Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs And Ors. vs Gopalkrishna Bros. And Ors. on 1 July, 1986
Equivalent citations: 1986(9)ECC148, 1986(26)ELT414(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. All these appeals relate to (a common issue and were, therefore, heard together. The relevant details in each appeal as to the name of the assessee, number of the order in appeal etc. are given in the annexure to this order.
2. The assessees in all these matters had imported Ophthalmic Rough Blanks. They had been called upon to pay additional duty of customs on such imports on the basis that the subject goods fell under T.I. 23A(4) CET. They later applied for refund questioning the said classification. In some of the matters the Appellate Collector concerned accepted the claims and held that proper classification would be under T.I. 68 CET. He, therefore, ordered refund of the difference in duty. In other cases (except one) the Appellate Collector upheld the order of the Assistant Collector. In the remaining case (Appeal No. 497/80) the refund claim has 'been rejected as barred by time in terms of the provisions of Section 27(1) of the Customs Act. In cases where the Appellate Collector had granted relief in the manner abovesaid, the Central Government issued two review show cause notices under Section 131(3) of the Customs Act as the Government were tentatively of the view that the classification ordered by the Assistant Collector was proper and hence the orders of the Appellate Collector were wrong. In the other matters, the Assessees (who had been denied relief by the Appellate Collector also) preferred Revision Petitions to the Government. Proceedings so initiated under the two review show cause notices, as well as the Revision Petitions preferred by the assessees, are now before us, on transfer, as appeals.
3. Except five of the assessees who did not personally participate in the hearing before us all the other assessees were represented by Shri M. Venkatraman, Advocate. The Department was represented by Smt. Dolly Saxena, S.D.R.
4. The facts are not in dispute. The subject goods are Rough Ophthalmic Blanks. They are made wholly of glass. Shri Venkatraman explained, with reference to the diagram of production line for raw blanks (as found in the Corning Special Issue of the Indian Optician for December, 1984-January, 1985) that the molten glass is refined for elimination of gases and then subjected to cooling and mechanical blending operations and, thereafter, as the glass stream leaves the delivery tube, it is cut into gobs or constant weight quantities of glass which correspond exactly to the pressed moulding weight. These gobs fall into the press moulds. The pressing machine determine the dimensional characteristics of the blanks, external diameter, convex curve, concave curve and moulding edge shape. The moulding is then annealed to reduce stress. He said that it was blanks so manufactured that have been imported.
5. Smt. Saxena for the Department contended that the subject goods would fall for classification under TI 23A(4) CET as they are articles of glass, though not glassware or tableware and, therefore, fell within the description "other glass" in the Tariff entry. She relied upon the judgment of this Tribunal in the case of Jintan Clinical Thermometer Company (India) Pvt. Ltd. (Order No. 211 of 1985-D in Customs Appeal No. 780 of 1983-D). She pointed out that in that case Capillary Glass Tubings for Clinical Thermometers were held to fall under T.I. 23A(4), though the said goods had special use for the purpose of manufacture of clinical thermometers. She contended that similarly in the present instance also though rough ophthalmic blanks may have utility for purpose of manufacture of spectacle lenses only, they would still be classifiable under the heading "other glass" in T.I. 23A(4) CET.
6. In this connection Shri Venkatraman contended that the goods concerned in the case of Jintan Clinical Thermometer Co. (India) Pvt. Ltd. were imported as glass tubes, and sold as glass tubes, and, therefore, known as articles of glass and that was the reason why they were classified under TI 23A(4) CET. According to him, the same result would not follow in the case of rough ophthalmic blanks, since they are not imported or traded as glass simpliciter but as a special commodity for purpose of manufacture 'of spectacle lenses. According to him the description "other glass" would mean something other than an article of glass (such as the glass tubes for clinical thermometers). His contention is that "other glass" would be glass in mass or glass in bulk. But it may be noted that in the case cited supra also it had been observed that the goods in question in that case also were not glass in mass or glass in bulk or unwrought glass or primary glass, nor were they glassware. Thereafter they were classified as "other glass". Therefore, the contention that "other glass" would mean glass in mass or glass in bulk only, is not acceptable.
7. Shri Venkatraman then contended that the subject goods had optical properties and for that reason also could not qualify for description as "other glass". It may be noted that in Collector of Central Excise, Kanpur v. West Glass Works (1984 Vol. 17 ELT 368) it had been held by this Tribunal that the true test for classification under T.I. 23A(4) is not the actual process adopted for manufacture but the identity of the goods with the relevant description or definition in the First Schedule or, failing that, in terms of commercial parlance and further that the existence or otherwise of optical properties, as distinguished from the exact specification required for optical glass, is no criterion for inclusion in, or exclusion out, of Item 23A(4). Therefore, the circumstance that the rough ophthalmic blanks may have optical properties (even if it is established) would not, by itself, lead to exclusion from Item 23A(4).
8. Shri Venkatraman contents that these goods are not known as articles of glass, and are not imported as glass or articles of glass, and for this reason also TI 23A(4) is to be excluded. -But we may note that in pages 34 and 35 of the Indian Standard Glossary of Terms relating to Glass and Glassware (I.S. 1382/1981) ophthalmic glass, optical blanks, optical pressings etc. are all defined. Both sides are agreed that the subject goods are not glassware. They do not fall in Sub-item 1-3 of Item 23A. Hence the inclusion of the above words in the Indian Standard Glossary above noted would establish that the ophthalmic blanks are recognized in the trade as glass. The Supreme Court has held in Empire Industries Ltd. v. Union of India (1985 Vol. 20 ELT 179 S.C.) that the views of the Indian Standard Institution can be looked into in such matters with a certain amount of credibility we are of the view that the inclusion in the Glossary prepared by Indian Standard Institution would furnish ample proof of the commercial description of an article and the commercial identity of the same. Therefore, the argument that ophthalmic rough blanks, though made of glass, are not known in the trade as glass is not acceptable.
