M/S. S.G. GLASS WORKS PRIVATE LTD.versusCOLLECTOR OF CENTRAL EXCISE AND CUSTOMS

            MIS. S.G. GLASS WORKS PRIVATE LTD.                               A
                             v.
        COLLECTOR OF CENTRAL EXCISE AND CUSTOMS

                          NOVEMBER 8, 1994

             [R.M. SAHAI AND N. VENKA TACHALA, JJ.]                          B

      Central Excises and Salt Act, 1944-Section 35 A (2)-Notification No.
329177 dated 26th November 1977-Exemption from payment of excise
duty-Glassware produced by semi-automatic process-Benefit of
exemption limited to such glassware in production of which molten glass C
was taken in first mould and where compressed air was used-Use of
compressed air is decisive of exemption irrespective of whether it was used
at first or second mould

     Notification No. 329n7 was issued which granted partial exemption
of excise duty over and above 18% ad-valorem to glassware produced D
manually and 24o/o ad-valorem to glassware produced by semi-
automatic process. The appellant claimed that the glassware
manufactured by it are covered under serial No.3 of Notification No.
329n7 dated 26th November 1977. A show cause notice was issued to
the appellant proposing to classify the goods under serial No. 1. In the
reply, the appellant explained that the appellant used compressed air E
and even through it was used in the second mould it did not make any
difference and the goods were covered by Item No. 3. This explanation
was accepted and the notice issued was cancelled. Fresh notice was
issued u/s 35-A (2) of the Central Excises and Salt Act, for review of the
order cancelling the earlier notice. The Assistant Collector reviewed the F
earlier order and held that the glassware manufactured by the
appellant fell under Item 1 of the Notification as compressed air was
not used in the first mould. The order was confirmed by the Customs,
Excise and Gold (Control) Appellate Tribunal. Hence this appeal.

    The question of law that arose for consideration was whether the         G
glassware such as globes, chimneys, gallon screw jars, tumblers
manufactured by the appellant manually was eligible to duty in the
relevant year under serial No. 1 or 3 of the Table to the Notification No.
329177.

    Allowing the appeal, this Court                                          H
                                   305
     306                     SUPREME COURT REPORTS          [1994] SUPP. 5 S.C.R.

A        HELD 1.1 The benefit under the Notification No. 329/77 dated
    26.11.77 has been given to the glassware produced by semi-automatic
    process. What is meant by semi-automatic process is further explained
    by limiting it to such glassware in the production of which the molten
    glass was taken in the first mould and where compressed air was used.
    But there is no indic&tion that the compressed air should have been
B used in the first mould only. The use of the word 'where' before
    'molten glass' and 'compressed air' is significant. According to
    dictionary the word 'where' may mean 'place or situation'. In the
    context· it has been used it is not descriptive of any place but has been
    used in the sense of relation or situation. What the Notification
    contemplates is that if the glassware is manufactured by taking the
C molten glass manually to the first mould then the compressed air or
    operated press is applied to it either in the first or second mould then it
    would be covered by the Not,ification. If the intention would have been
    to confine it to first mould when it was not necessary to use 'where' a
    second time. It is disjunctive 2nd has been used to denote the same
   .meani.ng, .namely, if in processing of ~t compressed air is used then it is
D deemed to be a production by semi-automatic process. The notification
  · does not state tha_t this process should also be completed in the first
    mould. Therefore, it was the use of compressed air which was decisive
    of exemption irrespeetive of whether it was ·used at the first or the
    second mould. Consequently the glassware manufactured by the
    appellant was produced by semi-automatic process and is exigible to
E ·duty under Serial No.t of Notification No. 329177. (308-B-H)
       , Mis Navooaf) India Ltd. v. Collector of Central Excise and (:ustoms,
    · JT (1994) 6 SC 89? distinguished.

           CIVIL: APPELLATE JURISDICTION: Civil Appea~ No. 2859of1986
         From the Order No. D.N. 444/85-D dated the 6th December 1985 of
F
     the c;ustoms, Excise and Gold (Control) Appellate Tribunal, New Delhi
     (CEGA T) in Appeal No. ED (SB) (T) A No. l 700/81-D
           V.A. Bobde, A.K. Sanghi and S. Mudaliyarfor the Appellants.
        A.K. Ganguli, V.J. Francis, V.K. Verm11 and Sushma Suri for the
G . Respondent. ·
           The Judgment of the Court was delivered by:

         R.M. SAHAI, J. This appeal is directed against the order of Customs,
     Excise and Gold (Control) Appellate Tribunal, New Delhi. The short
     question of law that arises for consideration .is whether the glassware such
H    as globes, chimneys, gallon screw jars, tumblers manufactured by the
S.G. GLASS WORKS. v. COLLECTOR OF C. EXCISE & CUSTOMS [R.M. SAHA!, J.] 307

appellant manually was exigible to duty in the relevant year under Serial A
No. l or 3 of the Table to the Notification No. 329/77 dated 26th November
1977.

