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TMI Blog2002 (9) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... nd facts and as such they are taken up together for hearing and this common judgment covers all the writ applications. 2. These writ applications have been filled basically with the following prayers: (i) for a declaration that there is no levy of any Central Excise duty on tea in unit containers of 20 Kgs. or more; alternatively a declaration that there is no levy of excise duty on bulk tea removed in unit containers of tea chests or the like containing more than 20 Kgs. of tea; (ii) for a declaration that the order/direction dated 13th October, 1998 is illegal, ultra vires and void; (iii) the impugned show cause notice of different dates issued in the month of November, 1998 being different annexures to different writ application [Annexure-H to WP(C) 3088/99] are illegal, ultra vires and void; (iv) for a declaration to withdraw the show cause notices issued by the authority. 3. The order/letter dated 13th October, 1998 issued by the Director, Ministry of Commerce is [Annexure-G to WP(C) No. 3088/99] (this is the common order in all the writ applications, but the annexure number may be different) and that Annexure-G is quoted below : ANNEXURE-G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the cases, in brief, are as follows: Petitioners carry on business of producing, manufacturing and selling tea. Petitioners remove tea in bulk in chests or gunny bags containing 20 Kgs or more. Petitioners challenge the levy and/or collection of duty on bulk tea removed/sold in the above way (20 Kgs. and above) for the period from June 2, 1998 to June 23, 1998. The basic contention is that the tea manufactured in tea estate cannot be sold in loose form. It is to be removed either in small packages or in gunny bags containing 20 Kgs or more and for the purpose of identification, in the gunny bags or in tea chest, names of the garden only is written and it is not a brand name. This is done only for the purpose of facilitating transportation so that the same are not mixed up with other tea and/or goods sent in the same truck or in the warehouse. The package tea with brand name stands on a different footing. The Central Excise Act, 1944 levies duty of excise on all excisable goods which are produced and manufactured in India at the rate set forth in the Schedule of the Central Excise Tariff Act, 1985 vide Section 3 of the Act of 1944. The Act of 1944 defines excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Major Changes in Duty Rates the particular item reads as follows : Chapter No. Description Change in rate duty 9 Packaged tea, From To branded 0% 8% By the notification dated 2nd June, 1998, the Central Government, in exercise of the powers conferred by sub-section (1) of Section 5A of the 1944 Act exempted diverse excisable goods from so much of the duties of excise as specified in the said notification. In that notification tea was not specified and it is submitted that there was no necessity to specify it as tea was already exempted under the Tariff Act. 11. Some representations were filed by the different bodies mainly by Indian Tea Association and United Planters Association of Southern India and they wanted to know what is the meaning of unit container, what is the maximum weight of unit container and what is the brand name. They wanted necessary clarification by the Central Excise Department. The basic contention of the petitioners is that is was all along the intention of the Legislature of levy excise duty on packaged tea. The imposition of excise duty on bulk tea sold in bulk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applications are not maintainable in view of the fact that Section 11A of the Excise Act provides a concrete machinery and without exhausting those remedies, these writ applications cannot be filed. (ii) To sell the bulk tea it has to be put into container (either in gunny bags or in a wooden chest) with the name of the garden, net weight/tare weight/emblem or any embose affixed in the container and that will come within the brand name as per Chapter 9, Note 5 of the Finance Act, 1988-89. Brand name simply means any identity mark. (iii) In interpreting the Finance Act, 1988-89 there is no relevancy to the earlier Legislative history prior to 1998-99. In interpreting the statute, the court is to interpret the enactment made by the Parliament and it cannot go to the intention of the Parliament. In a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. (iv) There is no ambiguity or uncertainty at all in the words used in put up in unit container and bearing a brand name . The meaning is clear, the tax is to be imposed when tea is put up for sale in unit container and bears a brand name and the tax will have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation and hearing the learned Counsel appearing for the parties, we are not inclined to stay the order passed by the learned Single Judge in the manner it has been asked for. We are of the view that without prejudice to the rights and contentions of the parties to the appeal the appellants shall give reply to the show cause notice and the respondents also shall be at liberty to come to a decision after giving a hearing to the writ petitioner. In accordance with law but no effect to such decision shall be given till the disposal of the present appeal . 18. I have looked to the judgment of the learned Single Judge of Calcutta High Court, but in that judgment there is absolutely no discussion with regard to the submissions of the parties and he simply came to the following finding : (a) the respondent authorities has jurisdiction to issue show cause notice and gave an opportunity to the respondents to place their facts before the taxing authorities; (b) If these writ applications are entered into it will amount to by passing the statute. 