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TMI Blog1991 (2) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... the view of the Collector (Appeals) has since been confirmed by the Tribunal s order No. 77/86, dated 27-11-1986. In other words in all these cases the amount in question was sanctioned as consequential refund due to M/s. Surgichem in terms of the aforesaid orders. 3. The department had filed appeals against all these orders of the Assistant Collector on the ground that the refund had been sanctioned erroneously. The Collector (Appeals) had thereupon passed the impugned orders, dated 13-1-1989 and 16-1-1989. The present appeals had been filed by M/s. Surgichem against both the orders and by the department against the order-in-appeal, dated 13-1-1989. 4. The learned counsel has stated that initially the department had considered these goods as non-excisable as evident from approval of their classification list, dated 8-12-1970 and approved on 9-12-1971. 5. Subsequently, while they still maintained that the goods were non-excisable, the department classified them under T.I. 60. They had protested and moved various forums. Ultimately as a consequence to a Court order the matter was heard by the Collector (Appeals), Bombay, and the goods were held as classifiable under T.I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal, the consequential relief ordered by the Collector (Appeals) order, dated 30-8-1983 had to be complied with and the Collector could not sit in judgment over these orders, whether right or wrong. 15. The goods are bulk drugs within the-meaning of Notification No. 234/82 and therefore exempt. The Collector (Appeals) was bound to follow that determination made by his predecessor in the orders passed in the case of competitors particularly as the goods were identical. 16. During the period 1-2-1978 to 30-10-1982 as Notification No. 55/75 exempted drugs there was, in any event, no erroneous refund made. 17. The goods are medicines as per the BPC and USP which list medicines only. They were exempt under Notification 55/75 even otherwise for the period 1-3-1978 onwards. Hence, refunds made of duty collected during that period was in order. 18. In any event, refund can be ordered only to the extent of Rs. 4,75,168.23 (as claimed in the show cause notice all dated 21-9-1987) and cannot be of the whole of the amount refunded originally. Additional Points : Re : Appeal No. E/2835 of 1989 (Rs. 2,38,094.11 P). Even during the period 1-3-1975 to 1-3-1978 when Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eia; and were being administered as such in actual practice. 21. He re-emphasised that common parlance test was required to be applied in the instant case and it is required to be noted that there was no difference between medicine and drug on one hand and between drug and bulk drug on the other in common parlance. 22. As regards classification he urged that the Tribunal had already confirmed the order of the Collector (Appeals), dated 30-8-1983 and held the goods as classifiable under T.I. 68. In view of the above position, he pleaded that they were eligible for the benefit of exemption notifications issued under T.I. 68 (as applicable to medicines drugs/bulk drugs) from time to time for the periods for which they were in force). 23. The learned Departmental Representative submitted that there is no bar against adopting the procedure prescribed under Section 35E(4) and placed relevance on the following decisions : 1985 (22) E.L.T. 892 (Tribunal) SRB 1988 (38) E.L.T. 571 (SC) 1988 (34) E.L.T. 473 (Cal.) He added that the ld. advocate has only cited the decisions passed by the Tribunal whereas the issue stands settled by the Hon ble High Court of Calcutta as mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Leuco Plast reported in 1988 (36) E.L.T. 369A where drugs and medicines have been held to be synonymous; and for the purpose of understanding the meaning of the drugs and medicine in common parlance, definition of the same as appearing in the Drugs Act has been relied upon by the Hon ble Court. However, he would like to urge that the decision in the case of M/s. Leuco Plast should not be applied in the present case in view of the following reasons : (1) It has been consistently held by different courts including the Privy Council. The Hon ble Supreme Court and the Hon ble High Courts that the definition appearing in one enactment cannot be applied in case of another. Hence the definition of medicine/drug under the Drugs and Cosmetics Act should not be utilised in the present case for understanding or interpreting the scope and content of those terms in the Central Excises and Salt Act and the notification issued thereunder. In this regard, he would place reliance on the following cases : AIR 1929 (PC) 181 AIR 1981 (SC) 951 1983 (54) STC 77 (Mad.) 1985 (19) E.L.T. 15 (SC) 1986 (26) E.L.T. 201 (Mad.) Further, the Tribunal has also consistently followed the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word, medicine, the meaning as understood in the common parlance is to be taken into consideration rather than the dictionary meaning or the meaning appearing in any other enactment. In the said order it has been observed that medicine is a drug in varying proportion which is administered either in the liquid, tablets, capsules or powder forms. This being the position the judgment in the case of M/s. Leuco Plast is running counter to this decision. The Department s submission is that the decision arrived at in the case reported in 1971 (28) STC 514 should be followed in preference to the Leuco Plast case in as much as the latter runs counter to the established principles of interpretation of the statute as upheld by the Privy Council, Hon ble Supreme Court, different High Courts and followed by the Tribunal in different cases consistently. 32. The ld. Advocate appearing on behalf of the appellants has attempted to rely on the meaning of drugs and medicine given in several dictionaries. Against this the submission is that in the interpretation of the statute the dictionary meanings are not applicable and should not be applied. In this connection, reliance is placed on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d finality and could not be re-opened subsequently. 41. Whereas the learned DR stated that the learned Collector (Appeals) had in the impugned order proceeded without regard to the Tribunal s order No. 727/86-C, dated 27-11-1986 and further stated that there was no res judicata in respect of taxing statute. 42. The learned counsel pleaded that the department is simply trying to do indirectly what it could not achieve directly. We have considered the submissions of both the sides carefully. 43. We observe that in so far as the preliminary point regarding recourse to Section 35E or 11(A) is concerned, the learned counsel has cited the orders of the Tribunal reported in 1988 (37) E.L.T. 222 and 1989 (43) E.L.T. 115. However, the point is not whether Section 11(A) could be invoked in the case of erroneous refund for certainly it could be wherever and whenever called for, but the point is whether this was the only course open or it was also possible to take recourse to Section 35(E) and Section 11(A) were independent of each other. In this respect the department s view that they were independent, finds support in the order of the Tribunal reported in 1985 (22) E.L.T. 852 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the first issue, i.e. the classification (even here the Tariff Item 68 in which the goods were classified was not on the statute book prior to 1-3-1975 and the Tribunal has not said in so may words that the item was non-excisable during this period). As regards the second issue, the tribunal did not pronounce any order (indeed there was no reference whatsoever to any exemption notification in the operative portion of the order). Hence, it could not be said that the refund became due in terms of the Tribunal s orders. (iii) In so far as the Collector (Appeals) order, dated 30-8-1983 is concerned, it does refer to Notification 55/75. However, it was evidently a case of error apparent from the record for neither Tariff Item 68 was in existence prior to 1-3-1975 (as mentioned above) nor the Notification 55/75 contained the Entry No. 19 regarding drugs/medicines/pharmaceuticals, during the relevant period (in fact the learned counsel for the assesee has been good enough to mention himself that the refund had been claimed by them under 54/75 and not 55/75). (iv) This factual position (which is not even disputed) shows that benefit of Notification 55/75 was neither claimed no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the filing of appeal before the Tribunal were ab initio bad in law null and void and we declare them as such. 54. In so far as the remaining appeals are concerned, the action of the Assistant Collector could only be treated as that of his own (in the circumstances discussed above). Therefore, if the department was aggrieved it could justifiably file an appeal before the Collector (Appeals) irrespective of the nature or type of the decision or order. 55. This would be apparent from the fact that Section 35 CESA does not place any bar on filing of appeals in cases of sanction of refund erroneously or otherwise. On the contrary the language of the Section clearly shows that an appeal lies to the Collector (Appeals) against any decision or order passed by an officer below the rank of Collector as evident from the relevant portion of Section 35(1) reproduced below: SECTION 35. Appeals to Collector (Appeals) : (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Collector of Central Excise, may appeal to the Collector of Central Excise (Appeals) [hereafter in this Chapter referred to as the Collector (Appeals)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and then the Assistant Collector sanctioned the refund as if it was due to the assessees in terms of this order, and erroneously so, as already shown above. 60. Be that as it may, in so far as we are concerned, we are faced at the moment with the fact that the basic issue regarding classification had already been decided by the Tribunal when the matter had earlier come up before it in the case of J. L. Morrison, Sons and Jones (Supra); And the Tribunal had held that such products were required to be classified as Patent and Proprietary medicines under Tariff Item 14E. 61. We further observe that in the second order of the Tribunal No. 727/86-C subsequently passed on 27-11-1986 the product has been treated as a surgical dressing of no medicinal or therapeutic value. We also observe that the ratio of the first order has not been applied in the second case on the ground that the earlier order (in the case of J. L. Morrison, Sons and Jones - Supra) had been passed sub silentio based on an admission by the appellant s advocate and was therefore not binding in character. The Bench was quoted extensively from Salmond s Jurisprudence in this connection and relied on the same in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilentio are not material; and Twisden, J. agreed: Precedents sub silentio and without argument are of no moment". This rule has ever since been followed". 63. From the above citation it is apparent that an order could be considered as sub silentio only if a point is not perceived by the Court or It was not argued or considered by the Court ; And a precedent sub silentio and without argument was of no consequence: Hence not binding. However, we observe that such was not the case in the matter of J.L. Morrison, Sons and Jones. In this case the main point whether the product was medicine/drug (or not) was very much urged and pleaded and fully argued; it was also duly perceived and taken note of by the Court and fully considered by it. In fact, nothing of consequence was missed and nothing which could affect the result remained to be considered. Hence, in our opinion, the order could not be considered as one passed sub silentio in terms of Salmond s Jurisprudence. 64. As regards the second point that the order was passed on the basis of a concession by the appellant and was therefore not binding, we find that this was also not the case. In this respect our attention was drawn i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification during pre 1-3-1975 period. It has simply classified the goods under T.I. 68 without noticing that this item was not on the statute book during pre 1-3-1975 period. In other words, this aspect was not perceived or present to its mind and therefore if any thing it was this order, dated 27-11-1986 which was passed sub silentio. Indeed it was per incuriam as per Salmond s jurisprudance. Hence it is not applicable. 70. In view of the above position we feel that the only appropriate course left open to us is to follow the first order of the Tribunal passed in the case of J.L. Morrison, Sons and Jones with which we are in agreement. 71. Hence, we hold that the impugned orders are required to be set aside and the matters are required to be remanded to the Assistant Collector for de novo consideration in accordance with law and above observations. 72. We order accordingly. 73. I have checked the procedure for referring to a larger Bench. 74. I am given to understand that the correct procedure is to incorporate the proposal to the President in the order itself. 75. For this purpose all the Members may record their observations and findings but instead of finally ..... X X X X Extracts X X X X X X X X Extracts X X X X
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