TMI Blog1988 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the respondent. [Judgment per : Sabyasachi Mukharji, J.]. - The Collector of Central Excise, Kanpur, is the appellant in this appeal under Section 35L(b) of the Central Excises and Salt Act, 1944 (hereinafter called 'the Act'). The period involved in this appeal is the assessment period from 25th March, 1979 to 24th September, 1979, a period of about six months. The respondent M/s. Krishna Carbon Paper Company was engaged in the manufacture of carbon papers. During the period from 25th March, 1979 to 24th September, 1979 the respondent manufactured and cleared from its factory a quantity of 5601 boxes, 20,288 reams and 45 packets of carbon papers for a total value of Rs. 7,67,498.40 without payment of any duty under the Act. The Superintendent of Central Excise, Lakhimpur Kheri, issued notice to the respondent demanding Central Excise duty on carbon paper cleared during the aforesaid period under Section 11 -A of the Act. The respondent submitted a written reply stating that the notice was without jurisdiction because the respondent had taken out the Central Excise licence immediately on the direction of the department and it was only after February 28,1982 that the prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y [1987 (23) E.L.T. 438 (Tribunal)], the Tribunal upheld the contention of the respondent and held that for the period before the amendment of Central Excise Budget, in 1982, carbon paper fell under Tariff Item 68 and not under Tariff Item 17(2), as it then was. The Tribunal did not go into the question of the limitation, namely, whether the claim was barred in any event by the lapse of time in view of Section 11A of the Act. The Tribunal came to the finding that the carbon paper in question fell under Tariff Item 68 of the Central Excise Tariff. Shri Kapil on behalf of the respondent submitted before us that the claim, in any event, was barred by lapse of time in view of Section 11A of the Act. In view of the fact that the Tribunal did not decide this question if we are persuaded to reject the revenue's contention in this appeal, the matter has to be remanded back to the Tribunal to decide this question as to limitation, as there is no decision of the Tribunal on this aspect of the matter. 3. Before the contentions are appreciated, it will be appropriate to refer to the position of Tariff Item 17 at three different phases, namely, in 1975, after the amendment in 1976 and after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Carbon and other copying papers (in stencils) and transfer papers, whether or not cut to size and whether or not put to in boxes 32 1 /2 % ad valorem (4) Boxes, cartons, bags and other packing containers (including flattened or folded boxes and flattened or folded cartons), whether or not printed and whether in assembled or unassembled condition." 32 1 /2 % ad valorem 4. The short question with which we are concerned is, whether during the relevant period, namely, 25th March, 1979 to 24th September, 1979 when the position mentioned above was prevailing, whether carbon papers could be included in "all kinds of paper including the paper which have been subjected to coating", would come within sub-item (2) of Item 17 as mentioned hereinbefore or under residuary Item 68 of the Central Excise Tariff. 5. The Tribunal followed a previous decision in Sai Giridhara Supply Co. v. Collector of Central Excise, Bombay (supra). There, the Tribunal had discussed the various aspects of the matter and felt itself bound by the decision of the Karnataka High Court to which reference will be made later. The Tribunal has referred to the observations of Buckl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are added to increase the blackness. The wax, which acts as a binder for the pigment, must have a viscosity low enough to permit slight penetration into the paper, but not so low that the wax strikes through or sweats oil. Waxes with a melting point between 105 to 120 F. and a viscosity of about 60 or 70 Saybolt at 210 F. are generally used. The principal wax used is carnauba, although some ceresin, beeswax, candelilla, ozokerite, ouricury, and synthetic waxes are also used. Special grades of microcrystalline waxes may be added to soften the coating and improve the printing qualities. In addition to the above ingredients, non-drying oils (mineral oils) are used to soften the coating and control the amount of coating transferred to the copy. Oleic acid is sometimes used as a solvent for oil-soluble dyes. All carbon papers must be free of offset, flaking, wrinkles, curt, or other defects, and must give a good impression on the copy paper. The coating must be hard enough not to smear in hot weather, but the exact degree of hardness depends upon the intended use, that is, whether the paper is designed as a pencil carbon, a typewriter carbon, or a one-time carbon. The amount of coat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specifications of the Indian Standard Institute, is described as follows: "Carbon Paper - paper coated (generally on one side) with a pressure transferable pigmented layer, used for making copies at the same time as an original manuscript or typescript is made." 8. It is well-settled, as mentioned before, that where no definition is provided in the statute itself, as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. In this connection reference may be made to the observations of this Court in Commissioner of Sales Tax, U.P. v. M/s. S.N. Brothers, Kanpur (AIR 1973 S.C. 78) at page 80 para 5. 