1974 (7) TMI 118 - HC - Central Excise

Summary

Issues:
Whether wafers are considered as biscuits for the purpose of levying excise duty under the Central Excises and Salt Act, 1944.

Analysis:
The petitioner, engaged in manufacturing wafers, contested that wafers should not be classified as biscuits and hence should not be subject to excise duty as per Section 2(d) of the Act. The petitioner sought a declaration that wafers are not covered under the definition of "excisable goods." The argument presented emphasized the need to strictly interpret fiscal statutes and tax liabilities, favoring the taxpayer's benefit. The contention was supported by the differentiation in manufacturing processes between biscuits and wafers. The respondent, on the other hand, considered wafers as biscuits based on market perception and dictionary definitions.

The court analyzed various dictionary definitions of "biscuit" and "wafer" to determine their characteristics. While acknowledging differences in size and shape, the court concluded that a wafer falls under the category of biscuits based on definitions from Oxford Dictionary, Chambers' Dictionary, and Encyclopedia Britannica. The judgment highlighted that even though manufacturing methods differ, the commonality in being a type of biscuit makes wafers liable for excise duty. The respondent's argument, supported by a ruling in a previous case, emphasized that the ordinary dictionary meaning of "goods" should apply, suggesting that wafers, known as biscuits in the market, are subject to duty.

The court dismissed the writ petitions, upholding the respondent's classification of wafers as biscuits and liable for excise duty. The judgment noted the petitioner's own labeling of wafers as "Wafer Biscuits" on their product tin, reinforcing the classification. The decision concluded that wafers, being a variety of biscuits, are indeed liable for excise duty under the Act. The court awarded costs and advocate's fees to the respondent, affirming the decision to dismiss the petitions.