19. In order to appreciate the points, let us have a look at Section 11A of the Central Excise Act, 1944 (hereinafter called the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a writ petition under Article 226 of the Constitution in spite of the alternative statutory remedy, is not directed specially in a case where the authority against whom the writ is filed is shown to have had not jurisdiction or had purported to usurp jurisdiction without any legal foundation. That being so, the High Court was not justified in dismissing the writ petition at the initial stage without examining the contention that the show cause notice issued to the appellant was wholly without jurisdiction and the registrar in the circumstances of the case was not justified in acting as the TRIBUNAL. Earlier addressing the question in relation to the practice earlier adopted by the High Court while exercising its power under Article 226, the Supreme Court observed in para 15 as follows : Under Article 226 of the Constitution the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court imposed upon itself certain restrictions as one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (IV) 1988 (36) E.L.T. 445 (Cal.) (S.A. International v. Collector of Customs). That is a case from Calcutta High Court wherein the learned Single Judge held that an application under Article 226 of the Constitution shall be maintainable if it is shown that the concerned authority acted without jurisdiction. 21. On the other hand, Mr. Bipul Sarma, learned Addl. CGSC places reliance on the following decisions: (I) AIR 1983 SC 603 (Titaghur Paper Mills Co. Ltd. and another, petitioners v. State of Orissa and another, Respondents). That was a case under the Sales Tax Act, 1956 and there the Supreme Court pointed out that if the petitioner has efficacious remedy by way of appeal and second appeal and under Sales Tax Act and in the event of failure to get relief in appeals can have the case stated to the High Court, writ petition is not maintainable. The Supreme Court in para 6 held as follows: We are constrained to dismiss these petitions on the short ground that the petitioners have an equally efficacious alternative remedy by way of an appeal to the prescribed authority. It was further pointed out that the act provided for an adequate sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Art. 226 is not meant to short circuit or circumvent statutory remedies are entirely ill suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where the private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Art. 226 of the Constitution. But then the court must have good and sufficient reason to by pass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters we can also take judicial notice of the fact that the vast majority of the petitions under Art. 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged. That was a case from Calcutta High Court. The company claims the benefit of exemption to the tune of Rs. 6.5 crores and filed the writ application before the Calcutta High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a waste Green tea and Black tea : 0902.11 - Packed in unit containers of content not exceeding 25 grams and ordinary intended for sale to consumers in that pack. 3(44 paise) per kilogram plus the duty for the time being leviable under sub-heading 0902.19. 0902.12 - Packed in unit containers of content exceeding 25 grams but not exceeding 20 kg. whether or not ordinarily intended for sale to consumers in that pack (Rs. 1.10) per kilogram plus the duty for the time being leviable under sub-heading 0902.10 (11%) plus the duty for the time being leviable under sub-heading 0902.19 Rs. 2 per kilogram 0902.13 - Packed in bags for retail consumption, known as tea bags 0902.19 - other Tea waste Nil From 1989-90 to 1994-95 the position was as follows : 09.02 Tea including tea waste Green tea and black tea : 0902.11 Packed in unit containers of content not exceeding 25 grams per kilogram and ordinarily intended for sale to consumers in that pack Rs. 2.50 Kg. 0902.12 Packed in unit containers of content exceeding 25 gram b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me that to construe the Statute in question, it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. These three being compared I cannot doubt the conclusion. And in construing sub-section (2), the Supreme Court relied on the speech made by the Finance Minister while moving the amendment introducing sub-section (2) and it was pointed out by the Supreme Court that the speech made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. In this case the Supreme Court placed reliance on earlier cases i.e. AIR 1976 SC 10, AIR 1976 SC 348 and AIR 1980 SC 387. In all the cases, the speech made by the Finance Minister while introducing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1953). The package tea was considered as different varieties of the product commercially as tea itself having distinct character and use and name and commercially known as such because transportation of package tea from loose tea purchased in bulk would be a question of degree. It was further pointed out that the Parliament deals in tea and have considered package tea as a different product for the last 30 years and subsequently Parliament by deeming provision provided that package tea itself is a different product. The Gujarat High Court further relying on 1983 (13) E.L.T. 1566 (S.C.) = AIR 1977 SC 597 [Dunlop (I) Limited v. Union of India] quoting para 36 of the judgment decided the matter and that para 36 of the judgment is again quoted below : We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows : It was also the case of the deponent that package tea is a product, which is known in the trade parlance and is bought and sold in the market and hence the same would be goods having a distinct name, character and use. Such being the position, the deponent has stated that the duty is duly leviable and has been appropriately levied on such a distinct and identifiable product which has been brought into existence by manufacture. Package tea, according to the deponent, is a product having distinct name, character and use and the same is known as such in the trade parlance. In a taxing statute it is to be noted that if the authority seeking to recover the tax cannot bring it within the four corners of law, the person is not liable whatever may be the spirit of law. In para 79 the Calcutta High Court pointed out as follows : We feel that pickage tea is itself a concept and the same has different and distinct use from the bulk tea as purchased and such package tea grew as a concept and gained popularity prior to 1953. 