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PETITIONER: NAT STEEL EQUIPMENT PVT. LTD.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE

DATE OF JUDGMENT19/01/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR  631            1988 SCR  (2) 732  1988 SCC  (1) 605        JT 1988 (1)   228  1988 SCALE  (1)214

ACT:      Central Excise  and Salt  Act, 1944:  Sections lIA  and 35L-Tariff item  No. 33C  Explanation I  and  item  No.  68- Manufacture of  items  used  in  big  hospitals  hotels  and industrial    canteens-Domestically    operated    machines- Classification of-Whether electrical appliance for household purposes-’Similar description’-Interpretation  of-Absence of suppression  of   fact  in   classification-Whether  s.  11A applicable.

HEADNOTE: % Words and Phrases: ’Similar description ’-meaning of.      The   appellant,    manufacturer   of    Hospital   and Pharmaceutical Appliances  and Heavy Duty Industrial Canteen Equipment, classified certain items like cooking range, deep fat fryer,  express  coffee  machine,  bread  toaster  etc., numbering 14, under Tariff Item No. 68 of the Central Excise and Salt  Act,  1944.  The  Assistant  Collector  held  that products 2  to 14  were classifiable  under Tariff  Item No. 33C, in  view  of  the  Explanation  thereof,  and  demanded differential duty  for the period of 1st March, 1979 to 30th June, 1980.      The Collector, on appeal, held that these items were to be classified  under Tariff item No. 68 and not under Tariff item 33C .      On appeal  by the  Revenue, the  Central Customs Excise and Gold (Control) Appellate Tribunal, while noting that the equipment in  question,  some  of  which  were  electrically operated machines,  were used  in industrial  canteens, five star hotels,  big hospitals, etc. held that the intention of the Legislature  was clear  from the  Explanation to  Tariff Item No.  33C, and  the  items  in  question  could  not  be classified under Tariff Item No. 68.      Dismissing the appeal by the manufacturer. ^      HELD: The  statute  does  not  contemplate  that  goods classed under the words of "similar description" shall be in all respects  the same.  If it  did, these  words  would  be unnecessary. These  were intended  to embrace  goods but not identical with those goods. If the items were

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732 similar appliances  which are  normally used  in  household, these will be taxable under Tariff Item No. 33C. [73CD]      It is  not necessary,  to be a domestic appliance, that it must  be actually  used in the home or the house. It must be of  a kind  that they  are generally  used for  household purposes. [736B]      The types  of items  concerned in  the instant case are generally  used   for  household   purposes  and   that   is sufficiently good  test for  classification in  the light of explanation to  tariff  item  No.  33C.  The  Tribunal  was. therefore, right  in holding  that these  items could not be classified under Item 68. [736C]      Since the appellant had set out all the details and the Revenue had assessed the appellant under Tariff Item No. 68, the  Tribunal  was  right  in  holding  that  there  was  no intention to evade payment of duty and in directing that the modification  of  the  classification  list  could  only  be prospective and  not retrospective.  In the  absence of  any proof of  suppression of  fact, it was also right in holding that s. l 1-A of the Act would not be applicable. [736D-E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2860 of 1987.      From the  Judgment and  order  dated  8.7.1987  of  the Customs Excise  and Gold  (Control) Appellate  Tribunal, New Delhi in  Appeal No.  1311 of 1983 and Suppl. A. No. 1798 of 1987-BI.      Soli J.  Sorabjee, S.R.  Grover and  K.J. John  for the Appellant.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J. This is a statutory appeal from the decision  and order  of  the  Customs  Excise  and  Gold (Control)  Appellate   Tribunal  (briefly   referred  to  as ’CEGAT’) under  section 35L  of the  Central Excise and Salt Act, 1944  (hereinafter called  ’the Act’).  It appears that the  appellant   is   a   manufacturer   of   Hospital   and Pharmaceutical Appliances  and Heavy Duty Industrial Canteen Equipment. The  following 14  items were  classified by  him under  Tariff   Item  No.   68  of   the  said  Act  in  his Classification List No. 106 dated 27:3.1979:-           "(1) Storage  Tank, (2)  Cooking  Range  (Electric           opera- 734           tion and  gas operated), (3) Baking oven, (4) Deep           Fat Fryer,  (5) Bain  Mafie, (6) Sterilizing Sink,           (7) Expresso  Coffee Machine,  (8) Steam  Jacketed           Vessel (Steam  operated), (9)  Bread Toaster, (10)           Bulk    Cooker    &    Fryer,    (11)    Chappatty           Plate/Chappatty Puffer and Chappatty Plate/Puffer,           (12) Dish  Washing Machine, (13) Potato Pooler and           (14) Masala Grinder. "      The Assistant  Collector held  the view that products 2 to 14 were classifiable under Tariff Item No. 33C in view of the Explanation  thereof. After  giving notice the Assistant Collector   demanded    differential   duty   amounting   to Rs.1,91,622.20 for  the period  Ist of  March, 1979  to 30th June, 1980.  The Assistant  Collector confirmed  the  demand except in  respect of  Item No.  8, namely,  Steam  Jacketed Vessel.      Being aggrieved  from these orders, the appellant filed appeals before  the Collector.  The Collector  accepted  the

