Hindustan Ferodo Limited Vs. The Collector of Central Excise  INSC 1554 (4 December 1996)
Bharucha, S.C. Sen
O R D
articles with which this appeal is concerned are rings punched from asbestos
boards and two types of asbestos fabrics, namely, special fabrics in a coil of
continuous length and M.R.Grey in rolls. The Customs, Excise and Gold (Control)
Appellate Tribunal in the order under appeal upheld the findings of the
authorities below that the said rings fell under Item 22F of the Central Excise
Tariff which, so far as is relevant, reads thus:
Mineral fibres and yarn and manufactures therefrom, in or in relation to the
manufacture of which any process is ordinarily carried on with the aid of
power, the following, namely :- xxx xxx xxx (2) asbestos fibre and yarn:
Tribunal rejected the contention of the appellants that the said rings were
intermediate products in the manufacture of brake linings and clutch facings,
that they were brittle and fragile, and that they were not marketable.
this behalf the appellants had produced before the Tribunal three affidavits,
of which we may refer to two. The one affidavit was made by a Senior Manager,
Technical, Sales, in the appellants employment. He stated, on the basis of his
experience and knowledge, that M.R. Grey solid woven asbestos rolls had,
generally, no industrial application except in the manufacture of woven type
that special long fibre asbestos rings, being weak and porous, were generally
not usable for commercial application other than in the manufacture of moulded
clutch facings, after treatment and chemical processing. Before treatment and
chemical processing, these rings broke on slight impact and could not withstand
friction. Asbestos cloth was impregnated in resin and cured in moulds for
making clutch facings. The other affidavit was of a man in the business of
asbestos products in a large way since 1957. He stated that he had been shown
BFB-9 cut rings and MR-Grey, that he had not dealt therewith, and that, to his
knowledge, they were not available in the market. During his time in business
not a single customer had either enquired or placed orders for the supply of
articles such as the above. The Revenue led no evidence.
Tribunal referred, in the order under appeal, to process drawings and came to
the conclusion that the duty was sought to be levied at the fourth stage of
manufacture in the appellants factory. The samples of the said rings, which
were shown to the Tribunal, arose after this stage.
were in a finished form. There was nothing elementary or crude about them. As
asbestos products, they were fully manufactured. Nothing further was required
to be done to make them fully manufactured asbestos products. The appellants
contention that the said rings were brittle and fragile articles and hence not
marketable "was simply not true. We examined the sample of the rings very
fibre is a very strong material. If the ring is allowed to fall on the floor,
nothing would happen to it. We found it neither brittle nor fragile. It was
perfectly capable of being handled and transported for marketing". In so
far as the aforementioned affidavits were concerned, the Tribunal observed that
the deponents were "not the right persons to give opinion on the type of
the products with which we are concerned in this case. The disputed products
are industrial goods. Only industrialists engaged in the manufacture of brake
linings and clutch facings would be interested in them and not a dealer who
sells commonly used asbestos products in the market". The Tribunal went on
to State, "Any small scale or medium scale manufacturer of brake linings
and clutch facings would be interested in buying the asbestos rings and asbestos
fabrics as his starting materials, if he does not have the resources to start
from the stage one (the asbestos fibre stage)........
fact that the appellants do not sell their asbestos rings and asbestos fabrics
is immaterial. ..... The material point is that their asbestos rings and
fabrics are marketable products, though marketable to a particular section of
the industry only. ......... The articles in dispute before us are high value
finished asbestos products and if the terms offered are right the smaller
manufacturers of brake linings and clutch facings would certainly be interested
in buying them" It is not in dispute before us, as it cannot be, that the
onus of establishing that the said rings fell within Item 22-F lay upon the
Revenue. The Revenue led no evidence.
onus was not discharged. Assuming therefore, that the Tribunal was right in
rejecting the evidence that was produced on behalf of the appellants, the
appeal should , nonetheless, have been allowed.
not the function of the Tribunal to enter into the arena and make suppositions
that are tantamount to the evidence that a party before it has failed to lead.
Other than supposition, there is no material on record that suggests that a
small scale or medium scale manufacturer of brake linings and clutch facings
"would be interested in buying" the said rings or that they are
marketable at all.
the brittleness of the said rings, it was for the Revenue to demonstrate that
the appellants averment in this behalf was incorrect and not for the Tribunal
to assess their brittleness for itself. Articles in question in an appeal are
shown to the Tribunal to enable the Tribunal to comprehend what it is that it
is dealing with. It is not an invitation to the Tribunal to give its opinion thereon,
brushing aside the evidence before it. The technical knowledge of members of
the Tribunal makes for better appreciation of the record, but not its
Revenue sought to make the said rings dutiable a asbestos articles. The
affidavit evidence of a dealer in asbestos was of some relevance. So was the
affidavit evidence that explained the character and use of the said rings. It
was wrong of the Tribunal to find that the deponents of these affidavits were
"not the right persons to give opinion on the type of products" with
which it was concerned.
the Tribunal's order under appeal shows that it was not fully conscious of the
dispassionate judicial function it was expected to perform, and it must be
counsel for the Revenue submitted that the matter be remanded to the Tribunal
so that the evidence on record may be reappreciated. As we have stated, no
evidence was led on behalf of the Revenue. There is, therefore, no good reason
to remand the matter.
appeal is allowed and the order under appeal is quashed. No order as to costs.