Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise, Kanpur vs M/S. Om Glass Works, M/S. Advance Glass ... on 12 April, 2001
Equivalent citations: 2001(76)ECC89, 2001(132)ELT122(TRI-DEL)
ORDER
Jyoti Balasundaram
1. The above appeals involve the common issue of classification of head light covers, made of glass, and used in automobiles, manufactured by the respondents herein. According to the Revenue, such covers fall for classification under ECT Sub-heading 7011.90 as "optical elements of glass, not optically worked", while the assessees contend that the goods are classifiable under CET Sub-heading 90.01 " other optical elements of any material", as according to them, the optical elements have been optically worked. The process of manufacture in Om Glass Works was noted by t he Assistant Commissioner after visiting the factory on 18.6.96 as under:
(a) In relation to the manufacture of head light covers they are using specially designed dies on which chrome plating and polish is done to manufacture good quality head light covers with an accurate focus.
(b) Molten glass is poured and then pressed in the dies
(c) The piece of head light cover is then taken out from the die and immediately transferred to anealing layer for anealing.
(d) After this process the piece of head light covers is taken to grinding belt where the edges of the head light covers are grin with the machine to smoothen it.
(e) Thereafter the piece of head light cover is polished with the machine using durham oxide (in fluid) The factual position as set out above has not been challenged by M/s.Om Glass Works in their appeal before the lower appellate authority against the decision of the Assistant Commissioner who approved their classification list under CET Sub-heading 7011.90. Further the other 3 assessees also have not disputed the process of manufacture as set out above which ha been taken to be the process carried out in their premises also. We have considered the rival submissions.
2. While it is clear that optical properties responsible for generation of a concentrational beam of light exist in the head light covers, the question for determination is whether such optical properties have arisen by way of optical working. From the process of manufacture set out above, lit can be seen that what takes place is moulding of glass in specially designed dies, grinding of edges of the moulded place and polishing with Barium Oxide. The Assistant Collector has noted on his visit to the premises of M/s.Om Glass Works that the head light covers are usually convex, hemispherical or flat with grooves on the concave (inner) side normally running parallel. Optical working of glass, as per HSN Explanatory Notes to Chapter Heading 90.01 at page 1459, is usually performed in two stages viz. the production of the surfaces 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, trueing, 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 centring and edging operation. This heading applies only to optical elements of which the whole or p art 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 which have been polished after moulding. The heading does not apply to unpolished elements having undergone merely one or more of the processes which precede polishing. Such elements fall in Chapter 70. Applying the above to the process of manufacture of the goods in question, we find that the gods in question cannot be said to be optically worked for the reason that only the edges of the head light covers are ground with the machine to smoothen its edges, as admitted by Sari Pradeep Gupta. Mere grinding of edges will not amount to grinding of the transmission surface of the Head right covers, as explained in HSN Explanatory Notes to Heading 70.14 at page 937 and further for the reason that the process of trueing is not carried out in the factory of the respondents. Therefore, grinding of edges in order to smoothen the same and making the head light covers of the required size is totally different from the grinding required in optical working which consists of grinding the surfaces meant for transmission by means of abrasives, rough at first, then grinding finer, successive operations being roughing, trueing, smoothing and polishing. The respondents have sought to explain that trueing and smoothing is not required due to availability of better moulds (chrome plated) which is what Sari Bal Kishan Gupta, representing M/s.Om Glass Works and M/s.Advance Glass Works has stated in the record of personal hearing before the Assistant Collector. However, this claim has not been substantiated with reference to any technical literature and further the HSN Explanatory Notes to Chapter 90 also does not bear out the above contention of the respondents.
3.1 The Development Officer (Glass), UP District Kanpur in his letter dated 30.11.89 has certified as under:
"We have examined and tested the sample of headlight covers brought to us from the factory of Advance Glass Works, Firozabad, and find that they have all the optical properties, without which they cannot be used in the headlight of motor vehicles/scooters, etc. These optical properties are the following:
1. Homogeneity of glass approved in headlights
2. Transmittance free of any defects
3. Strain free as test by polariser We further certify that for acquiring these optical properties the glass headlight covers should be suitably worked to acquire optical effects and without such working optical effects cannot be present in the headlight covers"
This report is factually incorrect in view of the fact that the process of optical working as described in the HSN Explanatory Notes is non-existent in the manufacturing process of head light covers carried out by the respondents. Therefore, we are of the view that this Certificate cannot be relied upon.
