9911796707
TMI Blog1984 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 1944 effective from 1-1-1982 classifying this product under sub-item (1) of Tariff Item No. 15 of the First Schedule to the Central Excises and Salt Act, 1944. The Central Excise duty payable under the said classification list was shown as 5% ad valorem under Notification No. 170/79-C.E., dated 24-4-1979. 3. M/s Oswal Agro Mills Limited, the respondents were, however, called upon vide letters C. No. V. (15) 30/2/81/3417 dated 28-3-1982 and C. No. V (15) 30/2/82/CL/13804-6 dated 27-11-1982 to show cause to the Assistant Collector of Central Excise as to why their product 'Kalpa' and 'Oasis' soaps should not be classified under Tariff Item No. 15 (2) "Other Sorts" on which central excise duty was payable (a/ 15% ad valorem under Notification No. 170/79-C.E., dated 24-4-1979 (as amended)? 4. The respondents M/s. Oswal Agro Mills Limited filed written reply alleging therein that their product 'Kalpa' and 'Oasis' soap are household soaps and the scope of household soap is not limited to washing soap only. It has been alleged that 'Kalpa' and 'Oasis' soaps are toilet soaps and toilet soaps are household soaps and Tariff Item No. 15 (1) specifies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Item 15 'soap' was added to the First Schedule to the Central Excises and Salt Act, 1944 as early as 28-2-1954. Further changes were made in the definition of soap in the Finance Act, 1955 and 1964. In the tariff of 1955, soap, household and laundry was under sub-item (1) of Item 15 CET whereas 'toilet soap' was under sub-item (2), showing thereby household and laundry soap was a distinct and different product from toilet soap. 11. In the year 1964, sub-item (2) 'Toilet' was omitted and it was merged with sub-item 'Other sorts'. The sub-item of soap, household and laundry remained as before. Shri Jain took us to the explanation appended to the Finance Bill, 1964, extract of which the appellant has given in the memorandum of appeal as under :- "The tariff item relating to the power operated sector is being amended to provide for two rates of duty, one for all types and sizes of household and laundry soap and other for the remaining varieties including toilet soap." As per the submission of Shri Jain, the intention of the legislature throughout was to keep toilet soap separate from household soap and that is why toilet soap was mentioned in a separate sub-item of the tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation is under Tariff Item 15(2) C.E.T. and not under Tariff Item 15(1) C.E.T. He also pointed out from various technical literature that "household and laundry' soap does not include 'toilet' soap. In "The Wealth of India"-a dictionary of Indian raw materials and industrial products published by the Directorate of Publications and Information, New Delhi, toilet soaps and household soaps have been described as distinct and different products. Toilet soap in any one of its forms has to be of high quality and mild on skin as it is used for personal cleaning whereas household soaps have been described to comprise of various types of laundry soaps available in various forms of bars, cakes, chips, flakes, powder etc. Another technical literature "Soaps-Their CHEMISTRY AND TECHNOLOGY" written by J.G. Kane published by the Indian Central Oil Seeds Committee also shows that laundry and household soaps are distinct and different from toilet soaps. In the technical book "SOAP MANUFACTURE" published by Inter Science Publishers, Inc. New York, household and laundry soaps have been shown as different and distinct product from toilet soap. 14. Shri Jain pointed out that the popular t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Soli Sorabjee, in the absence of any word of limitation, the term should be given full scope and, therefore, the products 'Kalpa' and 'Oasis' soaps manufactured by the respondents should fall under household soaps and classifiable under Tariff Item No. 15(1) C.E.T. He drew our attention towards some certificates produced from dealers of soaps in support of his contention that 'Kalpa' and 'Oasis' soaps are used for household purposes and they are generally known as household soaps. Drawing our attention towards the Dictionary meaning of the word 'Household', he pointed out that Household means pertaining to the house and the family. 'Kalpa' and 'Oasis' soap are used for bathing purposes in the house by the family and, therefore, they are household soaps falling under Tariff Item No. 15(1)-C.E.T. He cited a decision of Supreme Court M/s. Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise, Surat [AIR 1970 S.C. 755 = 1978 E.L.T. (J 350)] in support of his contention that the words of exclusion cannot be used while interpreting the tariff entry. According to him the findings of the Assistant Collector that the terms Household soap excludes the toilet soap cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ypes of soaps-household soaps and non-household soaps. Bathing soaps i.e. toilet soaps like 'Kalpa' & 'Oasis' come within the purview of household soaps and the Collector (Appeals), New Delhi has rightly classified them under Tariff Item No. 15(1)-CET, as household soaps. There is no justification for reversing the findings of the Collector (Appeals) which are based on merits of the case. 21. Whether the word 'and' used in the Tariff Item 15(1) appearing between the words 'household' and 'laundry' is conjunctive or disjunctive does not matter much in deciding the controversy before us. Assuming that the word 'and' is not conjunctive but is disjunctive as alleged by the respondents, we have to find out whether the product 'Kalpa' and 'Oasis' soaps, manufactured by the respondents, which are admittedly toilet soaps used for bathing purposes, fall within the heading Household soaps or not ? 