TMI Blog1985 (5) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... le and powered cycle rickshaws falling under Tariff Item 34 of the Central Excise Tariff from the whole of the duty of excise leviable thereon. The Explanation in the notification clarified what was meant by a powered cycle or a powered cycle rickshaw. For ease of reference, the notification is extracted below : Exemption to powered cycles. - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in suppression of the Notification of the Government of India in the Ministry of Finance (Deptt. of Revenue and Insurance) No. 102/76-Central Excise, dated the 16th March, 1976, the Central Government hereby exempts powered cycles and powered cycle rickshaws, falling under Item No. 34 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from the whole of the duty of excise leviable thereon. Explanation. - The expression Powered Cycle or Powered Cycle Rickshaw means a mechanically propelled cycle or as the case may be mechanically propelled cycle rickshaw, which may also be pedalled, if any necessity arises for so doing. After issue of the notification, the appellants claim that they approached the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the product and not reaching a distinct level of profits in the competitive market. Thus, an established product like Moped earning profits may not be entitled to any such exemption from duty, otherwise the Government could have expressly granted such exemption to the same. The appellants filed reply dated 23-9-1980 contending that the product fulfilled the requirement of the Explanation to the notification and several other pleas like Dictionary meaning of Moped, the proposed grounds of rejection were irrelevant and the like were also urged in reply. The Asstt. Collector also afforded an opportunity of hearing to the appellants. By his order dated 7-10-1981 the Asstt. Collector of Central Excise, Ahmednagar Division, rejected the appellants claim for exemption under the notification for the detailed reasons set out in his order. The order was upheld in appeal by Collector of Central Excise (Appeals) Bombay, by his order dated 11-5-1983. Aggrieved, appellants filed appeal to the Tribunal. 3. The Asstt. Collector in his order held that the powered cycle in respect of which exemption is granted by the notification is different from Moped. He described the difference be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motor-cycle, bicycle and cycle. They have also filed extract of Encyclopaedia Americana explaining the term motor-cycle . A catalogue of Luna Moped bearing title Operation, Maintenance and Free Service Luna TFR has also been filed before us. A leaflet relating to the product has also been filed. 5. Earlier, when arguments were heard it was urged by the appellants that in the organised sector there was no industry where an auxiliary motor may be fitted to a cycle so as to call or make it a powered cycle. The Bench then felt that for coming to a proper finding in the case it was necessary that parties should adduce some more material regarding trade understanding of the product and also as to the point whether apart from Mopeds there was any other industry to which the notification could be relatable if it was held not to apply to the appellants product or to similar products. The appellants then produced letter dated 8-3-1985 from Association of Indian Automobile Manufacturers addressed to the appellants. This letter inter alia states that in an organised sector large or medium, there is no one producing a powered cycle. The statistics available with the Association do not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enfield V-34 Cycle-Power Kit costs only ₹ 1350 . The leaflet shows that to an ordinary bicycle a motor is fitted. There are two leaflets from Ralli India Ltd. advertising Ralli Engine RT 35 for motorising a bicycle. From Kirloskar Kisan Equipment Ltd. we have another Kirloskar Gatiman 35 Engine. The leaflet says that it is a petrol engine for the bicycle. There are three more leaflets from Kirloskar Kisan Advertising petrol engine for cycle rickshaw, Kirloskar KP 32 petrol engine (This could be used not only in cycle rickshaw but in several other machines like Lawn mover, vibrator etc). Instruction manual and spare-parts for Kirloskar KP 35 petrol engine. From Ramant Exports Pvt Ltd., Madras we have a leaflet Introdu 34 Fitted auto-bicycle. From the pamphlet it would be seen that such cycle with engine would cost ₹ 1945. At the foot we have the following : You will agree the auto-cycle matches moped benefits in every way except equal its high price. So try out suggestion. Consider the V-34 fitted cycle. It is the vehicle you should be riding. From Srivenkateswara Fabricators Pvt. Ltd., Madras we have leaflets about rickshaws and cycles fitted with motors bearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considerations. It was also urged that in the organised sector there is no industry producing such powered cycles other than Mopeds to which the exemption could said to apply if it was held not applicable in case of the appellants product Luna Moped and Like Mopeds. Shri Diwan also made a reference to Board s Letter No. 156/7/82-CX. 4, dated 13-7-1983 and argued that in the Conference of the Collectors of Central Excise doubt was felt that definition of powered cycle as set out in the Explanation to the notification was not adequate to clearly exclude Mopeds and auto-cycles from its scope and that it required suitable modification. Shri Diwan urged that in a Taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The appellants product Luna Moped fell within the plain words of the Explanation appended to the Notification No. 52/77 and therefore, it could not be denied its benefit by calling in aid any supposed intention of the exempting authority. Shri Diwan in support of his argument strongly relied on the Supreme Court decision in M/s. Hemraj Gordhandas v. H.H. Dave, Assistant Collector of C.E. and Customs - 1978 E.L.T. (J 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshaws