Customs, Excise and Gold Tribunal - Delhi
Glass And Ceramic Decorators vs Collector Of Customs on 29 June, 1990
Equivalent citations: 1990(50)ELT158(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. These appeals arise out of the various orders passed by the Collector of Customs (Appeals) Bombay and a common issue is involved in all these appeals from the same appellant which is, whether the consignment of ceramic colours imported by the appellants would be eligible for exemption under Notification 210/71 dated 25-12-1971. This notification exempted ceramic colours falling under Item 14 of Central Excise Tariff from the whole of Central Excise duty leviable thereon. The appellants herein carried out the process of multi-colour printing on glass bottles for which process they had imported ceramic colours. They were paying Customs duty under Tariff Heading 32.04/12 and no additional Customs duty (CVD) was paid till 1981 when Additional duty of Customs (CVD) was levied on the goods under Item 68 of Central Excise Tariff. The appellants paid the CVD, cleared the goods and subsequently filed refund applications. At about latter half of 1983, the Custom House started levying CVD on the goods under Item 14-I(5) as paints and enamels not otherwise specified. The appellants filed refund application subsequently claiming exemption from duty under Notification 210/71, which gives full exemption to ceramic colours. The various claims of the appellants were rejected by several orders of the Assistant Collector and were, subsequently, upheld by the Collector (Appeals). The Assistant Collector in the various orders gave reasons, namely, that as per test report, the product is a stable compound of calcined and purified inorganic pigment and lead silicate glass flux prepared in a wax carrier for application by machine. Reliance was also placed on a Tariff Advice No. 9/69 dated 13-9-1969 of the Central Board of Excise & Customs to the effect that ceramic glazes are not covered by Item 14-CET. In another order dated 25-9-1985, the Assistant Collector observed that the party later had clarified that the item under reference is used to produce matty on glass bottles by vitrification. He also observed that glazes may also sometimes contain a small quantity of ceramic colours but the percentage may be very small. Thereafter, again, citing the Board's Tariff Advice, the Assistant Collector held that the goods, being colour glazes, cannot be considered as ceramic colours for the exemption claimed. In another order of the Assistant Collector dated 16-12-1985, it has been stated that the test results recorded on the reference of the Bill of Entry for the product TP H2 156 Pepsi Red and TP1 H2 728-White or in the form of chips, each is composed of waxy matter pigment and glass frit and the Assistant Collector held that as such the benefit of Notification 210/71 cannot be extended as these are not ceramic colours. The Collector (Appeals) upheld these orders and in one set of the orders of the Collector (Appeals), he relied upon his previous order on the same subject and adopted the same reasoning in that order, namely, Order-in-Appeal No. 2609/87-BCH dated 11-7-1987. The Collector (Appeals) observed that ceramic colours are mixtures of metallic oxide like antimony, arsonic, cobalt etc. which are used for colouring the body on fusion of ceramic articles, and he observed that the ceramic colours imported by the appellants are mainly glass frit with wax and some inorganic pigments as seen from the sample of a previous consignment. He found that from its function and the use to which it was put the goods imported is similar to ceramic glaze or enamels and cannot be treated purely as ceramic colour.
2. Appearing for the appellants, the learned counsel Shri R.K. Habbu submitted that the goods imported have been described as ceramic colours in the related invoice of the foreign suppliers and they had been declared as such in the Bill of Entry filed for the clearance of the goods. Notification 210/71 gives full exemption to ceramic colours from Excise duty. The learned counsel contended that the ceramic colours were covered by Item 14-I(1) (ii) which covers pigments and colours not otherwise specified, and the learned counsel pointed out that the Assistant Collector had rejected their refund claim based on a test report of 1978 on another Bill of Entry; the department itself does not indicate what the goods are, if they are not ceramic colours. The Collector (Appeals) has based his decision on a proposition as to what constitutes ceramic colours, and this basis was not at all put to the appellants. The learned counsel further pointed out that the lower authorities had ignored the ratio of the Supreme Court judgment in the case of Dunlop India - AIR 1977 SC 597 = 1983 (13) ELT 1566 (SC). Mere chemical test alone should not be the criteria for classification. The appellants had also asked for re-test which has not been allowed. The appellants herein have furnished sufficient evidence indicating the use of the material as ceramic colours which are exempt under Notification 210/71. Therefore, their refund claim should be granted.
