Judgment:
1. In both these appeals common question of law and facts are involved, hence they are taken up together for disposal as per law.
2. The Revenue is aggrieved with the order of the Collector (Appeals) granting the assessee the benefit of the exemption Notification No.33/69-C.E., dated 1-3-1969 (as amended) in respect of item 'electric coil stove' falling under T.I. 33C of the First Schedule to the Central Excises and Salt Act, 1944. The lower authorities have held the electric coil stove are nothing but electric hot plates and there is no difference between these items. The lower authorities have rejected the assessees' contention on the ground that the electric hot plate and electric coil stove are not one and the same and are also not similar in feature and construction. The assessee had filed the newspaper advertisement pertaining to both the products manufactured and advertised by various other manufacturers including leading manufacturers of electric appliances like "Jonson", "Vijay" and "Bajaj" who had given clear distinction between the two products. It was also argued before the lower authorities that the Trade recognised both the items as different. In this regard they had also relied on the separate ISI Specification for both the products. However, the lower authorities did not accept their contentions and held that the construction of the coil is that the conductor is covered with an insulator and a metallic tube and accordingly, the coil is sheeted one whereas IS 2994-1965 which refers to electric stove is covering "an Electric appliance having open elements", since the material being manufactured by the assessee is not having an exposed element but a "Sheeted Element". It was held that the item will have to be considered as a hot plate under Tariff Item 33C of CET and not covered under Notification No.33/69-C.E., dated 1-3-1969. The assessee filed an individual appeals before the Collector (Appeals) and made a detailed submissions before the Collector (Appeals). It was also pointed out that the price variance in respect of both the items and is different and items are understood as different in commercial parlance and that both the items are not one and the same. The learned Collector after a detailed analysis of the evidence and also after considering the judgment of the Government of India in review order No. 1301 of 1978, dated 22-11-1978 held that the items are different and therefore, the assessee's product namely electric coil stove cannot be considered as electric hot plate.
The Revenue is aggrieved with the orders of the Collector (Appeals), and the points raised in these appeals are that both the items are essentially same and only difference is one item being the solid unit type and the other being coil type but in fact, the Notification refers to both the items as same. In this regard, the Revenue is relying on the ISI Specification to argue that both qualify and fall within the definition of hot plate. It is stated that the hot element is not exposed but either embedded in a cost body or in sheeted in-confirmity with the impugned item in hand.
3. We have heard the learned SDR, Shri K.K. Jha and the learned JDR, Shri A.T. Usman for the Revenue and the learned Advocate Shri Rajesh Chander Kumar for M/s. Bontex Electricals.
4. The other assessees in these appeals have requested the matter be decided on merits in terms of their written submissions.
5. Both the sides have reiterated their submissions in terms of the appeal memo and the written submissions filed by the assessees in this case.
6. We have carefully considered the submissions made by both the sides and have perused the grounds made by the Revenue and the reasoning given by the learned Collector in this matter.
7. On a careful consideration of the issue we are of the considered opinion that the Notification has to be considered on a different footing from the classification of the items in question. The classification of goods are on the basis of Section note, Chapter note and on the basis of description of the headings of the goods in different Tariff headings. The goods which are in the same category and in the same range as in the Tariff heading are classified on the basis of its similarities and in the manner in which the items are understood in the trade and in the light of the commercial usage. In this particular case there is no dispute about the classification of the items under the same Tariff heading. It is, however, only the benefit of the Notification which is being disputed by the Revenue. The Notification No. 33/69-C.E., dated 1-3-1969 (as amended) from time to time and the latest being No. 165/79, dated 17-4-1979 exempts domestic electric appliances falling under 33C of the First Schedule to the Central Excises and Salt Act, other than those specified in the schedule annexed to the Notification from whole of the duty of excise leviable thereon. In the Sl. No. 16 of the Schedule the description of the item given is as "Hot plates, cooking ranges, grillers boiling plates, plate warmers, food warming trays, food warming trollies, hot food cabinets." 