TMI Blog2023 (2) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... g 0.2 mm nor a finding that the same is part of a structure or prepared for use in structures to come to a conclusion that it falls under Heading 7610. Nowhere the Tribunal has distinguished the opinions published by the Worlds Customs Organization. It was necessary for the Tribunal to consider the submissions made on behalf of the Appellants as well as the Respondent Revenue and give factual findings with detailed reasoning before confirming the orders of the Commissioner and dismissing the Appeals. The Tribunal is the last fact finding authority and is expected to come to a conclusion of a product under a Heading after a detailed factual analysis of the product in question and not merely on the basis of judgments cited before it - the Tribunal ought to have independently come to a conclusion after considering and exhaustively dealing with the material furnished by the Appellants. The matters are remanded back to the Tribunal - appeal disposed off. - DHIRAJ SINGH THAKUR AND ABHAY AHUJA, JJ. For the Appellant : Mr. V. Sridharan, Senior Advocate alongwith Mr. Sahil Parghi and Mr. S. Sriram i/by Mr. C.B. Thakur, Advocates in MVXA/56/2017. For the Appellant : Mr. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, No. VAT-1505/CR-113/Taxation-1 dated 1st April, 2005, the Government of Maharashtra hereby, specifies the following goods more particularly described in the Schedule appended hereto, to be the aluminium, its alloys and products for the purposes of the said entry 6, namely:- SCHEDULE Aluminium, its alloys and products covered from time to time, under the heading, listed below of the Central Excise Tariff Act, 1985 (5 of 1986):- Sr.No. Central Excise Tariff Heading Name of the Commodity (1) (2) (3) 6 7606 Aluminium plates, sheets (including circles) and strips, of a thickness exceeding 0.2 mm Note.-(1) The Rules for the interpretation of the provisions of the Central Excise Tariff Act, 1985 read with the Explanatory Notes as updated from time to time published by the Customs Co-operation Council, Brussels apply for th interpretation of this notification. Note.-(2) Where any commodities are described against any heading or, as the case may be, sub-headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order is reproduced as under:- a. The product Aluminium composite Panel is not covered under the Central Excise Tariff Heading 7606 and therefore, not covered by the notification issued for the purposes of the schedule entry C-6 of the Maharashtra Value Added Tax Act, 2002. b. The rate of tax applicable to the product is 12.5 % being covered by the schedule entry E-1 under the Maharashtra Value Added Tax Act, 2002. c. For reasons as discussed in the body of the order, the request for prospective effect is rejected. 9. The order of the Commissioner was challenged by the appellants before the Tribunal in three different appeals registered as VAT appeals bearing Nos. 278 of 2015, 279 of 2015 and 280 of 2015 respectively. Before the Tribunal, the appellants raised an alternative contention, that if ACP is not covered by CET Heading 7606, then it would fall within the purview of CET Heading 3920. Statedly, the alternative contention that ACP would fall under Heading 3920 has been given up by the Appellants in the Appeals before us. 10. By common order dated 27 February 2017, the Tribunal dismissed the appeals filed by appellants and confirmed the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains the description of ACP, the various sizes in which the same is manufactured and sold/used, its essential characteristics as well as the end predominant use. 15. While the Appellants have argued that the products that they have sold are aluminium plates, sheets of a thickness exceeding 0.2 mm and therefore to be classified under the Heading 7606, the Revenue argues that these are either parts of structures or prepared for use in structures considering the technical manual and the scope of application mentioned therein and would fall under the Heading 7610. 16. The Tribunal, as mentioned earlier, has passed a common judgment. As the issue with respect to Heading 3920 has been statedly not pressed, the relevant portion of the Tribunal order which is germane to our discussion is quoted as under : 33. Lastly, we must also consider alternate argument of the appellants that their product falls under CET Heading 7606, if not under residuary sub-heading 3920 as claimed above. So far as this argument is concerned, Mr. Thakar, the learned Advocate, has relied upon the observations in the case of Commissioner of Customs (Import), Chennai V/s. ICP India Ltd. reported in 2012 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance to the structure from outside. Therefore, it is not a part of the structure. It was contended by him that if the item were intended to be used in the structure, it would have certain additional indications such as holes for fitting screws, holes for fixing hinges etc. No such provision is made in it, and therefore, the item cannot be said to be manufactured for the use as a part of the structure. 