TMI Blog2002 (8) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) held that the correct classification of rock wool would be under Chapter heading 6803 with the following observations : "The Rockwool, slagwool and product thereof manufactured would be classifiable under Chapter sub-heading No. 6803.00 of the Central Excise Tariff Act, 1985 as the description of the product Rockwool/Slagwool/ Mineral wool are specifically mentioned in the sub-heading No. 6803.00 despite the fact that they contain blast furnace slag more than 25% by weight. As per Rule 3(a) of the Rules of Interpretation of the Central Excise Tariff Act lays down that the heading which provide a more specific description shall be preferred to heading providing general description. The description of Chapter sub-heading No. 6803.00 provides more specific description of the product 'Rockwool and Slagwool' as compared to the description under chapter sub-heading 6807.10 and therefore, I hold that the Rockwool, Slagwool and its products are classifiable under 6803.00 liable to appropriate duty. The Board vide Circular No. 387/24/2001/CX., dated 17-9-2001 has also issued clarification on the same lines." 3. The present appeal is directed against the order of the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular No. 587/24/2001-C.E., dated 17-9-2001 stating that Board has accepted the recommendation of the conference of Chief Commissioners that goods known/marketed as slagwool, rockwool and similar mineral wool, even though containing more than 25% by weight of blast furnace slag, etc. will appropriately be classifiable under Heading 68.03." 5. The contending headings for classification of the appellant's products (6803 and 6807) occur in Chapter 68, which is for "articles of stone, plaster, cement, asbestos, mica or of similar materials." Headings 6803 and 6807 under this Chapter are reproduced below for ease of reference and discussion :- Heading No. Sub-heading No. Description of goods Rate of duty (1) (2) (3) (4) 6803 6803.00 Slagwool, rockwool and similar mineral wools. 18% 6807 Goods, in which more than 25% by weight of red mud, press mud or blast furnace slag or one or more of these materials, have been used; all other articles of stone, plaster, cement, asbestos, mica or of similar materials, not elsewhere specified or included. 6807.10 Goods, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 156 of Notification No. 4/97-C.E., dated 1-3-97 refer)". [RLT-1997 (Vol. 19) M 84]. 7. Sl. No. 68.4 of Notification No. 8/96 referred to under 50.2 in the Explanatory Note above related to "Goods, in which more than 25% by weight of one or more of the following materials have been used :- (i) Red mud, (ii) Press mud, or (iii) Blast furnace slag". Budgetary (1977) policy is, thus, clear. Full exemption for goods of blast furnace slag etc. is replaced by lower tariff rate at 8%. 8. Full or partial exemption from Central Excise duty to goods produced from non-conventional raw materials or waste/polluting materials is part of taxation policy. Notification No. 38/93, dated 28-2-93 gave full exemption to goods falling under Chapter 68 of the Schedule to Central Excise Tariff Act, 1985 in which not less than 25% by weight of fly-ash or phospho-gypsum or both have been used. This scheme is to be noticed in the case of partial exemption under Notification 36/93, dated 28-2-93 in respect of Rice Husk Board, Glass-fibre Reinforced Gypsum Board (GRG) etc. and paper, paper board made out of non-conventional raw materials 50.3. Exemption for goods of blast furnace slags etc. is part of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... known/marketed as slagwool, rock- wool and similar mineral wool even though containing more than 25% by weight of blast furnace slag, etc. will appropriately be classifiable under Heading 68.03. 4. The field formations may suitably be informed. 5. Receipt of this Circular may please be acknowledged. 6. Hindi version will follow." 10. The foregoing circular of the Board has been followed by the Commissioner while passing the impugned order. Therefore, the issue raised in the present appeal is the correctness of the circular. As would be seen from Para 2 of the Circular, what prevailed with the Conference in reaching the view that Heading 68.03 is the proper heading for classification is that "goods were marketed as slag wool, rock wool in bulk of sheets", even as the Conference noted that "the goods may get covered under Heading 6803 and as also under Heading 6807". Classification under Heading 6803 was preferred, for the further reason that that heading was "more specific" for the product in question. Thus, it is clear that the conference was going by Rule 3(a) of Rules for interpretation of Central Excise Tariff Act. 11. It may be noted here that as against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant submits that the goods could be classified according to the terms of Heading 6807 itself. That heading covers "goods" in which more than 25% by weight of red mud, press mud or blast furnace slag or one or more of this material have been used. This is heading based entirely on material used, or composition of the goods. And the only specification is the percentage presence of red mud, press mud or blast furnace slag. There is no contention, and there could be none, that composition of the goods is unknown or cannot be ascertained and, therefore, classification cannot be determined in accordance with the heading. It cannot also be argued that the heading is not specific because stipulating composition is no way of specifying goods. Therefore, we are in agreement with the appellant that there is no basis for holding that Heading 6807 is not specific and no classification is possible under that heading. A tariff heading based on composition of goods is not any less specific than a heading based on commercial nomenclature. True, normally classification follows the commercial identity of the goods. However, this is valid only when the tariff adopts terms from commerce as the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le percentage of red mud, blast furnace slag etc. This intention is clear from Notification No. 36/93 and Notification No. 8/96. All that happened with the recasting of Chapter heading 68 in the Budget of 97 was to incorporate a heading for the goods which hither to enjoyed exemption under various exemption Notifications. This is specifically stated in the Explanatory Notes to the Budget of 1997, which has been reproduced earlier in this order. It bears repetition that an interpretation, which goes against the stated legislative policy is to be avoided. Since the interpretation contained in Circular No. 587/24/2001-CX, dated 17-9-2001 of the Board runs contrary to the legislated policy, the same has to be held as bad. 16. This brings us to the question of the binding nature of Circulars. It is now well settled that circulars issued by the Central Board of Excise and Customs are binding on the Revenue Authorities. However, assessees are at liberty to challenge the Circulars as has been done in the present case. In fact, the present is a case where a Circular of the CBEC is contrary to the Explanatory Notes to the budget of 1997. Can such a Circular be upheld ? The re-casting of Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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