TaxTMI 
TaxTMI 
1985 (6) TMI 179
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....m No. 68 of the First Schedule to the Act (CET, for short). The main raw materials used in the manufacture of `FRIT' are quartz, borax, potassium nitrate, soda, zirconia, alumina, titanium dioxide, lithium carbonate, and cobalt oxide etc. The manufacturing process, briefly stated, is that the mixture of the above raw materials is well ground and then heated. in a rotary furnace for about 3 to 5 hours at a temperature of 1000 to 1200oC. After it is melted, the material is dropped in a tub containing water for quenching. Small bits of blue shaped pieces are formed which are termed as `FRIT'. The FRIT is used for glass lining of low carbon steel surface of reaction vessels. The Assistant Collector of Central Excise, Anand, by his order dated 9-1-1981, classified the product `FRIT' (enamel) under Item No. 68 CET. On examination of the record of the case by the Collector of Central Excise, Baroda, for the purpose of satisfying himself as to the correctness, legality or propriety of the said order, the Collector felt that having regard to the amendments made to Tariff Item No. 23-A CET by the Budget of 1979 (which took effect from 1-3-1979) and having regard to certain technical authorit....
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....h `FRIT' (Enamel) was declared by the Appellants as falling under Item No. 68 CET. The said declaration was verified by the Excise authorities and approved by the Asstt. Collector. The Collector, in re-classifying the product under Item No. 23-A(4) CET, has relied on technical parlance in perference to trade and commercial parlance. This approach was not correct particularly in the absence of any definition in the tariff entry which would have helped in determining the classification of `FRIT'. Shri Khosla submitted that there were many judicial pronouncements laying down that in interpreting entries in taxing statutes, resort should be had not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in the commercial sense. The words of the item must be understood in the popular sense, i.e., the sense which people conversant with the subject matter with which the statute is dealing would attribute to them for the obvious reason that fiscal statute affects manufacturers, producers, wholesalers, retailers and consumers. In this connection, the following case-law was cited :- (1) Dunlop India Ltd. v. Union of India (77) ASE 50097. ....
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....se & Customs' circular No. 8-CX-VI, dated 15-3-1976 (Excise Law Guide by R.K. Jain) and to a Government of India's decision reported in 1981 E.L.T. 958. Therefore, Shri Khosla concluded that differential duty could not be recovered in respect of even six months prior to the date of the Review Order or Review Notice. 7. Appearing on behalf of Revenue, Shri K.V. Kunhikrishnan submitted that the manufacturers' own pamphlets described the product as glass. Once it was re-classified by a competent authority under Item No. 23A(4) CET, the position was that was the correct classification even in the past period and there should be no bar against recovery of the differential duty. On the issue of classification, Shri K.V. Kunhikrishnan, submitted that there were different products known as `FRIT', glass, enamel `FRIT', FRIT glaze, of which some are glass. What the Appellants were manufacturing was used for glass lining of reaction vessels and, therefore, the product manufactured by them was glass. The raw materials used by the appellants for manufacture of `FRIT' were the same as those used for manufacture of ordinary glass. Referring to Indian Standard Specifications 2717 : 1979, ....
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....mperatures upto 185oC and even 230oC. Several layers of glass frit of complex composition are, according to the technical literature, fused onto a metal base, making the glasslined equipment as tough as steel but inert as glass. The literature goes on to say that glass-lined equipment is a combination of two materials : glass and steel. Thus it is clear that the product "glass frit" or "glass enamel" is used to impart glass lining to reaction vessels, etc. where resistance to acids and alkalies is desired. 10. The question is whether such glass frit or glass enamel would come within the scope of the tariff entry "other glass and glassware including tableware" appearing as sub-item (4) of Item 23-A CET. It is relevant to note in this context that, prior to the Finance Bill, 1979, which brought about a change in the nomenclature of the said sub-item (4), it read as "other glassware including tableware". Apparently, special products like glass frit or glass enamel are not goods of the type which are stocked and sold by dealers in glassware. "Glassware", according to the Chambers Twentieth Century Dictionary means "articles made of glass". The appellants have filed affidavits f....