35. The essential characteristics of the product are required to be taken into consideration, while ascertaining appropriate Heading for taxing the commodity. In the case of Rana Enterprises, identical material was under consideration. In that case, also no extra work has been done on the panels which would have indicated that material was meant for use as a part of the structure. Still the CESTAT observed that the essential characteristics of the product were indicating that the same was meant for the use of giving better look to the structure from the outside. Since there is absolutely no difference between the description in the item before us and description in the item that was before the CESTAT for consideration, we are not inclined to take a different view. 36. Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding in the regulation 2(3)(11) of DCR is misplaced and would not assist the applicant in any manner. The definition is in the context and purposes of DCR and cannot be imported and applied in the facts and circumstances of the present case . 37. We fail to understand as to how this judgment is relevant for ascertaining if the item of the appellant falls within the purview of CET Heading 7606. In our considered opinion, this judgment is absolutely not useful for resolving the controversy before us arising for adjudication. 38. Mr. Thakar, strongly relied upon the opinion expressed by Harmonized System Committee, World Customs Organization, Brussels. He placed reliance on Volume published by the Committee in the year 2002 for the relevant periods 1998-1999 and 1999-2000. He invited our attention to entry No. 327 on page no. 140. The entry reads as follows:- DESCRIPTION OF GOODS HS HEADINGS UNDER CONSIDERATION CLASSIFICATION DECISION CLASSIFICATION RATIONALE AND OBSERVATIONS RELEVANT DOCUMENTS DECISION ON TAKEN CLASSIFICATION OPIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the high-powered body to ascertain International practice of classification of a particular product referred to it and recommends to the member nations the most appropriate classification of the product under HSN. We also find force in the submission made by the petitioner that opinion of Harmonized Systems Committee has lot of weight and the same should ordinarily be taken as binding. As its very name suggests, that the committee is constituted to harmonize the conflicting interpretations of the entries in the excise statutes, descriptions of various products and their formulae, in the member countries with a view to bring uniformity in taxation in international trade. 40. If ratio of this judgment is applied in the instant case at hand, following facts are emerging. In the cited case, the issue for consideration before the Delhi High Court was about the classification of Nycil Prickly Heat Powder i.e. whether it falls under Heading 30.03 as drug or it falls under Heading 33.04 of the CET as a cosmetic. It was brought to the notice of Delhi High Court that somewhat similar product manufactured by Jonson and Johnson Ltd. was held to be a product falling under CET Heading 33.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady mentioned in this judgment, we think that we need not refer to the opinions of lawyers produced by the appellant on record. We have demonstrated how the Item Entry No. 327 by Harmonized Systems Committee is different from the item of the appellant. 43. Mr. Thakar, during the course of his argument, heavily relied upon the Notification no. 71 of 2009- Customs issued by the Government of India, Ministry of Finance (Department of Revenue), New Delhi dt. 19th June, 2009. By this Notification, provisional safeguard duty on import of Aluminum Flat Rolled Products falling under heading 7606 was imposed, excluding aluminum composite panels. By placing reliance of this notification, attempt was made to contend that this notification shows that Central Government has classified ACP under 7606. While replying this contention, Ms. Naira brought to our notice paragraph 66 of the notification which reads as follows:- 66. It has been contended by some of the interested parties that at some places Aluminum Composite Panels are being classified under 7606 and thus the same also be excluded. On verification, it was found that Aluminum Composite Panels are not manufactured by Hinda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. 49. The Appellant has placed reliance upon the judgment in the case of State of Maharashtra vs. Bradma of India Ltd. reported in 140 STC 17 decided on 16th February 2005, wherein it was held that specific entry overrides general entry and specific entry always prevails. After applying the above said ratio, in our consideration, Central Excise Tariff Heading 7610 is more specific entry than Central Excise Tariff Heading 7606. Central Excise Tariff Heading 7606 generally speaks about the plastic material, whereas CET Heading 7610 specifically speaks about part of the structure. 50. Mr. Thakar also placed reliance on Bharat Forge Press Industries (P) Ltd. reported in 84 STC 414 (SC) decided on 16th January, 1990. We have carefully gone through the facts of this case. The Appellants were engaged in manufacturing pipe fittings; cutting it into different sizes. They were giving them shapes and they used to turn them into pipe fittings in their factories by heating in a furnace at temperature between 65 degrees Centigrade and 900 degrees Centigrade hammering and pressing. According to Revenue, the Appellants were bringing a new product into existence, and as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. We have dealt with the relevant judgments. We have referred them and we have expressed our opinion about their relevance and probative value. 