TMI Blog1983 (3) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... nvenience as countervailing duty) on the subject goods. 3. In the revision applications and at the hearing before us, two main grounds have been urged. These are that (a) the same or like articles are not produced or manufactured in India, and therefore no countervailing duty was payable under Section 3(1) ; and (b) Item 68 of the Central Excise Tariff Schedule is a residuary item and does not describe any goods or articles or class of goods or articles. Accordingly, countervailing duty under Section 3(1) could not be payable by applying the rate of duty under Item 68. 4. In addition, two other arguments have been mentioned in the appeal (s). One is that the provisions of Section 3 are ultra vires and beyond the legislative competence of Parliament, and that recovery of countervailing duty in these cases is violative of Articles 265 and 300A of the Constitution. Shri Ansari appreciated that the Tribunal could not appropriately go into the question of the vires of a statutory provision. He did not, therefore, aigue the above ground, and stated that the appellants reserved their rights to raise it in the appropriate forum. Similarly, Shri Ansari did not argue another ground, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, reported in 1980 E.L.T. 249 (Bom.). The other was the judgment of a Division Bench of the Allahabad High Court in the case of Ashok Griha Udyog Kendra Pvt. Ltd., Kanpur v. Collector of Central Excise and Customs, Kanpur, reported in 1982 E.L.T. 309 (All.). Shri Ansari laid stress on the wording of Section 3(1) of the Customs Tariff Act and particularly on the expression class or description of articles . He contended that Item 68 could not be said to relate to a class or description of articles. According to him a class could be defined as : a group, division, distinction based on quality or condition; a division of things according to grade or quality. The wording of Item 68, according to him, did not fulfil these requirements. Therefore Section 3(1) could not be invoked to levy countervailing duty on the subject goods. 8. On behalf of the Department, Shri Kunhikrishnan submitted that Item 68 of the Central Excise Tariff Schedule comprises several classes of goods. It. was not unique in this respect, since there were a number of other items in the Central Excise Tariff which also covered more than a single class of goods. The item could not be said to be vague on this acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Tariff Act. For reason which will be apparent later, we are not here going into details of this judgment. 14. The second decision, that of a Division Bench of the Allahabad High Court, was with reference to the classification of mixed masalas under the Central Excise Tariff Schedule. In this judgment, the Court held that the appropriate item could be Item 68. They also observed that this entry does not suffer from any charge of vagueness or ambiguity on account of lack of specification. 15. It would be useful at this stage to reproduce the relevant parts of the Allahabad High Court judgment, which we do below :- Reliance was placed on a decision of the Bombay High Court in Garware Nylons Ltd. v. Union of India and others (1980 E.L.T. 249) (Bom.). Garware Nylons Limited manufactured nylon yarn and nylon twine in its factory at Pimpri in Pune district. Prior to the insertion of Tariff Item 68 nylon twine was taxed at ₹ 4.00 per kg. under Notification No. 68/71-C.E., dated 29-5-1971. After the introduction of Tariff Item 68, the Department sought to tax nylon twine under it on the view that it was different from nylon yarn specified in Tariff Item 18. The or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item describing the goods or the general item, called the residuary item should hold the field for the purpose of fiscal liability. In the present case, however, the controversy is not so circumscribed. The controversy is as to whether the disputed item calls for total exemption from excise liability or falls in the residuary item. It is correct that Tariff Item No. 68 does not contain the definite description of the goods, nor does it disclose the identity of the goods and the matter is left to the applicative adjudication of the authorities concerned. The Entry 68 expressed in words are too wide and too general but there are some guidelines which can serve the purpose and apart from this if we look to the purpose behind the introduction of this item, the entry cannot be treated as running counter to the letter and spirit of Section 3 of the Act. We have already referred to the object which the Legislature had in mind while introducing this entry in the First Schedule. The purpose was to widen the coverage of taxable goods and secondly to provide a more dependable information based for future revenue exercises. In order to attract this entry the first condition is that there mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty. We do not agree because under Items 1 to 67 certain goods are specified. In other words, they are definitely formulated. This exercise, however, cannot be exhaustive and hence a residuary item has been introduced as a compendious and omnibus item. There was a purpose to do so as mentioned above. Therefore, these articles which are not specified elsewhere in the Schedule and satisfy the requirements contained in Tariff Item 68, would fall under it. Those conditions as noted above are : the articles must be goods ; they must not be specified elsewhere in this Schedule and they are manufactured in a factory. The entry thus does not suffer from any charge of vagueness or ambiguity on this account of lack of specification . 16. We have quoted at some length from the judgment of the Allahabad High Court not only because it has a very direct relevance to the point at issue in this case, but also because it specifically examines and comments on the judgment of the Bombay High Court which has been relied upon by learned Counsel for the appellants. The parts of the judgment which we have emphasized enunciate very clearly that: - (i) even though Item 68 of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grade bitumen/asphalt and for (2) Cut-back bitumen/asphalt. There is a further differentiation in each case between goods packed in drums and goods in bulk. One could go denoting these as sub-classes and so on, but it is clear that this is a matter of semantics, and that the main tariff item, viz. Item 11, covers a number of classes of articles, the material characteristic of a class in the present context being that it bears a particular rate of duty. The same is the case with several other items in the Central Excise Tariff Schedule, for instance Item 14, which covers pigments, colours, paints, enamels, varnishes, blacks and cellulose lacquers , and contains several divisions and sub-divisions, with varying rates of duty, and Item 18, which covers man-made fibres, filament yarns and cellulosic spun yarn . It is thus clear that as between goods covered by the same tariff item there need not be absolute homogeneity either in characteristics or in the applicable rate of duty. There has only to be some common characteristic, which could even be the very fact that the Legislature has included them within the same item of the Central Excise Tariff Schedule. The common characteri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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