TMI Blog1991 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... h 50% shareholding by Tamil Nadu Industrial Development Corporation Limited, a wholly owned State Government undertaking and the remaining 50% of the shares are held by private persons. The said company is engaged in the manufacture of cigarettes at its factory in Hosur, Dharmapuri District and for this purpose, he has taken out necessary licence in form L 4 etc., under the Central Excises and Salt Act, 1944, hereinafter called the Act. The cigarettes are subjected to levy of excise duty under Item 4 II(2) of the Central Excise Tariff. The cigarettes at the time of excise levy are packed in what are commonly known as cigarette packets. It is further stated that a packet of cigarette consists of two components. One is called the outer shell (also called the cigarette packet shell) and the other component is called the slide which is inserted into the shell to make a cigarette packet. The petitioner manufactures, the outer shell and the inner slide at its own factory in Hosur for the purpose of marketing its own brand. With respect to ITC brands, the inner slides are made at the petitioner's factory to be used along with the outer shells supplied by the ITC. By virtue of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proviso to the said notification. According to the petitioner in accepted commercial and common parlance a container for packing cigarettes is known only as "packets" and are never described as "carton" or "box" of cigarettes. The petitioner also submitted that the dictionary meaning of the words, "boxes", "cartons" and "containers" is fully consisteant with the stand taken by the petitioner. According to him, "boxes" and "cartons" are used to describe big containers and the public at large are also aware of the articles answering to such description. While the cigarette packet cannot be called a cigarette box or a cigarette carton and that a box or a carton cannot be equated with a packet. Hence the cigarette packet can only be a container or an article made of paper and wholly exempted from duty under the said Notification and will not fall within the exception relating to printed cartons or printed boxes. It is pointed out that prior to the introduction of Tariff Item 17(4) by the Finance Bill of 1982 the outer shells and the inner slides were classified under Tariff Item 68. These two items were exempted from the whole of duty by virtue of Notification No. 118/75 C.E., dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred against the said letter referred of the Superintendent of Central Excise, Range I Hosur, and stay was obtained and the goods were allowed to be cleared without payment of duty on production of 25% of the amount of duty involved before clearance as per the order of this Court. It is further stated that the cigarette packets, outer shells and inner slides are in the nature of printed boxes whether in assembled or unassembled condition and hence they are not entitled to claim exemption under the Notification No. 66/82, dated 28-2-1982. It is further submitted that the cigarette packet is known only as a packet and not as a box in the Trade parlance. When we consider the analogy of the Match industry, whether the unit containers of Match sticks are in commercial parlance called as "boxes" and the inner and outer slides of the said boxes as 'Inner box' and the 'outer box'. In the said juncture, the reference to the dictionary meaning of words "boxes", "cartons", "containers" cited by the petitioner are not relevant. It is also submitted that cigarette packet outer shell and inner shell are in the nature of printed boxes (slide type boxes) included flattened or folded printed box ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act. The averment that there is no other alternative remedy except to approach this Court is only an attempt to create prejudice against the department. It is also submitted that it is not relevant whether the containers of the cigarette is called a box/container/packet for duty liability. Lastly it is stated that since the containers/packing cigarette is covered by the separate tariff heading and in view of the legislature had decided the duty should be collected on packet separately the proposal to levy duty on cigarette packets/containers is justifiable and the action of the Department is well within its jurisdiction. Further, the cigarette packet outer shells and inner slides are in the nature of printed boxes (slide type boxes) including flattened or folded printed box whether in assembled or unassembled condition and hence they are not eligible to claim exemption under the Notification No. 66/82, dated 28-2-1982. Hence they pray for dismissal of all the writ petitions. 4. The points that arise for consideration in these writ petitions are :- 1) Whether the cigarette packets are covered under Item No. 17 of the First Schedule liable for duty and whether the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the meaning as proviso to the said notification. According to the learned Counsel for the petitioner that it is a settled law that for the purpose of classification of goods for levy of excise, that the description of the article is to be determined in accordance with the understanding prevalent in the trade and only such description of the article is relevant as is given in detail with the particular trade. He would submit that in accepted common parlance a container for packing cigarettes is known only as "packets" and are never described as "carton" or "box" of cigarettes. In this connection, the learned Counsel also drew the attention of this Court to the counter-affidavit filed by the respondents in paragraph 6.0 wherein it has been categorically stated as follows :- "With regard to the 12th paragraph of the affidavit, I submit that the