9. Shri 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, Ophthalmic 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) Ophthalmic Glass Blanks : Ophthalmic 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.
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.
(3) Photographic Lenses : These articles are classifiable under Tariff Item 68:
(Madras Collectorate Trade Notice No. 97/79, dated 27-4-1979).
10. According to him the subject goods will fall for classification under TI 68 in terms of sub-paragraph 2 of paragraph 2 of the above trade notice. It may be noted that Shri Venkatraman's submission, when questioned as to the nature of the goods (when imported) and the subsequent process carried out thereon by the importers, was that the rough ophthalmic blank, as imported, was of the required dimension, currature, diameter and moulding edge shape and that it was only final polishing that was done by the importers before they supplied the same to the opticians who are to convert them finally into spectacle lenses for individual use. According to him the final polishing was to remove the opacity in the rough blanks. A sample was also shown to us of such opaque rough blanks.
11. In the light of the above it appears to us that Ophthalmic rough blanks imported by the assessees would fall in sub-paragraph 1 of paragraph 2 of the trade notice rather than sub-paragraph 2. The optical qualities, though inherent in the rough blanks, would become explicit only after the final polishing done by the importers. Therefore, it appears to us that the goods will fall under sub-paragraph 1 rather than sub-paragraph 2 of the trade notice.
12. Shri Venkatraman relied upon the decision of this Tribunal in Gujarat Machinery Manufacturers Ltd. v. Collector of Central Excise, Baroda (1983 ELT 1249), We find that in that judgment also the following observations are to be found as to how trade terminology or trade parlance is to be applied in case of such specialised goods. "The fact that frit is not known as "Glass and Glassware" to dealers in ordinary glass and glassware items would not in our opinion ipso facto detract from the position that it is glass". There is another passage in the said judgment which would also be relevant in this connection. This is to be found at page 1255 and reads as follows:
"Apart from this there is a clue or indication in the terminology employed in item 23A as to the scope of the said item. The explanation appearing at the end of the item provides that electrical insulators or electrical insulating fittings or part of such insulators or insulating fittings are not included in 23A CET. This is a good evidence of the position that but for the said exclusion, the articles described therein, namely, electrical insulators, etc. would have fallen within 23A CET. Having regard to the nomenclature of Sub-item (1), (2) and (3), it is clear that these articles would have fallen only under Sub-item (4). These goods are not such as are stocked and sold by dealers in ordinary glass and glassware".
13. Another passage in the said judgment which would also be relevant occurs at page 1256 and reads as follows:
"The appellants have cited several judicial pronouncements laying down that meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand them in the usual course and that in interpreting taxing statutes resort should be had not to the scientific or technical meaning, but to the meaning attached to them by those dealing in them in their commercial sense. As we have stated already, the scope of the term "other glass" appearing in Item 23A(4) CET has to be under jod not necessarily and only in the sense in which dealers in ordinar, glass and glassware articles understand it, but having due regard in cases such as the present one (where the product is of a special nature and has a very limiied market being of interest only to manufacturers of glasslined equipment and not to the general trade and industry) to the sense in which people requiring the product understand it. From this point of view, we have the guidance of not only the CCN and the Indian Customs Tariff Schedule, but also the Indian Standards Publications, in all of which frit is described as glass".
14. It has already been seen that ophthalmic rough blanks have been dealt with in IS : 1328-1981 prepared by Indian Standards Institution, the same being a glossary of terms relating to glass and glassware. Since both sides are agreed that the subject goods are not glassware, the fact that they have been dealt with in the above glossary would indicate that these goods are recognized in the trade as glass. These goods have no doubt a limited market only, being of interest to manufacturers of spectacle lenses only, and not to the general trade and industry. They would have to be held to fall within the description "other glass" occurring in T.I. 23A(4), when it is seen that these goods do not fall under Sub-items 1 to 3 of TI 23A or within the other words in Sub-item 4 (glassware including tableware).
15. In the light of the above discussion we hold that the goods in question were properly classifiable under TI 23A(4)-CET for purposes of levy of additional duty of customs. That would mean that the review show cause notices were based on a correct appreciation of the facts and law and that the orders of the Appellate Collectors with reference to which these review show cause notices were issued are liable to be set aside. It further follows that where the Appellate Collectors themselves had held the classification as under T.I. 23A(4) the said orders are to be upheld and the appeals against the said orders are to be dismissed. So far as appeal No. 497 of 1980 is concerned, it relates to a refund claim which was admittedly preferred beyond the period prescribed under Section 27 of the Customs Act. The rejection of the said refund claim was, therefore, justified on that ground itself and hence that appeal also deserved to be dismissed.
16. Accordingly appeal Nos. 1335/80-D, 1429 to 1437 of 1986 D, 1012 of 1980-D; 1425 to 1428 of 1986-D are allowed, setting asidethe orders of the Appellate Collectors and restoring the orders of the Assistant Collectors in these matters. Appeal Nos. 923 of 1981, 242 of 1981 and 497 of 1980 are dismissed.