TMI Blog2017 (7) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... te large) molecule. The applicant has admitted the interpretation regarding CET H No.38231900 during the course of hearing and stated that he is not pursuing the said CET H No. for the impugned product. Therefore, the impugned products, Crysol CU and its variants are not covered by CET H No. 38231900 as mentioned in sales invoices. The CETH 3814 is covered at serial number 178 in the Notification Dt. 01.09.2005 issued to define "Industrial Inputs" for the purpose of Schedule Entry C-54. However, the description of goods in column 5 of the said notification against CETH 3814 is restricted to products, "Reducers and blanket wash/roller wash used in the printing Industry". The description of goods sold by the dealer i.e. Composite Organic Solvent and description given in notification Dt 01.09.2005 at Serial number 178 does not match. Hence the Note No. 2 appended with notification is applicable. The note no. 2 states that "Where any commodities are described against any heading or, sub-heading or as the case may be, tariff item, and the aforesaid description is different in any manner from the corresponding description in the Central Excise Tariff Act, 1985, then only those commodi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Badheka, Advocate along with Mr. Ashok Mehra , Proprietor attended and stated that the only difference in all these four variants is difference in percentage of each ingredient viz. Ethylene Dichloride (EDC), Carbon Tetra Chloride (CTC), Tetra Chloro Ethylene (TCE) and Chloroform . 2.1 The Crysol Cu is a registered trademark under class-1 and is classified as chemical solvent by applicant. The analysis certificate shows that the product is insoluble in water. 2.2 The applicant had classified the products under CETH sub-heading 38231900 while preparing the sales invoice. The investigation branch, Thane had visited the place of business of applicant. It was brought to applicant's notice that the impugned products are not covered by the Industrial input Notification and therefore not covered by the Schedule Entry, C-54 of MVAT ACT, 2002. The applicant has not paid the differential tax liability but preferred to apply for determination of tax liability. 2.3 The raw material, EDC Bottom is supplied by M/s Reliance Industries Ltd (RIL). The RIL has classified the said commodity under CET Heading 38256900 . The constituents of raw material (EDC Bottom) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary, 2017 . The applicant has informed that the SGS India Pvt. Ltd. have also classified the products as Halogenated Organic Solvents and their admixtures . The applicant has stated that the report of component given by both agencies matches in the components of the products. 2.9 The applicant has submitted that the CETH No. 38231900 and 29032900 are covered by the Notification issued by state Government for the purpose of Schedule Entry C-54 and thus subject to tax at the rate of 5.5 per cent. 2.10 Mrs. Badheka, Advocate has relied upon the judgment of Hon. Bombay High Court in case of M/S. Chheda Marketing, STA NO.1 OF 2011. 2.11 It is informed and understood that the impugned products, the Crysol Cu and its variants have different application and used in various industries. As suggested by the applicant on the website http://www. crystalindiachem.com/files/ crysolapps.pdf, the application and uses are as under. a) In Automobile Industries:- Crysol CU used for de-oiling of mild steel sheets along with degreasing automotive components such as Carburettors, plugs, Rubber moulded components, Metal parts, Surface preparation of metal parts before painting / el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r crude Oil, Die-Lubricants for casting stamping, paraffin, non-flammable paints, lacquers Adhesives, Alkaloids, Dyes, Fats, Grease, Gums, Oils, Pitch, Resins, Waxes etc. It readily dissolves cellulose ethers and some types of cellulose acetate and is extensively used in manufacture of Paint removers. k) In Leather Industries:- Crysol CU is used in the initial stages of processing of leather, it is also used to remove stains in finished Leather or during Processing of Leather in Tanneries. m) In Metal Industries:- Crysol CU is very widely used as cleaning agent for industries like SS Tubes, Copper Tubes, Brass Tubes, and Wires (Metal except Aluminum) Capillary Tubes etc. 4. The legal position, Analysis and discussion:- On this background, it would be worthwhile to have a closer look at the statutory provisions under the MVAT Act, 2002 and relevant schedule entry under the Act. 4.1 The charging Section- 6: Levy of sales tax on the goods specified in the Schedules:- (1) There shall be levied a sales tax on the turnover of sales of goods specified in column (2) in Schedule B, C, D or, as the case may be, E, at the rates set out against each of them in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005) and in supersession of Government Notification, Finance Department, No. VAT-1505/ CR-115/ Taxation-1, dated the 1st April 2005, the Government of Maharashtra hereby, with effect from 1st September 2005, specifies the following goods , more particularly described in the Schedule appended hereto, to be industrial inputs and packing materials , whether sold under a generic name or any brand name or otherwise, for the purposes of the said entry, namely:- SCHEDULE The Industrial inputs and packing materials covered from time to time, under the headings or sub-headings or as the case may be, tariff items listed below of the Central Excise Tariff Act, 1985 (5 of 1986)- Sr. No Heading No. Sub Heading No. Tariff Item No Description of goods 110. 2903 - - Halogenated derivatives of Hydrocarbons 178. 