Dispute regarding classification of Ladle Transfer Car.

PJ/Case Law /2016-17/3290

Case-JINDAL STEEL & POWER LTD. Versus COMMISSIONER OF C. EX., RAIPUR

Citation-2016 (338) E.L.T. 311 (Tri. - Del.)

Brief Facts-The present appeal is against order dated 29-3-2007 of Commissioner (Appeals-I), Raipur. The appellants are engaged in the manufacture of M.S. Ingots, castings and engineering goods liable to central excise duty. They were also availing credits under Cenvat Credit Rules, 2002. A dispute arose regarding classification of Ladle Transfer Car (LTC) cleared by them. The Revenue intended to classify the product under Central Excise Tariff Heading No. 8603 as self-Propelled Rolling Stock whereas the appellant classified the said product under Heading 8454 which covers parts of converters; ladles, ingot moulds and casting machines of a kind used in a metallurgy or metal foundaries. The dispute was adjudicated by the Original Authority. On appeal, the ld. Commissioner (Appeals) vide his impugned order upheld the original order to classify the LTC under Tariff Heading 8603. Aggrieved by this, the appellant is before us.

Appelants Contention-Ld. Counsel for the appellant submitted that they have correctly classified the LTC under CETH 8454.90 as the same is specially designed to accommodate the ladle full of hot metal for taking part in the movement of the hot metal to another process of steel making. The said item cannot be called as a vehicle of a category of self-propelled railway or tramway coaches, vans and trucks under CETH 8603 as decided by the lower authorities. Ld. Counsel relied on the HSN Explanatory Notes on “Ladles” and contended that providing of under-frame to the ladles cannot come, in any way, against the classification under CETH 8454. Ld. Counsel relied on the decision of the Tribunal in the case of Larsen & Toubro Ltd. - 2001 (136)E.L.T.562 (Tribunal-Kolkata) and Steel Authority of India Ltd. - 2010 (250)E.L.T.151 (Tribunal-Kolkata).

Respondents Contention-Ld. AR reiterated the findings of the lower authorities and relied on the Tribunal’s decision in the case of Bhilai Engg. Corporation Ltd. - 2005 (182)E.L.T.407 (Tribunal-Delhi) as confirmed by the Hon’ble Chattisgarh High Court reported in 2012 (281)E.L.T.514 (Chattisgarh).
Reasoning Of Judgement-The tribunal have heard both the sides and examined the appeal records. The dispute is regarding correct classification of LTC. In an integrated steel plant, molten hot metal iron is produced in electric arc furnace. The molten metal is tapped into a ladle, which is placed on a car. The ladle in the said car moves on a monorail to a refining furnace, where further processes like mixing with other metal and sending it to casting section for further process is done. They find that the Tribunal in the case of Larsen & Toubro Ltd.(supra) came to the conclusion that -
“Merely because the under-carriage has been attached to the Ladles, the same would not take it out of the category of Ladles which are specifically mentioned against Heading 84.54. the Ladles are meant for receiving molten metals from a furnace and puring in the converters or moulds. As long as the goods in question perform the said function, they have to be necessarily held as Ladles. Merely because Ladles are fitted with devices to tipping or pouring and in some cases fitted with wheels. H.S.N. Explanatory Notes in respect of the said heading are to the following effect :
“Ladles - These are used to receive the molten metal from a furnace and pour it into converters or moulds : they are simple open containers generally lined with refractory materials, usually fitted with devices to facilitate tipping or pouring and in some cases fitted with wheels. They are usually handles mechanically (e.g. by cranes), but the heading also covers foundry type casting ladles manipulated by small hand ladles of the type used by tinsmiths, goldsmiths, etc. are excluded (heading 73.25 or 73.26)”.
Similarly, in the Explanatory Notes below Section XVI in HSN, the following position has been clarified :-
“The bases, frames or housings may be provided with wheels so that the composite machine can be moved about as required during use, provided it does not thereby acquire the character of an article (e.g. a vehicle) more specifically covered by a particular heading of the Nomenclature”.
Thus it becomes clear from the foregoing that providing of under-frame to the Ladles cannot come in any way of their being classified under Heading No. 84.54.”
Theyfind that the reliance placed by the Revenue on the decision of the Tribunal in the case of Bhilai Engineering Corporation Ltd.(supra) is not appropriate. In the said case, the matter decided was classification of Coil Transfer Car. The Tribunal referred to the decision in the case of Larsen & Toubro Ltd. (supra) and distinguished the same as ladle cars meant for receiving molten metal from a furnace is specifically mentioned in Heading No. 8454. Hence, the decision in Larsen & Toubro Ltd. (supra) is correctly applicable to the facts of the present case. Following the ratio laid down in the said decision, we set aside the impugned order and allow the appeal.

Decision-Appeal allowed

Comment-In the given case there is dispute regarding the classification of Ladle Transfer Car which are moving on a monorail meant for carrying ladle containing molten metal received from melting furnace to refining furnace where further processes are done. Tribunal held that on relying on the decision in case of Larsen and Toubro Ltd. said goods are appropriately classifiable under sub-heading 8454.90 of Central Excise Tariff and not under Heading 8603 ibid as proposed by the department.

Prepared By-Neelam Jain

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PJ/Case Law /2016-17/3290

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