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TMI Blog1983 (11) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... acility of reference, the particulars relating to the four appeals, essential for the further discussion, are given below :- No. of Tribunal s Appeal File No. Date of Assistant Collector s Order Date of Show Cause Notice Period Covered Amount DemandedRs. 100/79 No. V(19)3-26CGR/ 75, dated 18-10-1976 25-3-1975 May 1972-Nov. 1974 21,214.055 364/79 No. V(19)15-5/75/ Cal. IV, dated 18-10-1976 9-12-1975 June 1975-Sep. 1975 3,165.55 365/79 No. V(19)30-3/76, dated 18-10-1976 30-6-1975 March-May 1975 1,351.58 366/79 No. V(19)15-5/76, dated 18-10-1976 30-3-1976 Oct. 1975-March 1976 3,666.07 3. All these appeals involve an identical question, namely, whether the goods described by the appellants as grey markin (medium A and Medium B) for use of the coated abrasive ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as pointed out to him that under Rule 173J, which came into effect in 1969, the applicable time limit under Rule 10 was one year for goods covered by the Self Removal Procedure (as the goods under consideration were), Shri Bannerjee accepted that the time limit under Rule 10 at the relevant time would be one year. It was found that in this view the demands which are the subject matters of the appeals Nos. 364/79, 365/79 and 366/79, would be wholly within time. As regards the demand which is the subject matter of the appeal in file No. 100/79 (which constitutes the lion s share of the total amount involved), it would be within time in regard to the period from about 25-3-1974 to 30-11-1974, and time-barred for the earlier period. In view of the conclusions contained elsewhere in this Order, it is not necessary to go further into the issue at this stage. 6. On the question of liability of the NTC, of which the present appellants are a unit, Shri Bannerjee referred to the provisions of Section 5 of the Sick Textile Undertakings (Nationalisation) Act, 1974, which run as follows :- (1) Every liability, other than the liability specified in sub-section (2) of the owner of a sick t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal No. 100/79 related to alleged liabilities over the period May, 1972 to November, 1974. According to him, any liability for the period May, 1972 to March, 1974 could be enforced only against the erstwhile owners of the mill and not against the NTC. 7. Shri Bannerjee admitted that this argument would not be applicable in respect of the demands covered by the other three appeals, all of which related to the period on or after 1-4-1974. 8. For convenience, we may mention, even at this stage, that Shri Tayal, the learned representative of the Department, stated that he had received instructions from the respondent Collector that there was a substance in this contention of the appellants, and that the NTC would not be liable for any demand in respect of taxes relating to the period prior to 1-4-1974. In effect, therefore, the Department has conceded that the present appellants, who are a unit of the NTC, could not be held liable for demands relating to the period from May, 1972 to March, 1974, which is the major part of the period covered in appeal No. 100/79. 9. As regards the third argument of Shri Bannerjee, namely, that the show cause notice was invalid as it was add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey markin was not known in common parlance as cloth . It was pointed out by the Bench that no specific evidence in this regard had been advanced and that there was reason to believe that grey markin was included in the definition of long cloth as laid down by the Textile Commissioner. Shri Bannerjee did not contest the latter point, but reiterated that grey markin was not commonly known as cloth . 13. Replying for the Department, Shri Tayal sought to argue that the entire demand for the period May, 1972 to November, 1974, covered by the appeal No. 100/79, was in time. However, in view of the concession made by the Department on the question of liability of the NTC for taxes payable for the period prior to 1-4-1974, this point ceases to be relevant. If the NTC, who are the present appellants, are fully exempt from liability for the period prior to 1-4-1974, the question whether the demand for liabilities related to that period was within time or not ceases to be relevant and need not be further considered. 14. Shri Tayal strongly opposed the argument of Shri Bannerjee that in view of the definition of cloth in the Charging Act, the handloom cess was not applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation, we have already observed that the demands covered by the three appeals Nos. 364/79, 365/79 and 366/79 were within the time limit of 12 months under Rule 10 as applicable at the relevant time. The demand covered by appeal No. 100/79 is also within time for the period from 1-4-1974. In the view we have taken regarding the liability of NTC, the demand for the period prior to 1-4-1974 is not enforceable against NTC, irrespective of the question of limitation. 19. As regards the argument of Shri Bannerjee, based on the definition of cloth in the Charging Act, we find substance in the submission of Shri Tayal that acceptance of Shri Bannerjee s argument would mean that handloom cess could not be levied on any single article, and would reduce the Charging Act to a nullity. It is well-known that the courts strongly lean against a construction which would reduce a statute to a nullity or futility. Several weighty authorities in support of this principle are found in the standard works on the interpretation of statues. A number of examples of the application of this principle, namely, construction ut res magis valeat quam pereat, have been given in Maxwell on The Interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich basic excise duty is not collected, Shri Bannerjee s argument in this regard cannot be accepted. 21. There remains Shri Bannerjee s argument that grey markin is not cloth in common parlance. As pointed out by Shri Tayal, no evidence in this regard has been placed before us. Apart from this, we would hesitate to say that the expression grey markin is itself common parlance. We think most laymen would be unfamiliar with this expression and if shown the goods under consideration would be inclined to consider them as a variety of cloth and would certainly not light upon the expression grey markin to describe them. So far as use by the textile industry is concerned, as pointed in para 12 above, it appears that grey markin is in fact included in the definition of long cloth as laid down by the Textile Commissioner. Further, we observe that the appellants themselves have referred to the goods as cotton fabrics . Thus, in para 6 of their memorandum of appeal it has been stated The said Unit produced among other varieties of cotton fabrics, grey-markin (Medium A and Medium B) for use of the coated abrasive industry . We have already held for the purpose of levy of handloom ..... 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