IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4988 OF 2003

COMMNR.OF CENTRAL EXCISE, BHOPAL ... APPELLANT

VERSUS

MINWOOL ROCK FIBRES LTD. ... RESPONDENT

    WITH

CIVIL APPEAL NOS.2504-2505 OF 2004

O R D E R

C.A.No.4988/2003:

1. This  appeal  is  directed  against  the  

judgment and order passed by  the Customs, Excise  

and Gold (Control) Appellate Tribunal, New Delhi  

(for  short  'the  Tribunal')  in  Final  Order  

No.204/2002-D  in  Appeal  No.E/964/2002-D  dated  

22.08.2002.  By the  impugned judgment  and order,  

the  Tribunal  has  accepted  the  assessee's  stand  

that the goods namely, Slagwool and Rockwool are  

to  be  classified  under  Chapter  sub-heading  

No.6807.10 by rejecting the stand of the revenue  

that  it  requires  to  be  classified  under  sub-

heading No.6803.00.

2. The  assessee  had  filed  the  

classification declaration before the adjudicating  

authority, under Rule 173 B of the Central Excise  

Rules,  1944  (for  short  ‘the  Rule),  inter  alia,  

claiming  that  the  goods,  namely,  Slagwool  and  

Rockwool requires to be classified under Chapter  

sub-heading No.6807.10 of Central Excise  Tariff  

Act, 1985 (for short ‘the Act’) with effect from  

09.06.1998.  

3. A show cause notice was issued to the  

assessee directing them to show cause as to why  

the goods in issue should not be classified under  

Chapter  sub-heading  No.6803.00  and  duty  of  18%  

should  not  be  charged  and  recovered  from  them  

under Rule 9(2) read with Section 11-A of the Act  

and as to why penalty should not be imposed under  

Rule 173Q of the Rules.  After receipt of the show  

cause notice, the assessee filed its reply dated  

16.11.1998, inter-alia, contending that they are  

manufacturing ‘Min wool’ using more than 25% of  

blast  furnace  slag  by  weight,  right  from  1993  

onwards and they have been filing classification  

declarations  mentioning  this  fact  and  such  

declarations  so  filed  prior  to  1997-98  are  

accepted  by  the  department  and,  therefore,  the

goods in question requires to be classified under  

Chapter sub-heading No.6807.10 of the Act.

4. The  adjudicating  authority,  after  

accepting  the  stand  of  the  assessee,  passed  an  

order dated 31.01.2000, inter-alia, holding that  

the  appropriate  classification  of  the  goods  in  

issue  should  be  under  Chapter  sub-heading  

No.6807.10  of  the  Act.  The  revenue,  being  

aggrieved by the classification so accepted by the  

adjudicating authority, had carried the matter by  

way  of  an  appeal  before  the  Commissioner  

(Appeals), Customs and Central Excise, who by its  

order  dated  23.01.2002,  allowed  the  revenue's  

appeal and, thereby, declared that the goods in  

question are to be classified under Chapter sub-

heading  No.6803.00  and  not  under  sub-heading  

No.6807.10, as claimed by the assessee.

5. The assessee had carried the matter in  

appeal  before  the  Tribunal.   The  Tribunal  has  

allowed the assessee's appeal by its order dated  

22.08.2002 and, thereby, restored the order passed  

by  the  adjudicating  authority.   It  is  the  

correctness  or otherwise  of the  aforesaid order  

passed by the Tribunal is the subject matter of  

present appeal.

6. We need to notice the relevant entries  

under Chapter 68 of the Act and the sub heading  

No.6803.00  and  sub-heading  No.6807.10  etc.  The  

same reads as under :

Heading  No.

(1)

Sub- Heading  No.

(2)

Description of Goods

(3)

Rate of  Duty

(4)

6803 6803.00 Slagwool,  Rockwool  and  similar wools

18%

6807 68.07

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,  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.  

8%

7. The rate of duty for the aforesaid goods if it  

is classified under sub-heading No.6803.00 is at  

18%  and  if  it  is  classified  under  sub-heading  

No.6807.10, is at 8%.

