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TMI Blog2004 (4) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... It appears that the petitioner purchases HDPE/PP granules. In order to convert the HDPE/PP granules into HDPE/PP tapes, the granules are poured into a machine called Extruder. In the extruder these granules are melted by heating. Due to heat the granules polymerize into a molten mass. Simultaneously with heating, mechanical pressure is applied by rotation of screw. By application of appropriate pressure a film or strip of desired gauge is obtained. This film or strip thus obtained is in a semi-finished condition. The film or strip is cooled with the help of air in the open and is slit into tapes with the help of blades fixed in a machine called Godet machine. After silting, the tapes are stretched with the help of heat generated by heaters and by mechanical force. This not only imparts strength to the tapes but it also results in reducing the width of the tape. By this process the desired width of the tapes can be obtained. In the instant matter, we are concerned with width of the tapes not exceeding 5 mm. These HDPE and PP tapes are manufactured from raw materials composed exclusively of plastic. 3. The petitioner filed a classification-list effective from 1st March, 1989. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1985 by issuing a writ of certiorary or any other writ, order or direction after summoning relevant records from the non-petitioners; (iii) Hold and declare that HDPE/PP tapes; are classifiable under Heading 39.22/39.26 of Chapter 39 of the Schedule to the Tariff Act, 1985; (iv) Prohibit the non-petitioners from levying and recovering the excise duty on HDPE/PP tapes under Chapter 54; (v) Direct the non-petitioners to refund the excise duty recovered from the petitioner company on HDPE/PP tapes under Heading No. 54.06 with interest at least @ 18% from the date of payment till its refund by issuing a writ of mandamus or any other writ, order or direction; (vi) An ad interim relief in terms of relief (iv) mentioned above be also granted (vii) Grant any other relief/reliefs which may do complete justice to the petitioners in the facts and circumstances of this matter; (viii) Award costs of this writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of this matter; and (VIII) Award costs of this writ petition from the non petitioners." 6. Before we proceed to determine the questions argued before us it needs to be noticed that the Madhya Pradesh High Court in Raj Pack Well Ltd. v. Union of India, 1990 (50) E.L.T. 201 held that HDPE strips and tapes fall under Section VII Heading No. 39.20 sub-heading No. 3920.32 and not under Section XI Chapter 54 Heading No. 54.06, sub-heading No. 5406.90 of the Schedule to the Central Excise Tariff Act, 1985. It was also held that HDPE sacks are classifiable under the Heading No. 39.23, sub-heading No. 3923.90. While coming to the aforesaid conclusion the Madhya Pradesh High Court referred to the decision of the Customs, Excise and Gold (Control) Appellate Tribunal (for short CEGAT) in Shellya Industries, Bangalore v. Collector of Central Excise, 1983 (14) E.L.T. 1827 wherein it was held that HDPE woven sacks were articles made of plastic and were classifiable under old Schedule Item No. 15A(2) of the Central Excise Tariff. Tariff Item 15A(2) at the material time was as under : "Articles made of plastics, all sorts, including tubes, rods, sheets, foil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Other plates, sheets, film, foil and strip of plastics, non-cellular, whether lacquered or metallised or laminated, supported or similarly combined with other materials or not. - Of other plastics 3920.32 - Flexible plates, sheets, film, foil and strip. 60% From 28-2-1986 to 28-2-1987 39.22 3922.90 Other articles of plastics and articles of materials of heading Nos. 39.01 to 39.1 - Other 30% From 1-3-1987 onwards : 39.26 Other articles of plastics and articles of other materials of heading Nos. 39.01 to 39.14 3926.90 - Other 30% According to the aforesaid written propositions and the oral submissions of the learned Counsel for the petitioners HDPE/PP tapes are not covered under heading No. 39.20 since the said entry inter alia relates to the strips of plastics and not to plastic tapes. The learned Counsel for the petitioners contended that there was a distinction between the words "tapes" and "strips". They drew our attention to heading No. 39.19 which mentions both the words strips and tapes. It was canvassed by the learned Counsel for the petitioners that heading No. 39.20 deals with strips of plas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here." 11. Again, in M/s. Oswal Agro Mills Ltd. etc. etc. v. Collector of Central Excise & Others, 1993 (66) E.L.T. 37 (SC) = AIR 1993 SC 2288, it was held that there is neither scope for any intendment nor equity in a taxing statute, that in a fiscal statute neither anything can be inserted nor anything can be deleted, while construing the same, that the taxing statute should be interpreted and construed as per the words which the legislature has chosen to employ in the Act and that in a taxing statute there is no room for assumption or presumption. In this regard the Supreme Court also observed as follows : "Where the words of the statute are plain and clear, there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute. The Court would interpret them as they stand. The object and purpose has to be gathered fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing statute. It is the express words of the taxing statute which determine the field of its operation. There is neither intendment nor equity in a taxing statute. 