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appellant’s contentions  and came  to  the  conclusion  that these were to be classified under Tariff Item No. 68 and not under Tariff  Item No.  33C. Tariff Item 33C at the relevant time contained the Explanation-I, which is as follows:           "Explanation-I  ’Domestic  electrical  appliances’           means electrical  appliances normally  used in the           household and  similar appliances  used in hotels,           restaurants,   hostels.    offices,    educational           institutions, hospitals,  train kitchens. aircraft           or ship’s  pantries, canteens, tailoring establish           ments, laundary shops and hair dressing saloons".      The revenue  went up  in appeal  before the  CEGAT. The Tribunal noted  that the equipments in question were used in industrial canteens,  Five Star  Hotels, big  hospitals etc. The nature  of the  items such  as deep  fat fryer, Expresso coffee machine,  bread toaster,  chap patty plate, etc. were all electrically  operated machines.  The  Tribunal  further noted that  Tariff Item  33C was  in  respect  of  "domestic electrical appliances not elsewhere specified". According to the Tribunal  the intention of the legislature in respect of "domestic  electrical   appliances"  was   clear  from   the Explanation. It  is apparent  that the above named items are specially designed  for use  in  big  canteens  attached  to industrial units,  big hotels,  hospitals etc. where food in bulk quantity  for hundreds  of people  is  required  to  be prepared and served. These required electric power exceeding 230  volts  in  order  to  have  considerable  capacity  for preparing and serving food. Their prices ranged from 735 Rs.7,000 to  Rs.1.5 lakhs.  It was  submitted that these are important and  relevant factors  for distinguishing the said items as  distinct and different from those appliances which are used  normally in  the household.  It was submitted that these heavy  duty items  fall outside  the purview of Tariff Item No.  33C. The  Tribunal was  of the  view  that  though considerable space is required for these items but space was not any criteria for determining this question. According to the Tribunal  that these items could not be classified under Tariff Item  No. 68. We are of the opinion that the Tribunal is right.      It is  manifest that  these equipments  were electrical appliances. There  was no  dispute on that. It is also clear that these  are  normally  used  in  household  and  similar appliances are  used in hotels etc. The expression "similar" is a  significant expression. It does not mean identical but it means corresponding to or resembling to in many respects; somewhat like;  or having  a general  likeness. The  statute does not  contemplate that  goods classed under the words of ’similar description’  shall be in all respects the same. If it did these words would be unnecessary. These were intended to embrace  goods but not identical with those goods. If the items were similar appliances which are normally used in the household, these will be taxable under Tariff Item No. 33C.      It appears  that the  Gujarat High Court in the case of Viswa &  Co. v.  The State  of Gujarat,  (17 Sales Tax Cases 581) had  occasion to  consider whether  electric  fans  are domestic electrical  appliances for  the purpose  of  Bombay Sales Tax  Act, 1953.  Bhagwati, J.  as  the  learned  Chief Justice then  was,  speaking  for  the  Gujarat  High  Court observed as follows:           "A domestic  electrical appliance, in our opinion,           would  be   an  electrical  appliance  of  a  kind           generally used  for domestic purposes. It may also           be used  at places  other than  the  home  or  the           house, but that would not destroy the character of

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         a domestic  electrical appliance which attaches to           it by  reason of its being a kind of an electrical           appliance generally  used for the household. There           are  several   electrical  appliances   which  are           generally used  in the household, such as electric           irons, electrical  sewing machines  and electrical           cooking-ranges  which   are  also  used  in  other           establishments. But these electrical appliances do           not therefore  cease  to  be  domestic  electrical           appliances. It  is of course not necessary that an           electrical appliance, in order to 736           satisfy the  description of  a domestic electrical           appliance, must  be actually  used in  the home or           the house. What is necessary is that it must be of           a kind  which  is  generally  used  for  household           purposes and  if that test is applied, there is no           doubt that  electric fans  are domestic electrical           appliances and the Tribunal was therefore right in           holding that they fall within entry 52 of Schedule           B."      We agree  that it  is not  necessary to  be a  domestic electrical appliance  that it  must be  actually used in the home or  the house.  It must be of a kind which is generally used for household purposes. It appears to us that the types of items  concerned in  this appeal  are generally  used for household purposes  and that  is sufficiently  good test for classification in  the light  of the  explanation to  Tariff Item No. 33C.      In view  of the  fact that the Tribunal recognised that the  appellant   had  set   out  all   the  details  in  the classification list  and the  revenue had assessed him under Tariff Item  68, the  Tribunal came  to the  conclusion that there was  no intention to evade payment of duty. Therefore, the  Tribunal   directed  that   the  modification   of  the classification  list  could  only  be  prospective  and  not retrospective. The  Tribunal was just and right in so doing. The Tribunal  was also  right in holding that in the absence of any  proof of  suppression of  fact, section  11-A of the said Act  would not  be applicable.  The show  cause  notice raising a  demand of  duty was  issued on  8th of September, 1980 and  the Tribunal  sustained the  demand for the period 9th March,  1980 to 30th June, 1980 in respect of items 3 to 7 and 9 to 14.      We are  of the  opinion that the Tribunal was right and the decision  of the  Tribunal therefore,  does not call for interference.      In that  view of  the matter  the appeal  is  rejected. There will be no order as to costs N.P.V.                                     Appeal dismissed. 737