Customs, Excise and Gold Tribunal - Delhi
Forbes Gokak Ltd. vs Collector Of Central Excise on 11 November, 1994
Equivalent citations: 1995(80)ELT801(TRI-DEL)
JUDGMENT G.R. Sharma, Member (T)
1. M/s. Forbes Gokak Ltd. have filed this appeal against the order of Collector of Central Excise. The ld. Collector in his order had held :-
"I hold that the subject Glass Moulds alongwith the Plastic Gasket are together classified under sub-heading 7015.90 of Central Excise Tariff with duty leviable at the rates applicable from time to time. There being no justification to invoke the proviso to sub-section 11A(1) of the Act, the show cause notice F. No. V(90)15-255/Adj /92, dated 26-11-1992 demanding of duty Rs. 1,54,90,1377- is ordered to be withdrawn. There shall be no orders on penalty in the facts of this case."
2. Briefly stated that facts of the case are that the appellants are manufacturers of Glass Moulds assembly consisting of (1) Glass Moulds (2) Gaskets; that on 25th October, the appellant entered into collaboration with an Italian Firm for manufacture of Hard Resin Lenses. The foreign collaborators of the appellants were required to pass on to the appellant their guarded process for the making of Plastic Gaskets and Grinding of Glass Moulds which are necessary for imparting the necessary curve and negative power to such Moulds. For this purpose the appellants purchase Rough Opthalmic Glass which is accurately ground by the appellants. This Technology for accurately grinding and imparting of negative is a closely guarded secret. One Glass Mould ground by the appellants, is of a concave shape while the other is convex. These pieces of ground Opthalmic Glass are known as Glass Moulds in International Trade. A Plastic Gasket which holds the two Moulds is then manufactured out of Ethyl Vinyl Acetate. The said two Moulds are held together by this Gasket.
3. Intelligence was collected by the Central Excise Officers which revealed that the appellants were manufacturing Glass Moulds and Gasket and consuming these products captively for the manufacture of Opthalmic Blanks (Lenses) and that these Glass Moulds were classifiable under Central Excise Tariff Chapter Heading 70.15 and that the appellant had claimed the classification of Glass Moulds under Heading No. 84.80 with full duty exemption under Notification 220/86, dated 2-4-1986 and that in respect of Gaskets the appellants had claimed its classification under Central Excise Tariff Chapter Heading No. 39.26 with duty exemption under Notification No. 53/88, dated 1-3-1988. The Department was of the view that Glass Moulds and Gaskets were classifiable under Central Excise Tariff Chapter Heading No. 70.15 and not under the Chapters 84.80 for Glass Moulds and 39.26 for Plastic Gaskets as claimed by the appellants. It was also noticed by the Officers that appellants had been manufacturing Glass Moulds and Gaskets without obtaining Central Excise Licence and was using these goods captively for further manufacture of their final product without discharging proper Central Excise duty. Accordingly, a show cause notice was issued to the appellants on 26-11-1992 asking them to show cause as to why Central Excise duty for the period October, 1987 to August, 1991 should not be demanded from them and why a penalty should not be imposed on them.
4. It was also pointed out that Glass Moulds are excluded from Chapter 84 by virtue of Chapter Note 1 (c) that Glass Moulds appropriately fall under the Central Excise Tariff Chapter Heading 70.15; that Gasket being an essential component and used for binding the Male and Female to form the Glass Moulds assembly would be classifiable alongwith the Glass Moulds under Central Excise Tariff Chapter Heading No. 70.15; the benefit of Notification No. 53/88 could not be available for Gasket because it is not classifiable under Central Excise Tariff Chapter Heading 39; that benefit of Notification No. 220/86 would not be available to Glass Moulds assembly as it was classifiable under Central Excise Tariff Chapter Heading No. 70.15 and not under Central Excise Tariff Chapter Heading 84.80.
