1984 (11) TMI 69 - HC - Central Excise

Issues Involved:
1. Classification of the equipment as "telephone" or "intercom" under the Central Excises and Salt Act, 1944.
2. Applicability of excise duty under item No. 33D of the First Schedule to the Act.
3. Relevance of the decision by the Central Board of Excise and Customs in a similar case.
4. Examination of the ruling by the High Court of Calcutta in a similar context.
5. Interpretation of the terms "intercom" and "telephone" in their popular sense.
6. Applicability of item No. 68 as a residuary item for excise duty.

Detailed Analysis:

1. Classification of the Equipment:
The petitioner, M/s. Associated Electronic and Electrical Industries (Bangalore) Private Limited, argued that the equipment manufactured by it was a "telephone" and not dutiable under item No. 33D of the First Schedule to the Central Excises and Salt Act, 1944. The Assistant Collector, Appellate Collector, and the Government of India rejected this claim, classifying the equipment as an "intercom machine" dutiable under item No. 33D.

2. Applicability of Excise Duty Under Item No. 33D:
Item No. 33D of the Act covers "office machines and apparatus, including typewriters, calculating machines, cash registers, cheque writing machines, accounting machines, statistical machines, intercom devices (but excluding telephones), teleprinters and auxiliary machines for use with such machines, whether in assembled or unassembled condition, not elsewhere specified." The court concluded that the equipment manufactured by the petitioner was an "intercom," which is expressly included in item No. 33D, and thus dutiable under this item.

3. Relevance of the Decision by the Central Board of Excise and Customs:
The petitioner cited a decision by the Central Board of Excise and Customs in an appeal filed by the Indian Telephone Industries, Bangalore, where a similar equipment was classified as a "telephone" and not dutiable under item No. 33D. However, the court noted that the decision of the Board was not binding on the Government or the court. Therefore, the court chose to examine the question independently.

4. Examination of the Ruling by the High Court of Calcutta:
The court considered a ruling by the High Court of Calcutta in Ramesh Shah v. Union of India, where it was held that "phonocom" could not be classified as a "telephone" under the Indian Telephone Act and was therefore dutiable. The petitioner argued that this ruling was not persuasive as it did not thoroughly examine the submissions or provide substantial reasoning. The court agreed with this criticism and decided to examine the question independently.

5. Interpretation of the Terms "Intercom" and "Telephone":
The court emphasized that in interpreting taxation statutes, terms should be understood in their popular sense. The term "intercom" was defined in various dictionaries as an intercommunication system used for internal communication within an office or establishment. In contrast, the term "telephone" was understood to mean a public telephone system used for long-distance communication, typically maintained by the Posts and Telegraphs Department of the Government. The court concluded that the equipment in question was an "intercom" and not a "telephone" as understood in common parlance in India.

6. Applicability of Item No. 68 as a Residuary Item:
The court noted that even if the equipment were classified as a "telephone" and thus excluded from item No. 33D, it would still be dutiable under item No. 68, which is a residuary item covering all manufactured articles not specified elsewhere, from 1st March 1975. The petitioner did not dispute this position.

Conclusion:
The court dismissed the writ petition, holding that the equipment manufactured by the petitioner was an "intercom" dutiable under item No. 33D of the Act. The court also noted that even if classified as a "telephone," the equipment would be dutiable under item No. 68 from 1st March 1975. The rule issued in the case was discharged, and each party was directed to bear its own costs.

← Previous Next →