Gokak Limited Vs. Collector of Central Excise, Aurangabad  Insc 117 (26 February 2003)
Shah & D.M. Dharmadhikari
WITH C.A. No. 7086 of 1999, C.A. Nos.2366-67 & 4384 of 2001 Shah, J. CIVIL APPEAL
No.1411 OF 1995.
judgment and order dated 28th October, 1994, in Appeal No.E/139/94-D, Customs
Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred
to as "the Tribunal") arrived at the conclusion that 'Glass Moulds'
along with plastic Gasket were classifiable under Central Excise Tariff Chapter
heading 70.15 as 'other articles of glass' and thereby confirmed the order
passed by the Collector of Central Excise, Aurangabad.
questions for consideration before the Tribunal were:
Whether grinding and polishing of Opthalmic Blanks into Glass Moulds amounts to
Whether the goods are known in the market as Glass Moulds?
Whether the goods should be classified under Chapter sub-heading 84.80 or under
Chapter 70.15 of the Central Excise Tariff?
the first question, the Tribunal came to the conclusion that the product which
comes out after grinding and polishing is product completely different from
raw-material, namely, the opthalmic blanks.
ground and polished material acquires different characteristic and properties,
and a new product distinct in name, character and use comes into existence
after the process of grinding and polishing.
the process of grinding and polishing is nothing but a process of manufacture.
the second question, the Tribunal found that the appellant had described the
product as Glass Moulds and that the product was internationally known as Glass
Moulds. That means, in common/ trade parlance, the product was known as glass
moulds. For the contention that the product is not marketable and does not come
to the market for being bought and sold on the ground that the technology for
manufacture of the product was a highly guarded secret and, therefore, it was
not available to trade in general, the Tribunal held that as the product was
imported by the appellant itself, it was not necessary that the product should
essentially come to the market for being bought and sold in the market. The
Tribunal held that the test is whether the product is capable of being bought
and sold in the market or is marketable? For this, the Tribunal relied upon the
decision of this Court in U.P. State Electricity Board v. CCE [1994 (70) ELT
the last question whether the goods were moulds for plastic articles or moulds
made of glass, the Tribunal relied upon the test of common/trade parlance and
observed that the admitted position was that the goods were known in the
international market as glass moulds; the appellants who were the manufacturer
also call the product as glass moulds; even at the time of import of the
product, it was declared as 'glass moulds'. Hence, the Tribunal held that the
product was known as 'glass moulds or moulds made of glass'.
regard to classification of the product, the Tribunal pointed out that lot of emphasis
was laid on Chapter Note 1(c) of Chapter 84 by the appellant whereas the
Department was of the view that the goods were articles for technical use and
the plastic gaskets were parts thereof and, therefore, not classifiable under
Chapter 84 and were appropriately classifiable under Chapter Heading 70.15.
Tribunal held that the moulds in dispute were glass moulds as known
internationally and nationally in trade/commercial parlance.
were not moulds for making plastic articles and therefore, in terms of the
Explanatory Notes of HSN, the goods were appropriately classifiable under
Central Excise Tariff Heading 70.15.
Tribunal also held that Gaskets are essential components and are used for
binding of male and female to form a glass mould assembly and, therefore, were
classified under Central Excise Tariff Chapter heading 70.15 when they were
imported along with glass moulds. Gaskets were given specific shape and design
for the purpose of preparing these glass moulds assembly and, therefore, shall
be classifiable under Central Excise Tariff Heading 39 as articles for plastic
and finally held that the glass moulds along with gaskets were classifiable
under Heading 70.15.
judgment and order of the Tribunal is challenged by filing this appeal.
the Glass Moulds consist of
Ground of one glass mould is of concave shape while other is convex.
pieces of ground opthalmic glass are known as glass moulds in International
Trade. A plastic gasket which holds the two Moulds is then manufactured out of
ethyl vinyl acetate. The said two moulds are held together by this gasket. This
is for manufacturing opthalmic lenses. Admittedly, the process is as follows:
the mould making section, the glass blanks are subjected, first to cutting the
surface by diamond to achieve designed curvature on the surface, then these
glass blanks are subjected to grinding and polishing to achieve a smooth
Two glass blanks so processed from (called male & female) constitute
appliances or articles of glass for use known as glass moulds, these two moulds
are held together with plastic gasket which they call a glass mould assembly,
such glass moulds are used repeatedly for casting of the plastic lenses.
contended by the Department that the assessees were manufacturing glass moulds
and gaskets and consuming these products captively for manufacture of
ophthalmic lenses and that these glass moulds were classifiable under Central
Excise Tariff Chapter heading 70.15. The assessee submitted that the same are
classifiable under the heading 84.80 for which there is exemption notification
No.220/86 dated 2.4.1986.
appreciating the contentions raised by the learned counsel for the parties, we
would refer to the relevant entries and chapter notes thereunder, upon which
reliance is placed by them.
