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TMI Blog1979 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... AND CELLULOSE LACQUERS. **** (5) Pigments, colours, paints and enamels not otherwise specified. Seven rupees per cwt. if sold by weight ; Two rupees per imperial gallon if sold by volume." There are subsequent amendments and Item 14D was inserted in 1961 and it was amended in 1962 which reads as under : "14D. Synthetic Organic Dyestuffs (including pigment dyestuffs) and synthetic organic derivatives used in any dyeing process. Fifteen per cent ad valorem." By Finance Act, 1964 certain additions were made to the First Schedule and Item 4A was inserted which reads as under : "14. (4A) Dispersed Organic Pigments ordinarily used for the printing of textiles, whether in the form of powder, paste or in emulsions Two rupees and fifty naya paise per kilogram." The sub-item (5) of Tariff Item No. 14 is pigments, colours, paints and enamels, not otherwise specified and the basic rate of duty is Rs. 17.25 per quintal plus 20% of the basic duty chargeable as special excise. The rate in respect of Item No. 14I (4A) is Rs. 2.50 per Kilogram plus 20% of the basic duty chargeable as special excise. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more letter addressed by the petitioners on February 1, 1968, reiterating their earlier stand. 3. The Assistant Collector by a very cryptic order dated June 11, 1968 confirmed the demand notice holding that the Carbon Black is an organic pigment and Acron Black is manufactured out of Carbon Black and the same is liable for duty under Tariff Item No. 14(4A). The petitioners carried an appeal before the Collector of Central Excise against that order. During the pendency of the appeal, the petitioners addressed a letter dated July 14, 1969 to the Collector of Central Excise furnishing two reports of Mr. Clark, Chairman of the Colour Index Editorial Board and Prof. (Dr.) Sunthankar, Head of the Dyes and Intermediates Section, Department of Chemical Technology. Both these reports supported the claim of the petitioners that Carbon Black is an inorganic pigment. The petitioners also invited the attention of the Appellate Authority to a large number of text books of chemistry which are treated all over the world as authoritative and in which Carbon Black is treated as an inorganic pigment. The petitioners have also received a letter dated December 29, 1969 addressed by the Deputy Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lely on the report of the Deputy Chemist which nowhere indicates that Carbon Black is an organic Pigment. Mr. Thakker further submitted that Carbon Black in its scientific and technical meaning is recognised all over the world and by all international authorities as an organic substance and the Excise Authorities were clearly in error in overlooking this international opinion. The learned Counsel further submitted that even the popular meaning or the meaning attached to Carbon Black by those dealing in them, that is to say the trade, was that it is an inorganic pigment. It was urged that the expression Carbon Black should be considered in its ordinary parlance and in the commercial sense as understand by the trade circles. Mr. Thakker made a grievance that all the three authorities have dealt with the grievance of the petitioners in a very slipshod fashion and heavy financial liability is caused without any application of mind. Mr. Dalal, appearing on behalf of the respondents, on the other hand, submitted that the order passed by the Excise Authorities are correct and even if the other views is possible still the decision taken by the Excise Authorities should not be disturbed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and the Excise Authorities were clearly in error in treating as an organic pigment. The submission appears to be sound and deserves to be upheld. 7. In answer to this submission, Mr. Dalal submitted that the Appellate Authority has relied upon Chambers Technical Dictionary which the word has been defined as the base of all theoretical organic chemistry. The reliance by the learned Counsel on the entry in the Chamber's Technical Dictionary is clearly erroneous. The Carbon Black has been defined on page 183 as under : "Carbon Black (Chem.) Finely divided carbon by burning hydrocarbons 9 e.g, methane) in conditions where combustion is incomplete. Carbon black is widely used in the rubber, paint, plastics, ink, and other industries. It forms a very fine pigment containing up to 95% of carbon, giving a very intense black; prepared by burning natural gas and allowing the flame to impinge on to a cool surface." From this definition it is very difficult to conclude that it is an organic pigment. Mr. Dalal submitted that an organic substance is one which completely burns out while the inorganic substance is one where combustion is incomplete. It is difficult to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that save and except