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TMI Blog2009 (1) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... s revealed that the petitioners imported the said goods from China containing higher chromium and aluminium content. The said goods were assessed by the customs authorities under Chapter 72 of the Customs Tariff Act, 1975, dealing with iron and steel goods, heading 72.23 as "wire of stainless steel". Accordingly, import duty was levied thereon. The petitioners realised four per cent sales tax applicable to the declared goods on sale of the said goods from its buyers. The assessment was deemed to have been made by the authority for the fourth quarter ended March 31, 1999 under section 46A of the 1994 Act accepting the returns filed on the basis that the said goods are declared goods liable to be assessed at the rate of four per cent. The Deputy Commissioner, Commercial Taxes, reopened the said assessment by an order dated September 20, 2001 on the ground that the goods could not be treated as declared goods and thereby are liable to be assessed under residuary head attracting the higher rate of tax at twelve per cent. Further the case of the petitioners is that in the case of a sister concern of the petitioner, which had also imported the said goods an order was passed by the Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orms including steel skull, turnings and borings; (xi) steel tubes, both welded and seamless, of all diameters and lengths, including tube fittings; (xii) tin-plates, both hot dipped and electrolytic and tinfree plates; (xiii) fish plate bars, bearing plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rail-heavy and light crane rails; (xiv) wheels, tyres, axles and wheel sets; (xv) wire rods and wires-rolled, drawn, galvanized, aluminized, tinned or coated such as by copper; (xvi) defectives, rejects, cuttings or end pieces of any of the above categories." He further drew our attention to serial No. 10 of Schedule IX to the 1994 Act which is reproduced hereunder: "10. All other goods not specified in this Schedule or in any other Schedule." He also contended that since the said goods being the declared goods under section 14 of the 1956 Act, its sales are assessable at the rate of four per cent under serial No. 1 of Schedule VII to the 1994 Act and therefore, the question of assessing the said sale at the rate of twelve per cent under residuary item 10 of Schedule IX of the 1994 Act cannot arise at all. Mr. Bajori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court in number of judgments that burden of proof is on the Revenue in the matter of classification. In Union of India v. Garware Nylons Ltd. [1996] 10 SCC 413, in para 15, this court held as under: '15. In our view, the conclusion reached by the High Court is fully in accord with the decisions of this court and the same is justified in law. The burden of proof is on the taxing authorities to show that the particular case or item in question is taxable in the manner claimed by them. Mere assertion in that regard is of no avail. It has been held by this court that there should be material to enter appropriate finding in that regard and the material may be either oral or documentary. It is for the taxing authority to lay evidence in that behalf even before the first adjudicating authority. . .' 31.. Similarly, in Hindustan Ferodo Ltd. v. Collector of Central Excise, Bombay [1997] 106 STC 214 (SC); [1997] 2 SCC 677, it is held in para 4 as under: (page 217 of STC) 'It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 20 of RC) "17. In Bharat Forge & Press Industries (P.) Ltd. [1992] 84 STC 414; [1990] 1 SCC 532; [1990] 45 ELT 525 (SC) a three-judge Bench of this court held that if a product cannot be brought under the specific entries in the Tariff Act only then resort can be made to a residuary entry. It was held in para 3 as under: (page 415 of STC) '3. The question before us is whether the Department is right in claiming that the items in question are dutiable under tariff entry No. 68. This, as mentioned already, is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item.' 18.. To the same effect is the judgment in Indian Metals and Ferro Alloys Ltd. AIR 1991 SC 1028; [1991] Supp 1 SCC 125. It was observed in para 16 as under: '16. One more aspect of the issue should be adverted to before we conclude. The assessee is relying upon a specific entry i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of this court in Indian Aluminium Cables Ltd. v. Union of India [1987] 64 STC 180; [1985] 3 SCC 284. In that case the question was whether 'properzi rods' manufactured and cleared by the assessee fell within entry 27(a)(ii) of the First Schedule to the Central Excises and Salt Act (1 of 1944). That entry read as follows: 'Aluminium- (a) wire bars, wire roads and castings, not otherwise specified.' It was contended, on behalf of the appellant, inter alia, that, commercially, properzi rods are not known as wire rods in the trade and that a person wanting to purchase properzi rods asks specifically for properzi rods and not for wire rods. Reliance was also placed on the view taken by this court that words and expressions describing an article in a tariff Schedule should be construed in the sense in which they are understood in the trade by the dealer and the consumer. The court held the properzi rods were only a species of wire rods. . . It is true that all pipes and tubes cannot be described as pipe fittings. But it would not be correct to say that pipe fittings are not pipes and tubes. They are only a species of pipes and tubes. . ." He further relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer of trucks, are steel tubes within the meaning of declared goods falling under the Second Schedule, item 4(xi), of the TNGST Act and that the fact that the buyer has used the steel tube supplied by the petitioner as part of chassis/engine by fitting it into such