9. The trade meaning is one which is prevalent in that particular trade where that good is known or traded. If special type of goods is subject matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind that particular word. Where, however, there is no evidence either way then the definition given and the meaning following from particular statute at particular time would be the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reiterated by Story, J. in 200 Chests of Tea (1824 9 Wheaton US 435 at 438) where he observed that the legislature does not suppose our merchants to be naturalists, or geologists, or botanists. See the observations of Bhagwati, J. as the learned Chief Justice then was, in Porritts Spencer (Asia) Ltd. v. State of Haryana 1983 [(13) E.L.T. 1607 (S.C.) -1979 1 S.C.C. 82]. But there is a word of caution that has to be borne in mind in this connection, the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular Statute and then if in respect of that particular items, an artificial definition is given in the sense that a special meaning is attached to particular words in the Statute then the ordinary sense or dictionary meaning would not be applicable but the meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. In the instant case, we have "all kinds of papers including papers subjected to coating, impregnating etc.": If there is a market meaning or trade meaning of that kind of a paper that should be adhered to. In this case, there is no direct evidence how these peculi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Statute is dealing, would attribute to it. That is the correct test. This Court observed further at page 839 of the report that in popular parlance, the word 'paper' is understood as meaning a substance which is used for bearing, writing, or printing, or for packing, or for drawing on, or for decorating, or covering the walls. Carbon paper is not commonly understood as paper. This Court thus held that paper simpliciter cannot include carbon paper because that would not be in consonance with the popular understanding of the expression "paper". But where paper of a special type defined in the particular statute as one including paper which have been subjected to various treatments such as coating, impregnating, how that paper be understood, there must be evidence of that understanding. In the absence of that evidence, the natural meaning following from the expression used in the statute should be adhered to. In that light, it appears to us that in view of the facts of this case and in the principles of law as prevailing in 1976 papers of all kinds including paper with coating and impregnating and the views of the Indian Standard Institute, would include carbon papers. 13. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the proper rule of construction applicable to items and entries occurring in Excise Schedule should be to construe not in scientific or technical sense but in the sense as understood by the parties dealing with or commercially conversant with them. The Government of India relied on the observations of this Court in Dunlop India Ltd. v. Union of India [1983 (13) E.L.T. 1566 (S.C.) = A.I.R. 1977 S.C. 597]. So far as that principle is concerned, this is applicable. It must be understood by the persons dealing with this particular type of goods. We are concerned here not with paper simpliciter or how it is understood in common parlance but paper with a particular definition at the relevant time, namely, all kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating) stated in that context. In that context, it cannot be said that carbon paper cannot be coated paper as such. Shri Kapil submitted that if carbon paper was there then there was no purpose for introducing two sub-items by the Finance Act of 1982. The Finance Minister, however, observed in his speech (extract of para 123 at page 38-39 of Part 'B' dated 27th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indly be acknowledged." These are relevant or proper materials to apply to construe the meaning of the Tariff Items. Moreover, in proper light these do not militate against the view that carbon paper in 1976, was included in the special type of paper, as defined at that time. 15. In the aforesaid view of the matter, we are of the opinion that as at the relevant time the definition of paper being paper board and all kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating and impregnating and in the light of the I.S. specifications as noted hereinbefore and there being no other reliable evidence as to how coated paper is understood in the market, except the opinion of the Indian Standard Institute in its specifications, in our opinion, the Tribunal was not right in the view it took. 16. The Tribunal in Kores (India) Ltd., Thane v. Collector of Central Excise, Thane (supra) expressed the view that carbon would fall under Item 17(2) of the Tariff Items relying on ISI specifications. There was authority of the Indian Standards Institute's publication "Glossary of Terms used in Paper Trade and Industry" - IS : 4661. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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