1986 (10) TMI 233 - AT - Central Excise

Summary

Issues:
Interpretation of Central Excise Tariff - Classification of products under Item 33B (ii) - Duty liability on aluminium wires and conductors - Applicability of proforma credit procedure under Rule 56A - Double taxation issue.

Analysis:

The judgment by the Appellate Tribunal CEGAT, New Delhi dealt with a revision show cause notice issued by the Central Government under Section 36(2) of the Central Excises and Salt Act, 1944. The Tribunal was tasked with disposing of the matter as an appeal filed by the department. Despite the respondents not being present, the Tribunal reviewed the written reply to the show cause notice, heard the department's representative, and examined the records. Given a common issue in five appeals, a combined order was made to resolve all cases collectively.

The main issue revolved around the classification of products under the Central Excise Tariff, specifically whether aluminium wires and conductors fell under the same tariff sub-item 33B (ii). The department contended that both products, though related, should attract a two-stage duty - first on wires and then on conductors. The Assistant Collector had confirmed demands for differential duty, which were later set aside by the Appellate Collector citing a relevant judgment. Subsequently, the Central Government sought to overturn the appellate order through the show cause notice.

The Tribunal considered the department's argument, referencing a prior order, but highlighted the absence of evidence indicating that the aluminium wires were fit for use as electric wires and cables. However, the Tribunal opined that even if the wires were distinct products, the proforma credit procedure under Rule 56A applied to both wires and conductors under the same tariff sub-item. Citing a Supreme Court judgment, the Tribunal emphasized that double taxation was impermissible, and any duty paid on wires should be offset against the duty on conductors. Consequently, the respondents were not liable to pay additional duty on wires, as they had already settled the duty on conductors.

In conclusion, the Tribunal dismissed all five appeals and discharged the show cause notice, ruling in favor of the respondents based on the interpretation of the tariff classification, application of proforma credit procedure, and the prohibition against double taxation as established in relevant legal precedents.