INDIAN METALS AND FERRO ALLOYS LTD. CUTTACK versus COLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR

Citation: [1990] SUPP. 3 S.C.R. 329 · Decided: 22-11-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

INDIAN METALS AND FERRO ALLOYS LTD. CUTTACK 
A 
v. 
COLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR 
NOVEMBER 22. 1990 
[S. RANGANATHAN AND K. RAMASWAMY, JJ.] 
B 
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. 
The appellant is a manufacturer of pipes, fu.iles and poles made of 
iron and steel. Tariff Item No. 26AA was introduced w.e.f. 24.4 . .1962 in 
c 
the First Schedule to the Central Excises and Salt Act, according to 
which, the appellant paid the excise duty. Thereafter the Government 
issued a notification dated 1.3.1963, whereby 'telegraph, telephone and 
electric li~ting and transmiSsion poles falling under Item 26AA" 
D 
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 complied 
with. The appellant thereupon preferred an appeal before the Collector 
E 
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 
F 
as falling under Item 26AA and those lists were duly approved and the 
appellant cleared its goods withont paying duty till August 1982. Earlier 
on 8.I2.1977, the Snperintendent of Central Excise had taken a view 
that the transmission and lighting poles were classifiable not under Item 
26AA bot under Item 68. The appellant was accordingly asked to 
furnish a statement of the goods manufactured and sold earlier and to 
G 
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 whereupon the appellant ftled a 
writ petition before the High Court challenging the communication 
dated 26.12.1977. The appellant received a further letter on 6.11.1981 
whereby it was required to pay duty under Item No. 68 in regard to 
H 
329 
A 
B 
c 
330 
SUPREME COURT REPORTS 
[1990] Supp. 3 S.C.R. 
''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 peti-
tions by directing that the adudication 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 afllrmed the order 
of the A 'sistant Collector. Both parties preferred appeals before the 
Central Excise and Gold (Control) Appellate Tribunal. The Tribunal 
did 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 
D 
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] 
E 
The language of tariff item No. 26AA is very wide. It covers iron 
and steel products of the description set out therein. [3370] 
Unless the department can establish that the goods in question 
can, by no conceivable process of reasoning_, be brou~t under an:r of 
the specific items mentioned in the tariff, resort cannot be had to the 
residuary item. [339E] 
F 
The appellant's contention that the goods in question fall under 
Item 26AA is well founded and the Revenue was not justified in at-
tempting to levy duty on the basis that the goods fall under Tariff Item 
No. 68. [334G-H] 
Indian Alumini

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