and then says that exemption has also been granted to powered cycles because intern combustion engine the presence of which forms major part of the value of such cycle would have already been charged to duty under Item 29 (of the 1st Schedule of the Central Excises and Salt Act 1944) and administratively it would be impossible to collect duty from various persons who may purchase these engines and fix them to their new or old cycles. The Circular dated 14-4-1977 of Central Board of Excise and Customs similarly interpreting the notification addressed to Collectors of Central Excise was also referred to by Shri Lakshmikumaran. For the same purpose Shri Lakshankumaran also referred to the Finance Minister s speech on 1979 Budget (p. 39 of the Paper Book, para 119). In this speech the Finance Minister inter alia referred to mopeds and stated that this was used by comparatively less affluent people and consumed less fuel, and that it will bear a lower rate of l0%(of duty) as against the existing rate of 13.1%. Shri Lakshmikumaran s argument was that even while Notification No. 52/77, dated 6-4-1977 was in force, the Finance Minister referred to reduction of duty on mopeds in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. He submitted that the product before the mechanical propulsion is given to it is not a cycle and when mechanical propulsion is withdrawn, it is not a cycle. Cycle mentioned in the Explanation in the Notification read in juxtaposition to cycle rickshaw could only mean a cycle as commonly understood and will not include a moped. 9. While agreeing that debates in Parliament cannot be used for interpreting certain words in a notification or Act, he argued that the speech made by the mover of the Bill in the Parliament can always be looked into for proper interpretation of the words used in a statute. His further submission was that the executive construction given by the highest authority implementing and administering the notification should be given due weight in interpreting the notification and the same before it is discarded should be held to be perversed. In his arguments he also referred to Doctrine of Contemporanea Exposition. Shri Lakshmikumaran in support of his arguments relied on the following decisions :- 1. Ashwini Kumar Ghose and Another v. Arbinda Bose and Another - AIR 1952 S.C. 369. 2. Deshbandhu Gupta Co. and Other v. Delhi Stock Exchange Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 2 of the order above. The notification itself is clear that it is in suppression of Notification No. 102/76, dated 16-3-1976. The exemption, however, granted by Notification No. 102/76 was retained in the superseding Notification No. 52/77. As would be seen, the Notification No. 52/77 grants exemption not only in respect of powered cycles but also powered cycle rickshaws. The Explanation appended to the notification explains the meaning of powered cycle and powered cycle rickshaw. Powered cycle rickshaw, according to the Explanation, means mechanically propelled cycle rickshaw which may also be pedalled if any necessity arises for so doing. Parties agreed that this powered cycle rickshaw referred to in the Explanation would not cover an auto rickshaw and would only cover an ordinary cycle rickshaw to which a motor or a petrol engine has been fitted. It would be seen that in the case of this cycle rickshaw mechanical propulsion is not the intrinsic character of the cycle rickshaw. It cannot be that the words mechanically propelled are interpreted in one way in the case of cycle rickshaw described in the notification and differently in the case of mechanically propelled cycle u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other arguments advanced by the parties. It is well settled that if any term or expression has been defined in an enactment then it must be understood in the sense in which it is defined, but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. The notification explains powered cycle and powered cycle rickshaw but does not give any definition of cycle or cycle rickshaw. Hence, so far as material for the present case is concerned, cycle would have to be understood in common parlance or commercial parlance. Mopeds and cycles in trade are well understood different terms carrying different meanings. It is true that the appellants during the hearing of the appeal obtained certificates from Automobile manufacturers referred to in para 4 supra stating that in automobile industry powered cycle, auto cycle and mopeds are synonymous words, but little weight can be attached to these certificates obtained during course of the hearing. As already stated, one of the certificates dated 12-1-1985 from Mary Cycle Trading Co. would contradict the other certificates given by Automobile manufacturers. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emorandum which is analogous to the speech of the Finance Minister preceding the notification for interpreting the notification can in view of the pronouncement of the Supreme Court in K.P. Varghese v. Income-tax Officer (AIR 1981 S.C. 1922) certainly be made use of. This Explanatory Memorandum would clearly show that exemption was intended to apply only to cycles fitted with motors and not to a product like Mopeds as that of the appellants which is definitely not a cycle because if mechanical propulsion is taken away it ceases to be a vehicle at all and cannot be made any use of. 18. At this stage we may also refer to an argument by the appellants with reference to Board of Excise and Customs letter dated 6-7-1982. This letter was referred to by the appellants for the argument that even the Department felt doubt about the notification not excluding mopeds. The letter shows that the Board of Customs examined the matter in consultation with Directorate General of Technical Development and were of the view that auto cycle mopeds will not be eligible for exemption under Notification No. 52/77. Shri V. Lakshmikumaran, learned DR, relying on the Supreme Court decisions in Deshbandhu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