17. Having noticed the aforesaid principles, the question still remains as to what is the meaning of the word "strip" used in heading No. 39.20. Whether the word "strip" means a tape as well and whether the word "tape" used in Entry 39.19 signifies that tape is synonymous with the word "strip". The meaning of the words "strip" and "tape" is not to be gathered from scientific and technical point of view, but the same can be construed on the basis of the meaning ascribed by the commercial world. In other words, meaning must be given to the words according to the understanding of the people in trade. 18 In Dunlop India Ltd. v. Union of India & Others, 1983 (13) E.L.T. 1566 (S.C.) = (1976) 2 SCC 241, the Supreme Court while giving guidance for interpret- ing the meaning of the words of a taxing statute, held that the acceptance of a particular word in trade and its popular meaning should commend itself to the authority. The Supreme Court while holding so, observed as follows : "It is clear that meanings given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Orissa v. Gestetner Duplicators (P) Ltd. (1974) 33 S.T.C. 333 that stencil paper could not be classified as paper for the purposes of the Orissa Sales Tax Act. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror. It was observed by this Court in Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan & Ors. 1980 (6) E.L.T. 383 (S.C.) = (1980) 3 SCR 1109 which was a case under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91 at p. 794 para 12 that the view of the Indian Standard Institute as regards what is refined oil as known to the market in India must be preferred in the absence of any other reliable evidence. It must be emphasized in view of the arguments advanced in this case that the meaning should be as understood in the particular trade. In this case, we are construing not paper as such but a particular brand of paper with a meaning attributed to it. Sub-item (2) of item 17 as was the position in 1976 paper referred to all kinds of paper including paper or paper boards which have been subjected to various treatments such as coating, impregnating. So, therefore, if all kinds of paper including coated paper is the goods, we have to find out the meaning attributed to those goods in the trade of those kinds of paper, where transactions of those goods take place." 23. In Indian Cable Company Ltd., Calcutta v. Collector of Central Excise, Calcutta and Others, 1994 (74) E.L.T. 22 (S.C.), the Supreme Court construed the relevant entry in the fiscal statute by holding as follows : '...............in construing the relevant item or entry, in fiscal statutes, if it is one of every day use, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary man has a right to rely on ordinary words addressed." In determining, therefore, whether a particular import is included within the ordinary meaning of a given word, one may have regard to the answer which everyone conversant with the word and the subject-matter of statute and to whom the legislation is addressed, will give if the problem were put to him.' x x x x "As a necessary consequence of the principle that words are understood in their ordinary or natural meaning in relation to the subject-matter, in legislation relating to a particular trade, business, profession, art or science, words having a special meaning in that context are understood in that sense. Such a special meaning is called the technical meaning to distinguish it from the more common meaning that the word may have....The Supreme Court has consistently taken the view that, in determining the meaning or connotation of words and expressions describing an article in a tariff Schedule, one principle which is fairly well settled is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 3920.32. The learned Counsel for the petitioners have produced certain letters of various traders to show that HTPE/PP tapes and strips are different commodities and are understood in commercial parlance as separate items. 26. In fact, the learned Counsel for the petitioners are asking us to hold that the strips and tapes are different items as understood by the traders. The submission raised by the learned Counsel for the petitioners is based on disputed questions of fact as the learned Counsel for the respondents has submitted that strips and tapes are not different articles and in commercial world they are considered to be the same. The pleadings also show that the plea of the petitioners is based on disputed questions of facts. 27. This Court sitting in writ jurisdiction is loath to decide disputed questions of facts since for determination of such questions evidence needs to be led, sifted and appreciated. The evidence must be adduced before the authorities charged with the duty to decide disputed questions of fact. In the instant case it is the concerned authority under the Central Excise Act, 1944, who has been entrusted with the statutory duty to decide the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the same. 29. It seems to us that instructions and directions issued under Section 37B of the Central Excise, 1944 are not binding on quasi judicial authorities, especially the appellate authority and assessees, who can question the correctness of the same before a quasi judicial authority. 