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TMI Blog1985 (1) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... equest reg. I am directed to refer to your letter No.03/l/PT3, dated the 3rd October 1964, on the above subject and to say that in pursuance of sub-rule (2) of Rule 8 of the Central Excise Rules, 1944, the Central Board of Excise and Customs grants exemption from whole of the Central Excise duty leviable on miniature tyres proposed to be manufactured and distributed as free gifts. Yours faithfully, Sd/- (N.B. SANJANA) Under Secretary, Central Board of Excise Customs It is the appellants case that their miniature tyres fall under Item 16-III (All other tyres) of the Central Excise Tariff and that even if it be assumed, as held by the Appellate Collector, that such tyres would fall under the residuary Item 68 of the Tariff which came into force from 1-3-1975, these tyres would still be entitled to exemption as the aforesaid exemption order does not mention any tariff item number. The appellants showed a sample miniature tyre during the hearing and stated that whereas the Central Excise officers in-charge of their Madras factory were allowing them the exemption in respect of the tyres manufactured in that factory, the officers in-charge of their Goa factory were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an event the assessee would clearly be entitled to the benefit of the partial exemption. The same principle should apply in the present case. If the goods are taken as outside the scope of Item 16, then no doubt the Board s exemption order was initially superfluous and therefore ineffective. But when the goods attracted duty under Item 68, and the exemption Order, which contained a clear description of those goods without reference to any Tariff item, continued without having been rescinded, that exemption order would clearly become operative. There could be little doubt that if an identically worded exemption had been issued on 27-10-1984 instead of 27-10-1964, it would have been taken as fully covering these goods. Merely because the order was made earlier and may have been superfluous and ineffective because the goods fell outside the scope of Item 16 (which itself is an open question), its effect could not be ignored. Shri Ignatius, appearing for the appellants, informed us, and we have no reason to doubt it, that it was only the excise authorities concerned with their Goa factory who had held the Board s order as inoperative, whereas the excise authorities concerned with thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse vehicles and ended up with a residuary entry All other tyres . The question is if a miniature tyre cover intended for use as an ash tray, and therefore useless for vehicles, can fall within the residuary entry. To put it differently is an outer cover of a miniature tyre, a tyre as defined in the first place and if so, does the residuary entry comprehend within its scope such a tyre cover even though it is useless for vehicles? The first essential requisite of a tyre as defined, it will be 9. observed, is that it should be pneumatic . What is meant by pneumatic ? The Twentieth Century Dictionary (Eight Reprint) has this to say of the word - relating to air or gasses - containing or inflated with air - worked or driven by air - spiritual . Obviously, in the context of the First Schedule a pneumatic tyre cannot be any thing other than one containing or inflated with air . By virture of the inclusive definition, an outer cover by itself of 10. such a tyre is also a tyre. The words Such a tyre are significant here. Clearly, if the outer cover does not pertain to a pneumatic tyre, it cannot come within the inclusive definition. The miniature tyre in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, cannot fall within the sub-item All other tyres in Item 16 of the First Schedule and cannot, therefore, be leviable to duty on 27-10-1964 when the circular letter was issued. (a) It is axiomatic in the construction of fiscal enactments that an 15. exemption from the levy has to be construed strictly against the assessee claiming it. Nor can a levy be inferred from an exemption, when, in fact, there is none [the two Golden Paper Udyog cases in 1983 ECR 799 and 1983 ECR 1349]. (b) The expression leviable on miniature tyres in the circular letter does not merely qualify the duty but also signifies that on the date of issue of the letter, such duty was, in fact and law, leviable. It was, indeed, on the wrong assumption that it was so leviable that the exemption was granted; (c) Item 68 was not in existence in the First Schedule at that time; (d) The assumption was, therefore, that duty was leviable on 27-10-64 under Item 16 itself, the only other item that could, if at all, apply. (e) What was exempted was, in the premises, the duty that was erroneously assumed to be leviable on tyres on and after 27-10-1964 in terms of Item 16 of the First Schedule. (f) No ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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