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TMI Blog1985 (2) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ndoned the delay in filing the supplementary appeals. Consideration of the appeals on merits was then taken up. 3. The appeals involve two main questions for our consideration. The substantive issue is whether broken glass, known in the local language as `Bhagar or as `Bhatti-Se-Nikala-Hua Broken , is liable to central excise duty and, if so, under which item of the Tariff. The connected issue is whether, in case this material is held liable to duty, the demands for recovery of the past duly are partially hit by time bar or not. The Appellate Collector decided the substantive issue in favour of the respondents. He relied on the Bombay High Court judgment in the case of Indian Aluminium Company v. A.K. Bandyopadhyay (1980 E.L.T. 146 Bom.) in which the said High Court had held that dross and skimmings of aluminium were refuse, scum and rubbish and were not goods. The Appellate Collector held that broken glass was also a waste material, hence not goods and not excisable. The Department is in appeal before us against this order of the Appellate Collector. 4. During the hearing before us, the Department s Representative relied on the Tribunal s order in the case of M/s. Super Tyr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stence in the furnace before glass was formed. They added that their customers had to remove the extraneous matter out of the material first before re-melting it for manufacture of rough glass articles. Their contention was that the material having arisen at a pre-glass stage and also being impure, could not be considered glass. Both the respondents pleaded that the material could not be considered a manufactured item nor as goods. They sought to distinguish the cases of bagasse and molasses decided earlier by the Tribunal saying that both bagasse and molasses were by-products whereas the broken glass was only a process scrap and not a by-product. They further sought to distinguish the case of lump glass saying that lump glass had a definite shape and size as compared to those of the broken glass. They added that the analogy of rubber scrap-the material which was the subject matter of consideration in the case of M/s. Super Tyres-also did not apply since further rubber products could be manufactured out of rubber scrap just by cutting or punching pieces out of rubber scrap while in the case o broken glass it had to be re-melted or re-cycled to make further glass articles. Both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not filed any price list, classification list or declaration in respect of `Bhagar nor, if in doubt, had they made any enquiry from the Department regarding its durability. He admitted that the Proviso to rule 10 dealing with longer time limit of 5 years on account of suppression of facts etc. had not been cited in the show cause notices nor had it been alleged therein that the facts of the case attracted the longer time limit. But he pleaded that the allegation of suppression of facts could be inferred from the dates of events narrated in the show cause notices. The respondents argued that since no facts making out any case of suppression had been disclosed in the show cause notices nor had the Proviso to rule 10 been specifically invoked, only the normal time limit of six months could apply. They added that the Assistant Collector had, no doubt, held in his order that the respondents were guilty of suppression and attributed mala fides to the respondents but yet he had not imposed any penalty on them. This also belied the charge of suppression or mala fides, according to the respondents. 9. We have carefully considered the matter. We agree with the Department s Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a substitute for the primary raw materials like silica sand, soda ash and chemicals. We find from the show cause notices that the value of Bhagar sold by the respondents ranged from ₹ 15 lakhs to ₹ 25 lakhs per annum. A material having such good value and use can by no stretch of imagination be considered scum, refuse or rubbish. We, therefore, hold that Bhagar or broken glass is excisable goods. The respondents pleaded before us that wherever the Parliament intended to tax industrial scraps, it had done so by including specific items or sub-items to that effect in the Tariff and since this was not done in the case of scrap glass, it ought not to be taxed. We do not agree with their plea. So long as Bhagar is a manufactured item and satisfies the definition of goods , it has to be considered taxable. If there is no specific item for any scrap goods in the tariff, the residuary item No. 68 would take care of the situation. Accordingly, we hold that till 28-2-1979, Bhagar was classifiable under Item 68. With effect from 1-3-1979, with the incorporation of the word Glass in item 23-A(4), this item became specific to cover any material which was in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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