The court held that the flanges are classifiable under both tariff items 26aa (ia) and 68 of the Central Excise and Salt Act, 1944. The court held that the flanges cease to be forged shapes and sections and become identifiable parts of machinery liable to be again classified under item 68, in addition to classification under Item 26aa (ia).

( 1 ) THE main question for determination in this Letters Patent Appeal is whether the steel flanges manufactured by the appellants are classifiablefor payment of excise duty under tariff item No. 26aa (ia) or under item No. 68 of the First Schedule to the Central Excies and Salt Act, 1944 or both. Briefly, the relevant facts are as follows :-

( 2 ) THE appellant company manufactures a number of steel products by forging process. The process of manufacture of their forged products consists of cutting of steel, pre-heating it, heating and beating of steel material till the final shape nearest to the shape desired by the customer and/or specifications is achieved. Thereafter, the extra/unwanted material is removed by cither trimling or by gas cutting or by skin cutting and/or by rough machining, to achieve the shape and section nearest to the forged steel product required by the customers. These shapes and sections are subjected to further processes of polishing and drilling, to make them suitable and identifiable as parts of machinery. Mostly the products are sold after processes of machining, polishing and drilling are done but, sometimes, these are also sold without such processes, if desired by the customers. According to the appellants, the dispute in this a/peal is only with. regard to flanges and no other product The claim of the appellants is that flanges are classifiable for payment of excise duty only under tariff item 26aa (ia) and under no other tariff item. Tariff item 26aa reads as under : 26aa. : Iron or steel products are as follows, namely :-

(I) Semi-finished steel cutting blooms, ballots, slabs and sheet bars, tin bars and hoe bars.

(IA) bars, rods, coils wires, jonts (girders, angles other than slotted angles, channels other than slotted channels), tees, beaims, zeds, through piling and all other rolled, forged, extruded shapes and Sections, not otherwise specified:

(II) plates and sheets (inoluding uncoated plates and sheets intended for tinning and forms, such as ridges, channels other than slotted channels, rain water pipes, and other fittings made from plates or sheets, but not including plates and sheets after tinning and hopps, all sorts other than skelp and strips ;

(III) flats, skelp and strips;

(IV) pipes and tubes (including blanks thereof) all sorts whether rolled, forged, spun, cast, drawn, annealed, welded or extruded;

(V) All other steel castings not otherwise specified;explanation "skelp" means hot rolled narrow strip width not exceeding 600 mm with rolled (square slightly round or levelled) edge.

( 3 ) TARIFF item No. 26aa was inserted by Act No. 22 of 1962. However, in the year 1962, the sub-item number of present (ia) was (i ). Tariff item No. 26aa (i) as extracted above, was not there in the year 1962. In the year 1963, by Act No. 13 of 1963, tariff item No. 26aa (i), as it now stands,. was inserted and original tariff item 26aa (i) was renumbered as (ia), and since then the position remains the same.

( 4 ) WITH effect from 1st March, 1975, tariff item 68 was inserted in the First Schedule to the Act and it reads as under:- Tariff item 68

ALL other goods not elsewhere specified manufactured in a factor, but excluding alcohols, opium. . . :. . . . . . . .

( 5 ) SOON afterinsertion of item 68, disputes started. The question arose whether the flanges manufactured by the appellants were liable to be classified for payment of central excise duty under sub-item (ia) of item 26a. A of the Schedule or the said ranges also attracted the newly introduced tariff item 68. The appellant company received letter dated 24th June, 1975 from" the Superintendent, Central Excise , (MOR-IV) wherein it was stated that forged products which are machined and are ultimately. parts of machinery should be classified under tariff item 68 A reply was sent to the said letter, staling that the intended classification is unwarranted and that neither such forged products nor any other forged products