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SVADESHI MILLS COMPANY LTD. Versus UNION OF INDIA AND OTHERS

1981 (12) TMI 41 - BOMBAY HIGH COURT

Windscreen for Motor Vehicles are not classifiable as glass or glassware - Excise duty - 133 of 1978 - Dated:- 16-12-1981 - D.P. Madon and Sharad Manohar, J.J. [Oral Judgment per : Sharad Manohar, J.]. - By this writ petition the petitioners who are the manufacturers of automobile windscreens, serving as parts and accessories of Motor Vehicles, are calling in question the validity and legality of the order passed by respondent No. 4, the Assistant Collector of Central Excise, Pune, by which orde .....

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te the few relevant facts which are as follows : As stated above, the petitioner-company manufactures automobile windscreens, both flat and curved, and sells them as parts and accessories of motor vehicles. There is no dispute that till 28th February, 1979, having regard to the notification issued by the Central Board of Excise and Customs, respondent No. 2 herein (hereinafter referred to as the Board ) windscreens were exempt from excise duty since the duty was paid on the glass from which they .....

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en liable to pay duty on windscreen at the rate of 20%. But by a notification issued contemporaneously, Notification No. 76/79-C.E., dated 1st March, 1979, it was provided that those motor parts which were not enumerated in the said entry 34A were exempt from the excise duty. The result was that if the windscreens were to be considered as motor parts, the petitioner would be exempted from paying any excise duty on the said article manufactured by them. It is not in dispute now that initially the .....

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vehicles falling under Tariff Item No. 34-A . 3. It appears, however, that the department had a second look at the provisions of the Act and while doing so their attention landed upon entry No. 23A of the tariff. The entry originally stood as follows :- 23A. GLASS AND GLASSWARE- (1) Sheet glass and Plate glass Thirty per cent ad valorem. (2) Laboratory glassware Ten per cent ad valorem. (3) Glass shells, glass globes and chimneys for lamps and lanterns. Fifteen per cent ad valorem. (4) Other gl .....

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. Laboratory glassware 10% Adv. -do- 3. Glass Shells, glass globes & for lamps chimneys and lanterns. 15% Adv. -do- 4. Other glass and glassware including tableware. 35% Adv. -do- Explanation. - This item does not include electrical insulators or electrical insulating fittings or parts of such insulators or insulating fittings. Although this amendment is prior to 7th April, 1979, when the licence was issued by the department to the petitioner considering that windscreens manufactured by them .....

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n of entry 34A. It is unnecessary to set out the various requisitions made by the department upon the petitioner-company in that behalf. It is enough to state that by their letter dated 28th August, 1979, the Superintendent of Central Excise, respondent No. 5, herein called upon the petitioner-company to take a licence under the Act for the purpose of manufacture of windscreen under Item No. 23-A(4), evidently on the ground that according to the respondents windscreen bore the character of other .....

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ty glass, Toughened glass, Flat and Curved safety glass (Toughened safety glass like windscreens, doorscreens and backscreens) etc., irrespective of their end-uses would merit classification under Item No. 23A(4) of the Central Excise Tariff. The petitioner has averred in the petition that in this connection the Assistant Collector, respondent No. 4, herein has sought for an opinion or advice from the Board and the view taken by the Assistant Collector was approved of by the Board. The result wa .....

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ents made in the petition have not been denied and it is common ground before me that the above-mentioned Trade Notice No. 240 of 1979 reflects the view of the department relating to the petitioners liability pertaining to the excise duty. The petitioner-company, therefore, applied for the licence as directed under protest and filed the present petition challenging the validity of the view taken and order passed by the respondents requiring the petitioner-company to pay the excise duty on the co .....

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ntention of the petitioner-company is that in the first instance the department itself had provisionally recognised the fact that windscreens manufactured by them were motor parts and such entry No. 34A of the Central Excise Tariff specifically applied to the said commodity. The contention is that since said entry No. 34A is a specific provision no question would arise of the application of entry No. 23A (4) which was after all general provision relating to glass and glassware. 6. The contention .....

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windscreens, that the ultimate commodity continued to be glass and that there is nothing in Item No. 23A(4) which would exclude from the category of glass articles which have been cut to sizes and are used ultimately for certain specific purpose. The contention further is that windscreen after all constitutes end-use of the glass and that the end use of the glass has no relevance while charging the duty. 7. To our mind the petitioners contentions in this petition have got to be accepted and the .....

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n to indulge in the niceties and technical distinctions and hence the consequent order passed by the respondents concerned has got to be quashed. 8. In this connection the basic principle that has to be borne in mind is that the commodity which is the subject matter of the excise duty is something different from the raw material from which the same has been manufactured. It may be noted, and there is no dispute about this fact, that the material used for the manufacture of windscreens is glass a .....

