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TMI Blog1979 (11) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excises and Salt Act, 1944. In this petition, two Notifications issued under Rule 8 of the Central Excise Rules, are germane. The first is Notification No. 29 of 1966, as modified by Notification No. 41 of 1968, which was in force during the relevant period, namely, 1st March, 1968 till 1st March, 1969. Textile fabrics were classified in the following principal categories, namely:- (a) Grey (unprocessed), (b) bleached or/and dyed, (c) printed mercerized or/and water proofed whether rot proofed or not including rubberized, (d) processed in any other manner including shrink proofed and/or organdie processed. The rates of duty payable were higher for each succeeding category. 2. Under the second Notification No. 88 of 1969, which was in force after 1st March, 1969, the earlier classification was altered as follows:- (a) Grey (unprocessed). (b) | | Bleached or/and dyed but not printed. (c) Bleached or/and printed. (d) | Mercerized or/and water proofed whether rot proofed or not including rubberized but not printed. (e) | | Mercerized or/and water proofed whether rot proofed or not including rubberized and printed. (f) Processed in any other manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a sum of Rs. 1,36,953.25, pertaining to the clearance effected by the petitioner between 24th December, 1968 and 7th April, 1969. By an order dated 20th June, 1969, passed by the Assistant Collector, the demands contained in both the notices dated 9th December, 1968 and 20th April, 1969, were confirmed. On 17th July, 1969, the petitioner fi1ed the requisite appeal on merits and also urged that the first demand notice dated 9th December, 1968 was time-barred. On 24th October, 1973, the appellate authority passed an order allowing the petitioner's appeal on merits, and hence did not decide whether the first demand notice dated 9th December, 1968 was time-barred or not. The appellate authority came to the finding that the fabric manufactured by the petitioner was not commercially or technically known as a water repellent fabric and as such the question of charging such fabric at the rates applicable to water-repellent fabric did not arise. The appellate authority agreed with the appellant's contention that the dyeing process in the case of this fabric was somewhat peculiar as compared to the normal dyeing process but that would not categories the petitioner's fabrics as cotton fabri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and restoring the order passed on 20th June, 1969 by the Assistant Collector of Central Excise. The revisional authority did not decide whether the first demand notice dated 9th December, 1968 was time-barred, because that question had not been decided by the Appellate Collector. Hence, the present petition was filed for an appropriate writ to set aside the revisional order and for the refund of the sum of Rs. 5,46,850/- paid by the petitioner under protest. 8. The narrow question that arises for determination in this petition is whether the process of working into the cloth, cold wax emulsion and cold aluminium acetate is a part of the general dyeing process so as to fall within classification (b) of the Notifications, viz. "bleached or/and dyed but not printed", as urged by the petitioner or whether it is some special process not being a part of the general dyeing process and hence amounts to the cloth being "processed in any other manner" so as to fall within the classification (d) or (f ) of the relevant Notification, as urged by the respondent. 9. In order to appreciate these rival contentions of the parties, it would be appropriate to briefly set out the manner in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importance in the light of the impugned revisional order. 12. Pausing here for a moment it may be recapitualated that the only ground given in the show cause notice for the proposed review was that it appeared to the Central Government that the petitioner's product was subjected to waxing and aluminium acetate treatment which could not be said to be incidental to usual dyeing process and hence merited the classification "processed in any other manner". In the light thereof, it would be pertinent to analyse the material placed by the petitioner-company before the revisional authority to refute what appeared to the Central Government, viz. that the working of cold wax emulsion and cold aluminium acetate into the cloth, was not incidental to the usual dyeing process. 