30. In Rajagopala Naidu v. The State Transport Appellate Tribunal, Madras and Others, AIR 1964 SC 1573, the Supreme Court noticed that the Motor Vehicles Act, 1939, as amended by the Madras Amending Act 20 of 1948, conferred judicial powers on State Transport Authority. Section 43A of the Madras Amendment Act empowered the State Government to issue orders and directions of general character as may be considered necessary in respect of any matter relating to road transport and the State Transport Authority, the Regional Transport Authority and such Transport Authorities were required to give effect to all such orders and directions. The Supreme Court construing the aforesaid provision held that it would be legitimate to assume that the legislature intended to respect the basic and elementary postulate of the rule of law and in exercising their authority and in discharging their qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o long to consider the validity of the Government order which on the construction suggested by the Respondent would clearly invade the domain of quasi judicial administration." (emphasis supplied) 31. In Orient Paper Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J 345) (S.C.) = AIR 1969 SC 48, the Supreme Court while dealing with the directions issued by the Central Board of Revenue held that the Collector while hearing the appeals exercises quasi-judicial power and the directions issued are not binding on him for the purpose of deciding the appeals. The Supreme Court keeping in view the principle that the decision of quasi-judicial authority cannot be controlled by directions of a superior authority held as follows :- "It is true that the assessing authorities as well as the appellate authorities are judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a misnomer to call their orders as their judgments; they would essentially be the judgments of the authority that gav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '8. If the power exercised by the Collector was a quasi-judicial power as we hold it to be, that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of a judicial or a quasi-judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty. It is true that the assessing authorities as well as the appellate authorities are judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a misnomer to call their orders as their judgments; they would essentially be the judgments of the authority that give the directions and which authority had given those judgments without hearing the aggrieved party. The only provision under which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1991 (51) E.L.T. 265 (Guj.) = 1990 (26) ECC 324] has held that the circular under Section 37B cannot go beyond the limited scope of Section 37B and it shall not bind the quasi-judicial authorities." x x x x 7. With regard to the circular dated 8-6-1990, I have already held that Section 37B has to be read down and in that view of the matter, the circular dated 8-6-1990 also cannot bind the authorities exercising quasi-judicial functions especially the Revisional or Appellate Authority under the Central Excises and Salt Act, 1944. 8. Taking the view that Section 37B of the Central Excises and Salt Act, 1944 is valid and need not be struck down as violative of Articles 14 and 19 of the Constitution and that the petitioner can raise all the objections before the authorities including the question of promissory estoppel with regard to the period 14-4-1986 to 25-9-1991, these writ petitions stand dismissed." 34. In Birla Jute and Industries Ltd. v. Assistant Collector of C. Ex., 1992 (57) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion. It is doubtful whether such clarifications and the circulars bind the quasi-judicial functioning of the authorities under the Act. While acting in quasi judicial capacity, they are bound by law and not by any administrative, instructions, opinions, clarifications or circulars. Law is what is declared by this Court and the Hjgh Court - to wit, it is for this Court and the High Court to declare what does a particular provision of statute say, and not for the executive. Of course, the Parliament/Legislature never speaks or explains what does a provision enacted by it mean. (See Sanjeev Coke Manufacturing Company v. M/s. Bharat Coking Coal Ltd. and Another - AIR 1983 SC 239)." (underlining is ours) 36. In Sundaram Clayton Ltd. v. Superintendent of C. Ex., Madras, 1994 (70) E.L.T. 190, it was held that trade notices issued by the Excise Department are not binding on the adjudicating authorities. The Madras High Court with reference to trade notices, observed as follows : "The Trade Notice does not bind the first respondent and hand and foot in the sense that the first respondent has no discretion or power to decide the case on merits. I am therefore, not inclined to ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985 but that fact cannot whittle down the binding effect of the circulars or instructions issued by the Board earlier. Such instructions were not issued earlier for fancy or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So the circular, whether issued before December, 1985 or thereafter should have the same binding effect on the Department. 21. Through a catena of decisions this Court has pronounced that the Revenue cannot be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter that an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the Department, more so when others have acted according to such instructions, [vide CCE v. Jayant Dalai (P) Ltd., 1996 (88) E.L.T. 638, Ranadey Micronutrients v. CCE, 1996 (87) E.L.T. 19, Poulose and Mathen v. CCE, 1997 (90) E.L.T. 264, British Machinery Supplies Co. v. Union of India, 1996 (86) E.L.T. 449. Of course the appellate authority is also not bound by the interpretation given by the Board but the assessing officer cannot tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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