5. Sh. Setalvad, Sr. Advocate alongwith Sh. F. Sorabjee, Advocate appeared for the appellant and submitted that the issue of classification only survives; that the rival entries are Central Excise Tariff Heading 84.80 for glass moulds and 39.26 for plastic Gaskets as claimed by the appellants and Central Excise Tariff Heading No. 70.15 as held by the Deptt. The ld. Counsel submitted that grinding of Rough Glass Blanks to get Glass Moulds does not amount to manufacture; that no new product comes into existence because Glass remains glass and no new product, with a distinct name, character and use comes into existence; that Glass Moulds cannot be considered as goods as they are not capable of being marketed; that the Tribunal in the case of Bakelite Hylam Ltd. v. Collector, Bombay reported in 1986 (25) E.L.T. 240 had held :-
"I have respectfully gone through the order recorded by Vice President (J) and also the elaborate order recorded by my ld. brother Sh. H.R. Syiem. On a cumulative consideration of the material on the subject, as reproduced in the order of ld. brother Syiem, I am inclined to say that the issue of classification is not wholly free from doubt, and that much can be said in support of plea of the importers, for assessment of the subject goods under Tariff Heading 84.60. While, therefore, agreeing with the conclusion of the ld. Vice president (J), I wish to add following observations :-
Order portion is in para 75 which reads, "In accordance with the decision of the majority the goods in question i.e. press plates or flat moulds are held classifiable under Heading 84.60 of CTA-75. The appeals by the importers M/s. Bakelite Hylam Ltd. and M/s. Wood Polymer Ltd., are accepted and review notices i.e. appeals by the Collector, Customs, Bombay, dismissed."
6. The ld. Counsel submitted that the issues to be thrashed out is whether (a) grinding of Opthalmic Blanks amounts to manufacture (b) whether Glass Moulds are goods and (c) if they are goods whether they are classifiable under Central Excise Tariff Heading No. 84.80 as claimed by the appellants or 70.15 as held by the Department. For deciding these issues, the ld. Counsel submitted that Rough Opthalmic Glass is ground and a negative power is imparted; that even after grinding, the Glass remains the glass and therefore, in the absence of any new product corning into existence, the process of grinding cannot be called a process of manufacture for levy of Central Excise Duty; that no new goods came into existence that for being goods they must be marketable; that the Hon'ble Supreme Court in a number of cases had laid down the test of marketability for the purpose of identification and classification as goods; that the technology for grinding the opthalmic Blanks is a very well guarded secret and, therefore the goods cannot come to the market for being sold and bought, in the sense it is understood in common parlance; that the said Moulds and Gaskets are not capable of being used in the absence of the know-how of the process and are therefore incapable of being bought and sold in the market; that the said Moulds would be correctly classifiable under Central Excise Tariff Chapter Heading 84.80 as Moulds of Plastics and the Plastic Gaskets under Chapter Heading 39.26 as other articles of Plastic made for materials of Headings 30.01 to 30.14; that Central Excise Tariff Entry 84.80 reads:-
"Moulding Boxes for Metal Foundry; Mould bases; Moulding patterns; Moulds for Metal (other than ingot Moulds), Metal Carbides, Glass, Mineral Materials, Rubber or Plastics."
That in the Explanatory Notes under Heading 84.80, there is a sub-heading 8480.50 reading as "Moulds for Glass"; that from this heading it will be very clear that Moulds manufactured by them are fully covered by the Central Excise Tariff Chapter sub-heading 84.80; that Chapter Note 1(c) of Chapter 84 at page 1135 of HSN Explanatory Notes reads:-
"This chapter does not cover Laboratory Glassware (Heading No. 70.12) Machinery, appliances or other articles for technical uses or parts thereof, of Glass (Heading No. 70.14 or Heading No. 70.15)".
7. Elaborating his submissions the ld. Counsel submitted that this chapter note clearly excludes the classification of the Glass Moulds under Heading No. 70.14 or 70.15 as the glass moulds manufactured by them were not appliances or other articles for technical uses or parts thereof, of glass.
8. Referring to Note 1(d) of Chapter 70 which reads as :
"This Chapter does not cover Optical Fibres, Optically worked optical elements, hypodermic, syringes, artificial eyes, thermometers, barometers, hydrometers or other articles of Chapter 90."
The ld. Counsel submitted that this note excludes optically worked, optical elements: that the Glass Moulds are optically worked and, therefore, Chapter Note 1(d) excludes the classification of the impugned goods under Chapter Heading 70. Therefore, the classification of Glass Moulds under Chapter heading is clearly ruled out even by Note 1(d) of Chapter 70; that the goods in question were Moulds for Plastic Lenses and were therefore, fully covered by Heading 84.80; that the Tribunal had clearly defined what a Mould is in their decision in the case of Bakelite Hylam wherein it was observed that :-
"73. The process of manufacture, as detailed in para 42 of foregoing order shows unmistakably that the products, which emerged as Plastic Laminates came into being only as a result of constituent material being put under pressure in the Hydraulic Press sandwiched or interleaved between these Press Plates placed on the top and the bottom. Dictionary meaning of the term mould as understood in generic term, when used as a verabec noun, is the process of shaping or anything formed by, or in a mould. This can include a formed surface from which an impression is taken."
