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TMI Blog1984 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... re and thus started manufacturing yarn from the above waste by blending the same with cellulosic fibre by describing the product as non-cellulosic waste-cellulosic blended yarn . In the said blended yarn, according to the petitioner, there is always predominance of cellulosic fibre. 2. Further according to the petitioners under mistake and impression that the said product was dutiable under Tariff Item 18(III)(ii), paid duty on the said blended yarn under the said sub-clause (ii) of Tariff Item 18(III) from 4-11-1983. Thereafter the petitioners came to know from other industries, namely M/s. Madhumilan Syntex (P.) Ltd., Biora and M/s. Rajasthan Syntex Ltd., Udaipur who are manufacturing identical yarn as the petitioners are manufacturing, that the said product was dutiable under sub-clause (i) of Tariff Item 18(III) and not under sub-clause (ii) of Tariff Item 18(III) and accordingly their classification had been approved provisionally by the proper authorities. Further, according to the petitioners they submitted the classification list of their product on 29-10-1983 to the Superintendent, Central Excise, Range Dewas (Annexure-4). In the said classification list they claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o two parts; (i) deals with spun yarn in which fibres of cellulosic origin predominates and not containing any fibre of non-cellulosic origin and (ii) deals with yarn in which fibres of cellulosic origin predominates but it contains man-made fibre of non-cellulosic origin. Therefore, according to the petitioners they mix some quantity of non-cellulosic waste falling under sub-item (IV) of Item 18 in the man-made fibre of cellulosic origin, but they do not mix any man-made fibre of non-cellulosic origin falling under sub-item I and, therefore, the petitioners are rightly entitled to claim clearance of their product under clause (i) of sub-item (III) of Tariff Item 18 as the Assistant Collector of Customs has committed an error in not distinguishing between polyester waste and polyester fibre. 6. Further, according to the petitioners clause (ii) of sub-item (iii) of Tariff Item 18 deals with cellulosic spun yarn containing man-made fibres of non-cellulosic origin, which is covered by sub-item I of Tariff Item 18 and not by sub-item IV of Tariff Item 18 and in view of this position the cellulosic spun yarn manufactured by the petitioners from man-made fibre of cellulosic origin (wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioner used non-cellulosic synthetic waste falling under T.I. 18(IV) as the initial raw material this has necessarily to be converted into fibre by process of mixing, blowing, cording, etc., before it can be used for spinning into yarn and the spun yarn can be manufactured only out of fibres. Thus they have prayed for the dismissal of the petition. 9. The learned counsel for the petitioners, after referring to Annexure-8, which is a letter dated 7-2-1984 sent by the Assistant Collector, Central Excise, Ujjain to the petitioners submitted that in this letter it has been mentioned that: It cannot be denied that the waste of polyester fibre is nothing but polyester fibre which is a man-made fibre of non-cellulosic origin. T.I. 18(III)(i) covers cellulosic spun yarn not containing any man-made fibre of non-cellulosic origin. The yarn in question would certainly fall under T.I. 18III(ii) i.e. yarn in which man-made fibre of cellulosic origin predominates in weight and which also contains man-made fibre of non-cellulosic origin. Such yarn is presently assessed under Notification No. 75/82, dated 28-2-1982 at the rate of ₹ 9/- per Kg. as basic duty. This would al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner on 31-5-1984 after they had filed the present writ petition. The learned counsel did not dispute this fact that this is a speaking and well reasoned order against which the petitioners can prefer an appeal with the Collector (Appeals) Central Excise. He also did not dispute that no appeal even thereafter has been filed by the petitioners. 10. However, the learned counsel for the petitioners further contended that the yarn in question about the classification of which the petitioners have raised a dispute has been claimed by them to be cellulosic spun yarn containing cellulosic fibre predominant in weight and non-cellulosic polyester waste. The so-called non-cellulosic waste is nothing but waste of man-made fibre of non-cellulosic origin. He further submitted that the petitioners have been purchasing polyester staple fibre which establishes that the material which they received under the name of synthetic waste from abroad is nothing but polyester fibre. He, therefore, submitted that the spun yarn can be manufactured only out of fibres and even if non-cellulosic synthetic waste is used as an initial raw material it has necessarily to be converted into fibres and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the meaning or connotation of words and expressions describing an article or commodity, there is one principle fairly well settled which is that the words or expressions must be construed in the sense in which they are understood in the trade by the dealer and the consumer. It is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the Legislative intention when the Statute was enacted, as has been held in the decision reported in AIR 1979 S.C. 300 (Porritts Spencer (Asia) Ltd. v. State of Haryana). 