53. Lastly Mr. Thakar contended before us that initially the Appellant was assessed and the product of the Appellant was held falling within purview of Central Excise Tariff Heading 7606 for levy of tax at concessional rate. Specifically the assessment order was confirmed in first Appeal by the First Appellate Authority. Thereafter there was visit of officers of Investigation Branch. They suggested the Appellant to make reference to the Commissioner of Sales Tax for correct classification of his product and accordingly, the Appellant was constrained to apply for classification U/s.56(1) (e) of the MVAT Act. In view of this fact, considering the decision given by the Commissioner of Sales Tax, the Appellant may be protected and he should be assessed for concessional rate of tax as per the notification dt. 1st June, 2005 issued under Schedule Entry C-I of the MVAT Act. In support of the contention, Mr. Thakar strongly relied upon the judgment of Gujrat VAT Tribunal in the case of M/s. Umiya Flexifoam Pvt. Ltd. V/s. The State of G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant is entitled to claim protection till date of determination order. Further, it would be profitable to see the observations of the Hon'ble Bombay High Court in the case of Lalbaugcha Raja Sarwajanic Ganeshotsav Mandal (MVAT Tax Appeal No.10 of 2015), wherein prospective effect was claimed. The Court observed as under : 10. On plain reading of both the sub-sections (1) and (2) of Section 56, it is apparent that the Commissioner may direct that the determination shall not affect the liability under the MVAT Act of the applicant or if the circumstances so warrant, of any other persona similarly situated, as respects any sale or purchase effected prior to a determination. Therefore, this is not a mandate but a discretionary power vested in the Commissioner. This discretionary power has to be exercised and while exercising it, the Commissioner, has to be guided by certain inbuilt checks and safeguards. He cannot in the garb of giving relief of the nature contemplated by sub-section (2) totally wipe out the liability of any and every dealer. 11. The Commissioner is expected to exercise this discretionary power so as not to defeat the law or render its provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to have laid any binding precedent. Whether to grant prospective effect or not is a discretion vested in the Commissioner of Sales Tax and the same is required to be used judiciously. In our considered opinion, there is no reason to interfere with this discretionary power of the Commissioner of Sales Tax unless there are pressing reasons such as legal ambiguity in the interpretation of the entry or statutory misguidance. There is no such case. The prospective effect can t be granted on the ground that some other importers/ traders also paid tax @ 4% or 5%. Whether the revenue has regarded the item @ 4% or 5% is relevant to grant prospective effect, and not what other importers / traders have done. It is clear that Appeal orders in the case of Appellant M/s. Kevin Impex Pvt. Ltd. are revised by the appropriate Authorities. Therefore, it is clear that revenue has not regarded ACPs taxable @ 4% or 5% as the case may be. In view of this, we hold that the Commissioner of Sales Tax has rightly rejected the request of the Appellant to grant prospective effect. Therefore, we pass the following order : ORDER VAT Appeals Nos.278, 279 and 280 of 2015 are dismissed. Reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embling metal structural elements of round cross-section (tubular or other). These devices usually have protuberances with tapped holes in which screws are inserted, at the time of assembly, to fix the clamps to the tubing. The heading also covers parts such as flat-rolled products, wide flats including so-called universal plates, strip, rods, angles, shapes, sections and tubes, which have been prepared (e.g., drilled, bent or notched) for use in structures. 20. It is submitted that the items covered are those which are essentially prepared for use in structures in such form and therefore Heading 7610 covers goods that are specifically prepared for use in structures by undertaking further processes such as drilling, bending, notching etc. Without such processes, such items cannot be covered under Heading 7610. That could be the meaning of specifically prepared for use in structures. Unless the processes as above are performed on the products and such products are cleared with standard sizes, then such products will not fall under the Heading 7610. Therefore, the carrying out of any of these processes before clearing from the factory is a must in order to classify such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct i.e. cut to size aluminium profiles (not Sheets) were imported as per the specifications requested for by the customer. All that was to be done at the site was to assemble it by drilling and punching. The Tribunal held that cut-to-size aluminium profiles imported by the assessee met the exact specific requirement i.e. cut-to-size and hence, was prepared for use in structure. 25. That, further, in the case of D M Building Products Pvt. Ltd. vs. Commissioner of Customs, Bangalore, the article in question was Aluminium Profiles , which is specifically mentioned in Heading 7610 under plates, rods, profiles, tubes and the like, prepared for use in structure , whereas, Sheets are not. Though Heading 7606 covers aluminium plates, sheets and strips, of a thickness exceeding 0.2 mm, Heading 7610 contains no reference to sheets and strips . 