9. Note 3 of the Explanatory Notes at Page 1321 reads :-
"Moulds for making plastic articles, whether or not electrically or otherwise heated; they may operate by gravity, or by injection or compression."
That this note further goes on to say that, "(d) This heading also excludes Moulds made of glass (Heading 70.20)"; that Heading 70.20 of the Customs Tariff is pari materia with Central Excise Tariff Heading 70.15.
10. Referring to the Hon'ble Supreme Court's decision in the case of Indo-International Industries v. Commissioner of Sales Tax, U.P. reported in 1981 (8) E.L.T. 325 wherein the Hon'ble Supreme Court had held :-
"5. Having regard to the aforesaid well-settled test the question is whether clinical syringes could be regarded as "glassware" falling within Entry 39 of the First Schedule to the Act ? It is true that the dictionary meaning of the expression "glassware" is "articles made of glass". (See : Websters New World Dictionary). However, in commercial sense glassware would never comprise articles like clinical syringes, thermometers, lactometers, and the like which have specialised significance and utility. In popular or commercial parlance a general merchant dealing in "glassware" does not ordinarily deal in articles made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee. It is equally unlikely that consumer would ask for such articles from a glassware shop. In popular sense when one talks of glassware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one's mind. Applying the aforesaid test, therefore, we are clearly of the view that the clinical syringes which the assessee manufactures and sells cannot be considered as "glassware" falling within Entry 39 of the First Schedule of the Act."
The ld. Counsel argued that in this decision the Hon'ble Supreme Court emphasised that in popular parlance, a general merchant dealing in glassware does not ordinarily deal in articles like clinical syringes etc. which though made of glass are normally available in medical stores or with the manufacturers thereof. In this view of the matter Glass Moulds were a specialised commodity and, therefore, cannot be classified under ordinary common parlance heading.
11. Referring to the decision of the Hon'ble Supreme Court in the case of Atul Glass Industries v. C.C.E. reported in 1986 (25) E.L.T. 473. The ld. Counsel submitted that the Hon'ble Supreme Court in that case had held :-
"We are firmly of the view that the glass mirror cannot be classified as 'other glass and glassware' set forth in Tariff No. 23A(4), and must therefore fall under the residuary Tariff Item No. 68."
On the ratio of this decision of the Hon'ble Supreme Court, the ld. Counsel submitted that the Glass Moulds manufactured by them cannot be classified as items of Glass or Glassware. Similarly, the Hon'ble Tribunal in the case of Ramchand Choithram Sons v. C.C.E. reported in 1990 (50) E.L.T. 193 had held, "Spectacles frames are not articles of Glass". On this analogy the ld. Counsel submitted that the Glass Moulds are not articles of Glass for the purpose of classification; that the Tribunal in the case of Paisa Fund Glass Works v. Collector reported in 1989 (44) E.L.T. 683 had held that: -
"Lenses manufactured by the appellant are optical glass with a definite refractive index. Although glass and glassware are specified under Item 23A(4) and a lense continues to be a 'glass', it cannot be classified under Item 23A(4) as it is hardly known in the trade as 'glass'".
Elaborating the ratio of this decision, the ld. Counsel submitted that opthalmic blanks by a process of cutting and grinding are converted into Glass/Moulds; that these Opthalmic blanks are optically worked, optical elements and were therefore excluded in accordance with Chapter Note 1(d) at page 925 of HSN Explanatory Notes from classification under Chapter 70 of CETA, 1985; that in the case of Paisa Fund Glass Works, the Tribunal had further observed that :-
"After hearing both the sides and going through the facts and circumstances of the case, we would like to observe that an optical glass cannot be equated with ordinary glass or glassware. An optical glass is no doubt a glass but it has got a definite refractive index and has also got a definite angle of refraction. BTN 70.18 is reproduced as under :-
"70.18 - Optical Glass and Elements of Optical glass, other than optically worked elements, blanks for corrective spectacle lenses."
that BTN 70.18 corresponds to CET 70.11; that in the case of Paisa Fund Glass Works referred to Supra, it was held by the Tribunal that: -
"Optical working consist of grinding the surface first with coarse, and then with gradually finer abrasives. The successive operations are thus roughing, truing, smoothing and polishing. Articles having undergone one or more of the processes preceding polishing remain within the present heading. But elements which have the whole or part of one or more of their surfaces polished to produce the required optical properties are excluded."
