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TMI Blog1980 (10) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... re made of brass, aluminum and plastic. Such flashlights are known as brass, aluminum and plastic torches respectively. For manufacturing plastic torches the petitioner has been granted industrial licence dated 22-5-1974 under the Industries (Development and Regulation) Act, 1951, Item No. 12(1) of the First Schedule of which requires obtaining of such licence in respect of plastic moulded goods. The petitioner also obtained a licence for manufacturing articles covered by entry at Item No. 68 of the First Schedule of the Excise Act which, according to it, authorised it to manufacture brass and aluminum torches as well. 3. Prior to the enforcement of the Finance Act of the year 1975, the position was that whereas excise duty was payable on the manufacture of articles made of plastics all sorts under Tariff Item No. 15A(2), there did not exist any item like Item No. 68 in the Tariff providing for duty on manufacture of goods not otherwise provided for in the Schedule. Thus prior to coming into force of the Finance Act of the year 1975, there was no provision for charging excise duty on the manufacture of brass and aluminum torches which admittedly were not made out of plastic. It ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cises and Salt Act. Consequently, when the petitioner submitted a classification list showing against column No. 5 that it was manufacturing plastic torches covered under Tariff Item No. 15A(2), the Superintendent, Central Excise Allahabad, by his order dated l3th August, 1975, amended the said classification list and directed that as the article mentioned against column No. 5 (plastic torches) was covered under Item No. 68 the said article may be treated to have been mentioned as a part of Serial No. 4 of the classification list (i.e. an article exigible to duty under Tariff Item No. 68) and that the particulars against serial No. 5 were shown as nil. 5. Being aggrieved the petitioner went up in appeal before the Appellate Collector, Central Excise. The Appeallate Collector, dismissed the appeal by his order dated 30th January, 1976. While dismissing the appeal the Appellate Collector held that the reliance placed by the petitioner on paragraph 39.07(4) of Brussels Nomenclature was misplaced and made the following observations : "I observe that in order to classify a particular item, it is necessary to know how it is known in trade parlance. A torch is not known as an article of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 15A (2) does not cover articles like torches as indicated by the illustration after word 'including'. In view of that, petitioner's plea that the goods involved are classifiable under the said Tariff item is not tenable. The revision application is accordingly rejected." 7. Having failed to persuade the respondents to accept its contention that the plastic torches manufactured by it fall under Tariff Item No. 15A(2) and not under Item No. 68 of the Central Excise Tariff, the petitioner has approached this court for relief under Article 226 of the Constitution. 8. Learned Counsel for the parties are agreed that in case the plastic torches manufactured by the petitioner do not fall under Tariff item No. 15A(2), they would fall under Tariff item No. 68 and that in case they fall under Tariff item No. 15A(2) they would not fall under Tariff item No. 68. The controversy between the parties, therefore, resolves itself into one question only, namely, whether or not the plastic torches manufactured by the petitioner fall under Tariff Item No. 15A(2). 9. A perusal of the order passed by the Central Government shows that relying uyon the following portion in Tariff item No. 15A(2) :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plastic materials, and cellulose esters and ethers, in any form, whether solid, liquid or pasty, or as powder, granules or flakes; or in the form of moulding powders, namely- (i) Condensation, Poly-condensation and polyaddition products, whether or not modified or polymerised, and whether or not linear such as Phenoplasts, Aminoplasts, Alkyds, Polyamides, Super polyamides, Polyesters, Polyallyl esters, Polycarbonates Polyethers, Polyethylenelmines, Polyurethanes Exposide Resins and sillicones ; (ii) Polymerisation and copolymerisation products such as Polyethylene, Polytetra-chaloethylenes, Polyisobutylene, Polystyrane, Polyvinyl Chloride, Polyvinyl acetate, Polyvinyl Chloroacetate and other polyvinyl derivatives, Polyacrylic and Polymethacrylic derivatives and coumarone Indene Resins; and (iii) Cellulose acetate (including cellulose diacetate or cellulose triacetate), cellulose acetate butyrate and cellulose propionate, cellulose acetate propionate, Ethylcallulose and Benzyl cellulose, whether plasticised or not and plasticised cellulose nitrate. (2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectangular or profile shapes whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade of plastics, all sorts, would include the aforementioned items as well and that manufacture of such item would also attract payment of excise duty. Likewise, sub-item (2) provides for payment of excise duty on manufacture of polyurethane foam and sub-item (4) provides for payment of excise duty on manufacture of articles made of such foam. The scheme underlying tariff item 15A thus envisages that whereas the manufacture of material [sub-item Nos. (1) and (3)] as also the articles manufactured from such material [sub-item Nos. (2) and (4)] attract payment of excise duty, manufacture of a commercial articles by using the articles covered by sub-item Nos. (2) and (4) do not attract excise duty under this item. Of course as has been clearly mentioned in this item where there is any specific entry dealing with a particular article then notwithstanding that such article is made of material mentioned in sub-item No. (1) it would still not attract duty under sub-item No. (2) and that the duty payable in respect thereof will be governed by the specific article. 13. We may, at this stage, note that until 1st March, 1975 when Tariff Item No. 68 was added to the schedule, there was no ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles made of plastic as contemplated by sub-item No. (2) of tariff item 15A and that its manufacture attracts duty under tariff item No. 68 which provides for payment of duty on goods not elsewhere specified. 17. Learned counsel for the petitioner contended that in order to qualify as an article made of plastic all that is necessary to be shown is that the article has been fashioned out of plastic or the plastic form part of its material component. According to him an article can be said to be made of plastic if its dominant component is made of plastic. It is immaterial if it also has other components which are made of material which is different from plastic. He urged that as the main body of the torches manufactured by the petitioner, constituting its dominant component, is admittedly made of a plastic it should irrespective of the fact that it has non-plastic components as well, be considered to be an article made of plastic. 18. Learned counsel appearing for the respondents on the other hand contended that considering the mechanism of a flash light torch, it is obvious that its manufacture can never be considered to be complete without its non-plastic components like the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case the Supreme Court, after noticing certain earlier decisions observed that the said words in C.P. and Berar Sales Tax Act must be construed not in any technical sense Nor the botanical point of view but as understood in common parlance. The expression had not been defined in the Act and it being a word of every day use, it must be construed in its popular sense meaning that sense which people, conversant with the subject matter with which the statute is dealing attribute to it. This decision, in our opinion, merely emphasises that where in statutes like the Sales Tax Act and other fiscal enactments, a word of every day use is mentioned and the scope and meaning of that word in technical or scientific and in common parlance; is not the same, it should in such statute, be given the meaning which is generally given to it by a person in trade or the common man and should be interpreted in the sense the person conversant with the subject matter of statute and dealing with it would attribute to it. No question or resolving such a controversy or of preferring one meaning to the other would arise where the words used in the statute are not capable of being used differently in tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the year 1972 after obtaining licence for the purpose from the respondents. On 22nd August, 1972 the petitioner was granted licence for manufacturing articles made of plastic (plastic torches) from out of duty paid plastic material. The respondents, therefore, while granted licence to the petitioner were themselves of opinion that plastic torches manufactured by the petitioner were articles made of plastic. The said licence was change being made therein. However, when the said licence was put up for renewal on 28th of November, 1975, the respondents unilaterally and without authority changed the words 'plastic torches' occurring in the licence into 'plastic articles'. This shows that right uptil the year 1976 the respondents themselves were treating the article manufactured by the petitioner as falling under tariff item 15A(2) as an article made of plastic. Since the petitioner was manufacturing such article from out of duty paid plastic material, the same was, under a notification No. 68/71-C.E., dated 29th May, 1971 issued under rule 8(1) of the Central Excise Rules, exempt from payment of duty. When in the year 1975 tariff item No. 68 was added to the tariff providing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t attract duty under tariff item 68, as they would fall under tariff Item 15A. It would be seen that a list of articles which are excluded from this item is also given. It may be noted that the Articles, so specially excluded and also those articles of plastic which are not mentioned in this chapter will automatically fall under tariff item 68. C.B.E. & C. Letter No. 35/68/75-CX. 4, dated 16-1-1976. and urged that these trade notices are binding upon the respondents. He contended that a perusal of these trade notices go to show that the article, major component of which is plastic, would be covered by the expression 'article made of plastic' used in tariff item No. 15A(2) and the respondents would not be justified in treating the same as an article covered by tariff item No. 68. 23. It is true that the form in which the licence was issued to the petitioner in the year 1972 for manufacturing plastic torches indicates that the respondents at that stage had permitted the petitioner to manufacture plastic torches out of duty paid plastic material on the basis that plastic torches were articles of plastic. Further while approving the classification list in March, 1975 they accepted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior officer, Superintendent, Central Excise, had decided that the product is liable to duty under Item No. 15A(2)." It thus appears that the real reason why the learned Judge bound the department to the position that the heat sealing tapes manufactured by the petitioner of that case fell within Tariff Item No. 15A(2) was that there was a difference of opinion in this regard within the department itself and that an authority superior to the Superintendent had already decided that the item fell within the ambit of Tariff Item No. 15A(2). In the case before us, however, there is no such difference of opinion amongst the departmental authorities and the highest authority which was expressed its opinion so far has taken the view that the torches manufactured by the petitioner do not fall under Tariff Item No. 15A(2). Further, a case where authorities have despite objections, been insisting that a particular Item fell within a particular entry and then they change there opinion with a view to subject the manufacturer to more duty, may stand on a different footing and it may be possible to contend in such a case that the departmental authorities should not be allowed to change their stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles falling within the ambit of sub-item (2) of item 15A. 26. So far as the second trade notice relied upon by the counsel for the petitioner is concerned it merely clarifies that (i) all articles composed wholly of plastic whether composite or separable (consisting of different components) should be deemed to be classifiable under Item No. 15A(2) of the Central Excise Tariff and (ii) articles made out of plastic and known plastic materials, whether composite or not which are essentially made of plastic and commercially known as articles of plastic may be deemed to be covered under the said item. This notification in our opinion does not dwell on the controversy on the question in issue before us. It only envisages that there may be an article of plastic even though it may also contain non-plastic material and that it may have various components. 27. The third trade notice merely clarifies that the articles which have been classified in the Brussels Tariff Nomenclature Item 39.07 if made of plastic [material indicated in sub-item (1) of item 15A - would be covered by Tariff Item No. 15A and not under the residuary Tariff Item No. 68. We have carefully gone through the list ..... X X X X Extracts X X X X X X X X Extracts X X X X
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