TMI Blog1982 (3) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... Factory' has the meaning assigned to it in section 2 (m) of the factories Act, 1948". By the Finance Act, 1979 the exclusions remained as before but the description of the Tariff Item was modified so as to read : "All other goods not elsewhere specified." The Finance (No. 2) Act, 1980 added an Explanation to this Tariff Item, but that is not relevant for the purposes of the present petitions. 2. The brief facts, as set out in Writ Petition No. 427 of 1979 are these. M/s. Ashok Griha Udyog Kendra Private Limited, a private .Limited company (hereinafter referred to as `the petitioner'), carries on business in purchase and sale of spices whole, ground and mixed. It purchases spices from the market like Jeera, Ajwaine, Saunf, Methi, Saunf Mahin, Rai and Kalaunji and sells the same as such after cleaning them. The second activity is that the petitioner grinds these whole masalas into powder form and sells the same as such. The last activity is that the petitioner grinds the Masalas and mixes them and prepares Garam Masala, Dal Masala, Sabzi Masala, Rayta Masala, Jal Jeera and Chana Masala. We are concerned with this item of mixed spices in the present writ petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d served on the petitioner certain goods belonging to it as also to its agent M/s Ashok Agencies, Kanpur, were seized and Writ Petitions 192 and 193 of 1980 have been filed by the petitioner and M/s Ashok Agencies respectively challenging the order of seizure of goods. 6. A preliminary objection was raised by the learned Standing Counsel for the Department that the petitions are premature inasmuch as no demand notice has been served on the petitioners as yet and further when the assessment order has been made, the petitioner has an alternative remedy by way of filing an appeal under Section 35 of the Act and a revision under Section 36. The dispute raised by the petitioner can be gone into and decided by the appellate and the revisional authorities. After hearing Counsel for parties we do not agree with this learned submission because the petitioner has attributed violation of Article 16 of the Constitution and also challenged the vires of Tariff Item 68. These questions cannot be decided by the authorities created under the Act. The writ petitions are hence maintainable. 7. The following submissions were made before us on behalf of the petitioners by Sri Jagadish Swarup, their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpendious omnibus item. In its Budget for the year 1975-1976, it introduced Tariff Item 68 in the First Schedule to the Act. It would be useful to recall the relevant portion of the Budget speech made by the Finance Minister on that occasion. The Finance Minister said:- "I now come to a new concept in central excise taxation. Hitherto, the Central Excise Tariff concerned only certain specified goods. With a view to widen the coverage of taxable goods and to provide a more dependable information base for future revenue raising excise. I propose to introduce a new item in the Central Excise Tariff Schedule which with a few exceptions will cover all goods produced for sale or other commercial purposes, not elsewhere specified in the Schedule. This levy is admittedly an experimental measure." Accordingly, Tariff Item No. 68 was introduced by the Finance Act, 1975. We have already extracted this Item above. It was modified by the Finance Act, 1979 and again by Finance Act, 1980. At first the tariff rate was kept low at one per cent, but subsequently it was raised because it was found that the Government could net in substantial revenue under this Tariff Item. However, this Tariff it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing judgment, took the view that it is of utmost importance and it appears to be the clear intention underlying such a fiscal statute that there would be sufficient description with regard to the Item of goods which are subject to excise duty. According to his Lordship : "When sufficient prescriptive or descriptive details of the goods are not available one would tend to raise, in keeping with the fairness, the liability by applying the principle of benefit to the subject." and further : "Fiscal statutes, for this reason, should always be specific and leave no manner of doubt in the minds of those who are required to obey the same particularly as to the item that is being subjected to fiscal levy." He further said : "To introduce general entries, like the one at Entry No. 68, may have expedient legislative purpose behind it, but, for the purpose of tariff in the context of Section 2(d) and Section 3, that can hardly be an appreciative exercise of legislative activity for obviously it does not give the definite description of the goods, nor does it disclose the identity of the goods, everything being left to the applicative adjudications by the Authorities concerned as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come goods article must be something which can ordinarily come to the market to be bought and sold. It is not necessary that before an article can be treated as goods it should have been actually brought to the market for being bought or sold but must be one which is capable of being brought to the market for being bought or sold. We may refer in this behalf to the observations made by the Supreme Court in South Bihar Sugar Mills Ltd. v. Union of India (A.I.R. 1968 S.C. 922) = 1978 (2) E.L.T. (J 336). It was held: "The duty is levied on goods. As the Act does not define goods, the Legislature must be taken to have used this word in its ordinary dictionary meaning. The dictionary meaning is that to become goods it must be something which must ordinarily come to the market to be bought and sold and is known to market." Apart from this, the meaning given to an article in a fiscal statute must be as people in trade, commerce, conversant with the subject generally treat and understand in the usual course. The article with which we are concerned in the present petitions is well known in the commercial community and in our opinion it would be 'goods' under Tariff Item 68 10. The nex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with approval the meaning attributed to the word 'manufacture' in Section 2(f) of the Punjab General Sales Tax Act, 1948, in Devi Dass Gopal Krishnan v. The State of Punjab (20 S.T.C. 420), where Subba Rao, Chief Justice, observed : "On the other hand, the dictionary meaning of 'manufacture' is 'transform or fashion raw material into a changed form for use'. When oil is produced out of the seeds the process certainly transforms raw material into different article for use. We cannot, therefore, accept this contention. Now coming to Civil Appeals Nos. 39 to 43 of 1965, the first additional point raised is that when iron scrap is converted into rolled steel it does not involve the process of manufacture. It is contended that the said conversion does not involve any process of manufacture, but the scrap is made into a better marketable commodity. Before the High Court this contention was not pressed. That apart, it is clear that scrap iron ingots undergo a vital change in the process of manufacture and are converted into a different commodity, viz., rolled steel sections. During the process the scrap iron loses its identity and becomes a new marketable commodity. The process is cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drugs and water and includes:- (a) any article which ordinarily enters into or is used in the composition of preparation of human food; (b) any flavouring matter or condiments; and (c) any other article which the Central Government may, having regard to its use, nature, substance or quality, specify by notification in the official Gazette as food for the purposes of this Act." According to the petitioner since spices are an article which are used in the composition and preparation of human food as also as a flavouring matter they should be treated as a food product. We do not agree, because the definition of food given in the Food Adulteration Act is for a different purpose. Food is different from food products and food preparations and in Brooke Bond India Limted v. Union of India and Others [1980 (6) E.L.T. 65] Coffee-Chicory-blend was held to be neither a food product nor a food preparation. It was treated as a beverage and not a food. In our opinion spices are neither food products nor food preparations. They may be used in preparation of human food for the sake of giving flavour and taste to it. This item, therefore, will not be entitled to exemption under Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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