M/s. Hindustan Ferodo Ltd. Vs. The Collector of Central Excise, Bombay.
EmailAppeal: Civil Appeal No. 1425 of 1987.
(From the Judgment and Order dated 28-04-87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in A.No. E.D. (SB) (T) A.No.817 of 1983-B1)
(From the Judgment and Order dated 28-04-87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in A.No. E.D. (SB) (T) A.No.817 of 1983-B1)
Petitioner: M/s. Hindustan Ferodo Ltd.
Respondent: The Collector of Central Excise, Bombay.
Apeal: Civil Appeal No. 1425 of 1987.
(From the Judgment and Order dated 28-04-87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in A.No. E.D. (SB) (T) A.No.817 of 1983-B1)
(From the Judgment and Order dated 28-04-87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in A.No. E.D. (SB) (T) A.No.817 of 1983-B1)
Judges: S.P.BHARUCHA & S.C. SEN, JJ.
Date of Judgment: Dec 04, 1996
Appearances:
Mr. S.Ganesh, Mr. Rajiv Tyagi, Mr. U.A.Rana, Mr. Sudhanshu Tripathi, Advocates for M/s. Gagrat & Co., Advocates for the Appellants.
Mr. N.K. Bajpayee, Mr. R.S. Rana and Mr. P. Parmeswaran, Advocates for the Respondents.
Head Note:
CENTRAL EXCISE TARIFF
Item 22F – Rings punched from asbestos boards, special fabrics and M.R. Grey in Rolls – Held onus of establishing that rings fall within item 22F lies on Revenue who did not discharge it – With Revenue failing to lead any evidence to discharge its onus, Tribunal cannot give an opinion brushing the evidence before it – Wrong of Central Excise Tribunal to ignore the affidavits – Held Tribunal failed to perform its judicial function – Order quashed – Further held that in absence of evidence led by Revenue, the case could not be remanded-
Item 22F – Rings punched from asbestos boards, special fabrics and M.R. Grey in Rolls – Held onus of establishing that rings fall within item 22F lies on Revenue who did not discharge it – With Revenue failing to lead any evidence to discharge its onus, Tribunal cannot give an opinion brushing the evidence before it – Wrong of Central Excise Tribunal to ignore the affidavits – Held Tribunal failed to perform its judicial function – Order quashed – Further held that in absence of evidence led by Revenue, the case could not be remanded-
Customs, Excise and Gold (Control) Appellate Tribunal
Held article or sample shown to Tribunal during hearing are not an invitation to the Tribunal to give opinion thereon brushing aside evidence before it – Held Technical knowledge of members marks for better appreciation of record but not its substitution – Wrong of Tribunal to ignore affidavits of deponents
Affidavit – of deponents – cannot be set aside on basis of their having in employments of the party.
Held:
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. The 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.
It is 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. As to 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 enable the Tribunal 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 substitution.
The Revenue sought to make the said rings dutiable as 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.
Regrettably, 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 quashed.(Para 4, 5, 6 & 7)
JUDGEMENT:
O R D E R
1.The article with which this appeal is concerned are rings punched from asbestos boards and two types of asbestos fabrics, namely, social fabrics in a coil of continuous length and M.R.Grey in rolls. The Customs, Excise and Gold (Control) Appellate, Tribunal in a order under appeal upheld the finding 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 :
“22-F. Mineral fibers 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:-
xxxx xxxx xxxx
(2) asbestos fibre and yarn:
xxxx xxxx xxxx”
2.The 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. In this behalf the appellants had product 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 brake linings. Also, 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 product in a large way since 1957. He stated that he had been shown BFB-9 cut rings 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.
3.The 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. They 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 carefully. Asbestos fibre is a very strong material. If the ring is allowed to fall on the floor, nor fragile. It was perfectly capable of being handled and transported 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 manufacture 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)……… The 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 article in dispute before us are high value finished asbestos products and if the terms offered are right the smaller manufactures of brake linings and clutch facings would certainly be interested in buying them”.
4.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. The 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.
5.It is 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. As to 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 enable the Tribunal 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 substitution.
6.The Revenue sought to make the said rings dutiable as 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.
7.Regrettably, 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 quashed.
8.Learned 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.
9.The appeal is allowed and the order under appeal is quashed . No order as to costs.
1.The article with which this appeal is concerned are rings punched from asbestos boards and two types of asbestos fabrics, namely, social fabrics in a coil of continuous length and M.R.Grey in rolls. The Customs, Excise and Gold (Control) Appellate, Tribunal in a order under appeal upheld the finding 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 :
“22-F. Mineral fibers 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:-
xxxx xxxx xxxx
(2) asbestos fibre and yarn:
xxxx xxxx xxxx”
2.The 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. In this behalf the appellants had product 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 brake linings. Also, 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 product in a large way since 1957. He stated that he had been shown BFB-9 cut rings 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.
3.The 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. They 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 carefully. Asbestos fibre is a very strong material. If the ring is allowed to fall on the floor, nor fragile. It was perfectly capable of being handled and transported 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 manufacture 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)……… The 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 article in dispute before us are high value finished asbestos products and if the terms offered are right the smaller manufactures of brake linings and clutch facings would certainly be interested in buying them”.
4.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. The 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.
5.It is 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. As to 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 enable the Tribunal 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 substitution.
6.The Revenue sought to make the said rings dutiable as 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.
7.Regrettably, 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 quashed.
8.Learned 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.
9.The appeal is allowed and the order under appeal is quashed . No order as to costs.
