NAT STEEL EQUIPMENT PVT. LTD.versusCOLLECTOR OF CENTRAL EXCISE

                     NAT SIBEL EQUIPMENT PVf. LTD.
   A
                                  . v.
                     COLLECTOR OF CENTRAL EXCISE

                                JANUARY 19, 1988

   B       [SABYASACHI MUKHARJI & S. RANGANATHAN, JJ.]
                                                                                  \
            Central Excise and Salt Act, 1944: Sections I IA 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'-Jnterpretation of-Abse-
   c   nce ofsuppression offact in classification-Whether s. I IA applicable.

       Wordr and Phrases: 'Similar description'-meaning of.

             The appellant, manufacturer of Hospital and Pharmaceutical
   D   Appliances and Heavy Duty Industrial Canteen Equipment, classified
       certain items like cooking range, deep fat fryer, expresso colTee
       machine, bread toaster etc., numbering 14, under TarilT Item No. 68 of
       the Central Excise and Salt Act; 1944. The Assistant Collector held that
       products 2 to 14 were classifiable under TarilT Item No. 33C, in view of
       the Explanation thereof, and demanded differential duty for the period
   E   of lsU\farch, 1979 to 30th June, 1980.

              The Collector, on appeal, held that these items were to be clas-



   F
       sified 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 ques-
       tion, 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.
    G
             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
                                                                                      'f
       same. If it did, these words would be unnecessary. These were intended
   H   to embrace goods but not identical with those goods. If the items were
                                         732
    734                    SUPREME COURT REPORTS            [1988] 2 S.C.R.
                                                                                -,...
A               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 Maclline, (13) Potato
B               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 diffe-
    rential duty amounting to Rs.1,91,622.20 for the period J:st of March,
c   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 appellant's conten-
D   tions 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
E               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".                  .


F
          The revenue went up in appeal before the CEGAT. The            Tri-~
    bunal noted that the eqnipments 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 electri-
    cal appliances not elsewhere specified". According to the Tribunal the
G   intention of the legislature in respect of "domestic electrical appli-         •
    ances" was clear from the Explanation. It is apparent that the above           y
    named items are specially designed for use in big canteens attached to          I

    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 consider-
H   able capacity for preparing and serving food. Their prices ranged from
             NAT STEEL EQUIPMENT v. COLLECTOR OF C.E. (MUKHARJI, J.]             735

             Rs. 7 ,OOO to Rs.1.5 lakhs. It was submitted that these are important      A
             and relevant factors for distinguishing the said items as distinct and
             different from those appliances which are used normally in the house-
             hold. 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 Tri-      B
             bunal that these items could not be classified under Tariff Item No. 68.
        .    We are of the opinion that the Tribunal is right.
    j

•                  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
                                                                                        c
             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 descrip-
             tion' shall be in all respects the same. If it did these words would be
             unnecessary. These were intended to embrace goods but not identical        D
             with those goods. If the items were similar appliances which are nor-
             mally 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      E
             consider whether electric fans are domestic electrical appliances for
             the p~rpose 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 F
                         an electrical appliance of a kind generally used for domes-
                         tic purposes. It may also be used at places other than the
                         home or the house, but that would not destroy the. charac-
                         ter of a domestic electrical appliance which attaches to it by
                         reason of its being a kind of an electrical appliance gener-
        •'               ally used for the household. There are several electrical G
                         appliances which are generally used in the household, such
    l'  I
                         as electric irons, electrical sewing machines and electrical
                         cooking-ranges which are also used in other establish-
                         ments. 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 H
     736                     SUPREME COURT REPORTS              I1988] 2 S.C.R.
A.                satisfy the description of a domestic electrical appliance, t"
                  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 appli-
                  ances and the Tribunal was therefore right in holding that
B                 they fall within entry 52 of Schedule B."

           We agree that it is not necessary to be a domestic electrical            i
     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~
c    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
D    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
E    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 deci-
F
     sion 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.