TMI Blog1999 (3) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing S.S. Castings falling under T.I. 25 (16)(ii) and subjecting them to further machining to obtain identifiable machine parts. The process of manufacture in the factory is that by melting scrap with other materials in the electric arc furnace is poured into mould to solidify in the form of a ring. After removing the crudeness of castings by rough machining, the rings are entered in R.G. 1 register as production of S.S. Castings on an average weight of 30 kgs per ring. After this, the rings are further machined and cut into 2 or 3 pieces of required sizes of 8" x 2", 81/4 x 2", 81/2 x 2", 2"x 4" and 61/4 x 3" as per requirements of their customers. The new product was called CTC segment and used in tea gardens for cutting, turning and curling of tea leaves. The department alleged that the appellants were clearing the castings under T.I. 25 (16)(ii) and thereafter processing them into CTC segments under T.I. 68 of the erstwhile Central Excise Tariff. It was alleged that the appellants were required to remove the castings on payment of duty as casting before using them captively in the manufacture or CTC segments and that the duty was required to be paid on the clearance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which can be used for utensils cannot be identifiable as machine parts. They cited the decision of the Government of India reported in 1982 (12) E.L.T. 607. In this case, it was held that if the goods were classifiable under 26AA for long time, they could not be taken out of that item and to be under T.I. 68 merely because T.I. 68 was inserted in 1975 when the impugned goods did not change the character. It was contended by the appellants that the goods were cleared by them under T.I. 25(16)(ii) and, therefore they could not be taken out from that heading to be classified under T.I. 68. After considering the submissions made, the Collector (Appeals) held as indicated above. 4. Shri B.B. Gujral, ld. Advocate submitted that the goods cleared by the appellants were S.S. Castings and had not acquired identifiable shape as machine parts (CTC). He submitted that the department had not conducted any enquiry to prove that the goods had reached the stage as to be identifiable as machine parts. He submitted that classification lists were submitted declaring the goods as S.S. Castings; that Classification List No. 2/83 was approved wherein the goods were claimed to be S.S. Castings; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers also. He cited the decision of Shri P.C. Jha, Deputy Collector observing that even after enquiries made on the subject product from the Shillong and Calcutta Collectorates, the classification of the product was not changed which was classified under T.I. 26AA or 25(16)(ii) and held that in the case there was no suppression. Ld. Counsel referred to the decision of another Deputy Collector, Shri B.S. Ganu wo in his order observed that the product was neither machined castings nor could it said to be CTC segments and that it was machined casting which had not become machine part. He, therefore submitted that from the above two decisions it was bonafide belief that the goods discribed by them as CTC segments or S.S. Castings were classifiable under T.I. 26AA or T.I. 25(16)(ii) as it then was. He also referred to the jurisdiction issue stating that the courts have consistently held that once the matter is before the appellate authority, it is the decision of the appellate authority that would prevail over all other decisions in the matter. In the instant case, this aspect was completely ignored. In support of this contention, he cited and relied upon the decision of the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SCN the allegation was regarding wrong description of goods in GP-1. We have perused the show cause notice. We find that the allegation is only for the purpose of showing that the appellants suppressed the fact that the goods were CTC segments. The Collector while deciding the issue has in addition held that the appellants were showing the description of goods as S.S. Castings (CTC segments) till 16-1-1979 but they deleted this expression CTC segments subsequently. This is an additional fact with an intention to show that the appellants tried to suppress the fact that the appellants were trying to mislead the authority by not correctly describing the goods. This cannot be termed as travelled beyond the SCN . The allegation was correctly described that correct description was not given in the GP-1 which is further supported that the correct description was not given in the classification list filed after 17-1-1979. 8. The second contention of the appellants was that the classification lists were approved. However, we find that the classification list No. 2/83, dated 1-2-1983 was provisionally approved first and when finally approved, it was reviewed by the Collector and then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the former with the latter. Before an article must be considered to have the essential character of the parts, it must, at least, lose the character of castings and must go beyond the stage of castings. In other words, an article, to have an essential character of a machine part must at least fall in between the proof-machined casting stage and the machine part itself ready for use. To what extent an article must go beyond the stage of casting so that it can be said to have the essential character of the machine part will depend upon the facts and circumstances of each case, the extent and nature of machining undertaken by the manufacturer and the extent and nature of machining required to be undertaken by the customer to convert it into a machine part ready for use. This question which does not fall for consideration here in these cases. It is admitted by both sides that the goods in question are castings - raw or unmachined or proof-machined - still having excess metal for machining according to the requirement in order to achieve the required size to make an essential part of a particular machinery. Thus subsequent machining is either done by the customer at his wor ..... 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