3. The learned Senior Departmental Representative Shri V. Chandrasekaran referred to the Paper-book in Appeal No. C/461/88-C at page 40, which gives the test report to the effect that the sample is in the form of paste containing pigment oil and glossy metallic; that it is prepared ceramic enamel and that is not ceramic colour. This shows, the learned SDR urged, that the test report while indicating that the goods are not ceramic colours, also says that they are prepared ceramic enamels. The learned SDR pointed out that there was no definition of ceramic colours as such even in the McGraw Hill Dictionary of Scientific and Technical Terms. Therefore, no empirical formula can be given to it. He referred to the appellant's letter to the Assistant Collector at Page 37 of the Paper-book in File No. C/461/88-C. In that letter, a lot of details about the goods imported is given as to its form and composition. The learned SDR then referred to page 80 of the Paper-book in Appeal No. C/1005/89-C. This is a letter dated 7-7-1983 from the appellants to the Assistant Collector, wherein they have given how the manufacturer classifies the product. It says that the goods are available in two forms - paste form and solid form - and that the manufacturer classifies the paste form as 'Z' series and the lump form as 'HZ' series. The learned SDR pointed out that it shows clearly that these are regular standard branded product of the manufacturer and yet the appellants had not at any stage produced manufacturer's literature relating to the product. The learned SDR also countered the submission of the appellants that lower authority's findings were based on the test results of a much earlier consignment by saying that for standard branded items, each and every consignment is not tested as a matter of practice in the Custom House but the previous test result is relied upon. He also referred to the HSN Explanatory Note at page 460 against Heading 3207.20 vitrifiable enamels and glazes engobes and similar preparations to say that the products are not ceramic colours.
4. We have carefully considered the submissions made by the learned counsel and the learned SDR. The question is whether the goods, which are described in the related invoice as ceramic colours and declared in the related Bill of Entry as such, are eligible for exemption from CVD under Notification 210/71 which gives exemption to ceramic colours falling under Item 14 from the whole of Central Excise duty. The appellants contend that they had requested for a re-test of the sample which they allege, had not been permitted. We find, however, that in the first instance the appellants had cleared the goods without contesting the assessment after the drawal of sample. The records show that the appellants had requested for the sample during the personal hearing in connection with their refund claim on 18-3-1985 on a consignment on which they had paid duty under Cash No. 7126/28-9-1983. The test memo of the Customs House Laboratory is dated 25-8-1983. Therefore, the request for re-test itself is found to be rather belated in the face of the clearance of the goods after the test. Secondly, the goods are branded products of the manufacturers and it is not the appellant's case that the composition of the product has changed between the period when these imports took place and that on which the test was conducted. Further contention that the departmental authorities and the test report had not stated what the goods are, if they are not ceramic colours, is also not borne out by records. The test report dated 25-8-83 clearly shows that the goods is prepared ceramic enamels and not ceramic colours. In the Assistant Collector's order dated 30-3-87, it has been stated that the goods have the characteristics of glaze enamels. Further, the letter dated 25-9-1985 of the Assistant Collector dearly calls the goods as ceramic glazes and not ceramic colours. It is further seen that in arriving at this conclusion, the Assistant Collector has relied upon the appellant's own clarification regarding the goods. In the letter dated 25-9-1985 of the Assistant Collector, it has been stated that the appellants in their letter dated 17-3-1983 had said that the * imported goods come under the description of Heading 32.08 of CCCN as verifiable enamels and glazes. The lower authorities have also followed the Tariff Advice No. 9/69 dated 13-9-1969 to say the ceramic glaze is different from ceramic colours and ceramic glaze is riot classified as pigments under Item 14-CET. The lower authorities, with reference to the Board's clarification, have held that the goods being in the nature of ceramic glaze are not ceramic colours and hence, not eligible for classification under Item 14-CET as pigments, colours paints and enamels and not exempt as claimed by the appellants. The Board's instructions as regards the scope of T.I. 14, being in the nature of contemporaneous exposition is also acceptable especially when considering that there is no technical definition available in standard works for ceramic colours and in the absence of any empirical formula for it. The appellants have made a further argument that the trade parlance criteria ought to have been adopted rather than test result for classification. However, the appellants have themselves failed to put forth any literature regarding the goods from the manufacturer, although it is evident from the records that the goods are standard branded products of the manufacturers, and the appellants themselves are aware of the groupings of the products by the manufacturer, as is seen from their letter dt. 7-7-1983 to the Asst. Collr., wherein they have explained that the manufacturers classify the paste form of the goods as 'Z' series and the lump form as 'HZ' series.
5. In the result, we see no reason to interfere with the orders passed by the lower authorities in these cases, and the appeals are, accordingly, rejected.