8.  Sub-heading  No.6803.00  speaks  of  Slagwool,  

Rockwool  and  similar  wools,  whereas  sub-heading

No.6807.10 speaks of goods in which more than 25%  

by weight, red mud, press mud or blast furnace  

slag or one or more of these materials is used.

9. Sub-heading No.6807.10 was introduced after the  

Budget of 1997.   

10. The period in question of this appeal is after  

9th June, 1998.

11.  Shri  R.P.Bhatt,  learned  senior  counsel  

appearing for the revenue would submit that when  

there  is  a  specific  heading/sub-heading  wherein  

the goods, such as Slagwool, Rockwool and similar  

wools are enumerated, that entry requires to be  

applied and not the general entry or a residuary  

entry. Learned counsel also brings to our notice  

about the Circular issued by the Central Board of  

Excise and Customs (for short ‘the Board’) dated  

17.09.2001 to substantiate that the Board, after a  

detailed  consideration  of  the  claim  and  the  

counter claim of the traders dealing in Rockwool  

and Slagwool, has specifically classified that the  

aforesaid  goods requires  to be  classified under  

sub-heading No.6803.00 and not under sub-heading  

No.6807.10.

12.  Per contra, Shri Alok Yadav, learned counsel  

appearing for the assessee, justifies the impugned  

judgment and order passed by the Tribunal.

13. We have already noticed the relevant entries  

to which we are concerned with in this appeal.  No  

doubt there is a specific entry which speaks of  

Slagwool  and  Rockwool  under  Sub-heading  

No.6803.00, but there is yet another entry which  

is consciously introduced by the Legislature under  

sub-heading No.6807.10, which speaks of goods in  

which Rockwool, Slagwool and products thereof are  

manufactured by use of more than 25% by weight of  

blast furnace slag.  It is not in dispute that the  

goods in question are those goods in which more  

than 25% by weight of one or more of red mud,  

press mud or blast furnace slag is used.  If that  

be the case, then, in a classification dispute, an  

entry which is beneficial to the assessee requires  

to be applied and the same has been done by the  

adjudicating authority, which has been confirmed  

by  the  Tribunal.  Alternatively,  it  can  be  said  

that Sub-heading No.6807 is specific to the goods  

in which more than 25% by weight, red mud, press  

mud or blast furnace slag is used.  The heading is  

based entirely on material used on composition of  

goods.  A tariff heading, based on composition of

goods,  is  also  specific  heading  like  a  heading  

based on commercial nomenclature.  Therefore, we  

are  of  the  view  that  the  goods  in  issue  are  

appropriately  classifiable  under  Sub-heading  

No.6807.10 of the tariff entry.

14. The learned senior counsel Shri Bhatt invites  

our attention to the circular instructions issued  

by  the  Board.  In  our  view,  the  departmental  

circulars  are  not  binding  on  assesee  or  quasi  

judicial authorities or courts and therefore, in  

that  view  of  the  matter,  the  circular/  

instructions issued by the Board, would not assist  

them.  

15. We may also notice that the Full Bench of the  

Tribunal in the case of Commissioner of Central  

Excise, Raipur Vs. Punj Star Insulation Fibre Co.  

has taken a view that the slagwool and rockwool  

would  fall under  sub-heading No.6807.10  and not  

under sub-heading No.6803.00. The judgment of the  

Tribunal has attained finality, since the revenue  

has not questioned the same before the appropriate  

forum.  This fact has been noticed by this Court  

while disposing of Civil Appeal Nos.60-61 of 2003  

in the case of M/s.Rockwool (India) Pvt. Ltd. Vs.

Commissioner  of  Customs  &  Central  Excise,  

Hyderabad decided on 07.05.2008.  

16. In view of the above, we are of the opinion  

that  the  Tribunal  has  not  committed  any  error,  

whatsoever, which would call for our interference.  

Accordingly, the appeal is dismissed.

C.A.Nos.2504-2505/2004:

These appeals are also disposed of, in  

terms of the observations and directions made by  

us  today  in  the  aforesaid  order  i.e.  

C.A.No.4988/2003.

Ordered accordingly.

...................J. (H.L. DATTU)

...................J. (ANIL R. DAVE)

NEW DELHI; FEBRUARY 02, 2012