Allahabad High Court
Hindustan Safety Glass Works vs Commissioner Of Sales Tax on 5 August, 1998
Equivalent citations: 1999(105)ELT288(ALL), [1998]111STC661(ALL)
Author: S.L. Saraf
Bench: S.L. Saraf
JUDGMENT S.L. Saraf, J.
1. Heard Sri Bharat Ji Agrawal, learned counsel for the applicant and the Standing Counsel appearing for the department.
2. The only controversy raised in the instant revision is whether glass screen manufactured by Hindustan Safety Glass Works, Bamrauli, would fall under item 39 of the notification dated 20th May, 1976 or be treated as unclassified item.
3. The counsel for the applicant argued that this is an unclassified item not falling within entry 39 aforesaid which speaks of all goods and wares made of glass. According to the applicant the honourable Supreme Court had an occasion to decide in the case of Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322 ; 1986 UPTC 1345 and in the case of the applicant itself that glass mirrors cannot be classified as other glass and glassware set forth in tariff item No. 23A, Schedule I, Central Excises and Salt Act, 1944. The Supreme Court decided that the glass screens manufactured for fitting in motor vehicles which are commonly known as wind screens, and door screens, cannot be described as "glass or glasswares".
4. Sri R.D. Gupta, Standing counsel on behalf of the Revenue has submitted that the said item would squarely fall under the heading "All goods and wares made of glass". According to the respondent's counsel in the instant case glass sheets are made toughened by heating and other process. As such, a new product of glass is manufactured. The aforesaid proposition was not involved in the aforesaid Supreme Court decision [Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322] and it is easily distinguishable.
5. For understanding the contentions of the parties, I quote the following entries :
Entry in tariff item No. 23A, Schedule I, Central Excises and Salt Act reads as under :
"23A Glass and glassware--
(1) Flat glass ... 35 per cent ad valorem.
Explanation.--'Flat glass' includes sheet glass, wired glass and rolled glass whether in the form of plate glass, figured glass or in any other form.
(2) Laboratory glassware ... 10 per cent ad valorem.
(3) Glass shells, glass globes and ... 15 per cent ad valorem.
chimneys for lamps and lanterns.
(4) Other glass and glassware including ... 35 per cent ad valorem.
tableware.
Explanation.--This item does not include electrical insulators or electrical insulating fittings or parts of such insulators or insulating fittings."
Entry 39 of the notification dated May 20, 1976 issued under the U.P. Trade Tax Act, 1948 reads as under :
"39. All goods and wares made of glass, but not including plain glass-
panes, optical lenses, hurricane lantern chimneys, bottles and phials, glass-beads, clinical syringes, thermometers and scientific apparatus and instruments made of glass."
It appears that the matter whether the glass screens manufactured by the applicant is to fall under the entry unclassified item or under the specific provisions of entry "glass and glassware". Under the Central Excises and Salt Act, 1944, it has been decided by the Supreme Court in favour of the revisionist holding that the said item would fall under the residuary item and not under the head "glass and glassware". The Supreme Court in the abovementioned case has been pleased to observe as follows :
"A broad description of the process through which a glass sheet passes has been detailed earlier. It indicates clearly to our mind that the original glass sheet undergoes a complete transformation when it emerges as a glass mirror. What was a piece of glass simpliciter has now become a commercial product with a reflecting surface. Into the process of transformation have gone successive stages of processing with the aid of chemicals such as stannous chloride, silver nitrate and copper coating besides an entire range of physical processes involving polishing, washing, coating, drying, varnishing, evaporation and cooling. The evolved product is completely different from the original glass sheet. What was once a glass piece in its basic character has no longer remained so. It has been reduced to a mere medium. That is clear if regard is had to the fundamental function and qualities of a glass mirror. The power to reflect an image is a power derived not from the glass piece but principally from the silvering and other processes applied to the glass medium. If any part of the coating is scratched and removed, that particular area of the glass mirror will cease to be glass mirror........."
It was further observed :
"The screen is manufactured from sheet glass. It is first given shape and size according to the specifications contained in the order and thereafter subjected to the process of toughening. It is a fabricated article."
The Supreme Court has further observed as under :
"...................We have no hesitation in holding that the screens cannot be described as 'glass or glasswares' under tariff item No. 23A(4). No one dealing in or using the screens would consider them as 'glass or glassware'. They can only be considered as motor vehicle parts."
6. The aforesaid judgment of the Supreme Court.[Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322] clearly lays down that a new product emerges out of glass sheets when glass mirror is being manufactured. Similarly glass screen is also considered by the Supreme Court to be a new product and the Supreme Court said that it has no hesitation in holding that the screens cannot be described as "glass or glassware".
7. Now coming down to the present case, description as per entry 39 of the notification dated May 20, 1976 is of "all goods and wares made of glass, not including plain glass-panes". This means that all items of glass have not been included as part of "glass and glassware". Plain glass-panes have been excluded from the scope of entry 39 aforesaid. Glass screen manufactured by the assessee is more akin to glass-panes rather than glassware. The said item has been excluded from the scope of item No. 39. Glass screen is manufactured out of glass sheets and it is a new item. As such, the same is excluded from the said entry 39. Following the Supreme Court decision [Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322], I have no hesitation in holding that the aforesaid goods fall under unclassified item rather than in item No. 39 of the notification. In any case, if it falls under item No. 39, the same is by way of exclusion.
8. Coming to the part of the decision of the Tribunal in paragraph 12, I have no hesitation in saying that the Tribunal had committed an error in making a distinction between item No. 39 of the said notification as stood prior to May 20, 1976 and subsequent thereto. Categories of the glassware and meaning thereof remain the same even after the notification dated May 20, 1976.
9. In that view of the matter, the revision is allowed. The impugned order of the Tribunal is set aside. Toughened glass sheets manufactured by the revisionist will be taxed as an unclassified item. There will be no order as to costs.