70 Glass and Glassware NOTES 1. This Chapter does not cover:
Optical fibre cables, electrical insulators or fittings of insulating material
Optical fibres, optically worked optical elements hypodermic syringes,
artificial eyes, thermometers, barometers, hydrometers or other articles of
Throughout this Schedule, the expression 'glass' includes fused quartz and
other fused silica.
Heading 70.15 Other articles of glass including those of a kind used for table,
kitchen, office, indoor decoration or similar purposes (other than that of
heading No.70.07 or 70.13) CHAPTER 84 Nuclear Reactors, Boilers, Machinery and
Mechanical Appliances; Parts Thereof NOTES 1. This Chapter does not cover:
Laboratory glassware (heading No.70.12); machinery, appliances or other
articles for technical uses or parts thereof, of glass (heading No.70.14 or
70.15) (d) Articles of heading No.73.21 or 73.22 or similar articles of other
base metals (Chapter 74 to 76 or 78 to 81)"
Heading 84.80 Moulding boxes for metal foundry; mould bases; moulding patterns;
moulds for metal (other than ingot moulds) metal carbides, glass, mineral
materials, rubber or plastics.
90 Optical, Photographic, Cinematographic, Measuring, Checking, Precision,
Medical or Surgical Instruments and Apparatus; Clocks and Watches; Musical
Instruments; Parts and Accessories Thereof.
Heading 90.01 Optical fibres and optical fibre bundles; optical fibre cables
other than those of heading No.85.44; sheets and plates of polarising material;
lenses (including contact lenses), prisms, mirrors and other optical elements,
of any material, unmounted, other than such elements of glass not optically
90.02 Lenses, prisms, mirrors and other optical elements, of any material,
mounted, being parts of or fittings for instruments or apparatus, other than
such elements of glass not optically worked." Further, learned counsel for
the appellant referred to relevant parts of Rules 1 to 4 of the Rules for
Interpretation of the Schedule of the Excise Tariff which are as under:
SCHEDULE EXCISE TARIFF RULES FOR THE INTERPRETATION OF THIS SCHEDULE
titles of Sections and Chapters are provided for ease of reference only; for
legal purposes, classification shall be determined according to the terms of
the headings and any relative Section or Chapter Notes and, provided such headings
or Notes do not otherwise require, according to the provisions hereinafter
(b) Any reference in a heading to a material or substance shall be taken to
include a reference to mixtures or combinations of that material or substance
with other materials or substances. Any reference to goods of a given material
or substance shall be taken to include a reference to goods consisting wholly
or partly of such material or substance. The classification of goods consisting
of more than one material or substance shall be according to the principles
contained in rule 3.
When by application of sub-rule (b) of rule 2 or for any other reason, goods
are, prima facie, classifiable under two or more headings, classification shall
be effected as follows :
The heading which provides the most specific description shall be preferred to
headings providing a more general description. However, when two or more
headings each refer to part only of the materials or substances contained in
mixed or composite goods or to part only of the items in a set, those headings
are to be regarded as equally specific in relation to those goods, even if one
of them gives a more complete or precise description of the goods.
Mixtures, composite goods consisting of different materials or made up of
different components, and goods put up in sets, which cannot be classified by
reference to (a), shall be classified as if they consisted of the material or
component which gives them their essential character, insofar as this criterion
When goods cannot be classified by reference to (a) or (b), they shall be
classified under the heading which occurs last in the numerical order among
those which equally merit consideration.