28. The question which now arise for determination is whether the tea removed from the tea estate in tea chest or in gunny bags with the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase with regard to right of a advocate to practise. (II) (2000) 7 SCC 463 (State of Maharashtra and others v. Santosh ShankarAcharya). That was a case under the Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-offenders and Dangerous Persons Act, 1981 and the Supreme Court in para 5 pointed out as follows: It is too well known a principle of construction of statutes that the legislature engrafted every part of a statute for a purpose and the legislative intention is that every part of the statute should be given effect. The legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons. So, to avoid redundancy the words put up in unit container with brand name must be given a qualified meaning to include only package tea with such qualified meaning because of the following : (i) As understood in the ordinary course of trade and business; (ii) Legislative history; (iii) Finance Minister s speech referring to package tea only; (iv) As understood in the trade and business circle because of the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te a connection in the course of trade between the product and some persons using such name or mark with or without any indication of the identity of that person. Taz tea, Golaghat tea are purchased by the person by not looking at the name of the owner, but because of their brand name. The words brand name must be understood as done by the common man in the common parlance and it is not expected that the Legislature is unaware of this position or ground reality. A specific question was asked to the learned Counsel for Union of India that if the Entry I covers all teas that what will remain for other. He could not give a specific reply, but he simply said that some garden may sell tea in loose manner, but in the written argument he has submitted that bulk tea cannot be sold in loose form or bulk manner like sand, soil. Bulk tea always used the container and as such it will come under Entry I. In support of this contention, he relies on the following: (i) Notification issued by the Government itself is a legislation and that not being challenged the writ petitions are to be rejected. (ii) The fiscal statute is to be interpreted in a manner which is different from oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent], wherein the Supreme Court pointed out as follows : The expression in the Schedule to the fiscal statute and in the notification for exemption should be understood by the language employed therein bearing in mind the context in which the expressions occur. The words used in the provisions, imposing taxes or granting exemption should be understood in the same way in which they are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them. A notification issued under the provisions of Rules has to be read along with the Act. The notification must be read as a whole in the context of the other relevant provisions. When a notification is issued in accordance with power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is, as if it were contained in the Act itself. It is well settled that when two views of a notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. However, that is so in the event of there being a real difficulty in ascertaining the meaning of a particular enactment tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and the Supreme Court pointed out that Act being a taxing statute, it must be interpreted as it reads, with no additions and no subtractions, on the ground of legislative intendment or otherwise the Act must be read in plain meaning. So, that is what I shall do in the instant cases. (2001) 6 SCC 764 (State of Kerala v. Vattukalam Chemicals Industries). That was a case under the Sales Tax Act and the Supreme Court pointed out that if the language of the notification is crystal clear, no external aid for construction is not required. (2001) 8 SCC 61 (Dental Council of India and another v. Hari Prakash and others) wherein the Supreme Court pointed out that when the language of the provision itself is absolutely clear, there is no question to adopt other modes of interpretation. In interpreting fiscal statute, the intention of the Legislature need not be taken into consideration when the language is clear. Reliance is placed by the learned Counsel for respondents with regard to the contention that when the language is clear, there is no question to adopt other modes of interpretation decisions are as follows: (1) (1999) 8 SCC 667 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, Chandigarh). That was a case of levying of tax under the Central Excise Act and there the question was whether the Dextrose injection manufactured by the appellant is liable to pay duty under the Tariff Item 14-E extracted below along with two explanations. That is quoted below: Tariff Description of Goods Rate of duty Item No. Basic Special Excise 14-E 14-E Patent or proprietary Medicines not containing alcohol, opium, Indian hemp or other Narcotic drugs or other narcotic other than those medicines which are exclusively Ayurvedic, Unani, Sidha or Homeopathic 12 % adv . 10% of the basic duty chargeable Explanation I. - Patent or proprietary medicines means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals, which bears either on itself or on its container or both, a name which is not specified in a monogram in a Pharmacopoeia Formulary or other publications notified in this behalf by the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ark and the medicine. For instance, if the appellant instead of using Dextrose injections would have described it as Astra injections or Astra Dextrose injections then it could be said that a relationship between the monogram and the medicine was established. In the case of appellant it was only a monogram to identify the manufacturer. 34. 1998 (99) E.L.T. 202 (S.C.) = 1998 (3) SCC 681 (Calcutta Chromotype Ltd. v. Collector of Central Excise, Calcutta) wherein, no doubt in interpreting the statute the Apex Court relied on in 1985 (3) SCC 230 (McDowell and Co. Ltd. v. CTO) the Supreme Court pointed out as follows : In McDowell and Co. Ltd. v. CTO this Court examined the concept of tax avoidance or other the legitimacy of the art of dodging tax without breaking the law. This court stressed upon the need to make a departure from the Westminister principle based upon the observations of Lord Tomlin in the case of IRC v. Duke of Westminster that every assessee is entitled to arrange his affairs as to not attract taxes. The court said that tax planning may be legitimate provided it is within the framework of law. Colourable devices, however, cannot be part of tax planning. Dubious ..... X X X X Extracts X X X X X X X X Extracts X X X X
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