CENTRAL EXCISE APPEAL NO 03 OF 2005
Bhilai Engineering Corporation Limited ...Petitoners
Versus
The Commissioner Central Excise and Customs & Another ...Respondents
! Shri Ramakant Mishra Advocate for the appellant
^ Shri Bhishma Kinger Advocate for the respondents
CORAM: Honble Shri Satish K Agnihotri & Honble Shri Radhe Shyam Sharma JJ
Dated: 12/12/2011
: Judgement
(Delivered on this 12th day of December, 2011) (Appeal under Section 35-G of the Central Excise Act, 1944)
Per SATISH K. AGNIHOTRI, J.
1. Heard learned counsel for the parties.
2. The present appeal filed under section 35-G of the
Central Excise Act, 1944 (for short "the Act, 1944")
arises from the final order No.03/05-B dated 24-12-2004
(Annexure A/4) passed by the Customs, Excise and Service
Tax Appellate Tribunal (for short `CESTAT'), in E/Appeal
No.2006/2004-NB(B) with E/CO/215/ 2004-
NB (B), whereby the appeal filed by the respondent/Revenue
was allowed.
3. By order dated 21-1-2010, this Court admitted the
appeal on the following substantial question of law :
"Whether the learned Tribunal was right in allowing
the appeal filed by the
Commissioner, Central Excise,
Raipur and considering that the
Coil Transfer Car is
classifiable under the Heading
86.06 Railway or Tramway Goods
Vans and Wagaons not self-
propelled instead of under
Heading No.84.55 part of Metal
Rolling Mills and Rolls of
Central Excise Tariff, 1994-
95?"
4. The facts, in brief, are that the appellant is a
registered company registered under the provisions of the
Companies Act and engaged in the business of manufacturing
of excisable goods falling under the heads 28, 72, 73, 84,
85 & 86 of the Schedule to Central Excise Tariff Act,
1985. The appellant is also manufacturer of a `Coil
Transfer Car' (for short "Car"), a material handing
equipment, which is used in the rolling mills for shifting
of hot rolled coils from one place to another within 500
meter distance. The appellant submitted a classification
list No.346/94-95 w.e.f. 30-12-1995 in which `Car'
claiming classification under Chapter sub-heading
No.8455.00 under heading No.84.55 with effective rate of
duty 10% advalorem, as being a part of the Rolling Mill.
5. Thereafter, the Assistant Commissioner, Central
Excise, Division II, Bhilai, issued a notice dated 28-7-
1995 (Annexure - A/1) and directed the appellant to show
cause asto why the `Car' should not be classified under
the Chapter sub-heading No.8606.00, heading No.86.06. It
was also directed that if the appellant failed to submit
the reply within the stipulated period, with all
supporting documents, the case would be decided ex parte.
The appellant submitted his reply, giving detailed reasons
and supporting documents. Thereafter, the Assistant
Commissioner passed the order dated 30-6-
1998 (Annexure - A/2), approved the classification and
confirmed the demand of Rs.1,78,096/-.
6. Being aggrieved by the said order, the appellant
preferred an appeal before the Commissioner (Appeals).
The Commissioner by order dated 21-1-2004 (Annexure - A/3)
allowed the appeal and set aside the order dated 30-6-1998
by recording the finding that the `Car' is an auxiliary
equipment and is used for shifting of material from one
place to another in rolling mill. Therefore, it can be
considered for classification under sub-heading No.8455.00
heading No.84.55 of the Central Excise Tariff.
7. Thereagainst, the respondent herein preferred an
appeal before the CESTAT. The said appeal was allowed by
the CESTAT vide impugned order dated 24-12-2004 (Annexure
- A/4) and set aside the order dated 21-1-2004 holding
that `Car' falls within the classification under heading
No.86.06.
8. The facts are indisputable that `Car' is used for the
purpose of carrying rolled coils from one place to another
within 500 meters distance. The `Car' is operated
hydrolically/electro-mechanically. The Assessing
Authority issued a notice on 28-7-1995 calling upon the
assessee/appellant to explain that `Car' does not appear
to be an integral part of rolling mill equipment, as it is
used only for transfer of coil. Secondly; the movement of
`Car' is on railway track.
9. The response of the assessee was that `Car' is
neither railway nor tramway, goods van not wagon and is
not fitted with any rolling stock, i.e. axles, wheels,
wheel sets, metal tyres, etc. `Car' is a handling
apparatus with individual function, which can be
classified under chapter heading 84.79.
10. The Assessing Officer having considered all the facts
held that `Car' is classifiable under chapter heading
86.06 sub-heading 8606.00, as `Car' is used only for
transfer of coils in the rolling mill from one place to
other place.
11. In the appeal, by order dated 21-1-2004, the
Commissioner (Appeals) set aside the finding of the
Assessing Officer and held that `Car' is to be considered
as material handling equipment used in the rolling mill
for shifting of hot rolled coils from one place to
another. Thus, the same is classifiable under sub-heading
8455.00 of the Central Excise Tariff.