cigarette packet is known only as a packet and not as a box in the Trade parlance." The learned Counsel also drew the attention of this Court to the meaning of the words given in the Oxford Advance Dictionary of Current English 1974 edition such as boxes, cartons, containers and packets. Boxes - containers usually with a lid made of wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific items set out in the table. The onus of showing this is clearly on the Revenue." Learned Counsel submitted that it is for the Revenue to show that the disputed items does not come under exemption and duty is leviable. But on the other hand, there is absolutely nothing on the side of the Revenue to show that the particular item does not come under the exemption but even in the exemption notification it comes under the proviso which includes certain articles claiming exemption. In this connection, the attention of this Court was also drawn to certain decisions by the learned Counsel appearing for the petitioner. In the decision reported in Indian Aluminium Cables Ltd., v. Union of India and Others [1985 (21) E.L.T. 3 (SC)] in paragraph 12, their Lordships have observed as follows :- "The affidavits to which we have referred assert, particularly those of the two dealers, that in commercial parlance Prospers Rods are not called wire rods and the two are treated as distinct species of goods. Shri Venugopal places strong reliance upon these affidavits and argues that whether a particular item falls under a particular entry must be determined with reference to its description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind." 9. In Dunlop India Ltd. v. Union of India [1983 (13) E.L.T. 1566 (SC) = AIR 1977 SC 597] it has been observed in paragraph 31 and 36 as follows :- "31. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the Trade and its popular meaning should commend itself to the authority. 36. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry." 10. In Ajay Electrical Industries Ltd. v. Collector of C.E. [1988 (37) E.L.T. 426 (Tribunal)] the head n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent-assessee was manufacturing printed bulb carton and printed tube carton falling under erstwhile Tariff Item No. 17(3) of the Central Excise Tariff. It is alleged by the revenue that the sleeve rolls had a width of 17.5 cms. consisting of corrugated kraft paper on one side and plain paper on the other side having printed thereon the name, monograms and so on pertaining to the lamps from the corrugated paper manufacturer. The rolls are mounted on a packing machine and are cut to adequate length to circumscribe the lamps and the joint is automatically covered by gum tapes. The sleeves are conveyed automatically to a conveyor on which the lamps are inserted manually. Further the ends of the above sleeve are folded to prevent lamps from falling out. The tube lamp is manually put in and the sleeve eldges folded over manually and gum tape is also applied manually. It is the case of the revenue that the respondent manufactured printed cartons for bulbs by way of printing on papers (printed and writing) and pasting the printed paper on the corrugated board and thus converting the said corrugated board to printing cartons. Hence the Notification No. 66/82 is not applicable as the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cigarettes is then inserted into the outer shell. The packet of cigarettes is thus completed at a stage when cigarettes are already in it. It is not in dispute that at this stage of assembly, it is not only the packet which is assembled but a packet of cigarettes containing cigarettes therein. Thus if this assembly is to be treated as manufacture, the manufacture is not of a packet but of a cigarette packet containing cigarettes. Thus a cigarette packet cannot be subjected to duty twice over. Even otherwise it is submitted that the outer shells and inner slides cannot be subjected to any separate assessment. Whatever it may be, there is absolutely nothing to show that the outer shells are to be called thus as packets and liable to excise duty. Hence there is no difficulty in finding point No. 1 in favour of the petitioner and against the revenue. 12. Point No. 2 : As regards the second question, it is the contention of the respondents that the impugned letter dated 23-8-1982 of the Superintendent, Central Excise, Hosur, the fourth respondent, is only an information to the petitioner of the legal requirements to be followed and it cannot be called as directive and that the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fourth respondent the impugned letter is nothing but a directive, the petitioner has no other remedy except to approach this Court for getting clarification with regard to the exemption for the goods in question and to quash the direction to obtain licence for the same. There is every force in the contention of the learned Counsel in this connection in view of the stand of the respondent taken in their counter filed in this case and also in the various communications with regard to the interpretation of the exemption clause in respect of the disputed items viz., the outer shells and inner slides of the cigarette packets as to whether they are liable to duty or whether they are entitled to exemption. It is not open to them to contend that the said point could have been canvassed before the Authority and then approach this Court by way of writ petitions. Hence in that view it has to be held that the writ petitions are all maintainable. 13. Point No. 3 : In view of the finding on point Nos. 1 and 2, these writ petitions are to be allowed as prayed for. In the result, these three writ petitions are allowed. However, there will be no order as to costs. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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