INDIAN TOOL MANUFACTURERS versus ASSTT. COLLECTOR OF CENTRAL EXCISE, NASIK AND ORS.

Citation: [1994] SUPP. 4 S.C.R. 1 · Decided: 23-09-1994 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Dismissed

Judgment (excerpt)

INDIAN TOOL MANUFACTURERS 
A 
v. 
ASSTT. COLLECTOR OF CENTRAL EXCISE, NASIK AND ORS. 
'; 
SEPTEMBER 23, 1994 
[ll.P. JEEVAN REDDY, SUHAS C. SEN AND 
B 
K.S. PARIPOORNAN, JJ.] 
Central Excise : 
Tariff Item Nos. 51A(iii), 62 and 68-Carbide Throw Away In- c 
serters-Oassified as Item No. 6~Subsequent reclassification under Item 
•• 
No. 51A(iii)-Held: Goods falling under the general heading one to be taxed 
under that heading-Market parlance cannot take it out of the general head-
ing-Merely because the inserters are detachable and thrown awc:ry after use 
cannot change the basic character or function. 
D 
The appellants have been manufacturing and selling Carbide Throw 
Away Inserters, which were classified under Tariff Item No. 68 till 
17.6.1977. However, by an amendment these inserts were classified under 
Tariff Item No. 51A from 18.6.1977. Appellants paid duty accordingly. On 
25.2.1980 the Assistant Collector, Central Excise issued a show cause E 
notice asking the appellants as to why the classification sbonld not be 
changed to Tariff Item No. 62. The reclassification proposed was con-
firmed and the inserters were classified under Tariff Item No. 62 as 'Tools 
and Tips'. 
The appellants preferred appeals and the Collector of Central Excise F 
(Appeals) held that the classiflcation was validly made. The demand for 
short levy for January and February, 1979 was held to be barred by 
limitation, but the demand from March 1979.to April 1980 was sustained.· 
The appellant applied for revision to the Central Government and G 
r 
it was transferred to the Customs, Excise and Gold (Control) Appellate 
Tribunal. The Tribunal held that the Inserts being a variety of generic item 
Tool Tips, had to be. classified as specific Item 62 and conld not fall under 
the more generic Item 51-A(iii)· 'Tools'. 
The said order of the Tribunal was challenged by the appellant in H 
1 
.. -
2 
SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R. 
. 
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A the present appeals, contending that regard must be had to the market 
parlance in deciding the iss~e. 
. 
Dismissing the appeals, this Court 
HELD : 1.1. If there is a general heading for the purpose of levy of 
B Excise Duty, then every variety of goods falling under that general heading t 
will have to be taxed under that heading. The fact that a particular variety 
is known by a particular name in the market will not take it out of the 
general heading. [8-D) 
. C 
1.2. The fin.ding of the Department which has been unheld by the 
Tribunal is that both Tool Tips as well as Throw Away Inserts were 
Carbide Tips for machining of metal. The Inserts had shorter functional 
life and were replaceable. The Tool Tip had one cutting edge while the 
Insert had multiple cutting edges. These fa~ts did not alter in any way the 
basic character and function of the two articles. Both were tips meant for 
D machining of metal. Both were manufactured by the same process and had 
b'een made out of same metals. The Inserts were clamped on the holders. 
The ordinary Tool Tips were brazed on the holders. This will not take the 
Inserts out of the amplitude of the description in T3riff Item 62 'Tool Tips 
in any form or size'. This wide description will encompass every type ofTool
0 
E 
F 
Tips detachable or otherwise. Whether a Tool Tip Is brazed on a tool 
handle or clamped on a tool handle. will not alter its basic character, 
function or use. The form of the Tool Tip is :also immaterial. The detach-
able Tool Tip Is only a variety of Tool Tips and the fact that it Is Identified 
by the name 'Throw Away Insert' will not take It out of the ambit of the 
heading 'Tool Tips in any form or size'.. (8-G-H, 9-A-B) 
1.3. It Is not the case of the appellant that its products are mounted 
on tools. The composition of its product is. same as mentioned in Tariff· 
Item 62. In shape or form it Is not differentfrom a Tool Tip, except that 
it has multiple cutting edges. Its function is the same as that of a Tool Tip. 
G The fact that It Is detachable and has to be thrown away after use, will not 
change its basic character or function, 111:G-H] 
· 
Plasmac Machine Manufacturing Co. Pvt.· v. Collector of Central 'Ex-
cise, Bombay, (1991) Supp.1 SCC 57, relied.on. 
H 
International Foods v. Collector of Genial Excise,. Hyderabad, (1978) 
-- .._ __ ~ 
( 
> 
INDIAN TOOL v. ASSIT. COLLECTOR OF CENTRAL EXCISE [SEN, J. J 
3 
E.L.T. (J.50), referred to. 
A 
Brussels Tariff Nomenclature relating to 'Tools Tips', referred to. 

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