8. The Revenue would like to consider the item in question which is hot coils as synonym with hot plates. In this regard only reliance placed is on ISI Specification. The assessee is also countering by filing ISI Specification for electric hot plates IS 65-1983 and another Indian Standard for solid embedded type electric heating elements IS 4159-1985. They are also relying on the literature and advertised materials to show that both the items are understood differently and they have different standards for the items. As can be seen from the IS 365-1965 at Para 2.101 the description of hot plate is given and in Paras 2.102 and 2.103 the description of solid element and sheathed element is given. The same is noted herein below :- "2.101 Hot Plate - An electrical appliance designed to accommodate on its upper surface, a vessel or vessels for heating liquids or cooking food." "2.102 Solid Element - Heating element, having one or more heating resistance enclosed or embedded within a cast body." "2.103 Sheathed Element - Heating element, having one or more heating resistors enclosed within a tubular metallic sheath or sheaths." 9. As can be seen from the description of these items, there is a variance between the two and it clearly discloses that both are different items. IS 4151-1985 at Para 2.100 to 2.104 gives the definitions of solid embedded type elements, metal body, heating spiral and embedding material. The said definitions are noted herein below :- "2.101 Solid Embedded Type Element - An element in which the heating spiral is insulated from the metal body by embedding material and this material is open to atmosphere." "2.102 Metal Body - The metal part of the element which gets heated by the heat given out from the spiral and transmits this heat to the object to be heated. It may be cast or preformed out of sheet metal." "2.103 Heating Spiral - The current carrying part of the element having high resistance and which is the source of heat." "2.104 Embedding Material - The insulating material which envelopes the heating spiral and retains it in the metal body." 10. Likewise at Para 22.101, Para 22.102 and Para 22.103 gives the definition of metal body, heating spiral and embedding material. The same are noted herein below :- "22.101 Metal Body - It shall be made of a material that does not readily deteriorate during normal use for which it is designed. It may be made by casting or fabricated by welding or formed from sheet metal with the help of press tools." "22.102 Heating Spiral - It shall be made out of wire or ribbon of nickel chromium alloy, aluminium-iron alloy or a suitable heat resistant alloy, having a high electrical resistance." "22.103 Embedding Material - It shall be electrically insulating, thermally conducting, and fairly non-hygroscopic after the process of embedding is complete." 11. From the reading of these ISI specifications it is clear that the specifications for hot plate and that of hot coil stove are different.
The same are traded differently and they are understood as different items by a customer. The commercial parlance is required to be applied in this case and on perusal of the advertised material of various companies it is seen from the photograph and the description that both the items that they are clearly described as different items and sold as different items and they are understood differently in the trade.
There is a price variance also in respect of both the products. For the purpose of interpreting the Notification, the words of the Notification are to be construed strictly when the Notification excludes hot plates and the item hot plate is understood differently in the trade as well as in ISI Specification, then in such a situation it cannot be stated that hot plates and hot coil stove are one and the same. In that view of the matter, the findings given by the learned Collector (Appeals) are sustainable and they are upheld.12. In the result there is no merit in these appeals, hence the same are rejected.
With due respects to ld. Judicial Member, my views and orders are as follows :- 13. I observe that ISI 365-1983 (revised) specification for electric hot plates indicates under sub-clause 2.101 that a hot plate is "an electrical appliance designed to accommodate on its upper surface a vessel or vessels for heating liquids or cooking food".
It further indicates that it has a "solid element - Heating element, having one or more heating resistance enclosed or embedded within a cast body" vide (sub-clause 2.102) and a 'sheathed element' - "Heating element, having one or more heating resistors enclosed with a tubular metallic sheath or sheaths" (vide sub-clause 2.103).
14. It does not indicate that such an appliance should have a hot plate at the top. Therefore having or not having a hot plate at the top is immaterial. What is essential for considering an electric appliance as hot plate is that the heating element(s) must be enclosed.
15. In the instant case it is not denied that the heating elements are enclosed in tubular metallic sheath or sheaths and therefore as per ISI the items in question are recognisable as hot plates.
16. ISI 4158-1985 is the specification for solid embedded type electric heating elements for hot plates i.e. of elements which are largely "used in hot plates" (apart from other types of appliances). The details in the sub-clauses 2.101, 2.102, 2.103, 2.104 regarding such elements, the metal body, the heating spiral and embedding material do not help us in clinching the issue because the corresponding details of the product in question have not been produced before us or explained at any stage and are not reflected in the orders of the lower authorities or in the submissions in the proceedings before us.
17. The Government of India's review order in the case of Jain Industries, Delhi - 1979 (4) E.L.T. (J 45) (GOI) refers to IS 2994-1965 for electric stoves states that in these appliances heating element is exposed and it appears that in the case of the product before Government of India this condition was satisfied and that is why it was held to be a stove, but in the case of the product in question before us evidently the heating element is enclosed in tubular sheath(s).
