JUDGMENT
1. A short but interesting question in the present petition is whether the goods manufactured by the petitioner-company, namely, wired glass, figured glass, rolled glass, coloured figured glass, coolex figured glass, and coolex wired glass belong to the category of sheet glass, and whether they are liable to be subjected to excise duty under tariff item 23A(1) of the First Schedule of the Central Excise andSalt Act, 1944, hereinafter referred to as `the Act.’
2. Now the main contention of mr. c.T.Daru, the learned Advocate appearing for the petitioner-company, is that the disputed items of glass manufactured by the petitioner-company can by no srtetch of imagination be considered to be sheet glass and consequently tariff item 23A could never apply to these items. It was contended by mr. Daru that figured glass, rolled glass, wired glass, coolex figured glass, coloured figured glass and cooles wired glass manufactured by the petitioner-company are different from sheet glass and plate glass; that in general commercial paralnce these goods are never treated as sheet glass and have well under stood different as known in the market. It was submitted that general public who have to deal with these items open market do not call these items as sheet glass. In order to substantiate this contention eveidence was led before the departmental authorities. But the said evidence was brushed aside as irrelevant and 1off the rail’.
3. Mr. Daru contended that the indian Standard institution has prepared a glossary terms relating to glass industry. The said glossary has been brought after common deliberations of the participants like the Council of the Scientific and Industrual Research, Hindustan Pikington Glass Works ltd., All Inida Glass manufacturers Assiciation and others. In the said glossary, published in February 1962, it has been clearly mentioned that Flat glass is a general term covering sheet glass and various forms of rolled glass such as plate glass, figured glass and wired glass. it would be apparent that the general term is shown as flat glass which is mentioned as comparising of all glasses which are flat in appearance. But flat glass would consist of various forms such as rolled glass, sheet glass, figured glass and wired glass. Similar the word `sheet glass’ is also defined as meaning flat glass made by blowing or drawing. Wired glass is alos defined as meaning flat glass with embeded wire mesh, square or hexagonal. Wired glass with embeded square mesh is called Georgian. Similarly, figured is shown to be flat glass having a pattern on one or both surface. It would be apparent from these various meaning assigned to these various phrases in the aforesaid glossary that flat glass is a general term covering various forms of other different types of glass. It is tghis glossary which has assigned various meanings to different types of glass and is required to be given the utmost weight as observed bythe Supreme court in A.I.R. 1963 S.C. 791 (Supra). This glossary is an authgentic piece of evidence on the subject matter of controversy.
23rd November, 1978
4. There was evidence before the departmental authorities as to how these items of glass were understood in coomon paralance and in the commercial market by persons conversant with the matter. the petitioner examined one K.D.Shah before the departmental authorities and in addition to K.d.shah, they examined two witness-D.K.Patel and A.K.Roy. Out of these witness K.D.Shah was an subject matter of dispute in the present case. He was aged 71 and was a businessman from ahemadabad. In jis deposition he stated that he was doing the business of buying and selling sheet glass, figured glass, wired glass, coolex wired glass, laminated glass, toughmen glass, and such material. He was doing the said business for the last 30 years. He further stated that he knew all the types of glasses and they are different from each other and inwon by different names and were known to be distinctly different from each other in the market. He also stated that these glasses have different characteristics, uses and prices. Each type of glass is a different article from others and known by diffeent name and sold and bought at diffeent price in the market by all persons in this trade all over India. He further stated that so far as plate glass in concerned, it was diffeent from the flasses stated above and it was not manufactured in Inida and was imported from foreign countries. This witness offered himself for cross-examination but the departmental authorities did not think it fit to cross-examine him. Now the evidence of this witness was very material for the test of the commodity being known in common paralance and commercial world but surprisingly enougn this eveidence has been brushed asude by the Assistant Collector by a cryptic observation that all that was stated by the witness was off the rail. The same is the evidence of other two witness but as they were employees of the petitioner-company we do not advert to their vision but the fact remains that the evidence regarding the treatment of the disputed goods by persons conversant with the use thereof in the commercial world has been brushed aside on entirly irrelevant considerations by the departmental authorities. the Assistant Coolector decided to ignore the evidence of this witness by saying that it was off the rail. the position is worse when we read the judgments and orders of the appellate Collector and the revisional authority. They have not thought fit to look at this evidence. in that view of the matter, when the correct test has no been applied by the departmental authorities for deciding the present question and when they have not gone into the relevant and material evidence on this aspect, and especially when they have not chosen to cross-examine the witness and have not led any rebutal evidence, the findings arrived at by the departmental authorities would obviously suffer from the apparent error or law as the correct test had not been applied and therefore the decisions of the said authorities would be vitiated in law.
5. Now in the light of the correct test as pronounced by the Supreme court, the question will have to be decided in the light of the test of recognition of goods on common paralance, namely, whether a common man who is conversant with this type of goods would treat the disputed items of glass as sheet glass or not; or, in other words, if a customer goes in the market to purchase theseitems i.e. wired glass, figured glass or other glass, and if he is supplied sheet gllass will he accept it or, to put it differently whether the coustomer who demands figured glass or wired glass would purchase sheet glass form any business mad and would any businessman give sheet glass when customer wants wired glass or figured glass? It is this test which has been completely ignored by the departmental authorities and on this aspect the evidence of K.D.Shah remains unchallanged and hence the conclusion is inevitable that on the application of the correct test the disputed items of glass manufactured by the petitioner company can never be covered by the phrase sheet glass and hence tariff item 23A(i) cannot apply to the facts of this case.
