COLLECTOR OF CENTRAL EXCISE, BOMBAY versus M/S. K.W.H. HELIPLASTICS LTD.

Citation: [1998] 1 S.C.R. 74 · Decided: 12-01-1998 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

• 
A 
COLLECTOR OF CENTRAL EXCISE, BOMBAY 
' 
v. 
r-.. 
MIS. K.W.H. HELIPLASTICS LTD. 
JANUARY 12, 1998 
B 
[J.S. VERMA, CJ., B.N. KIRPAL AND V.N. KHARE, JJ.] 
"' 
,.... 
Excise Laws : 
c 
Central Excise Tariff Act, i985: Chapter 39 Note ii (a). 
' 
Excise duty-Heading 39.25-Sub-heading 3925. iO or 3926.90-Tanks 
and vats-Capable of being used for water supply and storage-Classification 
of-Held: classifiable under Sub-heading 3925-iO and not under Sub-heading 
3926.90-in absence of definition of the term ''builders' ware'' under Heading 
D 39.25 to determine whether the goods were covered under this Head, CEGAT 
~ 
should have applied the Rules of interpretation of the Excise Tariff-In view 
.... 
of R.4 CEGAT should have found out the relationship of the said goods with 
the description of goods under disputed headings of the classification list-
Such a relationship depends upon disputed headings of the classification 
list-Such a relationship depends upon description, purpose and use of the 
E goods-Since the desc~iption of tanks and vats tallied with that given in 
Note 11 (a) of Ch. 39, the said goods had relationship with Heading 39.25 
Sub-heading 3925.iO-Rules of interpretation of Schedule, Rr. I to 4. 
The respondent-assessee was engaged in the manufacture of tanks 
and vats. The excise authorities were of the opinion that goods manufactured 
F by the respondents were classifiable under Heading 39.25 Sub-heading 
~ .. 
3925.10 as "builders' ware" whereas the respondent contended that he 
goods were classifiable under Heading 39.25 Sub-heading 3926.90 as "other 
articles of plastics" which were exempt from duty. Excise duty was, therefore, 
demanded from the respondents. 
G 
Being aggrieved the respondents preferred an appeal before the 
Customs. Excise and Gold (Control) Appellate Tribunal. The Tribunal held 
Y"-
that since no evidence was produced by the appellant-Revenue to establish 
that the goods manufactured by the respondent were "builders' ware" their 
classification would fall under Heading 39.25 Sub-heading 3926.90 and not 
H under Heading 30.25 Sub-heading 3925.10 of the Central Excise Tariff Act, 
74 
C.C.E. v. K. W.H. HELlPLASTICS LTD. [V.N. KHARE, J.) 
75 
1985. Hence this appeal. 
A 
~-1 
Allowing the appeal, this Court 
HELD: I. The approach of the Customs, Excise and Gold (Control) 
Appellate Tribunal was not legally correct. It was admitted before the Tribunal B 
by the respondent that they have been selling tanks and vats to the government 
-~ 
~ 
department etc. for purpose of water storage and supply. This admission 
~ 
unambiguously indicates that these tanks and vats can be used and are 
capable of being used for water storage either where there is a building 
activity or in any industrial plant. The term "builders' ware" is not defined 
any where. Under such circumstances, it would have been more appropriate c 
for the Tribunal to have applied Rules of Interpretation of the Excise Tariff 
Rules 1, 2 and 3 for Interpretation of the Schedule not being applicable in 
view of Rule 4, the Tribunal should have found out the relationship of goods 
manufactured by the respondent with the description of goods under disputed 
..!.._ 
headings of the classification list. The relationship of goods with particular D 
-
heading depends upon description, purpose and use of the goods. The 
--'I 
description and usage of tanks and vats manufactured by the respondent 
tallies with the description of goods given in Note 1 l(a) of Chapter 39 of the 
Central Excise Tariff Act, 1985. Therefore, there is a relationship between 
the goods manufactured by the respondent with the heading 39.25. and hence E 
the said goods fall under Sub-heading 3925. 10 and not Sub-heading 3926.90. 
178-F-H; 79-A-F] 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2817-18 of 
1993. 
F 
, ... 
~ 
From the Judgment and Order dated 12.8.92 of the Customs, Excise and 
~ 
Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 3 I 53/89-C 
and E/A No. 3104/90-C. 
Anoop Choudhary, K.C. Kaushik and V.K. Verma for the Appellant. 
G 
Joseph Vellapally, P. Venugopal and K.J. John for the Respondent. 
The Judgment of the Court was delivered by 
V.N. KHARE, J. These two appeals are directed against the order H 
76 
SUPREME COURT REPORTS 
[ 1998] 1 S.C.R. 
A dated 12.8.92 passed by the Customs, Excise and Gold (Control) Appellate 
Tribunal, New Delhi (hereinafter referred to as the 'tribunal'), whereby the 
';>-: 
tribunal allowed the r

Excerpt shown. Read the full judgment & AI analysis in Lexace.