M/S HINDUSTAN FERODO LTD.versusTHE COLLECTOR OF CENTRAL EXCISE, BOMBAY

                    MIS HINDUSTAN FERODO LTD.                                      A
                            v.
         THE COLLECTOR OF CENTRAL EXCISE, BOMBAY

                            DECEMBER 4, 1996

                  [S.P. BHARUCHA AND S.C. SEN, J.J.]                               B

        Central Excise Tariff: Item 22F-Scope oj

       Excise Duty-Rings punched from asbestos Boards and Asbestos
fab1ics-Excise authorities holding that rings fell under Item 22-F-Tribunal        C
upholding the findings of authorities-Evidence led by assessee viz. affidavits
of its senior Manager and of a man in the business of asbestos not accepted
by Tribunal on the gmund that deponents were "not the right persons to give
opinion on the type of products"-Appeal against the order of Tribunal-Held,
it was wrong of the Tribunal to find that the deponents of affidavits were "not
the right persons to give opinion on the type of products"-The onus of             D
establishing that the said rings fell within Item 22-F lay upon the revenue-17ie
Revenue led no evidence-The onus was not discharged-Assuming that the
 Tribunal was right in rejecting the evidence produced on behalf of the
appellants, the appeal should, nonetheless, have been allowed.

        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1425 of                    E
1987.

     From the Judgment and Order dated 28.4.87 of the Customs Excise
and Gold (Control) Appellate Tribunal, New Delhi in A. No. E.D. (SB)
(T) A. No. 817 of 1983-Bl                                                          F
     S. Ganesh, Rajiv Tyagi, U.A. Rana and Sudhanshu Tripathi for
Gagrat & Co. for the Appellant.

        N.K. Bajpayee, R.S. Rana and P. Parmeswaran for the Respondent.
                                                                                   G
        The following Order of the Court was delivered:

      The articles with which this appeal is concerned are rings punched
from asbestos boards and two types of asbestos fabrics, namely special
fabrics in a coil of continuous length and M.R. Grey in rolls. The Customs,
Excise and Gold (Control) Appellate Tribunal in the order under appeal H
                                      525
     526                   SUPREME COURT REPORTS (1996] SUPP. 9 S.C.R.
A upheld the findings of the authorities below that the said rings fell under
     Item 22-F of the Central Excise Tariff which, so far as is relevant, reads
     thus:

             "22-F. Mineral fibres and yarn and manufactures therefrom, in or
             in relation to the manufacture of which any process is ordinarily
B            carried on with the aid of power, the following, namely :

             xxxx                     xxxx                           xxxx

              (2) asbestos fibre and yarn:

             xxxx                     xxxx                          xxxx"

           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
JD   marketable. In this behalf the appellants had produced 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
lE   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
:F   moulds for making clutch facings. The other affidavit was of a man in the
     business of asbestos products in a large way since 1957. He stated that he
     had been shown BFB-9 cut rings and MR-Grey, that he had not dealt
     therewith, 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
 J   led no evidence.

            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
 f   said rings which were shown to the Tribunal, arose after this stage. They
   HINDUSTAN FERODO LTD. v. COLLECTOR OF CENTRAL EXCISE 527

were in a finished form. There was nothing elementary or crude about A
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 ex-
amined the sample of the rings very carefully. Asbestos fibre is a very B
strong material. If the ring is allowed to fall on the floor, nothing would
happen to it. We found it neither brittle nor fragile. It was perfectly capable
of being handled and transported for marketing". In so far as the aforemen-
tioned 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 C
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 manufacturer
of brake linings and clutch facings would be interested in buying the D
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
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 articles in dispute before us are high value E
finished asbestos products and if the terms offered are right the smaller
manufacturer of brake linings and clutch facings would certainly be inter-
ested in buying them."

       It is not in dispute before us, as it cannot be, that the onus of        F
establishing that the said rings foll 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.
                                                                               G
       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
 snggests that a small scale or medium scale manufacturer of brake linings
 and clutch facings "would be interested in buying" the said rings or that H
    528                   SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.
A 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 question in an appeal are shown to the Tribunal to enable the
  Tribunal to comprehend what it is that it is dealing with. It is not an
B 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
C 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.

        Regretably, the Tribunal's order under appeal shows that it was not
D fully conscious of the dispassionate judicial function it was expected to
  perform, and it must be quashed.

          Learned counsel for the Revenue submitted that the matter be
    remanded to the Tribunal so that the evidence on record may be reap-
    preciated. As we have stated, no evidence was led on behalf of the
E   Revenue. 1'here is, therefore, no good reason to remand the matter.

         The appeal is allowed and the order under appeal is quashed. No
    order as to costs.

    T.N.A.                                                      Appeal allowed.
F