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....y by manufacturers of glasslined equipment. The fact that frit is not known as "glass" and "glassware" to dealers in ordinary glass and glassware items would not, in our opinion, ipso facto detract from the position that it is a glass. Reference may also be made to the affidavit filed by Dr. Jayaraman, Manager, Research & Development Division in the appellants' firm wherein he has averred that "frit" in the condition in which it is manufactured and marketed by the appellants is not glass and glassware either in name or usage, that the product frit has to be mixed with other ingredients for further processing before it is used for glasslining steel vessels and that it cannot be used by itself for the said purpose, and that in the entire course of process of glasslining of vessels with frit glass and glassware is not produced at any stage as goods which can be brought to the market for the purpose of purchase or sale. We have already taken the view that glass frit and glass enamel do not fall within the scope of the expression "glassware". We may now examine in some more detail whether it would fall within the description "other glass". 12. Reference has been made by both sid....
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....d metal articles as well as for other purposes. For example, frit is used in the preparation of the vitrifiable products referred to in paragraph (2) above. Glass powder and granules are sometimes sintered to form discs, plates, tubes, etc., for laboratory use. x x x x x x x x x x When the products referred to in paragraph (5) above are in forms other than powder, granules or flakes, they are excluded, and generally fall within Chapter 70. This applies in particular to "vitrite" and "enamel" glass in the mass (Heading 70.01) to "enamel" glass put up in the form of bars, rods or tubes (Heading 70.....
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....fused materials which are subsequently melted to glassy state". The appellants' contention that the word "frit" occurs in the Glossaries of Terms relating to ceramicware and vitreous enamelware and that, therefore, it is not glass is not borne out by the definitions which we have just reproduced from these very Glossaries. The word also finds mention in the Glossary of Terms relating to glass industry. The contention that frit only when it is melted on steel vessels results in glasslining and, therefore, it is not glass by itself is also devoid of substance in the face of the definitions in the ISI Standards. The fact that glasslining results only when frit is melted on steel vessels does not detract from the position that it is glass. It is clear from the foregoing discussions that the Indian Standards Institution recognises "frit" as a "form of glass". For purposes of classification under the Central Excise Tariff, Courts have held that publications of the Indian Standards Institution are a good guide [Parry Confectionary Ltd., Madras - 1980 E.L.T. 468 (Mad.); Porrits and Spencer (Asia) Ltd., 1980 E.L.T. 679 (Delhi) and Supreme Court in Delhi Cloth and General Mills Co. Ltd., ....
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....as become an item which specifies 15 motor vehicle parts and accessories : windscreen is not one of them). The competing items in the case before the Bombay High Court were 23-A ("glass and glassware") and 34-A "motor vehicle parts"). And, since windscreen was held to be a motor vehicle part, applying the commercial parlance test, the Court came to the conclusion that it fell under Item No. 34-A. In the case before us, the competing items are 23-A and 68 (All other goods, not elsewhere specified"). As between these two items, it must be held that Item 23-A [(sub-item (4) to be precise)] is more specific. This is apart from the other considerations leading to this classification which we have adverted to. In our respectful opinion the ratio of the Bombay High Court judgment referred to above is not applicable to the facts of this case. 15. We have now to deal with the appellants' contention that if it is held that `frit' is classifiable under Item 23-A(4) CET, recoveries of short-levied amounts of duty could be made only in respect of a period of 6 months preceding the date of issue of the show cause notice in terms of Section 11-A of the Act. The submission is that, in the ....
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....assess on the basis of the assessee's return. The facts of the present case are not on all fours with the one before the Kerala High Court and hence the ratio of this decision would not, in our opinion, apply except to the extent that a show cause notice is a must for demanding payment of short-levies. 17. We must, at this stage, advert to another contention of Shri Khosla and that is that decisions reclassifying goods are prospective in effect. He relied on Govt. of India's decision in re : Navin Industries reported in 1981 E.L.T. 958. In this case, Govt. of India, while disposing of a revision application, relied on an Andhra High Court decision in southern Steel Ltd. v. U.O.I. [1979 E.L.T. (J402)]. The Court had taken the view that the mere fact that the authorities had not questioned the position taken up by the petitioner (i.e. that he would not be liable to excise duty and his position was accepted for a number of years by the Department) would not prevent them from levying duty whenever they came to the conclusion that the description in the classification list is not correct and according to the correct description duty is leviable. This is not of direct relevance t....