2009 (2) TMI 582 - AT - Central Excise

Summary

Issues: Classification of manufactured blanks under Central Excise Tariff Act, 1985

Analysis:
1. Issue: Classification of manufactured blanks under Chapter 87.

Analysis: The applicant procures coils of iron & steel and manufactures blanks supplied to motor vehicle manufacturers. The Department classified the blanks under Chapter 87, imposing duty and penalty. The advocate argues that the blanks are not usable as vehicle components until further manufacturing by the recipients. The Tribunal notes that the blanks, although meant for specific components, are industrial intermediate products and have not reached the stage for Chapter 87 classification. The duty paid was available as Cenvat credit to the recipients, implying a potential double classification issue.

2. Issue: Application of Section Note 6 of Section XVII of Central Excise Tariff Act, 1985.

Analysis: The Department applied Section Note 6 to classify the blanks under Chapter 87. The advocate contends that the blanks, specified as "Blanks" in invoices, are not yet components of motor vehicles. The Tribunal considers the condition in which the blanks are removed from the factory and whether they have reached the stage for Chapter 87 classification. The Tribunal finds that the blanks are industrial intermediate products and not yet components, supporting the applicant's case.

3. Issue: Invocation of extended period for duty demand.

Analysis: The Department invoked the extended period for duty demand due to alleged lack of details on the blanks. The Tribunal, however, finds the applicant's case meritorious and unjustified for the extended period invocation. Consequently, the Tribunal waives pre-deposit of dues and stays recovery pending appeal disposal, indicating a favorable stance towards the applicant.

In conclusion, the Tribunal ruled in favor of the applicant, determining that the manufactured blanks, although intended for specific components, were industrial intermediate products not yet classified under Chapter 87. The Tribunal highlighted the availability of Cenvat credit to recipient units and the potential implications of double classification. The decision also addressed the invocation of the extended period for duty demand, ultimately waiving pre-deposit of dues pending appeal disposal.