Compressed-air glassware classification turns on the manufacturing process, not the mould stage where air is applied.

Glass jars manufactured by a process involving initial mouth blowing followed by compressed air in a second mould were held not to fall within Notification No. 52/86-C.E. for glassware produced by the mouth blown or fully manual process with tank furnaces. The same goods were treated as covered by Notification No. 67/88-C.E. because the decisive feature was use of compressed air in a semi-automatic manufacturing process; the stage at which the air was applied did not alter that character. The exemption classification therefore turned on the presence of compressed air in production, rather than on whether it was used at the first or second mould.

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Issues: (i) Whether glass jars manufactured by the assessee were covered by Serial No. 5 of the Table to Notification No. 52/86-C.E. as glassware produced by the mouth blown process or by manually operated process by manufacturers having tank furnaces; (ii) whether the same goods were covered by Serial No. 1 of the Table to Notification No. 67/88-C.E. as glassware produced by a semi-automatic process using compressed air.

Issue (i): Whether glass jars manufactured by the assessee were covered by Serial No. 5 of the Table to Notification No. 52/86-C.E. as glassware produced by the mouth blown process or by manually operated process by manufacturers having tank furnaces.

Analysis: Serial No. 5 applied only where the glassware itself was produced by the mouth blown process, or where it was produced by a manually operated process by manufacturers having tank furnaces. The manufacture in question involved mouth blowing only to give the molten glass a preliminary semi-finished shape, after which compressed air was injected in the second mould to obtain the finished jar. The process was therefore not confined to the mouth blown process, and the goods were not shown to have been produced by a fully manual process with tank furnaces.

Conclusion: The glass jars were not covered by Serial No. 5 of Notification No. 52/86-C.E., and this issue was decided against the assessee.

Issue (ii): Whether the same goods were covered by Serial No. 1 of the Table to Notification No. 67/88-C.E. as glassware produced by a semi-automatic process using compressed air.

Analysis: Serial No. 1 covered glassware produced by a semi-automatic process, namely where molten glass is taken to the first mould manually and compressed air or a mechanically operated press is used. The use of compressed air was the decisive feature of the process, and it was immaterial that the compressed air was applied at the second mould rather than the first. Since the assessee used compressed air to obtain the finished product, the process satisfied the description of a semi-automatic process.

Conclusion: The glass jars were covered by Serial No. 1 of Notification No. 67/88-C.E., and this issue was decided in favour of the Revenue.

Final Conclusion: The appellate authority's view was rejected, the original adjudication restoring exemption under Notification No. 67/88-C.E. was upheld, and the Revenue's challenge succeeded.

Ratio Decidendi: For classification under the relevant exemption entry, the decisive factor is whether compressed air is used in the manufacturing process, and the stage at which it is used does not alter the character of the process as semi-automatic.

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