TMI Blog1977 (2) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ion) i.e. instead of assembling the cycles in the factory itself, the manufacturer clears and supplies to dealers, all parts of the cycle and the actual assembly of the cycle is done at the destination by the dealers. 2. Prior to the introduction of the Finance Bill of 1975 under Item 35 of the First Schedule of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act), only two parts of the cycle, viz, (i) free wheels and (ii) rims were liable to excise duty. However, the effective rate of duty on these parts was 'nil' in view of the exemption notification issued by the Government of India. In the Finance Bill of 1975, a new item was added to the First Schedule under Item 68. That reads: "All other goods, not elsewhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curring in Item 35 of the First Schedule, before amendment by Act 66 of 1976 ? 5. Mr. K.K. Venugopal, learned Counsel for the petitioner, raises the following contentions in support of his submission :- (1) Cycles in unassembled condition or `CKD' condition would undoubtedly fall within the word 'cycles' as occurring under Item 35. Having regard to the development of trade, the various parts of cycles, all of which if assembled would constitute one cycle as an integral whole or sent separately in convenient small packings. Therefore, to state that only fully assembled cycles are covered by this Item 35 is totally incorrect. In matters like this, how the trade understands it is essential as laid down in Union of India v. Delhi Cloth and Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his kind of interpretation is derived from my judgment in W.P. 5459 of 1975 batch - The English Electric Co. of India Ltd., Madras v. Government of India, Ministry of Finance, Dept. of Revenue and Insurance, New Delhi A.I.R. 1975 Mad. 393. Again it is the utilitarian test which should govern. If the interpretation sought to be placed by the petitioner is to be adopted, it would undoubtedly create chaotic condition in that the petitioner can send various parts of the cycle thereby avoid payment of excise duty while the dealer after assembling those parts can sell it as cycle. In such a case, the cycle, which normally would have been liable to excise duty, becomes free of excise duty. Such an interpretation which would have the consequence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretation is possible; so long as the interpretation adopted by the department is reasonable and in my view in this case it is so, that cannot be interfered with under Article 226 of the Constitution of India, since it is well known that the department has a wide discretion to classify. Therefore, the decision cited by Mr. Venugopal viz, Union of India v. Delhi Cloth and General Mills - A.I.R. 1963 S.C. 791 has no application to the facts of the present case. Nor again am I impressed with the argument that because contradictory stand is taken in the three public notices, the court will so interpret the Item as to favour the assessee. A comparison of this Item with either Item 29-A or 33 is odious because in both these entries the words ` ..... X X X X Extracts X X X X X X X X Extracts X X X X
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