3.2 The report of the Center for Improvement of Glass Industry is as under:
"Sub:Technical report on head light cover Kindly refer to your letter dated 23.9.94. on the above subject. In this regard it is clarify here that the manufacture of auto head light cover involved the melting and passing of glass by special type of moulds, grinding and rubbing of the fabricated piece of head light and finally polishing of the glass. The above procedure is adopted by the unit to have better optical properties such as refractive index, dispersion which enhance the transmission of light as a whole.
The analysis also revealed the presence of barium oxide in the glass responsible for brilliancy, strength and elasticity which are specifically required for the auto head light."
This report specifically refers to grinding and rubbing of the fabricated piece of head light and finally polishing of the glass which is contrary to the process explained to the Assistant Collector by Pradeep Gupta, who has admitted that they are only grinding the edges of head light covers with the machines to smoothen its edges. In other words, the report that the entire grinding of the head light covers takes place is contrary to the admission that the manufacturing process involves only grinding of the edges and not the entire fabricated pieces of head light covers. Therefore, this report is also not to be relied upon.
3.3 The technical report of Shri Des Raj Malhotra, Glass Consultant on auto head light covers manufactured by M/s. Om Glass Works in which he has stated that the manufacture involves pressing of molten glass in special type of chrome plated moulds, annealing, sorting, grinding, rubbing of the fabricated pieces of the auto head light covers and finally the polishing of the light covers and finally the polishing of the upper surface. For better optical properties such (a) dispersion of light-which enhances the transmission of light as a whole, (b) strength. The use of Barium Carbonate (Barium Oxide) in your glass batch checked by me is confirmed.
Does not help the assessees as Shri Malhotra has specifically stated about grinding of the entire surface of the head light covers, which is contrary to the admitted process of manufacture.
3.4 The letter dated 17.11.80 by National Physical Laboratory to Advance Glass Works is also not conclusive of the moot point viz. as to whether the head light covers in questions are optically worked. The NPL letter states that four types of glass lenses brought to the Lab for testing are designed to be used as cover glasses for head lights of motor vehicles, tractors, etc., and the glasses have been designed with such optical properties in the final end product shaper to transmit light and give a light distribution to a set pattern as required by headlight fittings.
This letter is, therefore, not determinative of the issue of optical working and hence does not advance the case of the assessees.
4. In the light of the above discussion, we hold that the head light covers manufactured by the assessees herein are not optically worked and hence not classifiable under Chapter 90 of the Schedule to the CETA 1985. (The plea for consideration of classification under Chapter 90 was raised in the miscellaneous applications No.E/517-518/2000 by M/s Advance Glass works and Om Glass Works for amendment to their cross-objections and the miscellaneous applications are allowed).
5. Having ruled out classification under Chapter 90, what remains for consideration is whether classification under Chapter Heading 70.11 or 87.08 is appropriate. The HSN Explanatory Notes to Heading 70.14 at page 937 states that optical elements of glass not optically worked remain under Chapter Heading 70.14 even if framed, set in a mounting or backed with a reflecting surface but recognised finished articles are excluded. HSN Explanatory Notes to Section XVII at page 1412 states that parts and accessories even if identifiable as for the articles of Section XVII are excluded if they are covered more specifically by another Heading elsewhere in the nomenclature. Several examples are given and SI.no.10 of the examples states that in general good of Chapter 70 are excluded from Section XVII. Applying the HSN Explanatory Notes as set out above, we hold that the classification under Chapter Heading 70 i.e. CET Sub-heading 7011.90 as claimed by the Revenue is most appropriate. We, therefore, set aside the impugned order and allow the appeals of the Revenue.
6. The point raised in the (SIC) is that the Assistant Collector exceeded the scope and remand proceedings by raising a duty demand and subsequently confirmed it in the adjudication order. In other words, it is the submission of the respondents that the Tribunal's Order No.E/6 to 12/94 dated 7.1.94 only remanded the case for decision on classification of the goods. However, this objection is overruled in view of the fact that a show cause notice raising the demand was also issued to the respondents. The second ground raised in the Co is that the Revenue has relied only upon CBEC Circular No.13/89 dated 11.4.89 to plead that the goods in question are classifiable under Chapter Heading 70.11 of the Schedule to the CETA. This objection is also not sustainable in view of our independent finding based upon the tariff entries and the HSN Explanatory Notes. The Cross-objections are, therefore, dismissed.
7. In the result the appeals of the Revenue succeed.