TaxTMI 
TaxTMI 
1986 (7) TMI 90
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....es Nos. 349, 350 and 355 of 1983 filed by the Hindustan Safety Glass Works Ltd., with an additional question whether the glass screens fitted in motor vehicles as wind screens, rear screens and window screens fall under Tariff Item No. 23A(4) or Tariff Item No. 34A or Tariff Item No. 68. 3. The appellant, Atul Glass Industries (Pvt.) Ltd., carries on the business of manufacturing and selling glass mirrors. It purchases duty paid glass sheets from the manufacturers of glass, and either in their original size or after reducing them to smaller sizes puts the glass sheets through a process of treatment. The glass pieces are buffed with the aid of buffing machines in order to improve the surface of the glass and prepare it for mirror processing. The glass is fed into an automatic silvering conveyor line where it passes through a stage of mechanical cleaning and polishing with the aid of nylon bristle brushes so that the glass surface is rendered free of scratches, dust particles and carbohydrates. The glass is then washed mechanically with the aid of cylindrical brushes using distilled water as a washing medium. Thereafter the glass surface is sensitised by chemical compounds such as....
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....an if it fell under Tariff Item No. 68. The appellant submitted a classification list showing glass mirror as covered by duty under Item No. 68. Before March 1, 1979 glass mirrors were treated as exempt from duty as they were manufactured from duty paid glass. The exemption was cancelled from March 1, 1979. Simultaneously Tariff Item No. 23A(4) underwent an amendment, as mentioned earlier, by the substitution of words 'other glass and glassware' for the words 'other glassware'. 5. On January 28, 1980 the Excise Authorities issued a notice calling upon the appellant to take out an L-4 Licence on the ground that glass mirrors were classifiable as 'other glass' within the meaning of Tariff Entry No. 23A(4) as a product now dutiable from March 1, 1979. The appellant filed a writ petition in the Delhi High Court and simultaneous preferred an appeal before the Collector (Appeals). The High Court disposed of the writ petition without deciding the question of liability to duty on its merits, observing that the appellant should pursue its appeal before the Collector (Appeals). On January 24, 1984 the appeal was allowed by the Collector (Appeals). He held that Tariff Item No. 68 applied t....
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....e Tribunal thereafter reversed the Collector (Appeals) and upheld the Superintendent of Central Excise. It is in this uncertain climate of opinion that the question calls for decision by this Court. 7. A broad description of the process through which a glass sheet passes has been detailed earlier. It indicates clearly to our mind that the original glass sheet undergoes a complete transformation when it emerges as a glass mirror. What was a piece of glass simpliciter has now become a commercial product with a reflecting surface. Into the process of transformation have gone successive stages of processing with the aid of chemicals such as stannous chloride, silver nitrate and copper coating besides an entire range of physical processes involving polishing, washing, coating, drying, varnishing, evaporation and cooling. The evolved product is completely different from the original glass sheet. What was once a glass piece in its basic character has no longer remained so. It has been reduced to a mere medium. That is clear if regard is had to the fundamental function and qualities of a glass mirror. The power to reflect an image is a power derived not from the glass piece but principa....
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....t a product is so identified. In Commissioner of Sales Tax, U.P. v. Macneill & Barry Ltd., Kanpur (1985) 2 SCALE 1093 = 1986 (23) E.L.T. 5 (S.C.), this Court expressed the view that ammonia paper and ferro paper, used for obtaining prints and sketches of site plans could not be described as paper as that word was used in common parlance. On the same basis the Orissa High Court held in State of Orissa v. Gestetner Duplicators (P) Ltd. (1974) 33 S.T.C. 333 that stencil paper could not be classified as paper for the purposes of the Orissa Sales Tax Act. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass ....
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....U.P. Sales Tax Act, indicating the content of the expression as developed through successive Notifications. 10. Our attention has been drawn on behalf of the Revenue to the circumstance that glass mirrors have been classified as 'glass and glassware' in Chapter 70 of the Brussels Tariff Nomenclature. It seems to us that this circumstance can hardly advance the case of the Revenue, because the First Schedule to the Central Excises and Salt Act does not appear to have been modelled on the Brussels Tariff Nomenclature. There is nothing to show that the Tariff Items were classified in the Schedule on the basis of the Brussels Tariff Nomenclature. It was when the Customs Tariff Act, 1975 was enacted that the First Schedule to that Act was framed in accordance with the Brussels Tariff Nomenclature, evidently because the progress made in industrial growth and economic development, and the substantial changes in the composition and pattern of India's external trade called for the need to modernise and rationalise the nomenclature of India's Tariff in line with contemporary conditions (introductory comments on the Customs Tariff Act, 1975). The glass mirrors were still not specifically m....
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....lahabad High Court challenging the view taken by the Excise authorities. The question in these cases is whether the screens manufactured by the petitioners can be classified under Tariff Item No. 23A(4) or Tariff Item No. 34A or Tariff Item No. 68. 15. Prior to February 28, 1979 Tariff Item No. 34A, which was headed Item No. 34A - Motor Vehicle Parts, related to "Parts and accessories not elsewhere specified, of Motor vehicles and Tractors, including Trailers", and the rate of duty prescribed was 20% ad valorem. Under Rule 8 of the Central Excise Rules, the Central Government issued Notification No. M.F. (D.R.I.) 99/71 dated May 29, 1971, as amended by a subsequent Notification, exemption parts and accessories of motor vehicles and tractors falling under Tariff Item No. 34A other than those specified in the Schedule annexed to the Notification, from the whole of the duty of excise leviable thereon. The Schedule annexed to the Notification did not mention the screens manufactured for motor vehicles. The parts and accessories specifically mentioned in the Notification to the Schedule were covered by a Notification No. 101/71 C.E., dated May 29, 1971 as amended subsequently, by whi....
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....1979 whereby all excisable goods on which the duty of excise was payable and in the manufacture of which parts and accessories of motor vehicles falling under Item No. 34A had been used were exempted from so much of the duty of the excise leviable thereon as was equivalent to the duty of excise paid by the said parts and accessories. Another Notification No. 167/79 dated April 19, 1979 was issued under Rule 8 whereby parts and accessories of motor vehicles falling under Item No. 34A and intended for use in further manufacture of excisable goods were exempted from the whole of duty leviable thereon provided that the intended use was in a factory of a manufacturer different from the factory in which the said parts and accessories had been manufactured. The Notification did not apply to the 15 specified items. Subsequently the two Notifications were amended by Notification No. 187/79 C.E., dated May 10, 1979 by deleting the reference to Tariff Item No. 34A and substituting for it Tariff Item No. 68. According to the petitioner the result of these successive Notifications is that the parts and accessories of motor vehicles fall under Tariff Item No. 34A prior to the enforcement of Fina....