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titioner-company and it is this different commercial commodity which is to be subjected to excise duty. This ultimate commercial commodity is something manifestly different from the raw material from which it is manufactured. If this was not so and if it was to be held that windscreen continued to be glass and hence continued to be governed by Item No. 23A(4) the proposterous result would be that the same commodity would be subjected to excise duty twice. Without entering into the question wheth .....

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or part. But it may be stated that his concession was a qualified concession. He contended that so far as motor parts were concerned, they were numerous in number. But even though the windscreen was a motor part it continued to be glass and hence entry 23A(4) must be held to be the specific provision so far as excise duty payable for windscreen was concerned. To our mind this contention is fallacious. We will presently point out that if at all there arose a question as to between the two entries .....

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e subject matter of the entries in the excise tariff for the the purpose of ascertaining the duties chargeable for excise, recourse is to be had to the understanding of the commercial community as regards the articles in question. To take the instance of the very commodity namely windscreens, the test to be applied is as to whether windscreens could be purchased from a glass or glassware shop or whether it could be purchased from dealers in motor parts only. In this connection we may state that .....

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is filed by Juzer Gari, who is a partner of M/s. City Glass Centre. He deals in automobile spare parts and as a spare parts dealer he stocks automobile windscreens both flat as well as curved. He has sworn on oath that windscreens are known and recognised in the automobile trade as parts of automobile and that windscreens are neither known nor recognised as glass or glassware or tableware. Similarly there is the affidavit filed by one N.S. Kachawala who is partner of M/s. Poona Glass Depot. He .....

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in that behalf. Moreover, at the time of the hearing Mr. Sethna the learned Counsel appearing for the department fairly stated that if he walked in a glass or glassware shop he could not purchase an automobile windscreen. It is therefore, clear that in commercial parlance windscreen is an entirely different commercial commodity identified independently from glass or glassware. 10. Both the sides heavily relied upon Brussels Nomenclature in support of their contention and hence it is worthwhile m .....

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as being suitable for use solely or principally with the above-mentioned vehicles, and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see corresponding General Explanatory Note). Further in the same para 87.06, it is mentioned in sub-para B that parts of bodies and associated accessories are classified in the present heading that is to say in the heading of parts and accessories of the motor vehicles and the parts and accessories which are enumerated by way of ill .....

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are pointed out therein and thereafter it is stated in the notes as follows: Because of these qualities these glasses are used in motor car windscreens and windows, in doors, in ships, portholes, in protective goggles for industrial workers and drivers, and for eye pieces for gas masks and divers helmets. Bullet proof glass is a special type of laminated glass. There is another significant position pointed out in the explanatory notes which reads as follows: However, curved safety glass having .....

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ablished nomenclature recognises windscreen to be a part of motor vehicle. This cannot but mean that it must be governed by entry 34-A directly. If that is so, it must follow that the entry 23A(4) relating to glass in general cannot be invoked. In between the two entries entry No. 34A is direct and specific entry and hence it must exclude the general entry, i.e. entry No. 23-A. 10. Mr. Sethna, however, advanced two-fold arguments before us to support the view taken by the department. His first c .....

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were governed by entry 23A(4). To our mind, answer to this argument is in the form of the same proposition as the one we have already referred to above. We have to take into account general understanding of the commercial community in respect of the particular word used by the excise tariff for denoting or identifying the relevant article. We have already found that windscreen is not considered to be mere glass by the commercial community. Windscreen will not be available with a dealer in glasse .....

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identifiable as for the articles of this section, are excluded, however, if they are covered more specifically by another heading elsewhere in the Nomenclature. Relying upon these observations Mr. Sethna contended that the commodity windscreen must be deemed to be excluded from the category of articles contemplated by entry 34A in view of the fact that commodity glass is included specifically in entry No. 23A (4). To our mind the proposition needs just be stated to be rejected. What para (C) at .....

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s including the Supreme Court. It is really unnecessary to set out all of them here but we may mention the judgment of the Supreme Court in M/s. Indo International Industries v. Commissioner of Sales Tax, Uttar Pradesh, reported in AIR 1981, Supreme Court, page 1079, wherein it was observed by the Supreme Court in pare 4 of its judgment as follows: It is well settled that in interpreting items in Statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and fo .....

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ce or commercial parlance has to be adopted. In Ramavtar Budhiprasad, etc. v. Assistant Sales Tax Officer, Akola, (1962) 1 SCR 279: (AIR 1961 S.C. 1325) the question was whether betel leaves fell within item vegetable so as to earn exemption from sales tax and this Court held that word vegetable had not been defined in the Act, and that the same must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance and so construed it denoted those .....

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be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. Viewing the question from the abo .....

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