Customs, Excise and Gold Tribunal - Tamil Nadu
D.S.G. Industries (P) Ltd. vs Commissioner Of Central Excise on 5 June, 1997
Equivalent citations: 1997(96)ELT123(TRI-CHENNAI)
ORDER
V.P. Gulati, Vice President
1. The issue in this appeal relates to the classification of watch glasses which are manufactured in flat form out of float/plate glasses by cutting the same in size by trimming and working the edges to render the same usable for the same. The competing Tariff Items are 91.14, 7011.90 and 70.03. The said competing items are reproduced below for convenience of reference :
91.14 - Other Clock or watch parts 7011.90 - Other 70.03 - Glass of Heading No. 70.02 bent, edge-worked, engraved, drilled, enamelled or otherwise worked, but not framed or fitted with other materials.
2. The learned Advocate for the appellants has pleaded that the goods were originally classified under Tariff Heading 91.14 which covers watch parts and the appellants paid duty based on this approved classification. Subsequently, however, the department had second thoughts and issued a show cause notice for re-classification of the goods under Tariff Heading 7011.90 and the said classification after grant of personal hearing has been approved by the authorities and which is now disputed before us. The learned Advocate has pleaded that primarily he will be urging that the goods would be classifiable under Tariff Heading 70.03 taking into consideration the way the same has been formed. He has pleaded that the articles of float glass are covered under Tariff Heading 70.03 and not under 7011.90. His plea is that though Tariff Heading 7011.90 covers watch glasses, the same as per the Chapter Notes under HSN will have to be in a curved form for being assessed under this heading. He has pleaded that the appellant's goods are in a float form and, therefore, by reason of Chapter Notes to HSN on which Central Excise Tariff is based, the same would be classifiable under 70.03 rather than under 7011.90. He has pleaded that Chapter Heading 70.15 of HSN is similar to 70.11 of Central Excise Tariff and he referred us to notes at page 938 of the HSN wherein it is clearly mentioned that the watch glasses covered under that heading would be only those which are curved.
3. It was pointed to the learned Advocate that the description at the relevant time under Tariff Heading 7011 in the Central Excise Tariff and 7015 in the HSN was not exactly similar and the word curved after describing the glasses which are covered is missing in the description given under 7011 in the Central Excise Tariff and he was asked to explain when there was a difference in the description and the word curved specifically figured in HSN while it did not figure in the corresponding entry 7011 under the Central Excise Tariff, how the Chapter Notes of HSN could be pressed into service by him. He pleaded the word curved can be taken to classify only the optical glasses and not watch glasses. He pleaded that for assessment under 7003 he draws authority from the HSN corresponding Tariff Entry 7006 under which it has been set out that the heading not only in the form of semi-finished products but also articles of float glasses designed for specific purpose. He has pleaded for that reason the goods would merit classification under 7003.
4. He has further argued that under the Customs Tariff under Notification 43/85, dated 20-2-1985 an exemption has been granted to watch crystals i.e. watch glasses and the tariff heading shown against watch crystals is 9014. He, however, could not show us any authority in support of his plea that watch crystals and watch glasses are one and the same. Even otherwise, the exemption notification cannot determine the classification of the goods as the notification extend benefit to a certain category of goods and if the description of the goods have been elaborated notwithstanding the classification given, the benefit will have to be primarily considered based on the description of the goods. This plea of the appellants, therefore, for claiming the assessment under 91.14 in preference to assessment under Chapter 70 is not acceptable, as Chapter 70 covers under the various headings the articles and manufacturers of glasses more specifically.
5. Heard the learned JDR for the department. He has pleaded that the watch glasses is specific entry under Tariff Heading 70.11 and unless it could be shown that the appellant's goods are not covered by that entry, then only alternate classification should be considered. He has pleaded that the watch glasses and other glasses covered under this heading need not be curved. The word curved as it is does not figure in the Tariff description under Tariff Heading 7011 to classify the watch glasses as in the case of HSN. This word, he pleaded now figures in the latter version of the Tariff. He has pleaded for that reason, the correct classification would have to be under the heading which is more specific i.e. 7011 in the present case. In regard to the classification under Chapter Heading 90.14 he pointed out that by Chapter Note 1 to Chapter 91, the watch glasses are specifically excluded on the purview of Chapter Heading 91.
6. We have considered the pleas made by both the sides. We observe that while Chapter Heading 70.03 covers articles of float glasses, there is a specific entry for clock and watch glasses i.e. Tariff Heading 70.11. The description as given covers all types of clock and watch glasses and there is no specification as to the shape of the clock or watch glasses which would be covered under this heading. Admittedly, the description in the HSN at the relevant time was slightly different from the description under Central Excise Tariff Heading i.e. Heading 70.15 in HSN, the corresponding entry to the Central Excise Tariff i.e. 70.11 was differently wording and the words curved figured after the types of the glasses which are covered under this heading. Chapter Note of HSN, therefore, in our view cannot be taken cognisance of for entering the Tariff Heading 70.11. The entry being specific for clock and watch glasses without any qualification has to be taken to cover all ranges of the watch glasses notwithstanding their shape. The learned Advocate's reference to the Chapter Notes of 70.06 which corresponds to Central Excise Tariff 70.03 is also not relevant as the Tariff Heading 70.11 is specific for watch glasses and in terms of the interpretative rules for the interpretation of the tariff, specific entry takes precedence over the general entry.
7. We are, therefore, of the view that the goods have been rightly classified under 7011.90. At this stage the learned Advocate pleaded that since higher duty is now being demanded, the appellant should be allowed deduction for the duty element based on the duty which is now asked to be paid. In this connection he referred us to the judgment of the First Bench of the Tribunal reported in 1997 (19) RLT 66. The Hon'ble President, Justice U.L. Bhat speaking for the Bench in that case has held as under in para 2:
"2. Department has no case that besides price collected, any amount has been collected as excise duty. Therefore, whatever amount was collected must be treated as amount collected on the basis of cum-duty price. That being so, the amount of Rs. 30,389.25 which was the duty calculated on the wholesale price amount should be treated as part of the wholesale price and assessable value and duty calculated accordingly. This is supported by the observations of the Supreme Court in Assistant Collector of Central Excise v. Bata India Limited [1996 (14) RLT 613 (S.C.)]. It was observed therein that unless it is shown by the manufacturer that the price of the goods includes an amount of excise duty payable by him no question of exclusion of the duty element from the price for determination of value under Section 4(4)(d)(2) will arise. In other words, if duty is payable by the manufacturer that will be eligible for deduction from the price. As has come out in the facts of this case, the price realised by the respondent was cum-duty price and as duty was leviable on the goods and had, in fact, paid pursuant to the impugned order passed by the Additional Collector of Central Excise, the deduction of the duty element claimed for arriving at the assessable value was justified. It will make no difference whether the duty amount has been paid by the assessee at the time of clearance of the goods or it was paid subsequently. What is material is that the excise duty was payable on the goods. The impugned order in this behalf is, therefore, correct. We are told that there is an appeal against the imposition of penalty filed by the respondent which is pending in another Bench."
The appellant's claim, therefore, will be required to be examined in the light of this judgment.
8. We, therefore, for this limited purpose, remand the matter to the original authority for re-computation of the amount to be paid by them in the light of the principles laid down in the judgment referred to supra.
9. But for the above modification, the appeal is, otherwise, dismissed.