engine/chassis, for use as exhaust pipe, does not in any way alter the basic fact that what is supplied by the petitioner is in fact a steel tube of certain shape and length. . ." Relying on those decisions and the principles laid down by the Supreme Court he submitted that the Department has failed to produce any vidence on behalf of the Revenue in support of their contention that the goods are to be classified under the residuary entry and are declared goods. On the contrary, the petitioner had adduced evidence by way of invoices of the foreign suppliers, the bills of entry of the customs authority assessing import duties and its own invoices showing that the goods were assessed and dealt with as wire of stainless steel and tax was realized by the petitioner as declared goods. He further submitted that before the Tribunal he relied upon a decision of the sales tax authorities of Delhi treating the said goods as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inless steel wire resistance melts first when the circuit is heated and this ensures the safety of the circuit. She further pointed out that the Legislature does not classify commodities on the basis of scientific or technical reasons. She further drew our attention to Schedule IX of the Act and submitted that the existence of Schedule IX precludes any doubt about the rate of taxation of stainless steel wire resistance. She further pointed out that the petitioners themselves filed their returns for the period of 1997-98 treating the stainless steel wire resistance as a commodity mentioned in Schedule IX of the West Bengal Sales Tax Act, 1994 which is liable to tax under section 17(1)(h) of the said Act. But subsequent thereto, for the assessment year 1998-99, the petitioner has made out a new case that stainless steel wire resistance was an item enumerated in section 14 of the Central Sales Tax ct, 1956 and she further contended that the stainless steel wire resistance as declared goods. Therefore, admittedly the petitioners themselves earlier took a plea that the stainless steel wire resistance is not a declared goods and after an order the petitioner now tried to make out a new c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, it appears to us that the resistance which is also made out of the wire rods or wires-rolled or even put it with coated with copper treating it as a resistance, then there would not be any difficulty to treat the same under the declared goods. In the instant case, it appears to us that even the court held in the said decision as follows: (page 7 of 86 STC) "Para 14. Our first endeavour will be to find out the meaning to be attached to the words 'iron and steel, that is to say'. We will refer to the meaning given by the Indian Standard (IS: 1956-1962) Glossary of Terms relating to Iron and Steel, which is relevant for our purpose: '2.10. Alloy.-A metallic substance consisting of two or more elements, one of which at least is a metal. It is generally obtained by melting together the constituent elements. 2.12. Alloy steel.-A steel containing one or more alloying elements as a result of which it develops specific characteristics. 2.347. Stainless steel.-An alloy steel containing about twelve per cent or over of chromium with or without nickel together with other elements and is characterized by its high resistance to corrosive media. 3.143. Steel.-An iron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e per cent nitric acid, five per cent restrainer and 55 per cent water. See also "chromium oxide scale". Wire-rod: Produced from a steel billet by passing, when hot, through a series of rolls by which it is reduced in cross-sectional area and consequently elongated to form a coil; it is the semi-finished product from which wire is made, and is generally about 5 S. W.G. (0.212 inch) to 9.16 inch diameter. The higher alloy and stainless qualities are rolled in semi-continuous mills, but qualities up to at least 0.50 per cent carbon are regularly rolled in continuous mills, the latest mills having four strands and weekly output of over 7,000 tons, at finishing speeds up to 8,500 ft. min. on 0.212 inch rod, producing coils of 1,000 lb.' We will then refer to Indian Standard-Classification of Steel. The relevant portion for our purpose is as follows: '2. Definition of steel. 2.1 For the purpose of classification, steel is an iron base alloy generally suitable for working to the required shape in the solid state having a carbon content generally less than 1.5 per cent and containing varying amounts of other elements. A limited number of high alloyed steels may have more then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the product. In Government statistics, alloy steel figures relate to steel, other than high-speed steel, containing any of the elements named below and in the quantities indicated: Choromium or nickel 0.4 per cent or more, Mo, W or V.C. one per cent or more, Mn ten per cent or more. Stainless steel. A corrosion-resistant type of alloy steel which contains a minimum of 12 per cent chromium. The latter is the element which confers upon the steel its property of resisting attack by the atmosphere or by a number of chemical reagents. The effect is attributed to the ability of chromium to form a thin, but very tenacious, film of oxide at the surface of the alloy which resists attack by most oxidizing agents. The resistance to corrosive attack is enhanced if nickel be added, and is further improved by small additions of molybdenum and copper. There are three main classes of stainless steels. Wire. A term somewhat difficult to define precisely. It refers to slender rod-like products. The cross-section of a wire is usually circular but not exclusively so. The method of manufacture is to draw wire bars or rods through successively smaller dies. The finer wires are reeled and the heav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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