Collector of Cus., Madras vs Indo-Swiss Synthetics Gem Mfg. Co. Ltd.>1988(09)LCX0056

1988(09)LCX0056

IN THE CEGAT, SPECIAL BENCH `D', NEW DELHI

S/Shri I.J. Rao, Member (T), D.C. Mandal, Member (T) and G.P. Agarwal, Member (J)

COLLECTOR OF CUS., MADRAS

Versus

INDO-SWISS SYNTHETIC GEM MFG. CO. LTD.

Order No. 602/88-D, dated 6-9-1988 in Appeal Nos. C/2032/85-D & CO 122/88-D

CASES CITED

Atul Glass Works v. Collector — 1986(07)LCX0018 Eq 1986 (025) ELT 0473 (S.C.) — Referred....................... [Paras 4, 7]

Collector v. West Glass Works — 1984(01)LCX0034 Eq 1984 (017) ELT 0368 (Tribunal) — Referred.................... [Para 4]

Indo-Swiss Synthetic Gem Mfg. Co. Ltd. v. Collector — 1983(01)LCX0004 Eq 1983 (012) ELT 0388 (Tribunal)
— Relied on ............................................................................................................. [Paras 3, 7]

REPRESENTED BY : Shri B.K. Gupta, DR, for the Appellant.

S/Shri N.R. Khaitan and Sandeep Agarwal, Advocates, for the Respondents.

[Order per : I.J. Rao, Member (T)]. - The question that arises for decision in this appeal is whether Tariff Item 23A CET would cover fused quartz and fused silica.

2. The circumstances in which the question arises are that the respondents imported goods described as "quartz cups". The goods were assessed under Heading 70.21 CTA for levy of basic customs duty (about which there is no dispute) and under Item 23A(4) of the CET for levy of Additional Duty (CVD). After paying duty as assessed by Customs, the respondents made a refund application claiming refund of the whole or part of the additional duty of customs on the ground that the goods were not assessable to CVD under CET 23A(4) since quartz cups which are silicon crucibles were not glass. The Assistant Collector while rejecting the claim for refund took into consideration the Glossery of terms relating to Glass and Glass-ware (IS : 1382-1981) wherein the term glass was defined. She also took into cosideration ASTM C-162-80 where the terms "silica glass" and "fused silica" were commented on. In the Assistant Collector's opinion the definition clearly establishes that "quartz cups" satisfy the standard definition of glass since the silica including its various forms such as glassware etc. was nothing but inorganic non-metallic materials well known as glass forming oxides. She also took into consideration that Central Excise Tariff Item 23A did not define the term glass and sub-section (4) thereof covered "other glass". In her opinion the absence of a Chapter Note to the effect that "glass" would ordinarily include fused quartz or fused silica did not change the position that the goods were covered by 23A(4) because fused quartz was only a form of glass. The Collector of Customs (Appeals) set aside the order holding that in the absence of a corresponding note or explanation in CET (unlike the note to the Chapter 70 in Customs Tariff) the expression "glass" would not ordinarily include fused quartz or fused silica and accordingly levy of CVD under item 23-A would not merit support. Hence the present appeal.

3. Shri B.K. Gupta, the learned Departmental Representative submitted that an earlier order of the CEGAT in the case of M/s. Indo-Swiss Synthetic Gem Manufacturing Co. Ltd., Mettupalayam v. Collector of Customs, Madras reported in 1983 (012) ELT 388 which dealt with the same question and held against the Revenue should be ignored because no evidence was placed before the Tribunal on the nature of the goods. He submitted that glass could be made by melting pure silica or pure silicon dioxide and therefore, quartz cups and silicon-crucibles are nothing but a form of glass. He referred to Indian Standards Institution Specifications (GLOSSARY) and submitted that glass was defined as "an inorganic product of fuse which was cooled to a rigid condition without crystallisation". The quartz cup also answers to the description according to the learned DR. Referring to the impugned order Shri Gupta submitted that Chapter Note is only an explanation and is not essential for the interpretation of the tariff. Under 23A(4), CET all articles of glass and glass-ware, not specified in the earlier items, are covered and the impugned goods are also covered as they are nothing but glass.

4. Shri Khaitan, the learned Advocate for the respondents submitted that the primary use of the glassware is in a furnace for melting and calcination during the manufacture of synthetic gems. He submitted that the primary function of the goods is the guiding factor in the classification and relied on the Supreme Court judgment in Atul Glass Works v. Collector of Central Excise and Others reported in 1986(07)LCX0018 Eq 1986 (025) ELT 0473 (S.C.). He further submitted that in common parlance quartz is not known as glass nor is it used as such. He submitted that the goods in question do not discharge any function of glass and stated that whereas glass melts at 700 to 800^oCentigrade, fused silica of which the imported goods are made melts at 1800^o Centigrade. Therefore, they are different from glass. Their function is different and they are differently known in the trade. He further submited that the earlier decision of the Tribunal should be followed as it was passed in consideration of all facts and there was no lack of evidence before the Bench. He also drew our attention to the Order of the CEGAT in the case of Collector of Central Excise, Kanpur v. West Glass Works, Firozabad [1984(01)LCX0034 Eq 1984 (017) ELT 0368 (Tribunal) = 1984 ECR 1895] wherein it was held that motor head lamp covers were not glass. He reiterated that though technically the imported goods may be glass in common parlance, for actual use and functions they are not glass. He submitted that in view of this the goods are correctly assessable under Tariff 68 and not 23A(4).