Goods which cannot be classified in accordance with the above rules shall be
classified under the heading appropriate to the goods to which they are most
akin." Now we would deal with the contention of the learned counsel for
the appellant that the glass moulds with plastic gasket manufactured by the
appellant would be covered by heading 84.80 and in any case, it would fall
under Chapter 90, heading 90.02.
the alternative submission, admittedly, it was neither the contention of the
Department nor of the appellant that the product would be covered under heading
90.02 and, therefore, that question is not required to be considered. However,
prima facie, it would be difficult for us to arrive at the conclusion that the
product is lense, prism, mirror and other optical element, of any material, unmounted,
being part of or fitting for instruments or apparatus, other than such elements
of glass not optically worked so as to be covered by Heading 90.02. Admittedly,
the product in question is for manufacture of lenses.
we would straightway consider whether the product would be covered by heading
84.80? Chapter Note 1(c) quoted above clearly provides that Chapter 84 does not
cover laboratory glassware (Heading No.70.12); machinery appliances or other
articles for technical uses or parts thereof of glass (Heading No. 70.14 or
we have to consider whether it would be covered by heading 70.15? Undisputedly,
in the present case, the glass moulds are articles of glass which are not
covered by heading 70.07 or 70.13.
glass moulds in question are covered by plastic gasket. As per the Rules for
Interpretation of Tariff Items, a product which is made up of different
components and goods put up in sets, which cannot be classified by reference to
rule 2 (a), are to be classified as if they consisted of the material or
component which gives them their essential character. In the present case,
plastic gasket cannot give the essential character of glass moulds which are
for the purpose of manufacture of opthalmic lenses. Plastic gasket only holds
the male and female moulds together.
relevant part of heading 84.80 deals with moulds for metal, metal carbides,
glass, mineral materials, rubber or plastics.
the said heading as a whole, it appears that the said heading covers various
moulds such as, mould boxes for metal foundry, mould bases, moulding patterns,
moulds for metal, moulds for metal carbides, moulds for glass, moulds for
mineral materials, moulds for rubber or plastics. It is nobody's case that the
product in question, namely, 'glass mould' is used for the aforesaid purposes.
It is used for manufacture of opthalmic lenses. Merely because lenses may be of
glass, it cannot be said that the said product is mould for glass. As per Rule
3(a) of the Rules for the Interpretation quoted above, the heading which
provides most specific description shall be preferred to headings providing a
more general description. The heading 70.15 would specifically cover the
product which is mainly consisting of glass as 'other article of glass'. These
glass-moulds are used for casting of the lenses.
discussion is also in conformity with the HSN explanatory notes. In Chapter 70
for Glass and Glassware, the general note specifically provides that the
Chapter covers glass in all forms and articles of glass, other than goods
excluded by Note-1 to the said chapter or covered more specifically by other
headings of the nomenclature. Learned counsel for the appellant submitted that
the chapter note 1(d) specifically includes optical fibres, optically worked
optical elements, hypodermic syringes, artificial eyes, thermometers,
barometers, hydrometers or other articles of Chapter 90. As stated above, the
glass moulds cannot be termed as optical fibres or optically worked optical
elements, which would be covered by Chapter 90. It also provides that
manufacturing processes vary considerably and inter alia include:
whether or not combined with pressing, blowing or drawing (e.g., for the
manufacture of bottles, tumblers, certain types of optical glass, ashtrays).
Cutting out the required articles from blanks, spheres, etc., obtained by any
process (articles of fused quartz or other fused silica, in particular, are
often obtained from blanks of solid or hollow section).
has been made clear in Chapter/Heading 90, the relevant part of which reads as
Optical elements of glass, optically worked, not permanently mounted. In order
to distinguish between optical elements of glass of this heading and those of
Chapter 70 it is necessary to determine whether or not they have been optically
optical working of glass is usually performed in two stages, viz., the
production of the surfaces to the shape required (i.e., with the necessary
curvature, at the correct angle, etc.), and the polishing of these surfaces.
working consists of grinding the surfaces by means of abrasives, rough at
first, then gradually finer, the successive operations being roughing, trueing,
smoothing and polishing. Finally, in the case of lenses required to be of an
exact diameter, the edges are ground; this is known as the centring and edging
operation. This heading applies only to optical elements of which the whole or
part of their surface has been polished in order to produce the required
optical properties. It applies therefore to elements which have been ground and
polished as described above, and also to elements which have been polished
after moulding. The heading does not apply to unpolished elements having
undergone merely one or more of the processes which precede polishing. Such
elements fall in Chapter 70." Further, as stated above, it is nobody's
case that item in question is covered by Chapter 90.
