Customs, Excise and Gold Tribunal - Delhi
Shon Ceramics Pvt. Ltd. vs Collector Of Central Excise on 7 November, 1990
Equivalent citations: 1991(52)ELT608(TRI-DEL)
ORDER G.A. Brahma Deva, Member (J)
1. This appeal was originally filed before the Central Board of Excise & Customs against the Order-in-Original No.11/MP/1980 dated 10-6-1980 passed by the Collector of Central Excise, Baroda, which has been statutorily transferred to this Tribunal for being disposed of as an appeal in terms of Section 35-P(2) of the Central Excises and Salt Act, 1944.
2. The issue in the present case is whether the product manufactured by the appellants was a Mosaic Tiles falling under Central'Excise Tariff Item 23D as claimed by the appellants or a Chinaware and Porcelain ware falling under Tariff Item 23B as held by the Department.
3. The facts of the case, in brief, relating to this issue are that the appellants were served with a Show Cause Notice dated 6-10-1976 charging that they availed wrongful exemption under Notification No. 208/73 dated 13-12-1973 and No. 38/75 dated 1-3-1975 in respect of the value of goods cleared on production which were chargeable to duty and classifiable as Chinaware and Porcelainware under Tariff Item 23(B)(4) for the period April, 1974 to March, 1976 under the false description that the goods were non-excisable terracotta tiles. Show Cause Notice was duly answered by the appellants contending that originally classification list submitted by them was at the instance of the Department official which was a mistake and they never manufactured products which were classifiable under Item 23(B), the product manufactured by them was a mosaic tile commercially known as mosaic tile, as contemplated in explanation to Tariff Item 23D. It was also urged that the issue of classification for the subsequent period was decided by the Appellate Collector in their favour classifying the item as mosaic tile as per orders-in-appeal Nos. 1454/78 and 1455/78 dated 16-12-1978 and the demand in this case was directly in conflict with that order. The Collector who adjudicated the proceedings held that the item in question was classifiable under Item 23B(4) on the ground that the appellants themselves declared the item as classifiable under Item 23B to avail exemption under Notifications and the appeal order referred to by them relates to a different period and event and among other grounds. Aggrieved by this order on the issue of classification the appellants have come before us by way of this appeal.
4. We have heard Sri R.K. Jain, learned Consultant for the appellants and Sri L.C. Chakraborty, learned JDR for the respondent.
5. Sri R.K. Jain appearing for the appellants submitted that issue of classification was decided by the Appellate Collector for the subsequent period in favour of the party classifying it as mosaic tile and that order has become final on point of classifcation as no appeal was filed against that order nor was reviewed. The impugned order was passed subsequent to the Appeal order and the adjudicating authority has taken a different view and deviated from the appellate authority in classifying the item in question without any cogent reasons. The Original Authority is bound by the decision of the appellate authority and it was not open for him to take different view when there is no change either in the manufacturing process or change in the Tariff entry in respect of the product in question. He referred to the decision of this Tribunal in the case of Orient Paper Mills, Shahdol v. Collector of Central Excise, Bhubaneswar, wherein it was held that Collector of Central Excise was not empowered to pass an order in respect of matter disposed of by Appellate Collector. He also relied upon the decision of the Allahabad High Court in the case of Nandan Iron & Metal Industries, Kaithal v. Union of India & Others reported in 1978 (2) ELT (J 39) (All.) wherein it was held that when the Central Government has accepted for one period that brass cylinders manufactured by the petitioners fell within the Item 26A(la), there is no reason why these goods should not be treated as falling under the same classification for an earlier period. He contended that impugned order is liable to be quashed on this legal point alone apart from merits. He urged that burden lies on the Department to prove the classification of the product with reference to Explanation in the Tariff Entry which has not been done in this case. In this connection he drew our attention to the observation of the unreported decision of Bombay High Court in para 3 of Writ Petition No. 3438/89 in the case of Kamlakshi Finance Corporation Ltd. y. Union of India & Others reported in 1990 (47) ELT 231 (Bom.), which reads as under:-
"This Writ Petition bears out the useless and unsatisfactory manner in which officers of the Excise Department carry out their duties and it does not matter whether the officers are attached to this division or that. The purpose of their orders appears to be to classify the product under the heading which will attract the maximum duty irrespective of whether that is the proper classification or not and also without taking into account the decisions of the Tribunal or of the Appellate Collector. Discipline would require that they would be bound by it but the paramount discipline in the Excise Department appears to be to try to secure as such money as possible from the assessees and not to do what is right or correct or legal."
