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TMI Blog1979 (2) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and Salt Act, 1944 called Central Excise Tariff which was in force during the relevant period, that is to say, in 1974 was as follows :- "18. Rayon and Synthetic Fibres and Yarn, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power - Explanation : Rayon and Synthetic Fibres and Yarn shall be deemed to include - (i) Man-made fibres; (ii) Spun (discontinuous) yarn containing not less than ninety per cent by weight of man-made fibres calculated on the total fibre content; (iii) Man-made filament (continuous) yarn; and (iv) Man-made metallic yarn." 2. Under a notification issued by the Government of India on 17th March, 1972, the Central Government exempted yarn spun out of synthetic staple fibre falling under Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 and of the descriptions specified in column 2 of the Table annexes to the said notification from so much of the duty of excise leviable thereon as was in excess of the duty specified in the corresponding entry in column 3 thereof. The relevant portion of Table was as follows :- "Column 1 Column 2 Column 3 2. Yarn Spun - (a) Wholly out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thetic staple fibres falling under Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and of the description specified in column (2) of the Table hereto annexed from so much of the duty of excise leviable thereon as is in excess of duty specified in the corresponding entry in column (3) thereof : Sl. No. Description Duty 2. Yarn spun - (a) wholly out of synthetic staple fibre of non-cellulosic origin other than acrylic fibre, or (b) partly out of the staple fibre aforesaid and partly any other fibre or fibres (including acrylic fibre) provided that the natural fibre content, if any of the yarn does not exceed 10 per cent of its weight - if the non-cellulosic fibre content of it is- (i) 50 per cent or more Rs. 15.00 (ii) less than 50 per cent but not less than 25 per cent Rs. 12.00 (iii) less than 25 per cent but more than 10 per cent Rs. 10.00 (iv) 10 per cent or less Rs. 7.50 4.The Tariff, as in operation on the relevant date, viz. 11th May, 1974, was as indicated in the proceeding paragraph. Gate passes were issued on 23rd July, 1974 and goods were cleared by the petitioner No. 1 on payment of excise duty at Rs. 7.50 per K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1944), and of the description specified in column (2) of the Table hereto annexed from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entry in column (3) thereof. THE TABLE Sl.No. Description Duty 1. Yarn Spun - Rs. per Kg. (a) Wholly out of synthetic staple fibre of cellulosic origin or (b) Out of staple fibre aforesaid and cotton only, provided that the cotton content of the yarn does not exceed 10 per cent of its weight - (i) of 84 or more counts 4.00 (ii) of 69 or more counts but less than 84 counts 3.00 (iii) of 51 or more counts but less than 69 counts 2.80 (iv) of 40 or more counts but less than 51 counts 2.40 (v) of 34 or more counts but less than 40 Counts 1.60 (vi) of 29 or more counts but less than 34 counts 1.45 (vii) of 22 or more counts but less than 29 counts 0.65 (viii) of 14 or more counts but less than 22 counts 0.30 (ix) of less than 14 counts 0.15 (c) out of staple fibre aforesaid and any natural fibre other than cotton, provided that the natural fibre content of the yarn does not exceed 10 per cent of its weight. 12.00 2. (a) Wholly out of synthetic staple fibre of non-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- "Having regard to the facts and circumstances of the case as on record as well as submissions, made and contention taken by the assessee, I am satisfied that the Yarn cleared by the assessee under Gate Pass Nos. 47 dated 23-7-1974 and 48 dated 24-7-7194 attracts duty @ Rs. 15 per kg. as envisaged in Sl. No. 2(b)(i) of Notification No. 52/72-C.E., dated 17-3-1972 and not Rs. 7.50 under S. No. 2(b)(iv) of the said Notification. Since duty has been paid @ Rs. 7.50 per kg. I confirm the demand for the differential duty for Rs. 5094.38 and order under Rule 10 of Central Excise Rules, 1944 that the assessee should pay Rs. 5094.38 to the Reserve Bank of India, Calcutta on T.R. 6 under Head of Account 038 - Union Excise Duties - Additional Excise duties - Receipted copy of T.R. 6 should be submitted to this office for record within 10 days of the receipt of this Order." 7. The petitioner No. 1 preferred an appeal and the Appellate Collector allowed the appeal holding, inter alia, as follows :- "I have carefully gone through the records of the case, the appeal petition and the submission of the appellants at the time of personal hearing held on 22-4-1975. The subject goods contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natural fibre content, if any, of the yarn does not exceed 10 per cent of its weight. If the fibre contents of it is - (i) 50 per cent or more 24.00 (ii) less than 50 per cent, but not less than 25 per cent 19.20 (iii) less than 25 per cent, but more than 10 per cent 16.00 (iv) 10 per cent or less. 12.00 10.Thereupon the Central Government issued a notice under Section 36(2) of the Central Excises and Salt Act, 1944 wherein after setting out the facts the show cause notice observed, inter alia, as follows :- "On Examination of the case records the Central Government tentatively hold the view that the order of the Appellate Collector, Central Excise, Calcutta mentioned above is not proper, legal and correct inasmuch as both acrylic and nylon fibres were synthetic fibre of non-cellulosic origin and it is nowhere stated in the Notification No. 52/72-C.E., dated 17-3-1972 that to determine the percentage of the non-cellulosic fibre content' acrylic fibre content has to be ignored. Since non-cellulosic content in the impugned goods is more than 50% in this case, the goods are classifiable under serial number 2(b)(i) of Notification No. 52/72-C.E., dated 17-3-1972. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of synthetic staple fibre of non-cellulosic origin other than acrylic fibre, or (b) partly out of the staple fibre aforesaid and partly any other fibre or fibres, provided that the natural fibre content, if any, of the yarn does not exceed 10 per cent of its weight in certain proportion as indicated in the notification set out hereinbefore, was entitled to exemption. Therefore, it was contended that acrylic fibre did not come within the meaning of non-cellulosic fibre content. Otherwise there was no purpose of using the expression "other than" before the expression, acrylic fibre, in 2(a) of the notification. If non-cellulosic fibre content did not mean something different from acrylic fibre, then the expression "other than" would be redundant. It was, therefore, urged that reading the expression of the relevant notification, which was in force, it could not be said that acrylic fibre was considered to be non-cellulosic in origin and the acrylic part of this should also be taken into consideration in determining the non-cellulosic fibre content of mixed yarn. There was no purpose in treating these two separately. In this connection reference was made to the significantly different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be condemned as lacking in reasons and, therefore, I am unable to accept this contention urged in support of the petition. 15. On behalf of the revenue learned Junior Counsel drew my attention to a decision in the case of Dunlop India Ltd. v. Union of India, AIR 1977 S.C. 597 where also the Supreme Court reiterated that the meaning given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject generally treated and understood them in usual course. But the Supreme Court emphasised that once an Article was classified and put under a distinct entry, the basis of classification was not open to question. Technical and scientific tests offered guidance only within limits. Once the articles are in circulation and came to be described and known in common parlance, then there is no difficulty for a statutory classification under a particular entry. Counsel for the revenue stressed on the point that once an article was placed in a particular item then there was no further question of enquiring whether the item was properly placed or not. But the difficulty is to find out the meaning of the item which is placed in a particular category and is ..... 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