1983 (7) TMI 51 - HC - Central Excise

Paints and varnishes - Classification of goods - ISI Specifications - Significance - Interpretation - Taxing statutes

Summary

Issues Involved:
1. Classification of "ultramarine blue" under Item No. 14-I(5) of the First Schedule to the Central Excises and Salt Act, 1944.
2. Popular and technical understanding of "ultramarine blue" as a pigment.
3. Validity of excise duty levied on "ultramarine blue".
4. Refund of excise duty collected.

Detailed Analysis:

1. Classification of "ultramarine blue" under Item No. 14-I(5) of the First Schedule to the Central Excises and Salt Act, 1944:

The petitioner-firm has been manufacturing "ultramarine blue" since 1965 and was assessed under Section 3 of the Central Excises and Salt Act, 1944, as per Item No. 14-I(5) of the First Schedule. The petitioner argued that "ultramarine blue" should not be classified under this item as it is not a pigment in the popular sense.

2. Popular and technical understanding of "ultramarine blue" as a pigment:

The petitioner claimed that "ultramarine blue" is popularly known as a separate product distinct from "paints", "colours", and "pigments" and is primarily used as a whitening agent for cotton textiles. The court noted that the statute does not define "pigments", "paints", or "colours" and emphasized that terms not defined in the statute should be construed in their popular sense. Various precedents were cited to support the principle that common parlance should guide the interpretation of such terms.

3. Validity of excise duty levied on "ultramarine blue":

The court examined the merits of the petitioner's claim by considering evidence from various international books, treatises, and dictionaries. It was established that "ultramarine blue" is widely recognized as a pigment used in multiple applications, including paints, enamels, lacquers, and as a whitening agent. The court found overwhelming evidence that "ultramarine blue" is indeed a pigment, both in its physical properties and its various uses.

4. Refund of excise duty collected:

The petitioner sought a refund of the excise duty already collected, arguing that the levy was without lawful authority. However, the court concluded that the excise duty imposed on "ultramarine blue" was valid under Item No. 14-I(5) of the First Schedule to the Central Excises and Salt Act, 1944. Therefore, no question of refunding the excise duties arose.

Conclusion:

The court held that "ultramarine blue" is a pigment and falls under Item No. 14-I(5) of the First Schedule to the Central Excises and Salt Act, 1944. The petitioner's challenge to the validity of the excise duties imposed was dismissed, and the request for a refund was denied. The rule was discharged without any order as to costs, with a stay on the operation of the order for three weeks.