That in view of this finding of the Tribunal two prepositions arise : (a) what is an optical lense (b) what optical working means and that these two questions have clearly been answered by the Tribunal in their order referred to above.
12. It was also argued by the ld. Counsel that cutting, grinding and polishing will not make the goods acceptable for classification under Chapter 70. In support of his contention, the ld. Counsel cited and relied upon the decision of the Tribunal in the case of Collector, Bombay v. Gopal Krishna Bros. reported in 1986 (26) E.L.T. 414 wherein the Tribunal had held : -
"9. Sh. Venkatraman further relied upon the Madras Collectorate Trade Notice No. 97 of 1979, dated 27-4-1979. The same (as reproduced in the Cen-Cus Central Excise Tariff for 1985-86 at pages II/45-0-451) reads as follows :-
"Optical Glass, Opthalmic blanks and Photographic lenses consequent on the changes made in the Tariff description of Glass & Glassware falling under Item 23A, the following clarifications are issued in the matter of classification of the articles mentioned herein :-
(1) Optical Glass : This will fall under sub-item (4) of Tariff Item 23A.
(2) Opthalmic Glass Blanks : Opthalmic Glass blocks or Glass blanks, which are used as raw material and are intermediate products for the manufacture of spectacle lenses, will be covered by sub-item (4) of Tariff Item 23A.
(3) Glass blanks and lenses which have been 'Optically Worked' will fall outside the scope of Tariff Item 23A but will be assessable to duty under Tariff Item 68. Thus the classification of Glass blanks or Glass blocks will be decided in each case on merits.
(4) Photographic Lenses : These articles are classifiable under Tariff Item 68 : (Madras Collectorate Trade Notice No. 97/79, dated 27-4-1979)."
The Optical Elements of Glass under Chapter 70.14 have been defined in Note (b) under Section XIII under Heading 70.14 of the HSN explanatory notes at page 937 as under :-
"The heading includes elements which are manufactured in such a way that they produce some required Optical effect without being optically worked. These articles include mainly lenses and similar articles for automobile headlamps, parking lights, direction indicating lights, cycle rear lights, road traffic lights, certain buoys, spotlight bulbs, pocket lamps, electric torches, switch boards or panel light, and also certain common magnifying glasses. The heading also includes blanks of optical elements and optical elements which require optical working."
In the head-note of Section XVIII of the HSN Explanatory Notes under subheading (c) under the Heading 90.01 at page 1459, it has been stated that :-
"In order to distinguish between optical elements of glass of this heading and those of Chapter 70 it is necessary to determine whether or not they have been optically worked and that optical working of Glass is usually performed in two stages, viz., the production of the surface to the shape required (i.e. with the necessary curvature, at the correct angle, etc.) and the polishing of these surfaces. This working consists of grinding the surfaces by means of abrasives, rough at first, then gradually finer, the successive operations being Roughing, Truing, smoothing and Polishing. Finally, in the case of lenses, required to be of an exact diameter the edges are ground, this is known as the centering and edging operation. This heading applies only to optical elements of which the whole or part of their surface has been polished in order to produce the required optical properties. It applies therefore to elements which have been ground and polished as described above and also to elements having undergone nearly one or more of the processes which have been polished after moulding. The heading does not apply to unpolished elements having undergone merely one or more processes which precede polishing, such elements fall in Chapter 70."
13. The ld. Counsel submitted that it is a fact that they had in the year 1985 imported two lots of Glass Moulds alongwith Plastic Gaskets and the goods were then assessed under Chapter Heading 70.20 of the Customs Tariff 1975 : that it is also a fact that Chapter Heading 70.20 of the Customs Tariff pari materia to Chapter heading 70.15 of Central Excise Tariff. The ld. Counsel submitted that there is a lot of case law whereunder it has been clearly laid down that this cannot work as an estoppel and, therefore it was argued that a stray instance cannot be taken as a precedent to decide classification. The ld. Counsel also submitted that Rules 3(a) and 3(b) fully supported their case inasmuch as the goods were covered by the specific description in the Central Excise Tariff. Summing up his argument the ld. Counsel submitted that in view of the overwhelming evidence in favour of the appellant, the impugned order may be set aside with consequential relief.
