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PETITIONER: INDIAN METALS AND FERRO ALLOYS LTD. CUTTACK

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR

DATE OF JUDGMENT22/11/1990

BENCH: RANGNATHAN, S. BENCH: RANGNATHAN, S. RAMASWAMY, K.

CITATION:  1991 AIR 1028            1990 SCR  Supl. (3) 329  1991 SCC  Supl.  (1) 125 JT 1990 (4)   763  1990 SCALE  (2)1109

ACT:      Central Excises and Salt Act, 1944--Section 3 and  First Schedule  Item Nos. 26AA and  68--Assessee--Manufacturer  of pipes,  tubes and poles of iron and steel--assessability  to excise duty--Whether under Item 26AA or 68.

HEADNOTE:     The  appellant  is a manufacturer of  pipes,  tubes  and poles  made  of  iron and steel. Tariff Item  No.  26AA  was introduced  w.e.f.  24.4.1962 in the First Schedule  to  the Central Excises and Salt Act, according to which, the appel- lant paid the excise duty. Thereafter the Government  issued a notification dated 1.3.1963, whereby ’telegraph, telephone and  electric lighting and transmission poles falling  under Item  26AA"  were exempted from payment of duty  subject  to certain  conditions.  The  appellant having  paid  the  duty earlier,  applied  for the refund on  10.5.1963  and  sought permission  to clear the goods without payment of duty.  The Assistant Collector rejected the said request on the  ground that conditions prescribed in the notification had not  been ï7 3 before  the  Collector of Central Excise who held  that  the goods in question were eligible for the exemption  contained in the notification. As a consequence thereof, the appellant paid  no duty on the goods and cleared the goods  from  1962 till  1975. On 1.3.1975, the Legislature  introduced  Tariff Item No. 68 in the First Schedule to the’ Act covering goods not  elsewhere  prescribed. Even  thereafter  the  appellant filed  classification  lists showing the  poles  as  falling under  Item 26AA and those lists were duly approved and  the appellant cleared its goods without paying duty till  August 1982.  Earlier on 8.12.1977, the Superintendent  of  Central Excise  had taken a view that the transmission and  lighting poles  were classifiable not under Item 26AA but under  Item 68. The appellant was accordingly asked to furnish a  state- ment of the goods manufactured and sold earlier and to  file a  classified list. The appellant objected  contending  that the poles were covered by Tariff 26AA and it was entitled to exemption. The Revenue did not accept that contention where- upon  the  appellant filed a writ petition before  the  High Court  challenging the communication dated  26.12.1977.  The

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appellant received a further letter on 6.11.1981 whereby  it was required to pay duty under Item No. 68 in regard to 330 ’swaged  poles" also. The appellant challenged  this  letter also by means of a writ petition before the High Court.  The High  Court  declined  to interfere  with  the  adjudication proceedings  and dismissed the writ petitions  by  directing that  the  adjudication  be made  within  three  months.  On 31.3.83 the Assistant Collector passed an order holding  the goods  classifiable under Item 68. The  Appellate  Collector affirmed the order of the Assistant Collector. Both  parties preferred  appeals before the Central Excise and Gold  (Con- trol)  Appellate Tribunal. The Tribunal lid not  agree  with the contention of the Appellant that the goods were dutiable under  Tariff Item No. 26AA. It however gave certain  direc- tions restricting the levy of excise duty periodwise.  Hence these appeals by the appellant under Section 35L of the Act. Allowing the appeals, this Court,     HELD: There is some difference in the description of the goods.  While  item 26AA covers only pipes  and  tubes,  the goods  manufactured by the assessee are called poles. It  is also true that the poles have to be manufactured by applying certain processes of heating and forging to pipes or  tubes. But all this does not so change the commercial character  of the  goods as to take them away from the scope of  item  No. 26AA. [336C-D]     The  language of tariff item No. 26AA is very  wide.  It covers  iron and steel products of the description  set  out ï7 3     Unless  the department can establish that the  goods  in question  can,  by no conceivable process of  reasoning,  be brought  under  any of the specific items mentioned  in  the tariff, resort cannot be had to the residuary item. [339E]     The  appellant’s contention that the goods  in  question fall under Item 26AA is well rounded and the Revenue was not justified  in attempting to levy duty on the basis that  the goods fall under Tariff Item No. 68. [334G-H]     Indian Aluminium Cables Ltd. v. Union, [1985] 3 SCC 284; Bharat  Forge and Press Industries v. C.C.E., [1990]  1  SCC 532;  Varghese v. I.T.O., [1982] 1 SCR 629; State  of  Tamil Nadu  v.  Mahi Traders, [1989] 1 SCR 445; C.C.E.  v.  Andhra Sugar  Ltd.,  [1989]  (Supp.) 1, SCC 144  and  Collector  of Central Excise v. Parle Exports P. Ltd.,  [1989] 1 SCC  345, referred to.

JUDGMENT: