9911796707
TMI Blog1992 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... were described as Toilet Soaps by the appellants, were classifiable under Item 15(1) or under Item 15(2) of the erstwhile Central Excise Tariff. The appellants claim is that Toilet Soaps manufactured by them are classifiable as soaps - household and laundry - under Item 15(1), whereas both the lower authorities have held that the correct classification of Toilet Soap is under Item 15(2). . 2. We will take up the common question of classification which has been raised in all the three appeals first. Briefly stated, the facts are that the appellants themselves were classifying the Toilet Soaps under Item 15(2) till about June 1983 when they submitted a Classification List to the Assistant Collector seeking revision of classification under Item 15(1). The relevant portion of this letter, dated 24th June 1983 is as under : We refer to our Classification List submitted vide our letter No. CBMS/EX. 4, dated 25-4-1979 and approved by you under No. 49/V/79, dated 14-5-1979, wherein the Toilet Soaps manufactured by us have been classified under Tariff Item 15(2). On scrutiny, we are of the opinion that Toilet Soaps are correctly classifiable under Tariff Item 15(1) i.e. soap, hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned and re-submit it for consideration and approval. The appellants did not feel satisfied with the clarification furnished by the Assistant Collector and wrote another letter on 26th December 1983 that the interpretation placed by him was not warranted by law because there was no room for any intendment. Thereafter, a show cause notice was issued to the appellants on 21st March 1984 asking them to show cause why Toilet Soaps manufactured by them should not be classified under Tariff Item 15(2) and why their claim for classification under Tariff Item 15(1) should not be rejected. After receiving the appellants reply and after granting them a hearing, the Assistant Collector passed a detailed order on 7th August 1984 confirming the classification of the Toilet Soaps under Tariff Item 15(2), and against this order, they went up in appeal to Collector (Appeals) who rejected the appeal. This is the position so far as Appeal No. E/2853/87-C is concerned. In respect of the other two appeals also the Assistant Collector has taken the same decision but, in case of Appeal No. 2983/87-C, a plea has been taken by the appellants that the Assistant Collector did not give them any show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stands cannot be interpreted properly or where there is a patent error or ambiguity in the Tariff Item. Reliance on the speech of the Hon ble Finance Minister while piloting the Finance Bill, 1979 to show that the legislature never intended that Toilet Soaps to come within the ambit of household and laundry soap is not permissible for interpreting the Tariff Entry. (d) The interpretation of the Assistant Collector and Collector (Appeals) that Tariff Item 15(1) will cover only those soaps which are not only household but also simultaneously laundry soaps is absolutely erroneous. Reliance on the decision of the Tribunal in the case of Collector of Central Excise v. Oswal Agro Mills Ltd. - 1984 (18) E.L.T. 431 is not apt. 7. We have heard Shri R. Ravindran, the learned Advocate for the appellants and Shri L.N. Murthy, the learned Departmental Representative for the respondent. 8. On the question of interpretation of statutes Shri Ravindran submitted that it is only when an ambiguity arises that the help of external aid is taken. He relied on the decision of the Supreme Court in the case of Lt. Col. Prithi Pal Singh Bedi. v. Union of India - AIR 1982 S.C. 1413, paragraph 8 of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the matter was covered by the decision of the Tribunal in the case of Collector of Central Excise, Chandigarh v. Oswal Agro Mills Ltd., Ludhiana - 1984 (18) E.L.T. 431, which related to certain varieties of Toilet Soaps which were held to be classifiable under Tariff Item 15(2) and not under Item 15(1). Referring to paragraph 8 of the decision of the Tribunal in the case of Lt. Col. Prithi Pal Singh Bedi (supra), Shri Murthy submitted that it was necessary to go into the legislative history of the Tariff Item to determine the correct classification of Toilet Soaps because the Tariff Entry itself had undergone changes from time to time. So far as the decision of the Supreme Court in the G.S. Dall Flour Mills case (supra) was concerned, the learned Departmental Representative submitted that in that case an executive instruction was issued to explain the exemption Notification issued under the Madhya Pradesh General Sales Tax Act and the Supreme Court had held that the scope of the exemption notification could not be curtailed by means of an executive instruction. Since the facts in the present appeals were different, the ratio of that decision was not applicable to the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered is the scope of the Tariff Entry soap, household and laundry and whether it would cover different varieties of Toilet Soaps manufactured by the appellants and for which they had filed the 3 Classification Lists which have become the subject matter of the present proceedings. In this context, it would be significant to remember that the appellants themselves regarded their toilet soaps not to fall in Item 15(1) and classified them under Tariff Item 15(2) during the period from April 1979 to June 1983. In their letter, dated the 24th June 1983, the appellants have merely stated that although the Toilet Soaps manufactured by them have been classified under Tariff Item 15(2) since 1979, on scrutiny, they were of the opinion that toilet soaps are more correctly classifiable under Tariff Item 15(1). The only ground for the change of opinion mentioned in the letter is that Toilet Soap, being an article of household use, should correctly fall under Tariff Item 15(1). To support their contention, the appellants had filed a large number of affidavits from consumers. These are all identically worded, and relevant portions are as under: - I am a householder and I purchase various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was being used by the consumers as Toilet Soaps was nothing but Household Soap would have to be rejected. 16. We would also like to add that just because someone describes himself as a householder and buys Cinthol and Crowning Glory brand soaps for household use for bathing purposes, that cannot make the soap a household soap. What is significant is that Toilet Soaps are used for bathing purposes. Chambers 20th Century Dictionary on which reliance has been placed gives the meaning of Toilet Soap as soap for personal use. This itself would show that personal use is different from household use , and soaps which are used for household purposes and for laundry purposes are the ones covered by sub-item (1). As we know from our common knowledge there could be variety of uses of such soaps in a household for washing and cleaning purposes. 17. In their letter dated 24th June 1983 (Exhibit A at page 21 of the appeal Paper Book), the appellants have themselves referred to the legislative history of Tariff Item 15, and have challenged the orders of the lower authorities on the ground that it is not permissible for them under the law to have taken, what they call, the he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 24th June 1983, a mention has been made in this letter of Notification 144/68, dated 13-7-1968 in support of the plea that the Department itself had considered Toilet Soaps" as falling under Tariff Item 15(1). It is with some difficulty that we have been able to lay our hands on a copy of the Central Excise Tariff as in force in 1976 in which. Notification 144/68 is available. The Notification is as under: - The Central Government has exempted from the whole of the duty of excise leviable thereon, the first 50 tonnes of household and laundry soap and the first 25 tonnes of toilet, monopole or textile soap, falling under this Item, cleared for home consumption on or after the first day of April in any financial year by any manufacturer whose total production of soap in the preceding financial year did not exceed 500 tonnes: Provided that where a factory producing soap is run at different times of the financial year by different manufacturers the quantity of such soap cleared from such factory in any such year without payment of duty shall not in the aggregate exceed the said limits. Vide M.F. (D.R.I) Notification No. 144/68-C.E., dated 13-7-1968 as amended by Notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aps in common parlance. Therefore, the appellants own plea for application of the common parlance test does not support their own case. 24. We do not think it necessary to consider the principle of contemporanea expositio as applied to taxation matters. The matter stands settled by the two decisions of the tribunal and following them we cannot but reject the plea. But we would only like to refer to the case of State of Madhya Pradesh v. G.S. Dall Flour Mills (supra) cited before us. This was a case of interpretation of an exemption Notification issued under Section 12 of the Madhya Pradesh General Sales Tax Act, 1958 by the State Government exempting certain class of dealers from payment of tax under the Act subject to certain restrictions and conditions specified in the Notification. When certain assessees approached the Director of Industries for issue of certificate of exemption envisaged in the notification, it was denied to them on the ground that the industries run by them are traditional industries which were not eligible for exemption. The Supreme Court held that for the grant of certificate, the Director of Industries had to look only to the conditions set out in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the facts of the present case because the reference to the Finance Minister s speech was for the purpose of explaining the nature of changes made in the Tariff Item and does not have the effect of narrowing down its scope in any manner whatsoever. In fact, as we have seen, even without reference to the Finance Minister s speech, the normal interpretation placed on the tariff entry has the effect of taking toilet soaps to the residuary entry (other sorts). This aspect of the matter has been fully considered by the Tribunal in paragraphs 23-27 of its decision in the Oswal Agro Mills case (supra) and paragraph-5 of Tata Oil Mills case (supra). The latter which explains the position is as under :- 5. We have carefully considered the submissions advanced by the parties. It is true that the latest decision of the Supreme Court in J.K. Spg. Wvg. Mills Ltd. Anr. - 1987 (32) E.L.T. 234 (SC), makes a departure from K.P. Varghese v. I.T.O - AIR 1981 S.C. 1982, but on going through the Tribunal decision in Oswal Agro Mills case -1984 (18) E.L.T. 431 (Tri.), we observed that besides invoking the rule of contempronanea expositio they had also relied on some other material in finding aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
