1977, the Superintendent of Central Excise had taken a view that the transmission and lighting poles manufactured by the appellant were classifiable not under Item 26AA but under Item 68 of the Central Excise Tariff and that, therefore, the appellant was liable to pay duty on all goods manufactured by it from 1-3-1975 till the date of the notice. The appellant was asked to furnish a statement of the goods manufactured and sold earlier and also to file a classified list for the above goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellate Collector. The Tribunal disposed of the appeals on 16-4-1985. It did not agree with the appellant's contention that the goods were dutiable under Tariff Item No. 68. It was, however, of the opinion that the back duty demand should be restricted to a period of six months prior to the issue of the show cause notice dated 8-12-1977 (excluding the period from 26-12-1977 to 16-3-1978). It upheld a demand of Rs. 15,45,217. The appellant filed a rectification application pointing out that the stay had been vacated by the High Court only on 6-10-1982 and this was disposed of by the Tribunal on 12-5-1986. The Tribunal directed the exclusion, from the levy of back duty, of the larger period from 26-12-1977 to 6-10-1982. There was, we are told, another rectification application and an order thereon which is the subject matter of another Special Leave Petition which is not before us today. We shall leave that out of account. 7. These appeals, under Section 35L of the Act, have been preferred against the orders dated 16-4-1985 and 12-5-1986 passed by the Tribunal. 8. We have heard the learned counsel for both parties. We are of the opinion that the appeals have to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, alters the identity of the mother tubes and that the stepped poles or swaged poles, as the case may be, constitute a distinct commercial commodity. In view of this process of manufacture which the tubes undergo, the end product, i.e. poles, no longer falls under the purview of the description of Tariff Item 26AA and hence falls under Item 68 introduced in 1975. 10. The Appellate Collector and Tribunal have endorsed this line of reasoning. The Tribunal observed that the process of manufacture of poles produced by the appellant showed that the goods in question were obtained by heating the steel pipes to a substantial temperature and giving shapes and forms by a series of processes to produce, what were known as, stepped poles and swaged poles. It was, therefore, manifest that the poles have a distinct name, character and use, different from pipes and tubes. In trade parlance also, the Tribunal pointed out, the expressions `pipes' and `tubes' were generally understood as something intended for conveying fluids. It could not be said that the products manufactured by the appellant are pipes or tubes. The products conform to ISI specification of "poles". The Tribunal agreed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the various items set out in the Schedule. It does not and cannot affect the interpretation of the items enumerated in the Schedule. This logic of the Tribunal is, therefore, clearly wrong. 12. The real question, therefore, is whether the goods manufactured by the appellant can be rightly classified under Item 26AA. We think that the answer of this question should be in the affirmative. It is true that there is some difference in the description of the goods. While Item 26AA covers only pipes and tubes, the goods manufactured by the assessee are called poles. It is also true that the poles have to be manufactured by applying certain processes of heating and forging to pipes or tubes. But does all this so change the commercial character of the goods marketed by the assessee as to take them away from the scope of Item 26AA? 13. We think not. The language of Tariff Item No. 26AA is very wide. It covers iron and steel products of the descriptions set out therein. The sum and substance of the descriptions given by the Assistant Collector in the assessment order is only (a) that the poles produced by the appellant are not ordinary pipes and tubes which convey a fluid from one place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21) E.L.T. 3 (S.C.) = [1985 (3) S.C.C. 284] followed and applied in Bharat Forge Press Industries v. C.C.E. - 1990 (45) E.L.T. 525 (S.C.) = (1990-1 S.C.C. 532). 14. However, even assuming that there could have been some doubt as to the intention of the legislation in this regard, the matter is placed beyond all doubt by the Revenue's own consistent interpretation of the item over the years. It has been pointed out that prior to 1-3-1975, residuary Item No. 68 was not in the Schedule. If the Revenue's contention that these poles are not pipes and tubes is correct then they could not have been brought to duty at all before 1-3-1975. But the fact is that transmission poles have been brought to duty between 1962 to 1975, and that could only have been under Item 26AA (for there was no residuary item then). This is indeed proved by the fact that this very assessee was thus assessed intially and also by the issue of notifications of exemption from time to time which proceed on the footing that these poles were assessable to duty under Item 26AA but were entitled to an exemption if certain conditions were fulfilled. Indeed, the assessee also applied for an obtained relief under one of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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