14. Shri R.K. Kapoor, the ld. SDR appearing for the respondents submitted that the issue revolves on the question whether they are goods, whether they are bought and sold in the market and whether they are re-classifiable under Chapter 70 or Chapter 84 of the CETA, 1985. The ld. SDR submitted that for purpose of classification under different headings he would like to proceed by the process of elimination and then come to residuary item.
15. Chapter Heading 84.80 of CETA, 1985 has been claimed as the heading for the classification of the goods by the appellants, the ld. SDR submitted that the item is not a Plastic Mould, the item is a Mould of Opthalmic Lense made of Plastic; that the item is no doubt a Mould; that Chapter Note 1 (c) of Chapter 84 at page 1135 of the HSN Explanatory Notes excludes Laboratory Glassware (Heading No. 70.17) machinery, appliances or other article for technical uses or parts thereof of glass (Heading 70.19 or 70.20); that the term Technical uses is very relevant and that the product in dispute being an article of technical uses excludes itself from classification under Chapter Heading 84; that Chapter Heading 84 covers Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; parts thereof; that by this general heading also the product manufactured by the appellant would not be covered by Chapter Heading 84.
16. Referring to Item (3) of Explanatory Note of HSN at page 1321 which says, this group includes Moulds for making plastic articles, whether or not electrically or otherwise heated; they may operate by gravity or by injection or compression. If you go a little further Explanatory Note (d) on the same page says that the Heading (Chapter 84) also excludes Moulds made of Glass (Heading 70.20). Clarifying the position the ld. SDR submitted that the Moulds in dispute are not Moulds for making plastic articles but they are glass moulds and hence they are not covered by Item (3) of the Explanatory Notes of HSN on page 1321; that coming to the position whether the goods manufactured by the appellant are known by the name of moulds for making plastic articles or they are known as glass moulds, the ld. SDR submitted that the appellant himself has described the goods as Glass Moulds. Even in the memo of appeal it has been stated that the goods are internationally known as glass moulds meaning thereby that in trade parlance or common parlance the goods are known as glass moulds. The ld. SDR further submitted that on earlier occasion when the said goods were imported by the appellant they were described by them as glass moulds and were assessed to duty under Chapter Heading 70.20 of the Customs Tariff; that Customs Tariff Chapter Heading 70.20 is pan materia to Central Excise Tariff Chapter Heading 70.15. Thus, from whichever angle or test, the goods are looked at they were glass moulds and not Moulds for making plastic articles. In this view of the matter, the ld. SDR submitted that Chapter sub-heading 70.20 and the Notes in the Explanatory Notes of HSN under Chapter 70 clearly show that glass moulds will be covered by Chapter Heading 70; that Chapter Heading 70.20 of the Customs Tariff Act is pari materia to Central Excise Tariff Heading 70.15.
17. On the question whether glass moulds are a different commodity from Opthalmic Lense, the ld. SDR submitted that Glass Moulds are a different commodity from Opthalmic Lense as made out in his earlier arguments that the trade parlance and common parlance test clearly establish the same.
18. On the rules of Interpretation, the ld. SDR submitted that Rule 3(a) will not be applicable; that Rule 3(b) will not be applicable, however, Rule 4 was relevant in so far as the term 'most akin' is concerned.
19. On the question of the product being goods, the ld. SDR submitted that there was an import of the goods by the appellant himself which clearly showed that the product was being brought into the market for being bought and sold; that for being goods the product should be capable of being bought and sold in the market as a distinct item; that from whichever test the product is measured it is goods and known in the market as glass moulds.
20. Heard the submissions of both sides and considered them. The issues for decision can be broadly classified as under :-
(a) Whatever grinding and polishing of Opthalmic Blanks into Glass Moulds amounts to manufacture.
(b) Whether the goods are known in the market as Glass Moulds.
(c) Whether the goods should be classified under Chapter sub-heading 84.80 or under Chapter 70.15 of the Central Excise Tariff.