3814 - - Reducers and blanket wash/roller wash used in the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely is required to be interpreted in very specific and restrictive manner; means what is provided is to be read and understood. There is no scope to add something or delete something. The Notification issued specifically declared that the goods more particularly described in the Notification are only to be covered by the Notification. Therefore, the word namely is required to be interpreted. The word namely means 'that is to say . It has restrictive meaning. Since it is exemption Notification it is required to be construed strictly. Also, the Hon. Apex court in many cases has laid down the principle regarding the interpretation of word namely . B) The Hon supreme court and various High courts have categorically interpreted the word 'namely ,' that is to say as under:- i) In the case of the State of Tamil Nadu v. PyareLal Malhotra, [1976] 37 S.T.C. 319 which is the decision by a bench of four Judges of Hon. Supreme Court. Hon'ble Chief Justice had occasion to consider the meaning of the expression that is to say and the tests to be applied in determining whether the sale of a certain class of goods is subject to the levy of single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise. The scope of the Notification has been kept restricted by the State Government. The word namely means specifically and used here in the context so as to restrict the Notification entries to specific listed goods. If the scope is extended beyond the specific goods then it is not allowed. Such goods other than those listed, would not get covered by the said Notification, as the word namely restricts the scope. The other goods and other commodities would not be eligible to get benefit of the Notification. The Notification entry cannot be interrelated also as to enlarge the meaning and scope of the word specifically mentioned in the said Notification . Thus it is seen that the statute itself uses different expressions: namely ; for example ; that is to say . When the statute itself uses deliberately different expressions in different contexts, it is not a rule of interpretation to hold that all these expressions mean one and the same thing. If the intention of the legislature was to give the same meaning to the different expressions, the legislature would not have used different expressions, but would have used the same expression. iv) Consequently there can be no doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the Notification i.e. by the plain terms of It is an application of this principle that a statutory Notification may not be extended so as to meet a casus omissus. As appears in the judgment of the Privy Council in Crawford v. Spooner (1). ....we cannot aid the legislature's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there. iii) The Apex court has taken similar view in Union of India v. Wood Papers Ltd., (1990) 4 SCC 256, Gammon (I) Ltd. v. Comm. of Customs, (2011) 12 SCC 499, Commissioner Of Central Excise, V/S Mahaan Dairies on 17 February, 2004, (2004) 11 SCC 798. iv) After analyzing the language of the Notification, words employed in Notification and rulings of Apex court, the said Notification is required to be interpreted strictly. The State Government has issued the Notification with specific Foot- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (whether or not containing impurities), except mixtures of acyclic hydrocarbon isomers (other than stereo-isomers), whether or not saturated (Chapter 27); (d) the products mentioned in (a), (b) or (c) above dissolved in water; [ii] We have perused the Note 1 appended to chapter 29. It is specifically stated that the headings of this Chapter apply only to the description provided in the notes. The Note 1(a) refers to separate chemical compound. The impugned products are manufactured from blending of different chemical compounds and cannot be considered separate organic compound. As such, this blend cannot be called 'separate chemically defined organic compound' as contemplated in Note 1(a) [iii] The note 1(b) refers to mixtures of two or more isomers of the same organic compound. The Isomers are compound having same chemical formula and have different bondings / shape or orientation. The chemical compounds used by applicant [as shown in Table-11 have different chemical formulae and thus they are not isomers. The impugned products are insoluble in water. The impugned products are manufactured from blending of different chemical compound. Thus do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct is covered or otherwise. i) The Chapter heading 3814 is reproduced as under:- 3814 - ORGANIC COMPOSITE SOLVENTS AND THINNERS, NOT ELSEWHERE SPECIFIED OR INCLUDED; PREPARED PAINT OR VARNISH REMOVERS 381400 - Organic composite solvents and thinners, not else-where specified or included; prepared paint or varnish removers: 38140010 --- Organic composite solvents and thinners, not elsewhere specified or included 38140020 --- Prepared paint or varnish removers ii) The applicant has informed that the impugned product is manufactured by distillation of EDC Bottom . Depending on the grade, distilled product is then named as Crysol CU, Crysol CU/132, Crysol CU/TCE and Crysol CU/EDC. As indicted above in Table-2, the impugned product is composite solvent and composed of Ethylene Dichloride Bottom' (EDC Bottom), Ethylene Dichloride, Carbon Tetra Chloride, Tetra Chloro Ethylene and Chloroform. Thus, it is organic composite solvent. The impugned products, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of this Notification. Hence the impugned product is not covered by the Notification Entry, 178. With the discussion held herein above, the contention and legal submission of applicant is to be scrutinized. 5. The contention of Applicant:- a) Mrs. Badheka, Advocate has relied upon the judgment of Hon. Bombay High Court in case of M/S. Chheda Marketing, STA NO.1 OF 2011.The Notification pertaining to Medical Devices and Implants for schedule Entry, C-0107(8) No.VAT-1505/CR-233/Taxation-1, 23rd November, 2005.The Notification Entry, 9004 - - Spectacles, Correctives, Protective or other was subject matter of interpretation. The Hon Bombay High court pleased to observed that- 7) We see no merit in the above contention. As per item 5 of the notification dated 23rd November, 2005 corrective spectacles as also protective spectacles are liable to be considered as medical device. It is not the requirement of the notification that the protective spectacles such as protective sunglasses can be considered as medical device only if it is sold under a prescription. 