Hence, this article cannot be considered as a stove.
18. (I may however add that the Govt. of India order also states, inter alia, that ISI Specification for hot plate envisages that the element should be enclosed or embedded within a tubular sheath and covered by a plate. If this was so there was no difficulty but the ISI Specification produced before us, does not incorporate any such stipulation. This shows that evidently an error apparent had crept in the above citation in the Govt. of India's order.
The words covered by a plate are just not there in the relevant ISI Specification cited in our order and therefore we cannot take this aspect into account).
Hence, ld. D.R. is correct in pointing out that in terms of ISI Specifications the appliance in question in this case could only be considered as a type of hot plate (even if it is described by the appellants as stoves in their pamphlets).
19. The respondents are of course correct in pointing out that hot plates and coil stoves/coiled stoves are being advertised as distinct articles in the pamphlets of various manufacturers filed by them, these pamphlets do .show that only the articles which are covered by plates are being advertised as hot plates whereas the articles which are not so covered are being described as cooking stoves even if the heating elements are enclosed in tubular sheaths but these are of little evidentiary value. The ISI Specifications are specifications laid down for commercial goods bought and sold in the market and are indicators of the market understanding in commercial parlance as well i.e. while the technical details act as a benchmark the items covered and described therein with specified particulars do show how they are known in the market by the persons who deal in them as well.
20. In so far as Notification No. 33/69, dated 1-3-1969 (as amended) is concerned it excludes the items listed thereunder from the benefit of exemption; and entry No. 16 covers hot plates, cooking ranges, grillers, boiling plates, plate warmers, food warming trays, food warming trawlers and hot food cabinets. CCCN and HSN are of no help in this regard as relevant Heading 85.12 and 85.16 do not seem to distinguish between hot plates and coiled stoves (although they cover cooking plates) but the Cochin Collectorate Trade Notice No.73/69-C.E., dated 29-4-1969 clarifies that open type electric stoves or 'signs' are not liable to duty as they are not known as hot plates. As is common knowledge such sigris are rather simple devices having exposed heating element embedded in insulating material fitted inside a metal body. Significant point to be noted is that even in common parlance only an appliance with exposed heating element is considered as stove. In the present case the heating element is not exposed but is (on the contrary) enclosed with a tubular metallic sheath or sheaths.
Therefore, even though it is not covered by an overall hot plate it is still classifiable only as a hot plate. I therefore, uphold the department's contentions and set aside the impugned order. The appeals are accepted.
In view of difference of opinion between Hon. Member (J) and the Vice President the matter is submitted to the President for reference to a third Member on the following point :- "Whether the product in question is an electrical hot plate or a coiled stove/cooking stove and was accordingly ineligible or eligible for the benefit of Notification No. 33/69." Sd/- Sd/-(S.L. Peeran) (S.K. Bhatnagar) Member (J) Vice PresidentDated 25-7-1996 Dated : 25-7-1996 When the matter was called, nobody appeared on behalf of the respondents. However, vide their letter dated 26-8-1996, the respondents had made a prayer to decide the difference of opinion on the basis of the merits in their absence. Accordingly, learned S.D.R., Shri A.K. Agarwal for the appellant Commissioner was heard.
2. The difference of opinion between the learned Vice President, Shri S.K. Bhatnagar and learned Brother, Shri S.L. Peeran, Member (Judicial), is whether the product manufactured by the respondents herein, is to be considered as a hot plate? If the answer to the above proposition is in the affirmative, the respondents get ousted from the benefit of the exemption Notification No. 33/69-C.E., dated 1-3-1969, as amended as the said Notification while granting exemption to domestic electrical appliances falling under the erstwhile Tariff Item 33C of the First Schedule to C.E.T. specifically excludes hot plates vide Serial No. 16 of the Schedule attached to it. Whereas the learned Member (Judicial) has held that the ISI Specifications for hot plate and that of hot coiled stove are different and as both are considered as two separate items in the common parlance also, the electric stoves being manufactured by the respondents cannot be considered as 'hot plates' and benefit of exemption cannot be denied to them.
