Holding

The glass moulds with plastic gasket are to be classified under heading 70.15 as other articles of glass because the essential character of the composite article is glass and Chapter 84 excludes glass articles.

Summary

Forbes Gokak Ltd. manufactured glass moulds with plastic gaskets for making ophthalmic lenses. The Central Excise authority classified the product under heading 70.15 of the Central Excise Tariff Act as "other articles of glass" and levied duty, while the assessee claimed classification under heading 84.80, which carried an exemption. The Tribunal upheld the revenue's classification and the Supreme Court examined the nature of the product, the essential character rule under the tariff interpretation rules, and the exclusions in Chapter 84. The Court held that the plastic gasket does not give the essential character to the composite article; the essential character is glass, and Chapter 84 expressly excludes glass articles, so the product must be placed in heading 70.15. Consequently, the appellant's appeals were dismissed and the Commissioner’s appeals were partly allowed, setting aside the Tribunal’s order.

Issues considered

Whether glass moulds with plastic gaskets used for ophthalmic lenses should be classified under heading 70.15 or heading 84.80 of the Central Excise Tariff Act.
Whether the process of grinding and polishing the blanks constitutes manufacture.
Whether the product is known in trade as "glass moulds" and is marketable.
Whether the exemption notification under heading 84.80 applies to the product.

Legislation cited

Central Excise Tariff Act, 1985

Subjects

classificationcentral excisetariff interpretationglass mouldplastic gasketheading 70.15heading 84.80essential characterexemption notificationophthalmic lenses

Judgment

I

A FORBES GOKAK LTD.
V.

COLLECTOR OF CENTRAL EXCISE, AURANGABAD

FEBRUARY 26, 2003

B [M.B. SHAH AND D.M. DHARMADHIKARI, JJ.]

Central Excise Tariff Act, 1985; Headings 70.15 and 84.80:

Classification-Principles of- 'Glass Mould with Plastic Gasket '-Held,
C since plastic gasket only holds the male and female moulds together, it can not
give essential characteristics of the product which is used in the manufacture
of opthalmic lenses-The product mainly consists of glass used/or casting of
lenses-Merely because lenses may be ofglass the product cannot be classified·
as mould/or glass-Hence the product is appropriately classifiable under the
D Heading 70.15 as other articles of glasses and not under the heading 84.80
as product is not used for moulding articles of glasses-Interpretation of
Schedule of the Excise Tariff-Rules I to 4.

Words & Phrases:

E 'Glass Mould' and 'Mould/or glass'-Meaning in the context o/Central
Excise Tariff Act.

Appellant-assessee had been manufacturing glass moulds and gaskets
used for manufacture of opthalmic lenses. Revenue classified the product
under Chapter heading 70.15 of the Central Excise Tariff Act and levied
F excise duty thereon. On appeal, Customs Excise and Gold (Control)
Appellate Tribunal confirmed the order of the Revenue. Hence these
appeals.

It was contended for the Revenue that since assessee were
manufacturing and consuming glass mould product for manufacture of
G opthalmic lenses, it is rightly classifiable under Chapter heading 70.15 of
the Central Excise Tariff Act.

