1986 (10) TMI 163 - AT - Central Excise

Issues Involved:
1. Classification of Soft Capillary Glass Tubing and Bulb Glass Tubing under the Central Excise Tariff.
2. Applicability of the principle of commercial parlance in classification.
3. Time-bar on the demand of duty.

Detailed Analysis:

1. Classification of Soft Capillary Glass Tubing and Bulb Glass Tubing under the Central Excise Tariff:
The primary issue in this case is the classification of Soft Capillary Glass Tubing and Bulb Glass Tubing under the Central Excise Tariff. The department classified these items under Item 23A(4) as "other glassware," while the appellants sought classification under Item 23A(2) as "laboratory glassware."

The appellants argued that these glass tubings are specifically for clinical thermometers and should be considered laboratory glassware due to their specialized nature and manufacturing process, which includes the use of materials like Lead, Jena, and Borosilicate glass. They cited various standards and notifications, including those from the Indian Standards Institution (I.S.I.), British Standards Institution, and German Standards Committee, which classify such tubings as laboratory glassware.

However, the Tribunal referred to a previous decision in the case of M/s. Jintan Clinical Thermometers Company, where it was held that capillary glass tubings for clinical thermometers are made of glass but are known in the trade as articles of glass. The Tribunal concluded that there was no reason to discard the specific description of "other glass" in Central Excise Tariff Item 23A(4).

Further, the Tribunal considered the Supreme Court's decision in the case of M/s. Atul Glass Co. Pvt. Limited, which emphasized that the identity of an article is associated with its primary functions. The Supreme Court held that a glass mirror, which undergoes a complete transformation from a glass sheet, cannot be regarded as glassware. Similarly, the Tribunal concluded that capillary glass tubings, being parts of clinical thermometers, cannot be classified as laboratory glassware.

The Tribunal also noted that the goods were described in the Bills of Entry and invoices as glass tubes for clinical thermometers, indicating that they are not known in the trade as laboratory glassware.

2. Applicability of the Principle of Commercial Parlance in Classification:
The appellants argued that commercial parlance should guide the classification of the impugned products rather than technical definitions. They contended that the products are known and sold in the market as laboratory glassware.

The Tribunal, however, found that the appellants failed to establish that the soft capillary glass tubings are used in laboratories or sold as laboratory glassware. The Tribunal emphasized that the classification should be based on the nature of the product, its use, trade understanding, and the wordings of the tariff entry itself.

3. Time-Bar on the Demand of Duty:
The appellants claimed that the demand for duty was barred by limitation, as the imports were made in December 1978, and the duty was demanded in October 1980. The Departmental Representative did not offer comments on this argument due to a lack of indication regarding the date when the duty was actually paid.

Conclusion:
The Tribunal rejected the appellants' plea for classification under Central Excise Tariff Item 23A(2) as laboratory glassware. It was held that the goods should be classified under Item 68 of the Central Excise Tariff for the pre-1979 Budget period, as Item 23A did not include "other glass" during that time. The Tribunal ordered consequential relief to the appellants, thus partly allowing the Revision Applications.

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