The learned DR in his rejoinder submitted that even ordinary glass and glass-ware can be used in industry and that fact does not take them out of the purview of the Item 23A(4). Laboratory glass-ware which could be used only in laboratories is mentioned in sub-item (4) of the item but still it is only glass for purposes of classification. Finally Shri Gupta pleaded that classification under Tariff Item 68 is the last resort and should not be the starting point for classification.

7. We have considered the arguments of both sides. As very properly pointed out by the learned DR the question of classification of quartz cup (silicon crucibles) came up for examination by the Tribunal in Indo-Swiss Synthetic Gem Manufacturing Co. Ltd., Mettupalayam v. Collector of Customs, Madras [1983 (012) ELT 388]. The argument advanced by the Revenue that there was lack of evidence and material before the Tribunal at the time of passing this order has not been substantiated. In fact this order was passed comparing the Excise and Customs Tariffs and taking into consideration the arguments advanced by the Revenue as well as the appellants. We also note that neither the definition given in the glossary of terms (IS : 1382-1981) nor the definition ASTM C-162-80 (neither of which was placed before the Bench during the hearing of the appeal of Indo-Swiss) can lead to a conclusion desired by the Revenue. The IS definition is that glass is an inorganic product of fusion which is cooled to a rigid condition without crystallising. The ASTM said that the term silica glass and fused silica are interchangeable and fused silica means a glass made either by flame hydrolysis of silicon terachloride or by melting silica usually in the form of granular quartz. These definitions have to be assessed keeping in view the Supreme Court's order in their judgment in Atul Glass Industries Ltd. and Others v. Collector of Central Excise (supra). In this judgment the Supreme Court held that goods should be classified as they are known by those who deal with or use them and according to the functions performed by them. The Supreme Court in the same judgment also held that glossary of terms by ISI is to be regarded as supporting material only of expert opinion by way of evidence and that other tangible considerations must weigh with the decision of the classification. In this context their lordships of the Supreme Court observed as follows :

“It is pointed out that glass mirrors have been classified by the Indian Standards Institution as "glass and glass-ware" in the glossary of terms prepared by it in respect of that classification. That, to our mind, furnishes a piece of evidence only as to the manner in which the product has been treated for the purposes of the specifications laid down by the Indian Standards Institution. It was a test employed by this Court in Union of India v. Delhi Cloth and General Mills - 1977 (1) ELT (J 199) (S.C.) = (1963) Supp.1 S.C.R. 586, but was regarded as supportive material only of the expert opinion furnished by way of evidence in that case. The considerations to which we have adverted should, in our opinion, have greatly weighed in deciding the question raised in this appeal. So also in Union Carbide Co. Ltd. v. Assistant Collector of Central Excise and Others, - 1978 (2) ELT 180, the description set forth in the publications of the Indian Standards Institution was regarded as a piece of evidence only. There were other more tangible considerations which weighed with the Court in reaching its conclusions.”

8. The Bench when passing the earlier order did not have the benefit of the Supreme Court judgment but as can be seen from what we have said earlier, non-consideration of Indian Standards cannot take away the value of the judgment. This is especially so when the contents of the order are carefully considered. We reproduce below an extract from order which shows that there is no ground to differ from the finding of this order even if they did not take the Indian Standards and ASTM into consideration :

“We have carefully considered the matter. Since Chapter Note 3 in Chapter 70 CTA gives an extended meaning to "Glass" so as to include fused quartz and fused silica therein, quartz cups (silica crucibles) would be correctly assessable for basic customs duty under Heading 70. They cannot, therefore, be classified under Chapter 69 which relates to ceramic products. We have noted that during the arguments before us the appellants accepted this position. Their request for reassessment of basic customs duty under Heading 69.03 CTA has, therefore, to be rejected. However, so far as countervailing duty is concerned, we find considerable force in the appellants plea. Since the position is that fused quartz and fused silica have to be considered as glass because of the extended meaning given to "glass', by Chapter Note 3 in the Customs Tariff Act itself. It would be logical to conclude that but for this chapter note fused quartz and fused silica would not ordinarily be considered as glass and, therefore, in the absence of a corresponding note or explanation in the Central Excise Tariff "glass" in Item 23A CET would not ordinarily include fused quartz or fused silica. Though Shri Chatterjee urged, on behalf of the Departments, that fused silica is nothing but glass, he produced no evidence or literature to substantiate his argument. We have, therefore, to uphold the claim of the appellants so far as countervailing duty is concerned.”

9. As a result we do not find any reason to differ from the earlier order or to interfere with the impugned order. We, therefore, dismiss this appeal.

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Equivalent 2000 (124) ELT 909 (Tribunal)