12. The Tribunal, in appeal preferred by the Revenue, set
aside the order dated 21-1-2004 passed by the Commissioner
(Appeals) holding that `Car' is not used as an integral
part of rolling mill and, as such, it does not come within
the definition of auxiliary equipments. Accordingly, by
the impugned order dated 24-12-2004, the order passed in
appeal by the Commissioner (Appeals) was set aside and the
order passed by the Assessing Officer, was restored.
13. Chapter 84.55 reads as under :
"84.55 8455.00 Metal rolling
mills and
rolls
therefor".
14. Chapter 86.06 reads as under :
"86.06 8606.00 Railway or
tramway,
goods, vans
and
wagons, not
self-
propelled."
15. Explanatory notes {second edition 1996)} of World
Customs Organization states that :
"Rolling mills are metal
working machines consisting
essentially of a system of
rollers between which the
metal is passed; the metal is
rolled out or shaped by the
pressure exerted by the
rollers and at the same time
the rolling modifies the
structure of the metal and
improves its quality. In some
cases in addition to their
normal functions rolling mills
may be used to produce a
pattern on the metal surface
or to roll together two or
more sheets of different
metals to produce a laminated
product.
Rolling mills are of
various types according to the
particular rolling operations
for which they are
designed viz. :
(A) Rolling out to
reduce the thickness
with a corresponding
increase in length
(e.g. in the rolling
of ingots into
blooms billets or
slabs; rolling of
slabs into sheet
strip etc.).
(B) Rolling of blooms
billets etc. to form
a particular cross-
section (e.g. in the
production of bars
rods angles shapes
sections girders
railway rails).
(C) Rolling tubes.
(D) Rolling of wheel
blanks or wheel rim
blanks (e.g. to
shape the flanges of
railway wheels)."
16. It is further provided that operation of rolling
mills requires a large number of auxiliary equipment as
under :
"In general the operation
of rolling mills requires a
large amount of auxiliary
equipment such as guides
roller tables handling
equipment re-heating furnaces
pickling tanks strip coilers
shears and saws cooling beds
weighing or marking machines
straightening or flattening
machines control apparatus
(mechanical electric or
electronic) etc."
17. In the same notes, heading 86.06 - Railway or
tramway, goods, vans and wagons, not self-propelled, it is
stated that this heading covers vehicles for the transport
of goods on railway networks (of any gauge). It also
covers small vehicles or trucks for the transport of goods
by rail, in mines, on building sites, in factories,
warehouses, etc. These latter generally differ from true
wagons, carriages, etc., in that they are not fitted with
springs.
18. Thus, admittedly, the coils are not rolled out on
`Car' by the pressure exerted by the rollers and at the
same time the rolling does not modify the structure of the
metal or improve its quality. As such `Car' does not
become a part of rolling mills. The `Car' works as
transporter of coils from one place to another on rail
without there being any change in the character, structure
or size of the coils. Strictly it does not come under
railways or tramway goods vans and wagons, but if the
railway tracks are used for transport of goods by rail, in
mines, on building sites, in factories, warehouses, etc.,
the same comes under heading 86.06.
19. Reliance of the learned counsel appearing for the
appellant on Collector of Central Excise, Shillong v. Wood
Craft Products Ltd.1, Collector of Central Excise, Bombay
v. K.W.H. Heliplastics Ltd.2 and Collector of Customs v.
Kumudam Publications (P) Ltd.3 are of no assistance in the
dispute involved in the instant case.
20. In Dunlop India Ltd. v. Union of India and Others4,
three Hon'ble Judges of the Supreme Court explained the
position as under :
"34...It is clear that
meanings given to articles in
a fiscal statute must be as
people in trade and commerce,
conversant with the subject,
generally treat and understand
them in the usual course. But
once an article is classified
and put under a distinct
entry, the basis of the
classification is not open to
question. Technical and
scientific tests offer
guidance only within limits.
Once the articles are in
circulation and come to be
described and known in common
parlance, we then see no
difficulty for statutory
classification under a
particular entry."
21. Two Hon'ble Judges of the Supreme Court in Plasmac
Machine Manufacturing Co. Pvt. Ltd. v. Collector of
Central Excise, Bombay5, held that it is an accepted
principle of classification that the goods should be
classified according to their popular meaning or as they
are understood in their commercial sense and not as per
the scientific or technical meaning.
22. Subsequently, three Hon'ble Judges of the Supreme Court in Indian Tool Manufacturers v. Asstt. Collector of Central Excise, Nasik and Others6, held that if there is a general heading for the purpose of levy of Excise Duty, then every variety of goods falling under that general heading will have to be taxed under that heading.
23. Having considered the well settled principles of law,
as aforestated, and also the finding of facts as recorded
and admitted by the parties, the Tribunal has not
committed any error in classifying the `Coil Transfer Car'
under heading 86.06. Accordingly, the substantial
question of law is answered in affirmation.
24. As an upshot, the appeal, being shorn of merit, is
liable to be and is hereby dismissed.
25. There shall be no order asto costs.
J U D G E