On behalf of the assessee, it was submitted that the product was
classifiable under the heading 84.80 of the Central Excise Tariff Act for
H which there was an exemption notification.
348
FORBES GOKAK LTD. v. C.C.E. 349
Disposing of the appeals, the Court A
HELD: I.I. The glass moulds in question are covered by plastic
gasket. As per the Rules for Interpretation of Tariff Items, a product which
is made up of different components and goods put up in sets, which cannot
be classified by reference to rule 2(a), are to be classified as if they
consisted of the material or component which gives them their essential B
character. In the present case, plastic gasket cannot give the essential
character of glass moulds which are used for the purpose of manufacture
of opthalmic lenses. Plastic gasket only holds the male and female moulds
together. (355-F-H] '
1.2. Glass mould is used for manufacture of opthalmic lenses. Merely C
because lenses may be of glass, it cannot be said that the product is mould
for glass. As per Rule 3(a), the heading which provides most specific
description shall be preferred to headings providing a more general
description. Heading 70.15 of the Central Excise Tariff Act would
specifically cover the product which is mainly consisting of glass as 'other
article of glass'. (356-8-C) D
1.3. Chapter 84 excludes ceramic articles and parts thereof,
laboratory glassware, machinery and appliances and parts thereof, of
glass, that means even if a machine or mechanical appliance is covered
by a heading of Chapter 84 by its description or nature, the item is not to
be classified therein if it has the character of an article of ceramic material E
or of glass. Further, heading 84.80 covers moulds used by hand or in
machines for moulding certain materials like moulds for glass, moulds for
mineral materials and moulds for rubber or plastics. The product in
question-'glass mould' is not for moulding such articles of glass.
(359-F-H]
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1141of1995.
From the Judgment and Order dated 28.10.1994 of the Central Excise,
Customs and Gold (Control) Appellate Tribunal, New Delhi in A. No. E/139/
94-D in F.O. No. 422 of 1994-D.
WITH G
C.A. Nos. 7086/99, 2366-2367 and 4384 of 2001.
Raju Ramachandran, Additional Solicitor General, A.M. Setalwad, Y.F.
Godrej, D.B. Shroff, Ms. Sophia Bawan, Ms. Puja Shanna, Rajan Narain, K.
Swami, D.N. Ray, Hemant Shanna and B. Krishna Prasad for the appearing .
parties. H
350 SUPREME COURT REPORTS [2003] 2 S.C.R.

A The judgment of the Court was delivered by

SHAH, J. CIVIL APPEAL No.14I l OF I995.

By judgment and order dated 28th October, 1994, in Appeal No.El
139/94-D, Customs Excise and Gold (Control) Appellate Tribunal, New Delhi
B (hereinafter referred to as "the Tribunal") arrived at the conclusion that 'Glass
Moulds' along with plastic Gasket were classifiable under Central Excise
Tariff Chapter heading 70.15 as 'other articles of glass' and thereby confirmed
the order passed by the Collector of Central Excise, Aurangabad.

The questions for consideration before the Tribunal were:
c
(1) Whether grinding and polishing of Opthalmic Blanks into Glass
Moulds amounts to manufacture?

(2) Whether the goods are known in the market as Glass Moulds?
(3) Whether the go~ds should be classified under Chapter sub-heading
D 84.80 or under Chapter 70.15 of the Central Excise Tariff?

For the first question, the Tribunal came to the conclusion that the
product which comes out after grinding and polishing is product completely
different from raw-material, namely, the opthalmic blanks. The ground and
E polished material acquires different characteristic and properties, and a new
product distinct in name, character and use comes into existence after the
process of grinding and polishing. Thus, the process of grinding and polishing
is nothing but a process of manufacture.

for the second question, the Tribunal found that the appellant had
F described the product as Glass Moulds and that the product was internationally
known as Glass Moulds. That means, in common/ trade parlance, the product
was known as glass moulds. For the contention that the product is not
marketable and does not come to the market for being bought and sold on
the ground that the technology for manufacture of the product was a highly
guarded secret and, therefore, it was not available to trade in general, the
G Tribunal held that as the product was imported by the appellant itself, it was
not necessary that the product should essentially come to the market for
being bought and sold in the market. The Tribunal held that the test is whether
the product is capable of being bought and sold ·in the market or is marketable?
For this, the Tribunal relied upon the decision of this Court 'in U.P. State
H Electricity Board v. CCE (1994) 70 ELT 3.
' \

FORBES GOKAK LTD. v. C.C.E. [SHAH, J.] 351
For the last question whether the goods were moulds for plastic articles A
or moulds made of glass, the Tribunal relied upon the test of common/trade
parlance and observed that the admitted position was tha< the goods were
known in the international market as glass moulds: the appellants who were
the manufacturer also call the product as glass moulds; even at the time of
import of the product, it was declared as 'glass moulds'. Hence, the Tribunal B
held that the product was known as 'glass moulds or moulds made of glass'.