26. Further it is submitted that the expression parts of structures is not the same as parts for general use. The same has to be understood as per the HSN Explanatory Note to Heading 7610 where such expressions appear, applies mutatis mutandis to Explanatory Note to Heading 7608. 27. Therefore, for a product to be covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctures . 35. Ms. Jejeebhoy, learned Special Counsel for the Revenue supports the MSTT judgment and submits that the question of classification is a question of law and requires consideration of this Court. 36. Learned Special Counsel relies upon the Technical Manual described as Eurobond Manual to submit that none of the Appellants raised any objection to the said Manual before the Tribunal. She further submits that as can be seen from the Manual, which she submits is not advertising material, that the subject product is not being sold in running length sheets or coils but in fact is being subjected to processes such as coating and cutting to desired size so as to prepare it for use as part of a structure. 37. Learned Special Counsel would submit that the Appellants DDQ annexed a note of manufacturing process of the ACP and the Appellants have admitted that the product has aluminium coated coils, that the final ACP is trimmed and cut to the desired sizes and that the composite sheets are eventually laminated with protection film on the top. All this, learned Special Counsel submits, is further elucidated in the Technical Manual on record. She would submit that before using ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding factor is the predominant or ordinary purpose or use and it would not be enough to show that the article can be put to other uses also. It is its general or predominant user which determined the category in which an article would fall. Learned Special Counsel refers to the decision of the Hon ble Apex Court in the case of M/s. Annapurna Carbon Industries Co. vs. State of Andhra Pradesh (1976) 2 SCC 273. 40. Learned Special Counsel would submit that considering the predominant use of the product as can be seen from the Manual, the Heading 7610 which refers to the use of the product as part of a structure or prepared for use in a structure, and therefore, the usage cannot be ignored. 41. Referring to the decision of the Lahore High Court in the case of Md. Umar vs. Fayazuddin AIR 1924 Lah 172, the learned Special Counsel draws our attention to paragraph 3 thereof as under : 3. ... The word building or structure is not defined in the Act but it may be stated that every building is a structure though every structure is not a building and the word structure can be applied to a wall or shed or any other unsubstantial erection for which the word building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual and website of 4Mann Industries Pvt. Ltd. bear out that the ACP is trimmed / cut to the desired size before sale. 45. With respect to the Appellants reliance upon the Explanatory Note to HS Heading 7308 to contend that the word prepared means drilled, bent or notched learned special Counsel would submit that these are merely examples of means of preparation. This is not an exhaustive definition of the word prepared nor does the listing of such examples preclude other means of preparation from bringing a product within the purview of CETH 7610. In the case of ACP, the preparation has taken place by coating the ACP for external use and/or cutting it to the requisite size. This, learned Special Counsel submits, is further borne out by Department Clarifications by which such flat rolled products of aluminium subjected to a process like trimming for being used as building materials are parts of structures and fall within heading 7610. 46. Learned Special Counsel further submits that the mere fact that there may be some further drilling or size adjustment at the site would not change the essential character of the product and it would still be classifiable under CETH 7610. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmit that there is no reasoning given to distinguish the opinions of the Worlds Customs Organisation as cited on behalf of the Appellants, except paragraph 41. 49. We observe from the impugned decision that although many of the arguments with respect to the two Headings 7606 and 7610 have been recorded by the Tribunal and undoubtedly, classification of a product would be a question of law, the factual findings as to whether the subject ACP was prepared for use in structure or part of structure which was a critical finding, which the MSTT appears to have missed out. Except paragraph 41, the learned Tribunal has failed to give any finding with respect to subject ACP in the context of the product description, its manufacture, its end use, the various principles including essential characteristics as well as the predominant use. There is no finding as to whether the subject aluminium panel is not a aluminum plate or sheet or a strip of thickness exceeding 0.2 mm nor a finding that the same is part of a structure or prepared for use in structures to come to a conclusion that it falls under Heading 7610. Nowhere the Tribunal has distinguished the opinions published by the Worlds Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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