K.L. Rekhi, Member (T)

1. The common issue involved in these three appeals of the same appellants is whether Carbide Throw Away Inserts manufactured by the appellants fall under Item 51A (iii) of the Central Excise Tariff, as urged by them, or under Item 62, as held by the lower authorities. The two rival items of the Tariff read as under :-

"51A (iii). Tools designed to be fitted into hand tools, machine tools or tools falling under sub-item (ii), including dies for wire drawing, extrusion dies for metals and rock drilling bits;"

"62. Tool tips, in any form or size, unmounted, of sintered carbides of metals such as tungsten, molybdenum and vanadium."

The Bench pointed out to the appellants that one of their appeals had been entirely allowed by the Appellate Collector on the ground of time-bar and in view of that whether they would like the Bench to consider all their three appeals. The appellants stated that they would like to argue on all the three appeals because even the Appellate Collector had rejected all their appeals on the substantive issue of classification.

2. The appellants produced samples of Throw Away Inserts as well as Tool Tips manufactured by them, explained the process of manufacture of the two articles and produced their trade catalogues in respect of them. The undisputed facts about the nature of the products are that both Tool Tips as well as Throw Away Inserts are made from carbide powder of the metals such as tungsten, molybdenum and vanadium. Both are pressed into the required shapes and then sintered (heat treated). Both are affixed on the tool handle and perform the function of machining of metals (turning and milling etc.). Thus, both are tools. So far as the differences between Tool Tips and Throw Away Inserts are concerned, the appellants gave an imposing list of 10 points of" difference. The Bench asked them to show the authorities and technical literature etc. on which these points of difference were based. The appellants were not able to produce any. The points of difference between Tool Tips and Throw Away Inserts, as understood by us on the basis of the samples, catalogues and Indian Standard Specifications etc. shown to us are as under:-

(i) The Inserts are clamped on the tool handle and are detachable. The Tool Tips are brazed (welded or soldered) on the tool handle.

(ii) The Inserts are pre-ground (sharpened) before clearance from the factory. Tool Tips are ground after they are welded on the tool handle.

(iii) Inserts have multiple edges. When one edge is blunted, the other edge can be put in place by manipulation of the angle. Tool Tips have only one edge.

(iv) When all the edges of the Inserts are blunted after use, the Inserts have to be thrown away. They cannot be sharpened again. The edge of the Tool Tip can, however, be sharpened and used again.

3. The appellants' arguments in favour of classification of the Inserts under Item 51A(iii) were three-fold :-

(1) It was well settled that in the absence of a statutory definition, the articles should be classified for the purpose of central excise duty according to the trade parlance and understanding. The two articles - Tool Tips and Throw Away Inserts-were internationally known by two different names. There were two separate Indian Standard Specifications brought out by the ISI for them. It was not enough to say that the two articles were made from the same raw material or that their process of manufacture was more or less the same. They were functionally two different articles as seen from the aforementioned four points of difference in their nature and method of use. A customer wanting Tool Tips will not buy Throw Away Inserts and vice versa. Since Item 62 covered only Tool Tips, Throw Away Inserts did not fall thereunder. But since the Inserts were also tools, they fell under Item 51A(iii).

(2) It was equally well settled in law that if two interpretations were possible, the one beneficial to the assessee should be adopted.

(3) The Department