With regard to classification of the product, the Tribunal pointed out
that lot of emphasis was laid on Chapter Note l(c) of Chapter 84 by the
appellant whereas the Department was of the view that the goods were articles
for technical use and the plastic gaskets were parts thereof and, therefore, not C
classifiable under Chapter 84 and were appropriately classifiable under Chapter
Heading 70.15. The Tribunal held that the moulds in dispute were glass
moulds as known internationally and nationally in trade/commercial parlance.
They were not moulds for making plastic articles and therefore, in terms of
the Explanatory Notes of HSN, the goods were appropriately classifiable
under Central Excise Tariff Heading 70.15. D
The Tribunal also held that Gaskets are essential components and are
used for binding of male and female to form a glass mould assembly and,
therefore, were classified under Central Excise Tariff Chapter heading 70.15
when they were imported along with glass moulds. Gaskets were given specific
shape and design for the purpose of preparing these glass moulds assembly E
and, therefore, shall be classifiable under Central Excise Tariff Heading 39
as articles for plastic and finally held that the glass moulds along with gaskets
were classifiable under Heading 70.15.

That judgment and order of the Tribunal is challenged by filing this F
appeal.

Admittedly, the Glass Moulds consist of (I) glass moulds; and (2)
.,........ gaskets. Ground of one glass mould is of concave shape while other is convex .
' These pieces of ground opthalmic glass are known as glass moulds in
International Trade. A plastic gasket whieh holds the two Moulds is then G
manufactured out of ethyl vinyl acetate. The said two moulds are held together
by this gasket. This is for manufacturing opthalmic lenses. Admittedly, the
process is as follows:

(a) In the mould making section, the glass blanks are subjected, first
to cutting the surface by diamond to achieve designed curvature H
352 SUPREME COURT REPORTS [2003) 2 S.C.R.

A on the surface, then these glass blanks are subjected to grinding
and polishing to achieve a smooth surface.

(b) Two glass blanks so processed from (called male & female)
constitute appliances or articles of glass for use known as glass
moulds, these two moulds are held together with plastic gasket
B which they call a glass mould assembly, such glass moulds are
used repeatedly for casting of the plastic lenses.

It was contended by the Department that the assessees were
manufacturing glass moulds and gaskets and consuming these products
captively for manufacture of ophthalmic lenses and that these glass moulds
C were classifiable under Central Excise Tariff Chapter heading 70.15. The
assessee submi~ed that the same are classifiable under the heading 84.80 for
which there is exemption notification No.220/86 dated 2.4.1986.

For appreciating the contentions raised by the learned ·counsel for the
parties, we would refer to the relevant entries and chapter notes thereunder,
D upon which reliance is placed by them.

"CHAPTER 70
Glass and Glassware

NOTES-
E
1. This Chapter does not cover:

(a)-(b) ........

(c) Optical fibre cables, electrical insulators or fittings of insulating
material (Chapter 85);
F
(d) Optical fibres, optically worked optical elements hypodermic ·
syringes, artificial eyes, thermometers, barometers, hydrometers
or other articles of Chapter 90.

5. Throughout this Schedule, the expression 'glass' includes fused
G quartz and other fused silica.

HEADING

Heading 70.15 Other articles of glass including those of a kind
used for table, kitchen, office, indoor decoration or similar
purposes (other than that of heading No.70.07 or 70.13)
H
FORBES GOKAK LTD. v. C.C.E. [SHAH, J.) 353
CHAPTER 84 A
Nuclear Reactors, Boilers, Machinery and Mechanical Appliances;
Parts Thereof

NOTES.

1. This Chapter does not cover: B

-- (a)-(b) .....

(c) Laboratory glassware (heading No.70.12); machinery, appliances
or other articles· for technical uses or parts thereof, of glass
(h~ading No.70.14 or 70.15) C
(d) Articles of heading No.73.21 or 73.22 or similar articles of other
base metals (Chapter 74 to 76 or 78 to 81 )."

HEADING
l{eading 84.80 Moulding boxes for metal foundry; mould bases; D
moulding patterns; moulds for metal (other than ingot moulds)
metal carbides, glass, mineral materials, rubber or plastics.

CHAPTER 90

-
Optical, Photographic, Cinematographic, Measuring,
Checking, Precision, Medical or Surgical Instruments and E
Apparatus; Clocks and Watches; Musical Instruments; Parts
and Accessories thereof.

HEADINGS
Heading 90.01 Optical fibres and optical fibre bundles; optical F
fibre cables other than those of heading No.85.44; sheets and
plates of polarising material; lenses (including contact lenses),
prisms, mirrors and other optical elements, of any material,
unmounted, other than such elements of glass not optically
worked.
G
Heading 90.02 .Lenses, prisms, mirrors and other optical elements,
of any material, mounted, being parts of or fittings for instruments
or apparatus, other than such elements of glass not optically
worked."

