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1986 (7) TMI 90 - SC - VAT and Sales TaxWhether glass mirrors fall under Tariff Item No. 23A(4) or Tariff Item No. 68 of the First Schedule to the Central Excises and Salt Act? Held that - Upon the tests and having regard to the foregoing considerations which have appealed to us when considering the proper classification of glass mirrors, we have no hesitation in holding that the screens cannot be described as glass or glasswares under Tariff Item No. 23A(4). No one dealing in or using the screens would consider them as glass or glassware . They can only be considered as motor vehicle parts. Even if we assume that they could fall under Tariff Item No. 23A(4) relating to glass and glassware also inasmuch as Tariff Item No. 34A is a special entry and Tariff Item No. 23A(4) is a general entry, the special must exclude the general and therefore also it is Tariff Item No. 34A which prevails and is attracted. It is clear, however, that after the amendment of Tariff Item No. 34A by the Finance Act, 1979 the scope of that Tariff Item is restricted to the 15 commodities specified therein. That being so the screens manufactured by the petitioner merit classification in the residuary Tariff Item No. 68. In the result Appeal is allowed.
Issues Involved:
1. Classification of glass mirrors under Tariff Item No. 23A(4) or Tariff Item No. 68 of the Central Excises and Salt Act, 1944. 2. Classification of glass screens fitted in motor vehicles under Tariff Item No. 23A(4), Tariff Item No. 34A, or Tariff Item No. 68. Issue-wise Detailed Analysis: 1. Classification of Glass Mirrors The primary issue in the appeal by Atul Glass Industries (Pvt.) Ltd. was whether glass mirrors should be classified under Tariff Item No. 23A(4) or Tariff Item No. 68 of the Central Excises and Salt Act, 1944. The appellant manufactures glass mirrors from duty-paid glass sheets, which undergo a series of processes including buffing, silvering, copper coating, and painting, transforming them into mirrors. Before the 1979 Budget, Tariff Item No. 23 included 'other glassware' under sub-item (4). Post-Budget, it was amended to 'other glass and glassware.' Tariff Item No. 68 is a residuary category for goods not specified elsewhere. The appellant initially classified glass mirrors under Item No. 68, but the Excise Authorities later demanded classification under Item No. 23A(4). The Tribunal reversed the Collector (Appeals) decision, classifying glass mirrors under Item No. 23A(4) as 'glassware.' However, the Supreme Court observed that the transformation from glass sheet to mirror involves significant processing, resulting in a product fundamentally different from the original glass sheet. The reflective function of the mirror, derived from the silvering process, is not inherent to the glass itself. Therefore, glass mirrors cannot be classified as 'glassware' because their primary function is reflection, not the properties of glass. The Court applied the test of common parlance and functional character, concluding that glass mirrors are identified by their reflective function rather than their glass medium. Hence, glass mirrors should fall under the residuary Tariff Item No. 68. 2. Classification of Glass Screens for Motor Vehicles The additional issue in the transferred cases by Hindustan Safety Glass Works Ltd. was the classification of glass screens (wind screens, rear screens, and door screens) fitted in motor vehicles. These screens are manufactured from sheet glass, shaped, and toughened according to vehicle specifications. Before February 28, 1979, Tariff Item No. 34A covered 'parts and accessories not elsewhere specified, of Motor vehicles and Tractors.' Post-amendment, the scope of Item No. 34A was restricted to 15 specified parts and accessories. The screens in question did not fall within these specified items. The petitioner argued that the screens should be classified under the residuary Item No. 68. The Court agreed, noting that the screens are not commonly understood as 'glass or glassware' but as motor vehicle parts. Even if they could be classified under Item No. 23A(4), the specific entry of Item No. 34A (pre-amendment) would prevail over the general entry of Item No. 23A(4). After the 1979 amendment, the screens no longer fell within the restricted scope of Item No. 34A and thus merited classification under the residuary Tariff Item No. 68. Judgment Summary: The Supreme Court allowed Civil Appeal No. 3435 of 1984, setting aside the Tribunal's order and restoring the Collector (Appeals) decision that glass mirrors fall under Tariff Item No. 68. In the transferred cases, the Court directed that glass mirrors and screens manufactured by the petitioner be treated to excise duty under Tariff Item No. 68, with each party bearing its own costs.
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