1978 (11) TMI 71 - HC - Central Excise

Glass and Glassware - Scope and connotation of - Interpretation - Heading of tariff entry - Writ Jurisdiction

Summary

Issues Involved:
1. Classification of different types of glass under Tariff Item 23A(1) of the Central Excise and Salt Act, 1944.
2. Applicability of common parlance test for classification.
3. Distinct manufacturing processes and characteristics of different types of glass.
4. Interpretation of the scope of Tariff Item 23A.
5. Validity of departmental authorities' decisions based on evidence.

Detailed Analysis:

1. Classification of Different Types of Glass:
The primary issue was whether the goods manufactured by the petitioner-company, namely, wired glass, figured glass, rolled glass, coloured figured glass, coolex figured glass, and coolex wired glass, belong to the category of sheet glass and are liable to excise duty under Tariff Item 23A(1) of the Central Excise and Salt Act, 1944. The petitioner contended that these items are distinct from sheet glass and plate glass and are not recognized as such in the commercial market.

2. Applicability of Common Parlance Test:
The court emphasized the importance of the common parlance test, which involves determining how the goods are recognized in the market by those who deal with them. Evidence from witnesses like K.D. Shah, who had extensive experience in the glass business, indicated that the disputed items were known by different names and had distinct characteristics, uses, and prices. The court found that the departmental authorities had ignored this evidence, which was crucial for applying the correct test.

3. Distinct Manufacturing Processes and Characteristics:
The petitioner argued that the manufacturing processes for sheet glass and other types of glass, such as wired glass or figured glass, are entirely different. Each type of glass emerges as a finished product through a separate process, and the furnaces used for manufacturing these types are also different. The court accepted this argument, noting that sheet glass does not undergo further transformation to become other types of glass.

4. Interpretation of the Scope of Tariff Item 23A:
The respondents contended that the title of Entry 23A, which mentions "glass and glassware," should cover all types of glass. However, the court noted that only sheet and plate glass are specifically mentioned in sub-item (1), and the rest are categorized as glassware. The court concluded that merely mentioning the word "glass" in the title does not imply that all types of glass are covered under Item 23A.

5. Validity of Departmental Authorities' Decisions:
The court found that the departmental authorities had not applied the correct test and had ignored relevant evidence. The Assistant Collector's decision to dismiss the evidence as "off the rail" and the appellate authorities' failure to consider it rendered their findings legally flawed. The court held that the disputed items could not be classified under Item 23A(i) as sheet glass but should fall under the residuary Item No. 68.

Conclusion:
The court allowed the petition, quashing the impugned orders of the departmental authorities and directing them to levy excise duty on the disputed items under residuary Item No. 68. The respondents were also ordered to revise the relevant assessments and refund the excess excise duty collected from 20-2-1976. The application for leave to appeal to the Supreme Court was rejected, as no substantial question of law of public importance was involved.