Further, learned counsel for the appellant referred to relevant parts of H
~.

I
354 SUPREME COURT REPORTS [2003] 2 S.C.R.

A Rules I to 4 of the Rules for Interpretation of the Schedule of the Excise
Tariff which are as under:

"THE SCHEDULE EXCISE TARIFF

RULES FOR THE INTERPRETATION OF THIS SCHEDULE
B
I. The titles of Sections and Chapters are provided for ease of
reference only; for legal purposes, classification shall be
determined according to the terms of the headings and any relative
Section or Chapter Notes and, provided such headings or Notes
do not otherwise require, according to the provisions hereinafter
c contained.

2. (a)

(b) Any reference in a heading to a material or substance shall
be taken to include a reference to mixtures or combinations
of that material or substance with other materials or
D substances. Any reference to goods of a given material or
substance shall be taken to include a reference to goods
consisting wholly or partly of such material or substance.
The classification of goods consisting of more than one
material or substance shall be according to the principles
E contained in rule 3.

3. When by application of sub-rule (b) of rule 2 or for any other
reason, goods are, prima facie, classifiable under two or more headings, /
classification shall be effected as follows :

(a) The heading which provides the most specific description shall
F
be preferred to headings providing a more gener<;il description.
However, when two or more headings each refer to part only of
the materials or substances contained in mixed or composite goods
or to part only of the items in a set, those headings are to be
regarded as equally specific in relation to those goods, even if
G one of them gives a more complete or precise description of the
goods.
(b) Mixtures, composite goods consisting of different materials or
made up of different components, and goods put up in sets, whiCh
'
cannot be classified by reference to (a), shall be classified as if "
H they consisted of the material or component which gives them
FORBES GOKAK LTD. v. C.C.E. [SHAH, J.] 355
,,,.__,
' their essential character, insofar as this criterion is applicable. A
(c) When goods cannot be classified by reference to (a) or (b), they
shall be classified under the heading which occurs last in the
numerical order among those which equally merit consideration.

4. Goods which cannot be classified in accordance with the above B
rules shall be classified under the heading appropriate to the
goods to which they are most akin."

Now we would deal with the contention of the learned counsel for the
appellant that the glass moulds with plastic gasket manufactured by the
appellant would be covered by heading 84.80 and in any case, it would fall C
under Chapter 90, heading 90.02.

For the alternative submission, admittedly, it was neither the contention
of the Department nor of the appellant that the product would be cover.ed
under heading 90.02 and, therefore, that question is not required to be
considered. However, prima facie, it would be difficult for us to arrive at the D
conclusion that the product is tense, prism, mirror and other optical element,
of any material, unmounted, being part of or fitting for instruments or
apparatus, other than such elements of glass not optically worked so as to be
covered by Heading 90.02. Admittedly, the product in question is for
manufacture of lenses.
E
Hence, we would straightway consider whether the product would be
covered by heading 84.80? Chapter Note l(c) quoted above clearly provides
that Chapter 84 does not cover laboratory glassware (Heading N:o.70.12);
machinery appliances or other articles for technical uses or parts thereof of
glass (Heading No. 70.14 or 70.15). Therefore, we have to consider whether
it would be covered by heading 70.15? Undisputedly, in the present case, the F
glass moulds are articles of glass which are not covered by heading 70.07 or
70.13. The glass moulds in question are covered by plastic gasket. As per the
Rules for Interpretation of Tariff Items, a product which is made up of different
components and goods put up in sets, which cannot be classified by reference
to rule 2 (a), are to be classified as if they consisted of the material or G
component which gives them their essential character. In the present case,
plastic gasket cannot give the essential character of glass moulds which are
.J
for the purpose of manufacture of opthalmic lenses. Plastic gasket only holds
the male and female moulds together.

Further, relevant part of heading 84.80 deals with moulds for metal, H
356 SUPREME COURT REPORTS (2003] 2 S.C.R.