with regard to the applicability of Chapter 84, Chapter Notes to Chapter 84
provide as under:
REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF Chapter
Notes 1. This chapter does not cover:
Laboratory glassware (heading No. 70.17); machinery, appliances or other
articles for technical uses or parts thereof, of glass (heading No. 70.19 or
(A) GENERAL CONTENT OF THE CHAPTER Subject to the provisions of the General
Explanatory Note to Section XVI, this Chapter covers all machinery and
mechanical appliances, and parts thereof, not more specifically covered by
Chapter 85, and not being:
(d) Laboratory glassware of heading 70.17; machinery and appliances and parts
thereof, of glass (heading 70.19 or 70.20).
general, Chapter 84 covers machinery and mechanical apparatus and Chapter 85
certain machines are specified in headings of Chapter 85 (e.g.
electro-mechanical hand tools and electro-mechanical domestic appliances) while
Chapter 84 on the other hand covers certain non-mechanical apparatus (e.g.
steam generating boilers and their auxiliary apparatus, and filtering
should also be noted that machinery and apparatus of a kind covered by Chapter
84 remain in this Chapter even if electric:
ceramic articles and parts thereof (Chapter 69), laboratory glassware (heading
70.17) and machinery and appliances and parts thereof, of glass (heading 70.19
or 70.20) are excluded from this Chapter, it follows that even if a machine or
mechanical appliance is covered, because of its description or nature, by a
heading of this Chapter it is not to be classified therein if it has the
character of an article of ceramic materials or of glass.
GENERAL ARRANGEMENT OF THE CHAPTER (5) Heading 84.80 covers, in addition to moulding
boxes for metal foundry and moulding patterns, moulds (other than ingot moulds)
used, by hand or in machines, for moulding certain materials. 8480.50 - Moulds
for glass 8480.60 - Moulds for mineral materials - Moulds for rubber or
heading covers the moulding boxes used in metal foundry, mould bases and moulding
patterns, with certain exceptions referred to later, it also covers all moulds
(whether or not hinged, and whether used by hand or in presses or moulding
machines) which are of a kind used for moulding the following materials into
blanks or finished articles:
Metals (including metal powders, sintered metal carbides and cermets.
Glass (including fused quartz or other fused silica) or mineral materials such
as ceramic pastes, cement, plaster or concrete.
Rubber or plastics.
general, the essential function of a mould is to retain the material in a
predetermined shape while it sets; some moulds also exert a certain pressure on
the material. But the heading excludes stamping dies of heading 82.07 since these
shape the material solely by means of a powerful blow or compression (e.g.,
dies for stamping out sheet-metal goods).
FOR GLASS This group includes:
Moulds for glass paving stones, bricks or flags, and compression moulds for
Bottle moulds for hand or machine working, including pedal operated moulds
(e.g., blank or finishing moulds, ring moulds).
Moulds for hollow glass ware, for insulators, etc.
Shaping moulds for glassmakers' lathes.
Moulds made of steel or cast iron, used to make lens or spectacle blanks
the aforesaid notes, it would be difficult to hold that glass-moulds in
question are moulds for glass. It is apparent that Chapter 84 covers machinery
and mechanical apparatus and certain non-mechanical apparatus e.g. steam
generating boilers and their auxiliary apparatus and filtering apparatus.
Further, the Chapter excludes ceramic articles and parts thereof, laboratory
glassware, machinery and appliances and parts thereof, of glass, that means
even if a machine or mechanical appliance is covered by a heading of Chapter 84
by its description or nature, the item is not to be classified therein if it
has the character of an article of ceramic material or of glass.
heading 84.80 covers moulds used by hand or in machines for moulding certain
materials like moulds for glass, moulds for mineral materials and moulds for
rubber or plastics. The product in question 'glass mould' is not for moulding
such articles of glass.
for glass include moulds for glass paving stones, bricks or flags, compression
moulds for glass tiles, bottle moulds for hand or machine working, moulds for
hollow glassware and for insulators, shaping moulds for glassmakers' lathes and
moulds made of steel or cast iron used to make lens or spectacle blanks.
result, Civil Appeal No.1411 of 1995 and Civil Appeal No.7086 of 1999, filed by
the appellant Forbes Gokak Ltd. are dismissed.
Appeal Nos.2366-67 of 2001 filed by Commissioner of Central Excise, Mumbai is
allowed and the impugned judgment and order passed by the Tribunal is set
nothing has been pointed out as to how the impugned judgment and order is
erroneous, Civil Appeal No.4384 of 2001 filed by Commissioner of Central Excise
and Customs, Aurangabad is dismissed.
shall be no order as to costs in all the appeals.