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TMI Blog1984 (1) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... , any part of India as, and at the rates, set forth in the First Schedule. (1-A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government as they apply in respect of goods which are not produced or manufactured by Government. (2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force." (Rest omitted as not relevant for the purpose of this case). 2. Section 4 provides for valuation of excisable goods for the purpose of charging of duty of excise. 3. Tariff Item 17 of the First Schedule Prior to 16-3-1976, Item 17 reads as follows : "17. Paper:- Description of goods Rate of duty Paper, all sorts (including paste board, mill board, strawboard and card board) in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in any other manner) shall be deemed to be goods not specified in that Item." 7. The petitioner was being assessed to excise duty on poster paper under Item 17(2) from 16th March, 1976 and the petitioner never claimed that poster paper was totally exempt from levy of excise duty under Tariff Item 17. The petitioner states that it came to know in the third week of July, 1982 about the decision of the Gujarat High Court in Darshan Hosiery Works v. Union of India (1980 Excise Law Times 390) where the expression "not elsewhere specified" in Tariff Item No. 68 was interpreted, and that from the aforesaid decision, the petitioner learnt that the levy of excise duty on poster paper from 16-3-1976 to 18-6-1980 was not valid, and that the poster paper became liable to excise duty under Tariff Item 68 only from 19th June, 1980 after the introduction of the explanation to Tariff Item 68 by the Finance Act 2 of 1980. The petitioner submitted a classification list in Form I under Rule 173-B of the Central Excise Rules to the Asst. Collector of Central Excise, Rajahmaundry contending inter alia that under mistake of law, poster paper was included in Tariff Item 17(2), and that the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poster paper is totally exempt from levy of excise duty under Tariff Item 17 from 16-3-1976 to 18-6-1980, and that it became leviable to excise duty only after the introduction of the explanation to Item 68 in June, 1980. 11. On the other hand, the learned Central Government Standing Counsel contended that prior to 1976, poster paper was treated as writing paper falling under Tariff Item 17(3) and Excise duty was being levied accordingly on poster paper. After the amendment of Tariff Item 17 by Finance Act 2/76, poster paper was excluded from sub-item (1) of Item 17, but it falls under sub-item (2) of Item 17 which is a residuary item for all kinds of paper not covered by sub-item (1) of Item 17. He further submitted that the residuary Tariff Item 68 applies only to excisable goods which are not covered by items 1 to 67, and as poster paper falls under Tariff Item 17(2), the Tariff Item 68 does not apply to poster paper. 12. The contention raised on behalf of the petitioner is two-fold. The first is, that poster paper is totally exempted from levy of excise duty from 16-3-1976 to 18-6-1980 by virtue of the amendment of Tariff Item 17 by Finance Act 2 of 1976, and secondly, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 17 which is a residuary item and applying the rate of duty of 40% ad valorem. Poster paper is used mainly for commercial purposes and hence a higher rate of duty is sought to be imposed by including it in sub-item (2) and it could not have been the intention of Parliament to grant complete exemption to poster paper used for commercial purposes from the levy of excise duty. 14. Further, the residuary Item No. 68 applies to all goods not elsewhere specified and inasmuch as poster paper is covered by sub-item (2) of Item 17, it does not fall under Tariff Item 68. When the specific Item 17 relating to paper covers poster paper, the residuary Tariff Item 68 does not apply to paper covered by sub-items 1 and 2 of Item No. 17. 15. Further, under Section 37, power is given to the Central Government to make rules to carry into effect the purpose of the Act and also with regard to the particular matters mentioned in sub-section (2), clause (xvii) of Section 37(2) empowers the Government, to make rule providing for exempting any goods from the whole or any part of the duty imposed by this Act. Rule 8(1) of the Central Excise Rules, 1944 empowers the Central Government, by notification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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