A metal carbides, glass, mineral materials, rubber or plastics. Reading the said
heading as a whole, it appears that the said heading covers various moulds
such as, mould boxes for metal foundry, mould bases, moulding patterns,
moulds for metal, moulds for metal carbides, moulds for glass, moulds for
mineral materials, moulds for rubber or plastics. It is nobody's case that the
B product in question, namely, 'glass mould' is used for the aforesaid purposes.
It is used for manufacture of opthalmic lenses. Merely because lenses may
be of glass, it cannot be said that the said product is mould for glass. As per
Rule 3(a) of the Rules for the Interpretation quoted above, the heading which
provides most specific description shall be preferred to headings providing a
more general description. The heading 70.15 would specifically cover the
C product which is mainly consisting of glass as 'other article of glass'. These
glass-moulds are used for casting of the lenses.

Aforesaid discussion is also in conformity with the HSN explanatory
notes. In Chapter 70 for Glass and Glassware, the general note specifically
provides that the Chapter covers glass in all forms and articles of glass, other
D than goods excluded by Note- I to the said chapter or covered more specifically
by other headings of the nomenclature. Learned counsel for the appellant
submitted that the chapter note I (d) specifically includes optical fibres,
optically worked optical elements, hypodermic syringes, artificial eyes,
thermometers, barometers, hydrometers or other articles of Chapter 90. As
E stated above, the glass moulds cannot be termed as optical fibres or optically
worked optical elements, which would be covered by Chapter 90. It also
provides that manufacturing processes vary considerably and inter alia include:

. (D) Moulding, whether or not combined with pressing, blowing or
drawing (e.g., for the manufacture of bottles, tumblers, certain
types of optical glass, ashtrays).
F
(IJ) Cutting out the required articles from blanks, spheres, etc.,
·obtained by any process (articles of fused quartz or other fused
silica, in particular, are often obtained from blanks of solid or
hollow section).

G This has been made clear in Chapter/Heading 90, the relevant part of which
reads as under:

"(C) Optical elements of glass, optically worked, not
permanently moun.ted. In order to distinguish between optical

-
elements of glass of this heading and those of Chapter 70 it is necessary
H to determine whether or not they have been optic~ly worked,
FORBES "GOKAK LTD. v. C.C.E. [SHAH, J.] 357
The optical working of glass is usually performed in two stages, A
viz., the production of the surfaces to the shape required (i.e., with
the necessary curvature, at the correct angle, etc.), and the polishing
of these surfaces. This working consists of grinding the surfaces by
means of abrasives, rough at first, then gradually finer, the successive
operations being roughing, trueing, smoothing and polishing. Finally, B
in the case of lenses required to be of an exact diameter, the edges
are ground; this is known as the centring and edging operation. This
head_ing applies only to optical elements of which the whole or part
of their surface has been polished in order to produce the required
optical properties. It applies therefore to elements which have been
ground and polished as described above, and also to elements which C
have been polished after moulding. The heading does not apply to
unpolished elements having undergone merely one or more of the
processes which precede polishing. Such elements fall in Chapter
70."

Further, as stated above, it is nobody's case that item in question D
is covered by Chapter 90.

Further, with regard to the applicability of Chapter 84, Chapter
Notes to Chapter 84 provide as under:

"Chapter 84
E
NUCLEAR REACTORS, BOILERS, MACHINERY AND
MECHANICAL APPLIANCES; PARTS THEREOF

Chapter Notes

I. This chapter does not cover: F
(c) Laboratory glassware (heading No. 70.17); machinery, appliances
or other articles for technical uses or parts thereof, of glass
(heading No. 70.19 or 70.20);

GENERAL
G
(A) GENERAL CONTENT OF THE CHAPTER

Subject to the provisions of the General Explanatory Note to Section
XVI, this Chapter covers all machinery and mechanical appliances,
and parts thereof, not more specifically covered by Chapter 85, and
not being:
H
358 SUPREME COURT REPORTS [2003] 2 S.C.R.

A (a)-(c) .....

(d) Laboratory glassware of heading 70.17; machinery and appliances
and parts thereof, of glass (heading 70.19 or 70.20).