21. Arguments were adduced on behalf of the appellants that grinding and polishing were not process of manufacture and a lot of case law was cited and relied upon. We find that the product which comes out after grinding and polishing is a product completely different from raw-material namely the Opthalmic Blanks. The ground and Polished material acquires different characteristic and properties, and a new product distinct in name, character and use comes into existence after the process of grinding and polishing. Thus, the process of grinding and polishing is nothing but a process of manufacture. This view is further supported by the fact that Opthalmic Blanks are classified under Central Excise Tariff Chapter Heading 90 whereas neither party has claimed the classification of the disputed goods under Chapter Heading 90 which clearly shows that glass moulds are different and distinct from Opthalmic Blanks.
22. On the question of the name of the product known to the trade and its marketability, it was argued that the goods are moulds for plastic or plastic moulds. However, we find that the appellant has described the product as Glass Moulds, we also observe that in the memo of appeal it has categorically been stated that the product is internationally known as glass moulds. We also notice that when identical products were imported by the appellant himself, they were described as 'Glass Moulds'. Thus, we find that the product in common parlance and trade parlance was known as glass moulds. A lot of emphasis was placed by the appellant on the ground that the product is not marketable and does not come to the market for being bought and sold on the ground that the technology for manufacture of the product was a highly guarded secret and, therefore it was not available to the Trade in general. As against this contention, we find that the product was imported by the appellant himself and therefore it is not necessary that the product should essentially come to the market for being bought and sold. The Test is whether the product is capable of being bought and sold in the market. The Hon'ble Supreme Court in the case of U.P. State Electricity Board v. Collector reported in 1994 (70) E.L.T. 3 while dealing with the issue whether the pre-stressed cement concrete manufactured by the Board are goods within the meaning of Section 3 of the Act had observed :-
"The fact that the goods are not in fact marketed is of no relevance. So long as the goods were marketable, they are goods for the purpose of Section 3 of the Central Excises and Salt Act, 1944. It is not also necessary that the goods in question should be generally available in the market. Even if the goods are available from only one source or from a specified market, it makes no difference so long as they are available for purchasers. Now in the appeals before us, the fact that in Kerala these poles are manufactured by independent contractors who sell them to Kerela State Electricity Board itself shows that such poles do have a market. Even if, there is only one purchaser of these articles, it must still be said that there is a market for these articles. The marketability of articles does not depend upon the number of purchasers, nor is the market confined to the territorial limit to this country."
On reading these observations of the Apex Court, we find that every point raised by the appellants during the course of their arguments before us has been adequately dealt with in the above observations. There is no doubt in our mind. From the evidence on record we observe that the product was imported by the appellants themselves and, therefore this product is capable of being bought and sold in the market. The contention that because of the technology being highly guarded secret, therefore there was no sale of goods in the way sale is understood in trade parlance. The fact remains that the product is known in the international market and was imported by the appellant themselves once and, therefore, we hold that the product is marketable.
23. There was some controversy on the question whether the goods were moulds for plastic articles or moulds made of glass, for determining this issue perhaps no now arguments are needed. A lot of material has already been discussed in the preceding paragraphs. For determining as what the product is we have to rely on the test of common/trade parlance. From the evidence on record, we find that the admitted postition is that the goods are known -in the international market as glass moulds. We also observe that the appellants who are the manufacturer call the product as glass moulds. Even at the time of (sic) the product it was declared as glass moulds. Having regard to this ample evidence, we have no hesitation in holding that the product is known as glass moulds and can also be called moulds made of glass.
24. Having held that grinding and polishing is a process of manufacture as also that the product is known to the trade as glass moulds and also that it is capable of being marketed. We shall now proceed to deal with the classification of the product. The two compacting entries for glass moulds are Central Excise Tariff Chapter sub-heading 84.80 as claimed by the appellants and 70.15 as held by the lower authorities. A lot of emphasis was laid on Chapter Note 1(c) of Chapter 84 by the appellants whereas the department was of the view that the goods namely glass moulds are articles for technical use and the Plastic Gaskets were parts thereof and, therefore, were not classifiable under Chapter 84 and were appropriately classifiable under Chapter Heading 70.15. The appellants submitted that glass moulds are not articles of technical use and were therefore not covered by Chapter Note 1(c) inasmuch as glass moulds cannot be termed as appliances for technical use; that the term technical use is understood generally and as glass moulds were not appliances so they were not excluded from the purview of classification under Central Excise Tariff Heading 84.80. The appellants also argued that the goods in question were known as moulds for plastic lenses and that moulds for plastic lenses are specifically covered by Chapter Heading 84. However, the ld. SDR argued that the goods in question were not known as Moulds for plastic lenses but were simply known as glass moulds and, therefore, pleaded that the contention of the appellants cannot be accepted so far as the name of the goods in common/trade parlance is concerned. On careful consideration of the arguments adduced by both sides, we find that we have already held that the goods were known as glass moulds as admitted by the appellants. No evidence to the contrary has been brought on record that the goods were known to the trade who dealt in them by any other name. We. therefore, do not see any reason to change our view.