13. The dictionary meaning of yarn is fibre, as of cotton, wool, silk, flax, spun and prepared for use in weaving, knitting etc. As the learned counsel for the petitioners frankly conceded that this Court cannot go into the question of facts in a writ petition, this Court is not called upon to decide whether the product of yarn manufactured by the petitioners is in fact covered by Item 18 III(i) or 18 III(ii) of the First Schedule. 14. It is also clear that S. 11A of the said Act is in substitution of rule 10 of the Central Excise Rules. This section was introduced by the amending Act 25 of 1978 and becam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined under that section is the time of removal of the article chargeable with duty from the factory and not the time when it is manufactured or produced. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, i.e. its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the Taxing Authority the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture, or production, is not lost. The manner of levy and collection of the duty is, however, left to be prescribed by Rules. This is the effect of the words there shall be levied and collected in such manner as may be prescribed as they occur in Section 3. 17. However, the learned counsel for the petitioners relying upon a number of decisions submitted that though the petitioners had an alternative remedy of filing an appeal under Section 35 of the Act, this Court in exercise of the writ jurisdiction can still give a funding as to whether the yarn manufactured by the petitioner is covered by Item 18 III(i) or (ii) as according to the learned counsel for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-cellulosic waste falling under sub-item No. IV of T.I. 18. 21. It is well settled that in interpreting a taxing statute one should bear in mind that it is to be construed strictly according to the plain words used therein. Section 3 of the Act, which is reproduced below, is quite clear on this point, as stated above :- Section 3. Duties specified in the First Schedule to be levied.- (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into and part of India as, and at the rates, set forth in the First Schedule : Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured in a free trade zone and brought to any other place in India shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962) on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld pass a speaking order which has been done in the present case. It was, therefore, necessary for the petitioners, in our opinion, to file an appeal against that order. 23. It appears that on knowing the fact that Madhumilan Syntex (P) Ltd. have filed a similar petition, they immediately rushed to this Court without caring to file an appeal against the order passed by the Assistant Collector of Central Excise. It was not disputed that the Assistant Collector had jurisdiction to make the classification. In fact when he had made a provisional assessment, it was for the petitioners to satisfy him that the yarn manufactured by them is covered by Item 18 III(i) and not Item 18 III(ii). Therefore, every case of misconstruction of law is not a case of non-compliance with the provisions of law nor of excess of jurisdiction. The reason is that the jurisdiction to decide a matter imports a limited power to decide that matter incorrectly. Therefore, in the present case, in our opinion, considering the facts and circumstances of the case the remedy of writ is not available only on the ground of mere misconstruction of law. In a writ petition the High Court is not a Court of fact and is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the findings of the Department as to whether the particular goods are covered by particular item in the excise tariff, are patently erroneous, that the decision is arrived at on the basis of irrelevant facts or irrelevant construction, that the decision is a result of ignoring relevant facts or relevant material though available on record and that when the decision discloses a wholly erroneous approach to the problem on the part of the Department. 27. In the present case, apart from the oral contentions of the petitioners, there is no material on record on the basis of which, as argued on their behalf, it could be inferred that their product falls under Item 18 III(i) and not under Item 18 III(ii). In fact after the provisional assessment was made the petitioners had the opportunity to satisfy and convince the authorities concerned by leading evidence to the effect that their product, though produced with the raw material of waste, in fact is covered by Item 18 III(i). The petitioners could get their sample analysed by an Expert and could also prove before the authorities concerned that they have been using non-cellulosic waste, the cost thereof being considerably less than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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