6. Apart from this aspect of the matter Mr. Daru also placed reliance on various other aspects. Ge submitted that even the process of manufacturing sheet glass was entirely different from the process of manufacturing other types pf glasses. It was submitted that sheet glass does not undergo any other transformation to become figured glass or a wored glass. each such glass is manufactured by a separate process, and emerges as a finished product as such, viz. when manufacturing process for sheet glass is over, a sheet glass is manufactured. Similarly by other manufacturing process the finished product which emerges is wired glass or coloured glass etc. as the case may be. It has been stated in the petition that even the furnaces for manufactring different types of disputed items are quite different. It is stated that the petitioner-company manufactured sheet glass from one furnace while it manufactured wired glass or coolex glass or figured glass, as the case may be, from different furnaces. Thus, it is not as if sheet glass after being manufactured is further processed to be converted into figured glass or wired glass etc and consequentlythere is no question of these other types of glassess being part and parcel of sheet glass as submitted by the respondents.
7. Even apart from this, each of these had different characteristics test. It was submitted by mr. Daru that even apart from the common paralance test and the fact that the customers and businessmen understood these various items as different commodoties in ordinary commercial market, even by appearance these commodities had, their distinct individual characteristics. That sheet glass and plate glass are transparent. the sheet glass has waviness, while plated glass has no waviness. These charactristics are absent in figured glass, rolled glass wored glass, coolex figured glass, coloured figured glass and coolex wired glass. it was further submitted that the charecteristics and properties lke obscurity or transparentness, design and pattern, wire mesh embeded etc. are not to be found in sheet glass or plate glass.
8. Mr. S.N.shelat, learned Advocate appearing for the respondents, raised certain technical contentions onmerits first. It was submitted that after all sheet glass was the genus and it is subjected to wire mesh it would result into wired glass, if it was subjected to colour treatment, it would result into colouredglass and so on. This submission of mr. Shelat was completely countrary to the overwhelmingevidence led by the peitioner company before the departmental authorities which shoed that it was not so and there was no question of sheet glass or coloured glass etc. The process of manufacture of each type of glass is differect and each type of glass into completed manufactured product quite independent of the other and each glass is separately manufactured by a separate process. Thus, the submission on behalf of the respondents is completely misconeived and coutrary of the evidence led in the case and cannot support the bald proposition of the departmental authorities.
9. Mr. Shelat also placed reliance on the title of the entry 23A and submitted that the very title of the entry denotes that it is meant to cover all types of glass and glassware. entry 23A is reproduced in earlier part of this judgment and it reads ‘glass and glaassware” and there are four sub-items mentioned therin. It is pertient to note that the word `glass’ is mentioned in the entry while giving all the details of the items which were liable to bear excise duty. the various rates which are prescribed do not cover all types of glass. Only sheet and plate glass are mentioned in sub-item (4) does not mention `other glasses`, as we find in entry 60 of the Custom Act. consequently, by merly mentioning the word `glass’ in the title of the item, it cannot be presumed that sheet glass and plate glass would cover all pther types of glass. Now so far as the heading of the item is concerned, Mr. Daru pointed out that in the Central Excise Tariff of Inida, 1978, published by Central Law office, Delhi, item No.35 refers to cycle parts in general. While in the tariff description only twocycle parts are mentioned as parts of cycle other than motor cycle- (i) free wheels (ii) Rims Different rates have been prescribed for only these parts even when a general term `cycle parts’ is mentioned in the title of the entry. Merely because the heading of the entry is wide, it would not mean that it would cover all types of commodities which would be covered by the general heading unless specific provision is made for these deferent parts in the body ofthe entry or item. consequently, we cannot accept the submission of mr. Shetal on the construction of the item 23A in the light of its heading.
10. We, therefore, hold on the application of the correct test of common paralance as to how a commodity is known in the common market and in commercial world by those who normally deal with it buyer or seller or as manufactrer or as a user of such commodity and in the light of the test evolved by the three aforesaid decisions of the Supreme Court, the disputed goods manufactured by the petitione- company, viz., figured glass, wired glass, coloured figures glass, rolled glass, coolex glass and as shown in the show cause notice 23A(i) as they are not sheet glass but they fall in the residuary item No. 68 and they would be liable to bear excise duty accordingly.
11. The oetition is accordingly allowed by issuing a writ of certiorari by quashing and setting aside the impugned orders of the departemental authorities at Annexure E. F and G of the petition and by a writ of mandamus the respondents are directed to levy excise duty on the disputed items of glass manufactured by the petitioner as showm in the show cause notice at Annexure A by treating these goods as falling under residuary item no. 68 of the First Schedule to the Central Excise Act and not under item 23A. They are further directed to revise the relevant assessment accordingly for the period from 20- 2-1976 onwards. The respondents are further adirected to refund the amount of excess excise duty collect by them on the disputed items from 20-2-1976 of excess excise duty collected by them on the disputed items from 20-2-1976 on the wrong assumption that they were covered by item 23A, and not byresuduary item 68.
12. Rule is accordingly made absolute with costs.
13. Mr. Shelat applied for leave to appeal to the Supreme Court under position laid down by the Supreme Court by a series of judgments on admitted importance arises in the present case which is required to be decided by the Supreme Court and hence the oral application made by Mr. Shelat for leave to appeal to the Supreme Court is rejected.
