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TMI Blog1981 (10) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty was levied on "electric insulation tapes'. On June 19, 1971, the Collector of Bombay issued a Trade Notice bearing No. 110 stating therein that "Electric insulation tape is a tape impregnated or coated with insulating compound used for covering joints in or open ends of electric wires and cables. Such tapes may have for packing, textiles cellulosic film or paper". 4. On June 9th, 1971, the partnership had addressed a letter to the Assistant Collector of Central Excise, Kalyan, giving details of the manufacture of the products and seeking advice as to whether the products attract excise duty under Tariff Item No. 59. The partnership concern received reply on June 16, 1971 that the query is receiving attention. On October 2, 1972, the Officers of the Preventive Branch of the Central Excise raided the factory premises of petitioner No. 1 Company at Worli and seized 40 Rolls of glass mica tapes valued at Rs. 720/- and 35 rolls of varnished fibreglass tapes valued at Rs. 1120/-. The raid was followed by show cause notice dated March 28th, 1973 received from the Assistant Collector, Bombay, calling upon the petitioners to show cause why action should not be taken for contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct varnished fibreglass tapes and glass mica tapes manufactured by the petitioners are impregnated or coated with the insulating compound, they are not exclusively used for covering joints in or open ends of the electric wires and cables. 6. Whether the product manufactured by the petitioners falls within Tariff Item No. 59 or not would be considered at a later stage and at present it would be appropriate to refer to the larger submission advanced by the learned Counsel. It was urged that the trade notice issued by the Collector was binding on the Department and if it is established that the product manufactured by petitioner No. 1 does not fall within the explanation provided by the notice, then it is not open for the adjudicating authority to take a contrary view. In other words, the submission is that the ambit of the entry will have to be regulated or artificially restricted by the adjudicating authority in view of the issuance of the trade notice. The submission was advanced by claiming that the assurance was given to the trade at large by the trade notice and the Department is estopped from claiming contrary in view of the doctrine of promissory estoppel. In my judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of the decision did not arise because the order under challenge was set aside on the ratio of the Supreme Court decision in the case of Orient Paper Mills Limited (supra). The reliance was then placed on the decision of the Single Judge in the case of Star Chemicals (Bombay) Limited v. Union of India and others reported in 1980 (6) E.L.T. 133. It is true that in paragraph 13 of the judgment, the learned Judge referred to the decision of the Gujarat High Court and held that the trade notice is binding on the Department. In my judgment, the observations made by the learned Single Judge in paragraph 13 of the judgment are clearly obiter. The learned Judge has found on merits in favour of the petitioners holding that rock phosphate whether in powder form or pebble form would be classifiable under Entry 35 of the Customs Tariff. Once having come to that conclusion, the learned Judge merely sought additional support by making reference to the argument based on the contents of the trade notice. The question as to the binding effect to the trade notice was not argued before the learned Judge and the obiter observations in paragraph 13 of the judgment cannot be considered as lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions make it clear that the contents of the trade notice cannot conclude the ambit of the tariff item. 10. Shri Hidaytullah then urges that the product manufactured by the petitioners i.e., varnished fibreglass tapes and glass mica tapes are not electric insulation tapes. It was urged that the tapes are not impregnated or coated with insulating compounds nor they are adhesive. The submission advanced by the learned Counsel is diametrically opposite to what was pleaded by the petitioners right from the inception. In answer to the show cause notice, the petitioner No. 1 gave reply on May 2, 1973 and this is what was claimed :- "Now though our product has fibreglass backing and is impregnated with varnish and backed by mica, these are not intended to be used and are never used for covering the open ends of joints or cables and wires, as required by the definition. Hence our products do not fall under purview of Central Excise Tariff.......... Our product cannot be considered as electrical insulation tape falling under Tariff item 59 because these tapes are never used for joining open ends of cables and wires." From this reply, it is crystal clear that the petitioners never de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is difficult to accept this submission. Shri Hidaytullah was unable to point out any authority to establish that the definition in the Chambers Dictionary should be taken as what is understood in the trade circles, about a particular product. Even assuming that the submission is correct, it is obvious that the product of the petitioners would be known as electrical insulation tape. It was urged that the tapes are not adhesive and are not used for covering joints of the wires. The submission is of no merit because the definition itself indicates that the tapes are frequently adhesive and are used for covering joints of the wires etc. The word "frequently" clearly establishes that there are certain tapes which are not adhesive and the word "etc." indicates that the only use is not for covering joints. It is not in dispute that the tapes manufactured by the petitioners are, in fact, used for covering joints in or open ends of electric wires and cables. In my judgment, the petitioners have miserably failed to establish that their product was not known in the trade circles as the electric insulation tapes. 13. The learned Counsel urged by relying upon some decisions of the Court th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me enquiry made by the partnership concern. The petitioners never made any enquiry from the Excise Officers at Bombay and, in my judgment, the provisions of Rule 9 are clearly attracted. Shri Chinai is also right in his submission that, in any event, the claim in the show cause notice would not be time-barred in view of the provisions of Rule 10A of the Rules. The submission of the petitioners that Rule 9 has no application as part of the claim in show cause notice was time barred has no merit and deserves to be repelled. 15. Finally, Shri Hidaytullah urged that imposition of penalty would cause an irreparable hardship to the petitioners and, therefore, the same should be set aside as the petitioners did not act mala fide at any stage. The Assistant Collector had imposed the penalty of Rs. 200/- and the fine of Rs. 400/- on the petitioners, while the appellate authority reduced the penalty to Rs. 50/- and the fine to Rs. 100/- only. The petitioners have undoubtedly contravened the provisions of the Act and the Rules and the imposition of penalty and fine cannot be set aside. The imposition of fine and penalty does not involve any moral turpitude and it is not open for the Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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