TMI Blog1982 (8) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... r cycle, namely- (i) Free wheels ... Rs. 2 each (ii) Rims ... Rs. 4 each." Till the introduction of item 68 on 1-3-1975, there was no levy of excise duty on cycles cleared from the factory in fully assembled condition, or cycles cleared in unassembled condition known to the trade as 'completely' knocked down condition (hereinafter to be referred as CKD condition). After the introduction of the residuary item 68, the Excise department took the stand that in respect of cycles cleared from the factory in CKD condition, free wheels and rims will be charged to excise duty under item 35, and the other parts of the cycle under the residuary item No. 68. The cycle manufacturers represented to the Government that the term 'cycle' in item 35 would include cycles already cleared in CKD condition and in respect of such cycles, only free wheels and rims are liable to excise duty, and that entry applies to manufacturers of cycles, clearing and despatching them in CKD condition. It was further pointed out that in the subsequent year the position has been clarified by deleting the word 'cycle' in item 35 and making it clear that only parts of cycles like free wheels and rims alone are liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cycles, it would undoubtedly mean a fully assembled cycle and not one in CKD condition ; and (c) as there is no ambiguity in interpreting item 35, Brussels Trade Nomenclature cannot be pressed into service. On the above findings, the learned Judge held that cycles cleared by the appellant from its factory in CKD condition will not fall within the ambit of the term 'cycle' in item 35 of the First Schedule to the Act. Aggrieved against the order of the learned single Judge, the writ petitioner has filed the present appeal before this court. 6. The learned counsel for the appellant contended that the term 'cycle' has not been defined in the Act, and in the absence of any definition in the Act, the term 'cycle' has to be understood in popular and commercial parlance ; and so understood, it would include a cycle despatched in CKD condition and fall within the ambit of item 35. In support of this contention, the learned counsel for the appellant relied on the following two decisions of the Supreme Court, viz., Dunlop India Ltd., v. Union of India and others AIR 1977 SC 597 = 1981 E.L.T. 565 and Messrs Indo International Industries v. Commissioner of Sales Tax U.P. AIR 1981 SC 1079 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be given a meaning which people conversant with this commodity would ascribe to it. 10. In the decision reported in Swadeshi Mills Co. Ltd. v. Union of India and others, 1982 E.L.T. 237 (Bombay) the question arose whether automobile windscreens fall under entry 23-A glass and glassware, or entry 34-A motor vehicle parts, tractors and trailers. The Bombay High Court held that in commercial parlance, windscreen is known as motor vehicle part for which there is a specific Tariff item No. 34-A and hence windscreens are not classified under Tariff item 23-A glass and glassware. 11. The legal position emerging from the decisions of the Supreme Court and the Bombay High Court cited above can be stated as under : The primary object of the Excise tax Act is to raise revenue on the manufacture and production of goods and for that purpose they classify diverse products, articles and commodities in the First Schedule to the Act. In the absence of any definition of any given item in the Schedule, the item has to be understood in its popular and commercial parlance and by those who are dealing in it. The meaning given to the term by those engaged in trade and commerce and how they gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. For purposes of easy transportation, the buyer bought the aforesaid cooler in parts and by means of nuts and bolts, he installed them in his premises and the court held that such a transaction would be covered by item 29-A of Schedule I to the Act and the seller is liable to excise duty. So, even if a manufacturer despatches an Ice-cream Combination Cooler in parts and the purchaser assembles and instals it in his premises, it is still a transaction falling under item 29-A. In the instant case, the appellant is a manufacturer of cycles and not a manufacturer of cycle spare parts. As such from the show cause notice issued to the appellants, it has been directed to furnish the total number of unassembled cycles cleared from 1-3-1975 onwards thereby implying that the appellant was despatching a complete and full set of cycles in an unassembled condition. In the instant case, the dealer purchased the cycles in CKD condition and then simply assembled them and offered them for sale. Instead of despatching the cycles in a ready and assembled condition, the appellant for the purpose of easy transport, and to avoid damage to the cycles, despatched them in an unassembled condition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this contention, learned counsel relied on the decision of the Bombay High Court reported in Tata Sons Ltd. v. Union of India and others, 1962 E.L.T. 53 (Bombay). In that case, the question rose whether data processing machines can be regarded as machines falling under item 72 (b) or 72 (3) of the Indian Tariff Act. Relying on Entry 84, 53, in Brussels Trade Nomenclature, volume 3 at page 1346, the court held that the data processing machine fall under the category of machines within the meaning of item 72 or item 75 of the Indian Tariff Act. 16. The above decision makes it clear that Brussels Trade Nomenclature can be pressed into service as an aid for interpreting and understanding the entries in the Indian Tariff Act. As the Central Excises a .d Salt Act, 1944 and the Tariff Act are cognate legislations which are in pari materia, it follows that Brussels Trade Nomenclature can be used as an aid for interpreting and understanding the terms and entries in the schedule to the Central Excise Act. According to Brussels Trade Nomenclature, a cycle in an unassembled condition, can be equated to a cycle in an assembled condition, and in this view, cycles despatched by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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