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Ganesh Metal Corporation Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)(14)ELT2506TriDel
AppellantGanesh Metal Corporation
RespondentCollector of Central Excise
.....held these to be liable to duty under item 42 of the central excise tariff schedule as "pilfer-proof caps". this has been contested by the appellants.9. the following extract from the assistant collector's order contains a description of the goods in question as well as his reasons for holding that they are "pilfer-proof caps" :- "i have examined the sample of the articles produced by the manufacturers. tear-off seals, b.t. caps, and vial caps produced by them are intended to be fixed on medicinal bottles like anti-biotics etc. for holding the rubber stopper firmly on the bottle in position as also to provide protection against pilferage. these caps have got four visible arc-shaped cuts on the top. these caps are fixed on the bottles and the bottom are sealed. the party's contention.....
1. This is a revision application (hereinafter called "appeal") filed before the Central Government which under Section 35P of the Central Excises and Salt Act, 1944, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal.

2. This is the fifth occasion when this appeal has been called for hearing. It was first listed for 7-1-1983. The appellants sent an application requesting that the hearing be held at Madras. A further date, viz. 18-2-1983, was fixed for hearing at New Delhi. The appellants did not appear on that date. A further notice was issued to the appellants, specifically informing them that their request for hearing at Madras had been rejected, that hearing would be on 23-3-1983 at New Delhi-and that this would be final. As the appellants did not appear on that date also, their appeal was dismissed for default.

3. Thereafter the appellants made an application for restoration of their appeal, on the ground that on 17-3-1983 they had submitted an application for adjournment of the hearing date (fixed for 23-3-1983) by two weeks in order to appear in person or by counsel. They submitted that their appeal had been dismissed for default without taking this application into account. On this application the Tribunal passed its order dated 7-7-1983 restoring the appeal and fixing the date of hearing as 1-9-1983.

4. When the case was called on 1-9-1983, no one appeared for the appellants. However, a telegram received from them was placed before the Bench in which they prayed for an adjournment without giving any reasons and stated that a petition had been sent by post. The Bench accordingly adjourned the case to 13-9-1983 for directions. On 13-9-1983 it was put up to the Bench along with the appellants' petition which had since been received by post. In that petition it was stated that the appellants counsel, Shri K.P. Jagadessan, was appearing in some cases before the Karnataka High Court. They accordingly sought adjournment of the case from 1-9-1983 to another date after three weeks. In the interests of justice the Bench adjourned the case to 13-10-1983, in accordance with the appellants' request, and notice of the revised date was issued to the appellants on 14-9-1983.

5. On the case being called today, there was again no one presort for the appellants. However, a telegram reading "Pray for adjournment.

Petition filed today", which had been received in the Registry on 10-10-1983, was placed before us.

6. We observe that the appellants have had as many as five opportunities to appear before the Tribunal, but have not done so even once. On the last two occasions they have sent telegrams requesting adjournment, without giving any reason, but referring to a petition sent by post. Taking it that the reason given on the last occasion was valid, they have been fully accommodated by fixing the hearing for today.

7. In view of the appellants' repeated failure to appear for the hearing on the given dates, we see no justification for giving them yet another adjournment. In the circumstances set out above, we would have been justified in once again dismissing their appeal for default.

However, in the interests of justice, we propose to hear and decide the appeal on merits.

8. The appeal relates to the classification of the goods manufactured by the appellants and referred to by them as "tear-off seals", B.T.caps and Vial caps. The authorities below have held these to be liable to duty under Item 42 of the Central Excise Tariff Schedule as "Pilfer-proof caps". This has been contested by the appellants.

9. The following extract from the Assistant Collector's order contains a description of the goods in question as well as his reasons for holding that they are "Pilfer-proof caps" :- "I have examined the sample of the articles produced by the manufacturers. Tear-off seals, B.T. caps, and Vial caps produced by them are intended to be fixed on medicinal bottles like anti-biotics etc. for holding the rubber stopper firmly on the bottle in position as also to provide protection against pilferage. These caps have got four visible arc-shaped cuts on the top. These caps are fixed on the bottles and the bottom are sealed. The party's contention is that without breaking the seal, the goods inside the bottle could be tampered with by means of a syringe, which can be inserted through one of the arc-shaped cuts on the top. I am unable to accept the party's contention in this respect.