In general, Chapter 84 covers machinery and mechanical apparatus
and Chapter 85 electrical goods. However, certain machines are
B
specified in headings of Chapter 85 (e.g. electro-mechanical hand
tools and electro-mechanical domestic appliances) while Chapter 84 ..,.'
on the other hand covers certain non-mechanical apparatus (e.g. steam
generating boilers and their auxiliary apparatus, and filtering
apparatus).
c It should also be noted that machinery and apparatus of a kind
covered by Chapter 84 remain in this Chapter even if electric:

Since ceramic articles and parts thereof (Chapter 69), laboratory
glassware (heading 70.17) and machinery and appliances and parts
D thereof, of glass (heading 70.19 or 70.20) are excluded from this
Chapter, it follows that even if a machine or mechanical appliance is
covered, because of its description or nature, by a heading of this
Chapter it is not to be classified therein if it has the character of an
article of ceramic materials or of glass.

E (8) GENERAL ARRANGEMENT OF THE CHAPTER
\..'
(5) Heading 84.80 covers, in addition to moulding boxes for metal
foundry and moulding patterns, moulds (other-than ingot moulds)
used, by hand or in machLles, for moulding certain materials.
8480.50 Moulds for glass
F
8480.60 Moulds for mineral materials
Moulds for rubber or plastics:
--,-
This heading covers the moulding boxes used in metal foundry,
mould bases and moulding patterns, with certain exceptions referred
G to later, it also covers all moulds (whether or not hinged, and whether
used by hand or in presses or moulding machines) which are of a
kind used for moulding the. following materials into blanks or finished
articles:

(I) Metals (including metal powders, sintered metal carbides and
H cermets.
FORBES GOKAK LTD. v. C.C.E. [SHAH, J.] 359
(II) Glass (including fused quartz or other fused silica) or mineral A
materials such as ceramic pastes, cement, plaster or concrete.

(III)· Rubber or plastics.

Jn general, the essential fanction of a mould is to retain the
material in a predetermined shape while it sets; some moulds
also exert a certain pressure on the material. But the heading B
excludes stamping dies of heading 82.07 since these shape the
material solely by means of a powerful blow or compression
(e.g., dies for stainping out sheet~metal goods).

MOULDS FOR GLASS
c
This group includes:

( 1) Moulds for glass paving stones, bricks or flags, and compression
moulds for glass tiles.
(2) Bottle moulds for hand or machine working, including pedal
operated moulds (e.g., blank or finishing moulds, ring moulds). D
(3) Moulds for hollow glass ware, for insulators, etc.
(4) Shaping moulds for glassmakers' lathes.
(5) Moulds made of steel or cast iron, used to make lens or spectacle
blanks etc." E
J
Reading the aforesaid notes, it would be difficult to hold that glass-
moulds in question are moulds for glass. It is apparent that Chapter 84 covers
machinery and mechanical apparatus and certain non-mechanical apparatus
e.g. steam generating boilers and their auxiliary apparatus and filtering
apparatus. Further, the Chapter excludes ceramic articles and parts thereof, F
laboratory glassware,. machinery and appliances and parts thereof, of glass,
that means even if a machine or mechanical appliance is covered by a heading
of Chapter 84 by its description or nature, the item is not to be classified
therein if it has the character of an article of ceramic material or of glass.

Further, heading 84.80 covers moulds used by hand or in machines for G

-
moulding certain materials like moulds for glass, moulds for mineral materials
and moulds for rubber or plastics. The product in question-'glass mould' is
not for moulding such articles of g\ass. Moulds. for glass include-moulds for
glass paving stones, bricks or flags, compression moulds for glass tiles, bottle
moulds for hand or machine working, moulds for hollow glassware and for H
360 SUPREME COURT REPORTS [2003J 2 s.c.R.'

A insu.lators, shaping moulds for glassmakers' lathes and moulds made of steel r
or cast iron used to make lens or spectacle blanks.

In the result, Civil Appeal No.1411of1995 and Civil Appeal No.7086
of 1999, filed by the appellant Forbes Gokak Ltd. are dismissed.

B Civil Appeal Nos.2366-67 of 2001 filed by Commissioner of Central
Excise, Mumbai is allowed and the impugned judgment and order passed by
the Tribunal is set aside.

As nothing has been pointed out as to how the impugned judgment and
order is erroneous, Civil Appeal No.4384 of 2001 filed by Commissioner of·
C Central Excise and Customs; Aurangabad is dismissed.

There shall be no order as to costs in all the appeals.

S.K.S. Appeals disposed of.

L

-