TMI Blog1980 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... s as falling under Item 15A(2) and called upon the petitioners to pay excise duty thereunder. It is that order which is challenged by petitioners in this petition. 2. The only contention which we are required to decide is whether the said tiles attract excise duty under Item 15A(2). Item 15A in so far as it is relevant for the present purpose reads as follows : "Artificial or Synthetic Resins and Plastic Materials, and Articles thereof — ***** (2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectangular or profile shapes, whether laminated or not, and whether rigid or flexible, including lay flat tubings, and polyvinyl chloride sheets, not otherwise specified." There is the Explanation appended to item 15A. It reads as follows : "For the purpose of sub-item (2), "plastics" means the various artificial or synthetic resins or plastic material included in sub-item (1)." In order, therefore, to understand the exact connotation of the expression "articles made of plastics" used in sub-item (2) of Item 15A, it is necessary to have a look at sub-item (1). Sub-item (1) consists of three parts. It is not in dispute that parts (i) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor, Central Excise, and held as follows : "Having regard to the facts and circumstances of the case, I hold that Asbestos Vinyl Tiles manufactured by M/s. Bhor Industries Limited, Maneja, Baroda, are not liable to duty under Item 15A of the First Schedule to the Central Excises and Salt Act, 1944. The order of the Assistant Collector of Central Excise, Baroda II Division, referred to above, is therefore, set aside and the appeal is allowed. Consequential relief, if any, shall be granted to the appellants." The said appellate order which was a quasi-judicial order clearly recorded the finding that the said tiles manufactured by the petitioners did not fall under Item 15A(2). The central excise authorities did not get rid of that order and reopened the proceedings by issuing a fresh show cause notice. 5. In a way, Mr. Andhyarujina who appears on behalf of the petitioners is justified in commenting that unless the earlier order made by the Appellate Collector in the case of the petitioners themselves in respect of the same excisable goods was got rid of, the central excise authorities in fairness could not have issued the fresh show cause notice. Indeed, he has told us that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te uncertainty in the realm of taxation. However, we are not resting our decision on what the Appellate Collector found in 1973. We propose to interpret the item itself. 8. Therefore, can we say that tiles in the manufacture of which 10% of plastic material is used are "articles made of plastics"? The Court has got to bear in mind the part which plastic material in such a case plays. There is no doubt about the fact that the plastic material operates only as a binding agent and is not the principal ingredient of the said tiles manufactured by the petitioners. What operated only as a binding agent cannot determine the basic character of the product. The real character of the product is determined, in a case of this type, by materials which are predominantly used therein. The only predominant material which is used by the petitioners in the said tiles is limestone. It forms 45% of the total quantity of a tile. The next in importance is asbestos which forms 26%. The rest of the materials are incidentally used in order to transform those two raw materials, by the process of manufacture, into tiles. 9. Mr. Mehta has argued that mere quantity of a particular ingredient does not prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Plastics and Paints Division, Department of Chemical Technology, Matunga, Bombay-19. In his opinion, an article can be said to be made of plastics if it contains a major proportion of ploymeric material. Since the tiles manufactured by the petitioners are based on asbestos and other inorganic fillers and contain only 10 to 15% of the ploymeric material as a binder, it cannot be covered under the group of "articles made of plastics". He has cited instances to show that certain other materials even though they contain a larger quantity of ploymeric material are not known as "articles made of plastics". One of them is leather cloth which contains as high as 25-30% PVC polymer. The second is Ferro-asbestos sheets which contain 50% or more asbestos and 27% polymer. They are known as asbestos based sheets. The third is chic-board or particle-board which contains 7-8% of polymeric resin as a binder. It is classified as a wood based item. 13. Mr. Andhyarujina has invited our attention to the decision taken at the Conference of Central Excise Collectors held by the Central Board of Excise and Customs at New Delhi on 21st January, 1978. The relevant proceedings of the Conference which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Collector issues directions by which the Deputy Superintendent or the Assistant Collector is bound no room is left for the exercise of his own independent judgment. In such a case, an appeal to the Collector becomes an empty formality. The Supreme Court, therefore, held in that case that the direction given by the Collector was invalid and that, therefore, the proceedings before the Deputy Superintendent or the Assistant Collector were vitiated. 16. Mr. Mehta who appears on behalf of the central excise authorities has invited our attention to the decision of the Supreme Court in V.V. Iyer v. Jasjit Singh, Collector of Customs, and Another, (1973) I Supreme Court Cases 148. The principle which the Supreme Court has laid down in that case is that the High Court should not interfere with the decision of the central excise authorities in the matter of classification unless that decision is perverse or mala fide or is based upon a wrong test. It has next been observed in that decision that the High Court is not a Court of appeal against the orders of adjudication made by the central excise authorities. 17. In the instant case, the central excise authorities have not only applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained because the excisable goods with which we are concerned in this petition do not attract, for the purpose of excise duty, Item 15A(2). 20. Since we have decided this case in favour of the petitioners on merits, we have not dealt with the second contention which Mr. Andhyarujina has raised before us. According to him, the present case will be governed, if at all, by Rule 10(1) (a) and not by Rule 9(2) or Rule 173A. 21. We, therefore, issue a writ of certiorari and quash the impugned order. Rule is made absolute with costs. In pursuance of the interim order made by this Court in this petition, the petitioners have furnished Bank guarantee to the respondents in respect of the amount in dispute. Since the petitioners have succeeded in this petition, the Bank guarantee furnished by them to the respondents is discharged. 22. Mr. H.M. Mehta who appears on behalf of the respondents applies for a certificate of fitness under Art. 133(1) of the Constitution in order to enable the respondents to appeal against this decision to the Supreme Court. We find no substantial question of law in this petition which is required to be decided by the Supreme Court. The oral application ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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