It is seen that it is definitely not possible, without tearing off the arc shaped cuts on the top, to insert any syringe successfully, inside the bottle and take out the contents. It is doubtful whether the syringe can be inserted at all inside the bottle without tampering with the cuts on the top. The cuts on the top are not wide enough to pass a syringe through them. Even for the sake of argument, if it is taken that a syringe can be inserted through these cuts on the top without tampering them, it will be most uneconomical and troublesome for anybody to do this.

These caps are evidently intended to provide protection to a manufacturer's product against substitution, adulteration or pilfering by someone else. Once these caps are fixed on the package viz. bottles, it would ordinarily not be possible to tamper with the contents of the package without destroying the special device in the cap which is intended to provide such protection, viz. the top portion or arc-shaped cuts on the top." 10. In their memorandum of appeal, the appellants have advanced the following three arguments :- (ii) a classification list describing the goods as non-excisable was approved on 20-11-1974, whereas the show cause notice under Rule 9(2) seeking to hold the goods as excisable was issued only on 15-10-1976. Rule 9(2) could not properly be invoked in this case, while a demand under Rule 10 was time-barred; (iii) identical goods manufactured by other manufacturers have been held as non-excisable.

11. In support of their first argument, the appellants have contended (a) that the expression "Pilfer-proof caps" can be applied only to the kind of caps where there is a ring attached to the cap which has to be broken before the cap can be unscrewed; and (b) that the goods manufactured by them are not actually pilfer-proof, as they cannot prevent pilferage.

12. So far as the first limb of this argument is concerned, the appellants have not cited any authority to show that the expression "Pilfer-proof caps" covers only a particular type of caps as contended by them. On the other hand, the description in the Tariff item, which is reproduced below, is found to be very wide :- "Pilfer-proof caps for packing, all sorts, with or without washers or other fittings of cork, rubber, polyethylene or any other material." In the absence of any other statutory or standard definition, the description would have to be applied in accordance with its plain meaning.

13. The second limb of the argument is that the goods in question would not prevent pilferage. This point has been fully dealt with in the part of the Assistant Collector's order which has been reproduced in para 9 above. The basic requirement of a pilfer-proof cap is that any tampering with the contents of the bottle or other container would leave visible signs on the cap, which could be noticed by an alert consumer. The description in the Assistant Collector's order shows that the top of the caps has four visible arc-shaped cuts. These would facilitate the process of tearing-off the top of the cap and giving free access to the rubber stopper. Once the top is torn off, it would be quite evident to any purchaser that the bottle, etc., has been tempered with. The Assistant Collector has also recorded that the cuts on the top are not wide enough for a syringe to be passed through them.

Accordingly, the possibility of pilferage from the bottles, etc., without leaving definite signs can be ruled out. Hypothetical possibilities such as a syringe being used to draw out or replace the liquid contents without leaving signs on the lid have quite properly been ruled out by the Assistant Collector. These goods can, therefore, clearly be regarded as coming within the plain meaning of the expression "Pilfer-proof caps", and we, therefore, see no reason to differ from the finding of the lower authorities on this question.

14. As regards the second argument, namely that a classification list showing the goods as non-excisable had been approved by the Department, and that there was no suppression of facts by the appellants which would enable Rule 9(2) to be invoked, we must observe that the appellants have not furnished copies of the classification list or correspondence or any other evidence to substantiate their contention.

The mere fact that a particular classification was approved earlier would not prevent the excise authorities from subsequently taking a different view, provided new facts come to notice or there are other cogent reasons justifying a changed view, vide the judgment of the Delhi High Court in the case of Bawa Potteries v. Union of India and Anr., reported in 1981 E.L.T. 114. It is not possible, without any supporting evidence, to accept their contention that all the facts relating to their goods had been made fully known to the Central Excise authorities in such a manner as to invalidate the application of Rule 9(2). We accordingly reject this contention of the appellants.

15. As regards the third ground advanced by the appellants, namely that identical goods manufactured by other manufactures are being treated as non-excisable, we observe that no details have been given to show whether the goods manufactured by others are identical to the appellants' goods and whether they are being assessed differently. In any event, it is the appellants' case which is before us and we find that in the facts and circumstances of this case the classification was correctly made.

16. In the result, we confirm the order of the Appellate Collector and reject the appeal.

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