1978 (7) TMI 106 - CGOVT - Central Excise

Summary

Issues: Classification of putty for fixing glass in windows under Central Excise Tariff, applicability of excise duty, timeliness of show cause notice, conformity with ISI specification, end use of the product, classification as paint or painter's material.

The judgment pertains to the classification of putty manufactured by M/s. U.K. Paints for fixing glass in windows under the Central Excise Tariff. The Assistant Collector of Central Excise, Amritsar, initially classified the putty under Tariff Item No. 14 and issued a demand notice for non-payment of duty. However, the Appellate Collector of Central Excise, New Delhi, overturned this decision, stating that the putty was not liable to duty under Tariff Item 14 as it did not contain certain components and was not usable as paint. The Central Government issued a Show Cause Notice to the party to challenge the Appellate Collector's decision under Section 36(2) of the Central Excises and Salt Act, 1944. The party raised a preliminary objection regarding the timeliness of the notice, arguing it was received after the stipulated one-year period. The Government determined the notice was served within the prescribed time frame, as the order date was the date it was made known to the affected party.

Regarding the technical aspects, the party contended that the putty manufactured was in compliance with ISI specifications for use in window frames and was distinct from other putties used in paints. The party emphasized that the putty was mainly sold to glass fixers and dealers, not as a paint material. The Government observed that the putty met the ISI standard exclusively for use on window frames and was primarily sold to glass dealers, supporting the argument that it was not used as a paint material. Additionally, the Government referenced a Supreme Court case emphasizing that goods must answer to their description in trade and commerce for excise duty assessment.

Based on the end use of the product, its conformity with the ISI specification, and the common understanding in the trade, the Government concluded that "putty for use in window frames" was not classifiable as paint under Tariff Item No. 14 of the Central Excise Tariff. Consequently, the review proceedings were dropped, and the initial decision of the Appellate Collector was upheld.