22. A perusal of the record shows and it is also not disputed that as per Finance Act, 1955, the Tariff Item 15-CET was as under: 15. Soap :- I. Soap manufactured with the aid of power :- (1) Soap, household and laundry : (i) Plain bars of not less than 454 gms. in weight, (ii) Oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gathered. 23. Now the question arises whether it is permissible to look at the legislative history of Tariff Item 15, the explanatory memorandum to the Finance Bill, 1964, the Budget Speech of the Finance Minister in 1979 in order to ascertain the scope and coverage of the tariff entry and sub-entries and to arrive at a correct interpretation thereon. The appellant has invoked the rule of contemporanea expositio. The rule of construction by reference to con-temporeneous document is a rule for interpreting the statue by reference to the exposition it has received from the contemporary authority, but such exposition must give way to plain and unambiguous language. 24. The Supreme Court in K.P. Verghese v. ITO - (MR 1981 S.C. 1922) at Page 1932 stated as follows :- "The rule of construction by reference to contemporenea expositio is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. This, rule has "been succinctly and felicitously expressed in Crawford on Statutory Construction (1940 ed) where it is stated in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd purpose for which the legislation is enacted. According to their Lordships, this is in accordance with the recent trend in juristic thought not only in Western Countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. The plea of the learned Counsel of the respondents that the decision of K.P. Verghese case (Supra) cannot be made applicable in the present case concerning the interpretation of tariff item in Central Excises and Salt Act, is not tenable. Whether the findings are on a matter under the Income-tax Act or under the Central Excise Act, it shall be relevant and binding as far as this proposition of law is concerned that a 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 legislature and the object and purpose for which the legislation is enacted. The decisions of the Supreme Court reported in AIR 1952 S.C. 369, AIR 1973 S.C. 1214 and AIR 1976 S.C. 10, as cited by the learned Counsel of the respondents do not help t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that toilet soaps are quite distinct and different from household and laundry soap. The ordinary dictionary meaning of the word 'Household' cannot be adopted as a criterion for classifying toilet soap under the heading 'household and laundry soap'. The dictionary meaning is a delusive guide. A dictionary gives various meanings. Therefore, words in the section of a statute are not to be interpreted by having these words in one hand and the dictionary in the other. The correct guide is the context and the trade meaning. Hon'ble Mr. Justice Tulzapurkar (whilst a Judge of Bombay High Court) in the leading case of Nirlon Synthetic v. Audim (Bombay High Court dated 30-4-1970 Misc. Petition 491/64) observed that Excise Act was enacted to raise revenue. For this purpose, substances should be classified according to the general usage and known denominations of trade. The principal concern of classification is how a product is known in trade parlance. The wrapper of Oasis soap describes it as a toilet soap and that of Kalpa soap as a Bath soap. This is a clear proof of the fact that in common parlance, trade and commercial understanding the products, 'Kalpa' and 'Oasis' soaps are known as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be pieced on such stereotype evidence produced for the first time before the Collector (Appeals) where the department had no opportunity to rebut the same. Besides this, the certificates are from some dealers of Punjab only and not from consumers. A dealer cannot give a certificate regarding the use of any particular product. If a customer comes to him, he would not ask that dealer to give him a household soap or a non-household soap. He would make a demand either for a bathing or laundry soap or for a washing soap. No evidence from any consumer has been placed on record to show and prove that in common parlance and trade understanding this product 'Kalpa' and 'Oasis' soaps are used for household purposes. The wrappers of Oasis and Kalpa soaps described them as toilet and bath soaps respectively. However, the dealer's letters produced by the respondents described them as household soaps. If these are indeed household soaps, there is no explanation forthcoming why the wrappers do not describe them as such. According to the respondent's contention before the Assistant Collector, as seen from the Asstt. Collector's Order-in-Original No. 7/CL/82, Kalpa soap is an all-purpose soap use ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