8) In the present case, the Commissioner himself has admitted in his order that the protective sunglasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is observed that these agencies, on analysis have given the composition of impugned products only. We have also mentioned composition of product in table-2 above. On merit, we have discussed that the impugned product is not covered by CETH No. 2903 of Central Excise Tariff Act, 1985 (CETA) having description Halogenated derivatives of Hydrocarbons . d) Thus, we find that the contention of the Applicant is devoid of merit. 6. Conclusions:- a) The applicant has stated that the impugned products are to be classified under excise heading 29032900. We have already discussed that the relevant Chapter Notes I (a) to (c) are important to analyse whether the impugned products are covered by chapter 29 or otherwise . The impugned products do not satisfy the requirements / qualifications as laid in Note-I specifically (a) and (b). Similarly, the impugned products are not separate chemically defined elements or compounds (usually classified in Chapter 28 or 29) and not covered with the exception provided there in. Therefore, the products cannot be classified under chapter 29 of Central Excise Tariff Act, 1985 (CETA). b) The Crysol CU and its variants are not mono-car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other commodities though covered by the corresponding description in the Central Excise Tariff will not be covered by the scope of this Notification. Hence the impugned product is not covered by the Notification Entry, 178. e) The judgment of Hon. Bombay High Court in case of M/S. Chheda Marketing, STA NO.1 OF 2011.The Notification pertaining to Medical Devices and Implants for schedule Entry, C-0107(8) in relation to Notification Entry, 9004- -Spectacles, Correctives, Protective or other was subject matter of interpretation. It is held that the additional requirement (which is not part of Notification) cannot be imported to classify the product. In present case we are not applying any additional requirement which is not part of notification or Notes appended with Central Excise Chapters. Hence, the ratio in the case of Chheda marketing is not applicable. f) The applicant has stated that the Excise authorities on intimation have confirmed this submission of the application. We have perused the letter and observed that this is simply a letter submitted by the applicant. The Excise duty on the earlier heading and heading submitted by the applicant is same, and it har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted on account of assessee being misled by assessment order. (b) Mrs. Nikita Badheka, Advocate has stated that the entire nation has moved to GST. The prospective effect is to be granted in the interest of justice and fair play. We have perused submission. On the fact of this case, issues are dealt with in earlier para regarding interpretation of State Government Notification and the Central Excise Tariff Headings. It is necessary to analyse the provisions of prospective effect related to MVAT Act, 2002. For clarity the provisions are reproduced as under. (c) Section 55 (9):- The Commissioner or, as the case may be, the Advance Ruling Authority, may direct that the Advance Ruling shall not affect the liability of the applicant or, if the circumstances so warrant of any other person similarly situated, as respects any sale or purchase effected prior to the Advance Ruling. On careful analysis of the section, it reveals that the Advance Ruling Authority may protect the liability of dealer in two conditions. a. in case of applicant or b. if the circumstances so warrant of any other person similarly situated. It is settled principle that the issue of prosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd purpose sought to be achieved by the enactment itself, his exercise of the discretionary power is always apable of being questioned. Therefore, when the Commissioner finds that there was never a disputed question to be determined and the law is very clear and free of doubt, equally its applicability, then, refusal by the Commissioner to exercise the discretion is rightly Upheld by the Tribunal . Just as the Commissioner was obliged to assign reasons for not exercising his discretionary power equally the Tribunal was in upholding his order. The Tribunal in paragraph 22 of its order found that the entire process was utilized so as to delay compliance with the mandate of the Act. The Tribunal has also found that the Commissioner refused to grant relief holding that there is no ambiguity in the provisions and there is no scope, for any doubt arising out of the provisions and relevant for the purpose of the determination. The reasons that are assigned by the Commissioner for refusing to give prospective effect to his determination order, have not been found to be suffering from any error of law apparent on the face of the record or perversity warranting interference in the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002 are subjected to Rectification under section 24 or Review under section 25.The legislature has taken the care to cure the impropriety in the assessment order. The legislature has intentionally provided the remedies to avoid loss to Government Treasury for a mistake committed by any assessing officer. The applicant fails to establish his case. The enactment of new ACT, GST would not be a ground for granting the prospective effect in the repealed Act. (f) The applicant cannot prove existence of circumstances which warrant us to use the discretionary power. In fact use of such discretionary powers in the absence of compelling circumstances would be detrimental to legitimate government revenue and would wipe out the legitimate tax liability In these circumstances, we do not allow the use of prospective effect as a tool to protect or to wipe of legitimate tax liability. Hence, we feel that here is no strong and sufficient reason to hold that this advance ruling shall not affect the liability of the applicant or, if the circumstances so warrant of any other person similarly situated, as respects any sale effected prior to the Advance Ruling. h) Hence, the prayer for gra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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