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TMI Blog1994 (7) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was not justified in allowing investment allowance in the assessment years 1978-79, 1979-80 and 1981-82 in respect of machineries engaged in the manufacture of these items. (ii) That the Assessing Officer has wrongly considered the value of work-in-progress while computing the working of "the capital employed" for the purpose of section 80J in respect of assessment year 1979-80. (iii) That the Assessing Officer also wrongly allowed 100% depreciation on the furnace used in melting of glass in respect of assessment year 1983-84, as in the past he had been treating the assessee as not a company manufacturing glass or glassware. (iv) That the Assessing Officer also wrongly allowed investment allowance in respect of fire extinguishers, electrical works of cable, fire hydrant extensions and piping work pertaining to assessment year 1984-85, since these items had no closer nexus with the production process. (v) That for assessment year 1984-85 the Assessing Officer failed to consider the salary paid to car drivers while working out disallowance under section 37(3A). The Commissioner of Income-tax Bombay therefore, set aside the order of the Assessing Officer pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sswares are those articles of glass which are normally used by the common people in daily use such as crockery, sheet glass for doors and windows, etc., which are manufactured by hard and transparent substance. In support of his contention he relied on the decision of the Hon'ble Supreme Court in the case of Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 3 SCC 480. He also invited our attention to the meanings of the fibre glass as well as glass and glassware given in various dictionaries. He also referred to encyclopedia Britanica. He then referred to the entries given in the First Schedule to the Central Excise Act which describe different rates of excise duty. The items glass fibre and its yarn have been classified under entry 22F(1) attracting excise duty at the rate of 15% while the "glass and glassware" are classified under entry 25A attaching excise duty at the rate of 35%. It is further stated that items manufactured by the assessee have been classified by the Excise authorities under item 22F(1). The glass fibre and yarn were also shown and produced before us for identification. In view of this fact and case law, the counsel for the assessee finally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This principle has been followed in several cases by the Supreme Court. In the case of Atul Glass Industries (P.) Ltd. relied upon by the assessee, the issue before the Supreme Court was whether the glass mirror would fall within the entry No. 22A(4) of the First Schedule i.e. glass or glassware. In deciding the issue Their Lordship observed at page 485 as under: "8. The test commonly applied to such cases is : How is the product identified by the class or section of people dealing with or using the product? That is a test which is attracted whenever the statute does not contain any definition. It is generally by its functional character that a product is so identified." After applying this test it was held that glass mirror could not be treated as glass or glassware. At this stage it would also be advantageous to refer the following observations of Their Lordship of the Supreme Court in the case of Delhi Cloth General Mills Ltd. v. State of Rajasthan AIR 1980 SC 1552: "In determining the meaning or connotation of words and expressions describing an article or commodity the turnover of which is taxed in a sales tax enactment, if there is one principle fairly well-settled it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bles of about 5/8 inch (16 millimetre) diameter that are passed to the spinning machines, also called fiberizing units." From the above definition also it is clear that glass is hard, brittle and transparent substance, while the glass fibre filaments are spun directly from the molten glass. Even the use of both these items are different. Glass fibre is used as insulation material for refrigerator, or air-conditioners etc., while glass is normally used for doors, windows and also for manufacturing of glassware which are generally known as crockery, bottles etc. That is why the people in the trade treat them different. Even for the purpose of Excise Duty the Government has treated them different. (iii) The contentions put forth by the revenue have no force. Merely the raw material for manufacturing both the items are same, it cannot be said that the end products of both the items are same. We have to see the end-product and their use and not the raw material. This view is supported by the judgment of the Supreme Court in the case of Atul Glass Industries (P.) Ltd., where the glass mirror though prepared from glass itself cannot be treated as glassware. Similarly, in the case of H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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