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TMI Blog1984 (4) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... in force from 1-3-75, has the following main description :- Tyres means a pneumatic tyre in the manufacture of which rubber is used and includes the inner tube, the tyre flap and the outer cover of such a tyre. This is followed by separate sub-items fixing different rates of duty for different articles falling within this heading. Prior to 1-3-75, this Item did not include a reference to the tyre flap . This was added to the description through the Finance Act of that year. 5. The appellants started the manufacture of tyre flaps from May, 1978. They applied for a manufacturing licence in Form L-4 and deposited the appropriate fee of ₹ 20. They were, however, informed by the Central Excise authorities that the tyre flaps fell under Item 68 of the Central Excise Tariff and as their clearances fell within the exempted ceiling, there was no need for them to take out a licence. On 6-7-78, they filed the prescribed declaration to the effect that their clearances in a year would be less than ₹ 30 lakhs. Similar declarations were filed by them in the year 1979-80 and the year 1980-81. All these declarations were accepted by the Central Excise authorities and no q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assistant Collector. 9. The Appellate Collector upheld the Assistant Collector s order and rejected the appeal. 10. Appearing before us for the appellants, Shri K.R. Mehta advanced arguments on procedure as well as on merits. As regards merits, he submitted that tyre flaps were not covered by Item 16. He pointed out that according to the definition given in this Item, tyres means a pneumatic tyre, that is one which could contain air under pressure. The tyre flap was open on one side, like the tyre cover itself and, therefore, according to Shri Mehta, could not be said to be pneumatic . 11. It was pointed out to Shri Mehta that the description in the Tariff Item as in force after its amendment in 1975 specifically states that tyres includes the tyre flap. Shri Mehta, however, submitted that a tyre flap would be dutiable under this Item only if it was manufactured along with the inner tube and the outer cover. If only a tyre flap was manufactured and cleared, it would not be covered by the Item. 12. In this connection Shri Mehta also referred to a Trade Notice of 1974, containing a tariff advice of the Central Board of Excise and Customs, according to whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, Shri Tayal submitted that the Tariff Item contained an extended definition which specifically included a tyre flap and, therefore, it was not relevant to consider whether a tyre flap by itself could contain air or not. He also submitted that Shri Mehta s argument would lead to the conclusion that a tyre flap manufactured by a person who also manufactured the inner tube and the outer cover would be dutiable, whereas one manufactured by a person who did not manufacture the inner tube and the outer cover would not be dutiable. Considering that excise duty was basically on goods, this would be an unreasonable interpretation which would lead to anomalous situations and discrimination between different manufacturers. The correct interpretation, therefore, would be that a tyre flap was dutiable under Item 16 irrespective of the other articles which were or were not manufactured by the manufacturer. 14. Shri Mehta had argued that over a period of years, the Excise Department had been aware that the appellants were manufacturing tyre flaps and the Department had specifically told them that the tyre flaps were classifiable under Item 68 and not under Item 16. Shri Mehta had, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with an inner tube and an outer cover. We do not find any force in this contention. The main description of Tariff Item 16 gives an extended meaning to the term tyres and specifies that it includes inter alia a tyre flap. When it is laid down that a particular term includes X, Y and Z, it cannot reasonably be contended that Y is included in that term only if it is accompanied by X and Z. This would not be a normal or reasonable interpretation. 18. In support of his argument, Shri Mehta contended that a tyre flap could not be regarded as a pneumatic tyre because it could not itself contain air under pressure. Whatever force this submission might otherwise have is taken away by the fact that the term tyres is defined in the statute itself so as to specifically include a tyre flap. As has been laid down by the Supreme Court in its judgment in the case of Dunlop India Ltd. v. Union of India (ECR C476 SC), once an article is classified and put under a distinct entry, the basis of the classification is not open to question . The weakness of the argument advanced would be apparent if we look at Item 39 of the Central Excise Tariff which deals with lighters, not elsewhere spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that their request for adjournment was not before the Assistant Collector when he passed his order, and they have admitted that they have no evidence of the receipt of this letter by the office of the Assistant Collector. The Assistant Collector has given a reasoned decision on the basis of the appellants reply to the show cause notice. In the circumstances we do not find substance in the plea that there was a violation of the principles of natural justice in the proceedings before the Assistant Collector. As regards the proceedings before the Appellate Collector, the question of violation of natural justice was only faintly urged, and it transpired that it was based on the ground that they were not given time to file copies of trade notices and judgments which the appellants had cited during the hearing. We do not think that such a factor could vitiate the order of the Appellate Collector. It was for the appellants to have ready with them copies of the trade notices and judgments, etc., of which they wished to submit copies and to submit them at the time of the hearing. 22. As regards Shri Mehta s argument that the Department had over a period of time accepted the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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