He said that commodity was sold as mosaic tile as it was commercially known in the market as per explanation to Item 23D of the Tariff. Sufficient evidence was produced by the appellants to prove this aspect but it was ignored by the Collector whereas same evidence was appreciated by the Appellate Collector for subsequent period while classifying the same item as mosaic tile. Description in the explanation to Tariff Item 23D is the criterion to determine the classification of the product and he relied upon the decision of this Tribunal in the case of Mridul Enterprises v. Collector of Central Excise [1988 (37) ELT 279].
6. Sri L.C. Chakraborty, while countering the arguments, submitted that the two decisions cited by the appellants' counsel on the point of binding nature and authority should accept the same classification for different periods are not applicable to the facts of this case. He said in the case of Orient Paper Mills the distinction was made between the Executive Collector and Appellate Collector in respect of the same matter whereas in the present case the Collector has adjudicated the proceedings as an adjudicating authority and he is at liberty to take independent view on available materials for different period. Further the matter was related to refund which was considered by the Appellate Authority and the Collector has dealt with in respect of demand in the present case. In the case of Nandan Iron & Metal Industries, it was a case which was reviewed by the same authority, i.e., Central Government for different periods and that is not the case at present as it was dealt by the independent adjudicating authority for different period. On merits, he said that Tribunal emphasised only on trade parlance in determining the classification in the case of Mridul Enterprises (supra), whereas the Adjudicating authority has classified the item based on declaration, description, meaning and contents of the product with available evidence. He reiterated the grounds adopted by the Collector while justifying the impugned order.
7. We have considered the arguments advanced on both sides and perused the records. On going through the impugned order it is evident that Collector mainly has proceeded to classify the item in question based on the declaration filed by the appellants at the first instance. There is no estoppel in law against a party in taxation matters for claiming change of classification as it was rightly argued by the appellants' counsel. Revised classification list was filed and claimed accordingly. Next the Collector has taken description and properties of the product as basis while determining the classification. The item was described by the appellants as ceramic vitreous mosaics and declared that Shon Mosaics are made of hardened permanently coloured Vitrified body. Relying upon meaning and expressions of the terms 'Vitreous', vitrefication and vitrify used in the Condensed Chemical Dictionary, 9th Edition, Revised by Gessner G. Hawley and the Webster's Third New International Dictionary (Unabridged) as 'that the item changed into glass or a glassy substance by heat'. We have come to the conclusion that product manufactured by the appellant was a porcelainware. But Tariff Item 23D clearly lays down the condition into the explanation below the main heading that for the purpose of classification, tiles known as Mosaic tiles commercially should be considered mosaic tiles. It means Chemical contents of mosaic tiles are not to be considered while deciding the classification under Item 23D. The appellants have also produced evidence to establish that the product manufactured by them are considered to be mosaic tiles in trade parlance. The Department has not produced any material evidence to rebut it. Further this aspect was well considered by the Appellate Collector for the subsequent period with reference to explanation under T.I. 23D. The same view was expressed by the Tribunal in the case of Mridul Enterprises (supra) while deciding the issue of classification in respect of glass mosaic tiles it was held that they were not classifiable as glass and glasswares under Item 23A but the same were classifiable under Item 23D emphasising on the usage of trade parlance with reference to explanation under Item 23D.
8. In the view we have taken we do not find any justification in the view taken by the Collector in classifying the item under Item 23B. We hold that the goods in question were classifiable as mosaic tiles under Tariff Item 23D and accordingly, we allow the appeal on the issue of classification with consequential relief.