1980 (4) TMI 110 - HC - Central Excise

Not elsewhere specified - Licence - Criteria for - No-excisable goods - Construction of Statutes - Statutes - Canons of interpretation

Issues Involved:
1. Maintainability of the petitions.
2. Requirement of a license under the Central Excises and Salt Act, 1944.
3. Applicability of Items 22D and 68 of the First Schedule to the Central Excises and Salt Act, 1944.
4. Definition and classification of "Banians" and "Jangias" as "articles of hosiery."
5. Violation of Article 14 of the Constitution (proposed amendment).

Detailed Analysis:

1. Maintainability of the Petitions:
The primary issue raised by Mr. Vakil was the maintainability of the petitions, arguing that the petitioners were merely directed to take out a license under the Central Excises and Salt Act, 1944, and an appeal against such a notice lies to the Collector, Central Excise, under Section 35 of the Act. The court rejected this preliminary objection, stating that failure or omission to comply with such a notice results in penal consequences, making the petitions maintainable under Article 226 of the Constitution.

2. Requirement of a License under the Central Excises and Salt Act, 1944:
The court examined whether the petitioners were required to take out a license for manufacturing "Banians" and "Jangias." It was argued by Mr. Vakil that irrespective of whether Item 22D or Item 68 of the First Schedule is attracted, a license is necessary. The court found this proposition fallacious, stating that if the articles manufactured do not fall under any of the specified items in the Schedule, it is not necessary to take out a license.

3. Applicability of Items 22D and 68 of the First Schedule:
The court analyzed Items 22D and 68 to determine their applicability. Item 22D covers "articles of ready-to-wear apparel, including undergarments and body-supporting garments but excluding articles of hosiery." Item 68 is a residuary item for "all other goods not elsewhere specified." The court concluded that "articles of hosiery," which include "Banians" and "Jangias," are statutorily excluded from Item 22D and cannot be included in Item 68 by implication. The expression "not elsewhere specified" in Item 68 means total omission or failure to specify either for taxability or exemption. Thus, "articles of hosiery" are exempt from taxability under Item 22D and cannot be taxed under Item 68.

4. Definition and Classification of "Banians" and "Jangias" as "Articles of Hosiery":
The court referred to various definitions and judicial interpretations to classify "Banians" and "Jangias" as "articles of hosiery." The Oxford English Dictionary defines "hosiery" as frame-knitted articles of apparel. Judicial precedents from the High Courts of Rajasthan and Allahabad support the inclusion of "Banians" and "Jangias" in the category of hosiery goods. Consequently, the court held that "Banians" and "Jangias" are indeed "articles of hosiery" and are exempt from excise duty under Item 22D.

5. Violation of Article 14 of the Constitution (Proposed Amendment):
The petitioners sought to amend their petitions to include a contention of violation of Article 14 of the Constitution. However, in light of the court's decision that "articles of hosiery" are exempt from the provisions of the Central Excises and Salt Act, 1944, the proposed amendments were deemed unnecessary and were rejected.

Conclusion:
The court declared that "articles of hosiery," including "Banians" and "Jangias," manufactured with the aid of power, are exempt from the provisions of the Central Excises and Salt Act, 1944. Consequently, the impugned notices issued to the petitioners were quashed, and the rule was made absolute in each case with costs. All applications for amendment were rejected.

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