1984 (10) TMI 225 - AT - Central Excise

Issues Involved:

1. Classification of tiles under Item 23A(4) of the First Schedule to the Central Excises and Salt Act, 1944.
2. Validity of the Assistant Collector's classification of the tiles.
3. Examination of the Board's revision order classifying the tiles as "glass" and "glassware."
4. Relevance of commercial parlance and trade usage in classification.
5. Consideration of technical and scientific evidence in classification.

Detailed Analysis:

1. Classification of Tiles under Item 23A(4):

The primary issue for consideration was whether the tiles manufactured by the Appellant fell within Item No. 23A(4) of the First Schedule to the Central Excises and Salt Act, 1944. The Assistant Collector initially classified the tiles as building material, not as "glassware" under Item 23A(4). The Central Board of Excise & Customs (CBEC) later revised this classification, arguing that the tiles, made from similar raw materials and through a similar process as glass, should be classified as "other glassware."

2. Validity of the Assistant Collector's Classification:

The Assistant Collector, after examining the matter, concluded that the tiles were building materials and distinct from glassware. He noted that:
- The tiles were not available with dealers in glassware but with those dealing in building materials.
- The tiles were assessed under a separate schedule for Sales Tax purposes as "roofing tiles" or "floor tiles."
- The tiles did not possess the basic properties and characteristics of glassware.

3. Examination of the Board's Revision Order:

The CBEC set aside the Assistant Collector's order, classifying the tiles as "glass" and "glassware" based on the following reasons:
- The raw materials and manufacturing process for the tiles were similar to those used for glass.
- The tiles were advertised as "Vitrum Venetian Type glass mosaic," indicating their classification as glass in commercial parlance.
- Even if sold by dealers in building materials, the tiles remained glass due to their composition.

4. Relevance of Commercial Parlance and Trade Usage:

The Tribunal emphasized the importance of commercial parlance and trade usage in classification. It referred to the Supreme Court's decision in Indo-International Industries v. Commissioner of S.T., U.P., which held that the meaning of terms in the absence of specific definitions should be understood in common or commercial parlance. The Tribunal noted:
- The goods were not available with wholesalers dealing in glassware but with those dealing in building materials.
- The evidence from the trade indicated that the tiles were understood as building materials.

5. Consideration of Technical and Scientific Evidence:

The Tribunal also considered technical and scientific evidence but emphasized that such evidence should only provide guidance within limits. The similarity in the manufacturing process or raw materials used could not conclusively establish classification. The Tribunal noted:
- The National Chemical Laboratory's test report indicated that the tiles had some crystalline material and a glassy phase.
- The Assistant Collector's reliance on trade evidence and the commercial understanding of the tiles as building materials was neither incorrect nor improper.

Conclusion:

The Tribunal concluded that the tiles could not be classified under Item 23A of the First Schedule to the Act. The revision/appeal succeeded, and the notice to show cause for revising the Assistant Collector's order was discharged. The Tribunal held that the Appellant's product did not fall within the classification of "glassware" under Item 23A(4).

Dissenting Opinion:

One member dissented, arguing that the tiles had a glassy character and should be classified as glassware. The dissenting opinion emphasized the raw materials and manufacturing process, which were similar to those used for glass, and concluded that the tiles could be appropriately assessed under Item 23A as glass and glassware.

Assenting Opinion:

The assenting opinion highlighted the evidence from trade and the Assistant Collector's findings, which indicated that the tiles were understood as building materials in commercial parlance. The assenting member agreed with the majority view that the tiles did not fall under Item 23A and allowed the appeal.

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