PETITIONER:
NAT STEEL EQUIPMENT PVT. LTD.
Vs.
RESPONDENT:
COLLECTOR OF CENTRAL EXCISE
DATE OF JUDGMENT19/01/1988
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
RANGNATHAN, S.
CITATION:
1988 AIR 631 1988 SCR (2) 732
1988 SCC (1) 605 JT 1988 (1) 228
1988 SCALE (1)214
ACT:
Central Excise and Salt Act, 1944: Sections lIA and
35L-Tariff item No. 33C Explanation I and item No. 68-
Manufacture of items used in big hospitals hotels and
industrial canteens-Domestically operated machines-
Classification of-Whether electrical appliance for household
purposes-'Similar description'-Interpretation of-Absence of
suppression of fact in classification-Whether s. 11A
applicable.
HEADNOTE:
%
Words and Phrases: 'Similar description '-meaning of.
The appellant, manufacturer of Hospital and
Pharmaceutical Appliances and Heavy Duty Industrial Canteen
Equipment, classified certain items like cooking range, deep
fat fryer, express coffee machine, bread toaster etc.,
numbering 14, under Tariff Item No. 68 of the Central Excise
and Salt Act, 1944. The Assistant Collector held that
products 2 to 14 were classifiable under Tariff Item No.
33C, in view of the Explanation thereof, and demanded
differential duty for the period of 1st March, 1979 to 30th
June, 1980.
The Collector, on appeal, held that these items were to
be classified under Tariff item No. 68 and not under Tariff
item 33C .
On appeal by the Revenue, the Central Customs Excise
and Gold (Control) Appellate Tribunal, while noting that the
equipment in question, some of which were electrically
operated machines, were used in industrial canteens, five
star hotels, big hospitals, etc. held that the intention of
the Legislature was clear from the Explanation to Tariff
Item No. 33C, and the items in question could not be
classified under Tariff Item No. 68.
Dismissing the appeal by the manufacturer.
^
HELD: The statute does not contemplate that goods
classed under the words of "similar description" shall be in
all respects the same. If it did, these words would be
unnecessary. These were intended to embrace goods but not
identical with those goods. If the items were
732
similar appliances which are normally used in household,
these will be taxable under Tariff Item No. 33C. [73CD]
It is not necessary, to be a domestic appliance, that
it must be actually used in the home or the house. It must
be of a kind that they are generally used for household
purposes. [736B]
The types of items concerned in the instant case are
generally used for household purposes and that is
sufficiently good test for classification in the light of
explanation to tariff item No. 33C. The Tribunal was.
therefore, right in holding that these items could not be
classified under Item 68. [736C]
Since the appellant had set out all the details and the
Revenue had assessed the appellant under Tariff Item No. 68,
the Tribunal was right in holding that there was no
intention to evade payment of duty and in directing that the
modification of the classification list could only be
prospective and not retrospective. In the absence of any
proof of suppression of fact, it was also right in holding
that s. l 1-A of the Act would not be applicable. [736D-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2860 of
1987.
From the Judgment and order dated 8.7.1987 of the
Customs Excise and Gold (Control) Appellate Tribunal, New
Delhi in Appeal No. 1311 of 1983 and Suppl. A. No. 1798 of
1987-BI.
Soli J. Sorabjee, S.R. Grover and K.J. John for the
Appellant.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. This is a statutory appeal from
the decision and order of the Customs Excise and Gold
(Control) Appellate Tribunal (briefly referred to as
‘CEGAT’) under section 35L of the Central Excise and Salt
Act, 1944 (hereinafter called ‘the Act’). It appears that
the appellant is a manufacturer of Hospital and
Pharmaceutical Appliances and Heavy Duty Industrial Canteen
Equipment. The following 14 items were classified by him
under Tariff Item No. 68 of the said Act in his
Classification List No. 106 dated 27:3.1979:-
“(1) Storage Tank, (2) Cooking Range (Electric
opera-
734
tion and gas operated), (3) Baking oven, (4) Deep
Fat Fryer, (5) Bain Mafie, (6) Sterilizing Sink,
(7) Expresso Coffee Machine, (8) Steam Jacketed
Vessel (Steam operated), (9) Bread Toaster, (10)
Bulk Cooker & Fryer, (11) Chappatty
Plate/Chappatty Puffer and Chappatty Plate/Puffer,
(12) Dish Washing Machine, (13) Potato Pooler and
(14) Masala Grinder. “
The Assistant Collector held the view that products 2
to 14 were classifiable under Tariff Item No. 33C in view of
the Explanation thereof. After giving notice the Assistant
Collector demanded differential duty amounting to
Rs.1,91,622.20 for the period Ist of March, 1979 to 30th
June, 1980. The Assistant Collector confirmed the demand
except in respect of Item No. 8, namely, Steam Jacketed
Vessel.