13. There is on record a Note issued by the Bombay Textile Research Association, on the complete processing for the dyeing of industrial cloth (sum shades and awnings) with sulphur black dye with fairly good standards for fastness to washing and light and reasonable suppleness of handle. The same process listed in this Note is followed by the petitioner. Processes 1 to 4 in this Note pertain to (1) the preparatory tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Items 1 to 7 pertain to stitching, wetting, boiling, washing, dyeing with sulphur black dyestuff, oxidising and soaping. Item 8 reads as under :- "The cloth is then dried but because of the presence of Poly-Sulphides in dyes and because of Alkaline action of Sodium Sulphide in the Dyebath, the fabric gets hardened up. Dyeing Process at this stage is not completed and it is therefore necessary that the fabric must be passed from a cold bath of Wax Emulsian to give the original suppleness of the Cotton Fabrics. It is therefore, also necessary to pass the same cloth through the solution of Metallic Salt consisting of alum sulphate or chrome alum along with Sodium Acetate, which by the inter-reaction, develops a solution of alum-acetate which will, therefore, help to improve the fastness to light as well as washing and will also therefore, protect against possible tendering of the cloth which otherwise would have happened because of the evolution of acidic gas (sulphurcus acid resulting in formation of Sulphuric acid coming out of sulphur dye as stated above) which has a definite tendency of tendering cloth on storage." (The underlining is mine.) Dr. Patwardhan's opinion ends by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion is worked into the cloth, viz. to cover the bronziness and to make the dyeing appear black and to make the cloth supple and (b) the purpose for which the aluminium sulphate treatment is given, viz. to improve the fastness of the dye to washing. This report also reveals that these two processes are not any special or extraordinary processes, but are a part of the general process of dyeing, without which the finished product would not be of the requisite standard and quality. The correctness of the report of Chika Ltd. was also not disputed before the revisional authority, and rightly so, for it has never even been the suggestion of the department that Chika Ltd. made or was interested in making an incorrect report. 17. Also was placed before the revisional authority the opinion and report of Hickson Dadajee Ltd. which is on a par with the other reports and opinions referred to earlier. After stating that the product must be given a wash and a light soaping to remove superfluous colour, it is slated as under :- "Dry the fabric and treat with T.R.O. or a wax emulsion to cover the bronziness and to give a jet black appearance. This treatment will also give a supple hand sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd rightly so, for it was not even the department's case that Hoechest Dyes Chemicals Ltd. had any reason to make an incorrect report. 20. Also placed before the revisional authority was the report of I.C.I. (India) Ltd., wherein after setting out the various stages of manufacture, namely, preparation of the material, dissolution of the dyestuff, and the dyeing procedure, is stated the following :- "Certain after-treatments are necessary to avoid bronziness, to improve fastness to washing and to counter-act the harsh feel obtained during dyeing." "In order to remove traces of bronziness and to enhance the appearance of goods dyed with Sulphur Blacks, a treatment is generally given with ammonia and Turkey Red Oil. Washing and light fastness of sulphur dyeing can be improved by an after-treatment of the dyed goods with metal salts of copper, chromium nickel and aluminium." "The dyed material invariably has a harsher feel as the shade dyed is fairly heavy. This is therefore treated with softness of Waxol P.A. type (Wax Emulsion)." From this report also emerges that the two processes used by the petitioner-company are a part and parcel of the general manufacturing process. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authority, for reasons best known to itself, has chosen simply to ignore them and maintain a strenge silence about them, presumably on the footing that what is inconvenient is best ignored. Despite the uncontroverted Note on processing of the Bombay Textile Research Association and the reports and opinions of Dr. Patwardhan, Chika Ltd., Hickson Dadajee Ltd., Hoechest Dyes Chemicals and I.C.I., the revisional authority chose to reject the petitioner's submissions by adopting a strange line of reasoning as under :- "Use of aluminium acetate is not necessary for after-treatment in dyeing of fabrics with sulphur dyes. H.C. Speel and E.W.K. Schwarz, refer to improvement of washfastness of direct dyeings on rayon by finishing impregnation with necessary metallic salt like aluminium acetate. Dr. Desirens does not refer to aluminium acetate at all. There is specific reference to its use in other books. On the other hand from the books "Encyclopaedia of Textiles" and "Textile Encyclopaedia" and other technical books it appears that "tent" and "Awnings" fabrics are made water repellant by wax and aluminium acetate treated. In the circumstances the Government of India cannot accept th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinions to the contrary, which disclose in ample measure that its use as a part of the general manufacturing process is not only important but is also imperative, if the end-product is to be of any consequence and not worthless. Significantly enough, the revisional authority concedes that there is specific reference to its use in other books, yet strangely enough, has chosen to ignore those references. This is yet another illustration of the revisional authority proceedings on the footing that what is inconvenient is best ignored. To make assurance doubly sure that there was no typographical error, I enquired from both the learned Counsel who stated that the sentence reproduced by me from the above order, does appear in the revisional order, viz. that "there is specific reference to its use in other books". It is curicus that the revisional authority should content itself by making this bald statement and yet not even make a passing reference as to what use has been referred to in other books. The reference to the Encyclopaedia of Textiles and Textile Encyclopaedia and "other technical books", disclosing that tent and awning fabrics are made water repellent by wax and aluminium ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is has been placed on the fact that the petitioner's product has a water repellent quality. That concept was not relevant for the purpose of the controversy between the parties and was throughly an unnecessary factor, needlessly dilated upon by the revisional authority to no purpose except thereby to hold willy-nilly that thereby the cloth should be treated as "processed in any other manner". What the revisional authority ignored or failed to appreciate was that while the water repellent quality of the petitioner's fabric happened to be incidental to the process of manufacture, the use of wax emulsion and aluminium acetate was for improving body and suppleness of the fabric and for improving the sales appeal. Mr. Setalvad is, therefore, correct when he says that the revisional authority has taken an extraneous consideration and has based its finding only on that extraneous and irrelevant consideration, namely, that the fabric manufactured by the petitioner was water repellent and hence should be treated as "processed in any other manner". 26. Mr. Manjrekar, the learned Counsel appearing on behalf of the respondents, strenuously urged that the working of the wax emulsion and alum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not render the cloth an "processed in any other manner" as long as the method or process by which the improvement is made, is a part of the general process of manufacture, which it is in this case, as has been predominently brought in the forefront by the numerous opinions and reports not even considered by the revisional authority. 30. Mr. Manjrekar next urged that even though the reports and opinions of Dr. Patwardhan, Chika Ltd., Hickson Dadajee Ltd., Hoechst Dyes Chemicals and I.C.I. have not been referred to in the revisional order, the revisional authority had in fact considered them. In support of this contention, Mr. Manjrekar invited my attention to several passages in the revisional order. It is unnecessary to advert to any of those passages for the simple reason that there is nothing in those passages to substantiate Mr. Manjrekar's contention which at best is in the nature of an ipse dixit. However, assuming for the sake of argument, that they had been considered by the revisional authority, in that event, surely, it was for the revisional authority to have given some reasons why it did not accept those reports and opinions which were not only relevant but the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to the respondent, inasmuch as in the matter before me, it can hardly be said that in the teeth of the uncontroverted reports and opinions, and by completely ignoring the same, the conclusion arrived at by the revisional authority can be said to be reasonable. In the light of the discussion earlier, it is not difficult to come to the conclusion that the view taken by the revisional authority, based on an extraneous circumstance, and by ignoring the uncontroverted reports and opinions of Dr. Patwardhan and others, is a view which no reasonable person could take and discloses utter non-application of mind, if not sheer perversity. 33. In the result, the entry applicable in the case of the petitioner is entry (b) in either of the Notifications and not entry (d) in the first Notification or entry (f) in the second Notification. 34. An alternative contention was urged on behalf of the petitioner, viz. that in any event, the first demand notice dated 9th December, 1968 is time-barred. This contention now does not survive. Since, however, it was urged, I may as well deal with it and get it out of the way. The first demand notice dated 9th December, 1968 was issued under Rule 10A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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