the report by the Deputy Chemist and Chief Chemist and the reliance on the Chamber's Technical Dictionary and on the book by Mooler, there were nothing before the Customs Authorities to conclude that scientific and technical meaning of the expression 'Carbon Black' is an organic pigment. As I pointed out hereinabove that the Deputy Chemist's report is totally silent on the point while the Chief Chemist's report is thoroughly worthless and the Chamber's Technical Dictionary does not support the cooclusion of the Appellate Authority. The Appellate Authority has clearly overlooked the vast material produced before it in the shape of authoritative reports and the opinions of experts on the subject. The Assistant Collector had not given a thought to the problem involved while the Appellate Authority has ignored the entire material on record and the Revisional Authority has passed a very cryptic order. In my judgment, the decision of the authorities below are clearly perverse and are not based on consideration of material on record. The orders suffer from non-application of mind to the evidence on record and it requires to be quashed in this proceeding. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute recourse should be had to the popular meaning; or the meaning attached by those dealing in the trade of the articles or the meaning given in ordinary parlance is also correct. The learned Counsel pointed out that it has been universally recognised and the contracts are entered into on that basis all over the world on the footing that Carbon Black is an inorganic pigment. The learned Counsel pointed out that the book 'Colour Index' which has been published by the Society of Dyers and Colourists, England and by the American Association of Textiles Chemists and Colourists is recognised as a standard authority all over the world, and in the commercial and trade circles. Relying upon the contents of this book the Carbon Black is treated as an inorganic pigment. Mr. Thakker then relied upon three decisions to support his submission that the popular expression must be taken into consideration to interpret the entry in the Schedule to the Excise Act. The first one is the decision of the Supreme Court reported in AIR 1977 Supreme Court 597 in the case of Dunlop India Ltd. v. Union of India and the reliance is placed upon the contents of paragraph 36 of the judgment which reads as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A). The submission is sound and deserves to be uphold. 11. In answer to the submission, Mr. Dalal submitted that the petitioners have not produced any material before the Customs Authorities to establish the popular meaning of the expression Carbon Black or in the sense in which it is understood in the trade circle. Mr. Dalal further submitted that even in these proceedings the petitioners have not produced affidavits of any persons dealing in this article in the market. It is true that the petitioners have not filed the affidavits of any person dealing in the product but the petitioners have relied upon Colour Index, a book which is universally recognised, and the entries in which are based on the customs and practice prevalent in the markets of various countries. Mr. Thakker is right in his submission that the entries in this book are gathered after consideration of the popular meaning of the expression and also the scientific meaning as understood by the trade in various markets. Mr. Dalal, in this connection, relied upon an unreported decision of the Division Bench of this Court in Appeal No. 12 of 1967. The learned Chief Justice Kantawala while delivering the judgment agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that Carbon Black is an organic pigment and their sudden change of opinion was not based on any substantial material. The submission of the learned Counsel that the Excise Authorities and so also the other taxing authorities have always treated Carbon Blacks and organic pigments separately is accurate and that would also indicate that the decision arrived at by the Excise Authorities was clearly perverse. In my judgment, this is a fit case in which this Court should interfere with the orders passed by the Excise Authorities and grant relief to the petitioners. 13. Accordingly, the petition succeeds and the rule is made absolute and the orders passed by the Excise Authorities on June 11, 1968, February 6, 1970 and September 30, 1974 being exhibits 'G', 'J' and 'L' are quashed and set aside. The petitioners are also entitled to refund of amount as claimed in prayer (c) of paragraph 44 of the petition. It is not necessary to quash the trade notice issued in the year 1974 as it is now well-settled that the trade notice has not force of law. In the circumstances of the case there will be no order as to costs. The respondent should refund the amount mentioned in prayer (c) of paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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