1994 (11) TMI 270 - AT - Central Excise

Summary

Issues Involved:
1. Whether grinding and polishing of Ophthalmic Blanks into Glass Moulds amounts to manufacture.
2. Whether the goods are known in the market as Glass Moulds.
3. Whether the goods should be classified under Chapter sub-heading 84.80 or under Chapter 70.15 of the Central Excise Tariff.

Detailed Analysis:

Issue 1: Whether grinding and polishing of Ophthalmic Blanks into Glass Moulds amounts to manufacture.

The appellants argued that grinding and polishing of Rough Ophthalmic Glass Blanks to form Glass Moulds does not amount to manufacture, as no new product with a distinct name, character, and use comes into existence. They contended that the Glass remains glass and is not capable of being marketed. However, the judgment found that the product emerging after grinding and polishing is completely different from the raw material, acquiring different characteristics and properties. Thus, the process of grinding and polishing is considered a process of manufacture, creating a new product distinct in name, character, and use. This view is supported by the classification of Ophthalmic Blanks under Chapter Heading 90, indicating that Glass Moulds are distinct from Ophthalmic Blanks.

Issue 2: Whether the goods are known in the market as Glass Moulds.

The appellants described the product as Glass Moulds, and it was stated in the memo of appeal that the product is internationally known as Glass Moulds. When identical products were imported by the appellants, they were described as Glass Moulds and assessed under Chapter Heading 70.20 of the Customs Tariff, which is pari materia to Chapter Heading 70.15 of the Central Excise Tariff. The judgment concluded that the product is known in both common and trade parlance as Glass Moulds. The contention that the product is not marketable due to the highly guarded secret technology was dismissed, as the product was imported by the appellants themselves, proving its capability of being bought and sold in the market. The Hon'ble Supreme Court's decision in U.P. State Electricity Board v. Collector supported this view, emphasizing that marketability does not depend on the number of purchasers or the territorial limit of the market.

Issue 3: Whether the goods should be classified under Chapter sub-heading 84.80 or under Chapter 70.15 of the Central Excise Tariff.

The appellants argued that Glass Moulds should be classified under Chapter sub-heading 84.80 as Moulds for Plastics, and Plastic Gaskets under Chapter Heading 39.26 as other articles of Plastic. They cited various case laws and Explanatory Notes to support their claim. However, the judgment found that the goods are known as Glass Moulds and not as Moulds for Plastic articles. Chapter Note 1(c) of Chapter 84 excludes Laboratory Glassware and articles for technical uses or parts thereof of glass from this Chapter, making the classification under Chapter 84 inappropriate.

The Explanatory Notes of HSN at page 1321 state that Moulds made of glass are excluded from Chapter 84 and are classifiable under Chapter Heading 70.20 of the Customs Tariff, which corresponds to Chapter Heading 70.15 of the Central Excise Tariff. The judgment concluded that the goods in question are appropriately classifiable under Chapter Heading 70.15. The Gaskets, being essential components used for binding Male and Female to form a Glass Mould Assembly, are also classifiable under Chapter Heading 70.15. Consequently, the benefits of Notification Nos. 53/88 and 220/86 are not applicable.

Conclusion:

The judgment upheld the classification of Glass Moulds along with Plastic Gaskets under Chapter Heading 70.15 of the Central Excise Tariff. The appeal was rejected, and the impugned order was upheld.