     By Notification No. 265/77 dated 3rd August 1977, glassware
manufactured manually were fully exempted from payment of excise duty.
Notification No. 266/77 applied to other glassware. Both these notifications B
were superseded by Notification No. 330/77 and Notification No. 329/77
was issued which granted partial exemption of duty over and above 18% ad
valorem to glassware produced manually and 24% ad valorem to glassware
produced by semi-automatic process. The appellant in the classification list
submitted to the Department Claimed that the glassware manufactured by it
was covered under serial No. 3 of Notification No. 329/77. This C
classification list was approved by the Assistant Collector. However, on
23rd August 1978 a show cause notice was issued to the appellant
proposing to classify the goods under serial No. l . In the reply it was stated
by the appellant that it was known to the Department that the appellant used
compressed afr and even though it was used in the second mould it did not
make ai.1y difference and the goods were covered by Item No. 3. This D
explanation was accepted by the Department and the notice issued was
cancelled. Fresh notice was issued Under Section 35-A (2) of the Central
Excises and Salt Act, 1944 on l 0th December 1979 for review of the order
cancelling the earlier notice. This was contested and the appellant claimed
that the authority had no jurisdiction to review or revise the order. The
Assistant Collector by his order dated 5th January 1981 reviewed the earlier E
order and held that the glassware manufactured by the appellant fell uuder
Item 1 of the Notification as compressed air was not used in the first mould.
In appeal it was held that the molten glass was brought from the furnace to
the first mould manually by a worker and another worker operated the press
resulting in what was described as processing of the glass. It further found F
that the final shape to the article manufactured by the appellant was given at
the second mould by using compressed air. It consequently held that since
there was no use of compressed air in the production process of the
glassware in the first mould, the articles manufactured by the appellant did
not fall in serial no. 3 of the Notification.

    Relevant part of the Notification No. 329/77 is extracted below:           G

               "Glassware including tableware produced by Semi-
               automatic process, that is to say,where molten glass is taken
               to the first mould manually and where either compressed air
               or mechanically operated press is used."                        H
     308                     SUPREME COURT REPORTS           [1994] SUPP. 5 S.C.R.

A          None or' the authorities disputed that in the manufacturing process the
     molten glass was taken by the appellant to the first mould manually. Nor
     there was any dispute that the compressed air was used by the appellant.
     The narrow difference arose whether the compressed air was used in the
     first or the second mould. The appellant admitted that it was used in the
     second mould for giving the final shape. According to Tribunal the
B Notification exempted only those glassware where molten glass was not
     only taken to the first mould manually but the compressed air or mechani-
     cally operated press was also used in the first mould. The short question is
     if this was correct reading of the Notification. The benefit under the
     Notification has been giyen to the glassware produced by semi-automatic
     process. What is meant by semi-automatic process is further explained by
c    limiting it to such glassware in the production of which the molten glass
     was taken in the first mould and where compressed air was used. But there
     is no indication that the compressed air should have been used in the first
     mould only. It has not been found by any of the authorities that the
     compressed air was not used in the second mould or it was not necessary
D    for  the production of the glassware. The Notification does not further say
     like taking of molten glass manually that the process of compre:;sing air etc.
     should have been applied in the first mould. The use of the word 'where'
     before 'molten glass' and 'compressed air' is significant. According to
     dictionary the word 'where' may mean 'place or situation'. In the context it
     has been used it is not descriptive of any place but has been used in the
E sense of relation or situation. In other words what the Notification contem-
     plates is that if the glassware is manufactured by taking the molten glass
     manually to the first mould and then the compressed air or mechanically
  ·' operated press is applied to it either in the first or second mould then it
     would be covered in the Notification. If the intention would have been to
   · confine it to the first mould then it was not necessary to use 'where' a
F second time. It is disjunctive and has been used to denote the same
     meaning; namely, if in processing of it compressed air is used then it is
     deemed to be a production by semi-automatic process. The Tribunal in
     reading the words 'where either compressed air or mechanically operated
     press' along with the earlier expression 'first mould' com~itted an error of
G law. The two requirements are quite distinct. The one requires the glass to
     be taken to the first mould manually. Once that was found, that request
     stood satisfied. But to be covered in the expression 'semi-automatic
     process' the glassware was further required to be processed by use of
     compressed air; The Notification does not state that this process should also
     be completed in the first mould. The word 'and' by itself may have been
H susceptible of giving rise to the argument that it was another condition to be
S.G. GLASS WORKS. v. COLLECTOR OF C. EXCISE & CUSTOMS [R.M. SAHAI, J.] 309

satisfied in the first mould itself. But it having been used before the word A
'where' it is disjunctive and lays down another requirement for a glassware
to be produced by use of semi-automatic process to be entitled for
exemption. Therefore, it was the use of compressed air which was decisive
of exemption irrespective of whether it was used at the first or the second
mould. Consequently, the glassware manufactured by the appellant was
produced by semi-automatic process as contemplated in the Notification at B
serial no. 1 ofNotification No. 329/77.

     Reliance was placed by the learned counsel for the Department on Mis
Novopan India Ltd., Hyderabad v. Collector of Central Excise and
Customs, Hyderabad, JT (1994) 6 SC 80. It was urged that the Notification
under which the appellant was claiming concessional rate of tax being a C
Notification of exemption should be construed strictly and in case of doubt
and ambiguity in favour of the State. True, but there does not appear to be
any doubt or ambiguity. Therefore, the ratio of the decision is not of any
help to the Department.

    In the result, this appeal succeeds and is allowed. The order passed by
the Tribunal is set aside. It is held that the glassware manufactured by the
appellant during the period in dispute was exigible to duty under Serial
No.I of Notification No. 329/77. The appellant shall be entitled to its costs.

A.G.                                                         Appeal allowed.