3. Learned Vice President, Shri S.K. Bhatnagar in view of the definition of 'Hot Plates' in ISI specifications, has held that there is nothing in the ISI specifications that heating appliance should have a hot plate at the top for its consideration as 'hot plate'. He has held that since ISI specification 365-1983 covers the respondents' product in question, even though not covered by a hot plate at the top, the same has to be considered as a hot plate and as such the same gets excluded from the benefit of the exemption Notification referred to supra.
4. I have gone through the Orders proposed by both the learned Members.
I agree with the Order proposed by the learned Member (Judicial) for the reasons recorded below :- 5. The ISI specifications for hot plates and that of hot coiled stoves are different as recorded by the learned Member (Judicial). This fact has not found favour with the learned Vice President on account of the fact that the ISI specifications for hot plates do not indicate that such an appliance should have a hot plate at the top. From this, he has concluded that having or not having a hot plate at the top is immaterial for the product to be considered as 'Hot Plate'. What is essential for considering an electric appliance as hot plate is that the heating element(s) must be enclosed. I find that even though as per the ISI specifications for the hot plates, it may not be essential that a hot plate must have a plate at the top, but the very fact that hot plates and electric coiled stoves are known as two different types of kitchen appliances in the common parlance, is a fact which goes in favour of the respondents. Both the Members have observed that hot plates and coiled plates are being advertised as distinct articles in the pamphlets of the various manufacturers. I have also looked into the advertising materials of various manufacturers put on record by the respondents. From a look at the advertisement materials, it becomes clear that two types of products are being advertised by them - one which is covered by the hot plate and another which is not covered by hot plate as 'electric coiled stoves'. The specifications for the hot plates and coiled stoves have also been enumerated in the same advertising materials differently. It is also a fact that in the common parlance, hot plates and electric coiled stoves are considered to be two different items. Whereas electric coiled stoves are much less in value, the hot plates are considered to be much sophisticated and highly technical items and valued towards the higher side. I also note that while excluding certain items from the benefit of the exemption Notification in Serial No. 16 of the Schedule, the hot plates have been put on the same platform as the cooking rangers, grillers, boiling plates, plate warmers, food warming trays, food warming trawlers and hot food cabinets. All these items are luxury items. The intention, while granting the exemption Notification, seems to exclude the luxury items from the benefit of the exemption. Electric coiled stoves being cheaper in value are to be considered as a common man's appliance and an essential item. ISI specifications are also formulated keeping in view the common parlance test and the way a product is treated by those who use the same. Sufficient materials have been put on record by the respondents that the two products are known in the market and by the consumers, as two different products. In fact, there is no dispute between the two Members so far as the above findings are concerned. We are not dealing with the classification of the products in question and it is the exemption Notification which is being interpreted. As such the same is to be interpretated in such a way so as to further the purpose for which the same was issued. I also find from the reply filed by the respondents in response to the show cause notice that IS 4151-1985 defines mineral filled sheathed elements which are used in heating appliances such as emersion heater cooking appliance and oil heaters whereas ISI specifications for solid and embedded heating elements have been contained in IS 4158-1967 which has defined the same as solid embedded heating elements used in hot plates only. Thus IS 4158-1967 makes a clear distinction of heating elements provided in the coiled stoves and in the case of hot plates. As per the respondents, the elements which are used in the coiled stoves are different from the heating elements used in the hot plates. By virtue of this definition also, electric coiled stoves are required to be considered as separate items than the hot plates.
6. I further find from the records of the personal hearing dated 20-9-1984 before the Assistant Commissioner of Central Excise appearing at Page 48 of the paper book, that the respondents had demonstrated before the adjudicating authority the construction of the hot plates in which the element is embedded in white cement and hot plates have the property of heating at low density than that of coiled stoves. It was contended before the adjudicating authority by the respondents that the hot plates can be used by using the full elements whereas the coiled stoves have inner and outer elements and each coiled element can be used separately and independently by use of rotary switch. This definition as placed by the respondents before the Assistant Commissioner is also worth-noticing and supports the respondents' case that the two have to be considered separately construction-wise as well as function-wise.
7. In view of my foregoing discussions, I hold that the electric gas stoves are not hot plates and as such are covered by the exemption Notification No. 33/69-C.E. as held by the learned Member (Judicial).
8. Papers are now being placed before the Original Bench for pronouncement of the majority decision.
In view of the majority opinion that the electric gas stoves are not hot plates and as such are covered by the exemption Notification No.33/69-C.E., the appeals are rejected.