25. Explaining the implications on Note 1(d) to Chapter 70 at page 925 of HSN Explanatory Notes, the ld. Counsel for the appellant submitted that this note excludes optically worked elements and, therefore pleaded that possible classification of the goods under Chapter 84 is not ruled out even by Note 1(d) of Section XIII; that Central Excise Tariff Chapter sub-heading No. 84.80 specifically covers Moulds for plastics. That in the Explanatory Note under Chapter Heading 8480, there is a sub-heading 8480.50 reading as "Moulds for Glass" (page 1319 of HSN Explanatory Notes). It was argued on behalf of the appellants that the goods in dispute could be treated as Moulds for Glass and as Moulds for Glass are specifically covered under Chapter sub-heading referred to above, therefore there was no question of classification under any other. The ld. SDR submitted that Chapter Note 1(d) of Chapter 70 of the Explanatory Notes of HSN provides for optically worked optical elements ; that optical means for looking through for helping eyesight; that if this meaning is assigned to the word then the glass moulds .shall become classifiable under Chapter 90, which is nobody's case.
26. Referring to the Explanatory Notes of HSN at page 1321, the ld. Counsel submitted that Note 3 reads, "Moulds for making Plastic articles". It was argued by the appellant that the Moulds in dispute were undoubtedly for making plastic articles and, therefore, should fall under specific chapter sub-Heading 84.80. As against this, the ld. SDR submitted that on the same page moulds made of glass (Heading 70.20) were excluded from the purview of classification under Chapter Sub-Heading 84.80 that Customs Tariff Chapter Heading 70.20 was pari materia to Central Excise Tariff Chapter sub-heading 70.15 and, therefore, Glass Moulds were appropriately liable for classification under Central Excise Tariff Heading 70.15.
27. On careful consideration of the arguments adduced by both sides, we find that there is force in the arguments adduced by the ld. SDR inasmuch as we have already held that the Mould in dispute were Glass Moulds as known internationally and nationally in Trade/Commercial parlance. They were not moulds for making plastic articles and, therefore, in terms of the Explanatory Notes of HSN the goods were appropriately classifiable under Customs Tariff Heading 70.20 and Central Excise Tariff Heading 70.25.
28. A reference was made also to interpretative Rules and it was contended by the ld. SDR that Rule 3(a) was not applicable, Rule 3(b) was not strictly applicable and that Rule 4 is relevant inasmuch as the goods were most akin to Glass moulds, and that the word 'most akin' used therein is relevant inasmuch as the goods were most akin to glass items.
29. On the question of the case law relied upon and cited by the appellants, the ld. SDR submitted that the case law cited by the appellant pertains to old Tariff and as there is a vast difference in so far as the various items in the old Tariff and new Tariff are concerned, therefore the case law cited and relied upon by the appellants does not squarely cover the present case which is under the new Tariff.
30. In so far as the classification of Gasket is concerned, we find that Gaskets are an essential component and used for binding of Male and Female to form a Glass Mould Assembly and therefore were classified under Central Excise Tariff Chapter Heading 70.15 when they were imported along with Glass Moulds. Gaskets were given specific shape and design for the purpose of preparing those glass moulds assembly and, therefore, shall be classifiable under Central Excise Tariff Heading 39 as articles for Plastic. Notification Nos. 53/88 and 220/86 would not be available in view of the above Trade Notice.
31. The issue for determination before us was of classification. In view of the above findings we hold that Glass Moulds alongwith the Gaskets shall be classifiable under Central Excise Tariff Heading 70.15. In this view of the matter the impugned order is upheld and the appeal is rejected.