Being aggrieved from these orders, the appellant filed
appeals before the Collector. The Collector accepted the
appellant’s contentions and came to the conclusion that
these were to be classified under Tariff Item No. 68 and not
under Tariff Item No. 33C. Tariff Item 33C at the relevant
time contained the Explanation-I, which is as follows:
“Explanation-I ‘Domestic electrical appliances’
means electrical appliances normally used in the
household and similar appliances used in hotels,
restaurants, hostels. offices, educational
institutions, hospitals, train kitchens. aircraft
or ship’s pantries, canteens, tailoring establish
ments, laundary shops and hair dressing saloons”.
The revenue went up in appeal before the CEGAT. The
Tribunal noted that the equipments in question were used in
industrial canteens, Five Star Hotels, big hospitals etc.
The nature of the items such as deep fat fryer, Expresso
coffee machine, bread toaster, chap patty plate, etc. were
all electrically operated machines. The Tribunal further
noted that Tariff Item 33C was in respect of “domestic
electrical appliances not elsewhere specified”. According to
the Tribunal the intention of the legislature in respect of
“domestic electrical appliances” was clear from the
Explanation. It is apparent that the above named items are
specially designed for use in big canteens attached to
industrial units, big hotels, hospitals etc. where food in
bulk quantity for hundreds of people is required to be
prepared and served. These required electric power exceeding
230 volts in order to have considerable capacity for
preparing and serving food. Their prices ranged from
735
Rs.7,000 to Rs.1.5 lakhs. It was submitted that these are
important and relevant factors for distinguishing the said
items as distinct and different from those appliances which
are used normally in the household. It was submitted that
these heavy duty items fall outside the purview of Tariff
Item No. 33C. The Tribunal was of the view that though
considerable space is required for these items but space was
not any criteria for determining this question. According to
the Tribunal that these items could not be classified under
Tariff Item No. 68. We are of the opinion that the Tribunal
is right.
It is manifest that these equipments were electrical
appliances. There was no dispute on that. It is also clear
that these are normally used in household and similar
appliances are used in hotels etc. The expression “similar”
is a significant expression. It does not mean identical but
it means corresponding to or resembling to in many respects;
somewhat like; or having a general likeness. The statute
does not contemplate that goods classed under the words of
‘similar description’ shall be in all respects the same. If
it did these words would be unnecessary. These were intended
to embrace goods but not identical with those goods. If the
items were similar appliances which are normally used in the
household, these will be taxable under Tariff Item No. 33C.
It appears that the Gujarat High Court in the case of
Viswa & Co. v. The State of Gujarat, (17 Sales Tax Cases
581) had occasion to consider whether electric fans are
domestic electrical appliances for the purpose of Bombay
Sales Tax Act, 1953. Bhagwati, J. as the learned Chief
Justice then was, speaking for the Gujarat High Court
observed as follows:
“A domestic electrical appliance, in our opinion,
would be an electrical appliance of a kind
generally used for domestic purposes. It may also
be used at places other than the home or the
house, but that would not destroy the character of
a domestic electrical appliance which attaches to
it by reason of its being a kind of an electrical
appliance generally used for the household. There
are several electrical appliances which are
generally used in the household, such as electric
irons, electrical sewing machines and electrical
cooking-ranges which are also used in other
establishments. But these electrical appliances do
not therefore cease to be domestic electrical
appliances. It is of course not necessary that an
electrical appliance, in order to
736
satisfy the description of a domestic electrical
appliance, must be actually used in the home or
the house. What is necessary is that it must be of
a kind which is generally used for household
purposes and if that test is applied, there is no
doubt that electric fans are domestic electrical
appliances and the Tribunal was therefore right in
holding that they fall within entry 52 of Schedule
B.”
We agree that it is not necessary to be a domestic
electrical appliance that it must be actually used in the
home or the house. It must be of a kind which is generally
used for household purposes. It appears to us that the types
of items concerned in this appeal are generally used for
household purposes and that is sufficiently good test for
classification in the light of the explanation to Tariff
Item No. 33C.
In view of the fact that the Tribunal recognised that
the appellant had set out all the details in the
classification list and the revenue had assessed him under
Tariff Item 68, the Tribunal came to the conclusion that
there was no intention to evade payment of duty. Therefore,
the Tribunal directed that the modification of the
classification list could only be prospective and not
retrospective. The Tribunal was just and right in so doing.
The Tribunal was also right in holding that in the absence
of any proof of suppression of fact, section 11-A of the
said Act would not be applicable. The show cause notice
raising a demand of duty was issued on 8th of September,
1980 and the Tribunal sustained the demand for the period
9th March, 1980 to 30th June, 1980 in respect of items 3 to
7 and 9 to 14.
We are of the opinion that the Tribunal was right and
the decision of the Tribunal therefore, does not call for
interference.
In that view of the matter the appeal is rejected.
There will be no order as to costs
N.P.V. Appeal dismissed.
737