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TMI Blog1983 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, it is engaged in the manufacture of, inter alia, Cycle Dynamo Lighting Sets which can only be used on bicycles. The petitioner has alleged that after kerosene-fed lamp, specially manufactured for lighting purposes for bicycles, became obsolete, lighting requirements by Dynamo in cycles became very common and was an essential component of a bicycle and was the most convenient accepted mode of lighting arrangement for using a cycle at night. The petitioner has further stated that the Cycle Dynamo Lighting Set is an essential part of a cycle. The current energising the bulb in the lamp is generated by a Dynamo which works by friction carried by the spindle set rubbing against the side of the cycle tyre. To facilitate the rotation of the Dynamo, the cycle tyre itself is given a special reinforcement as there is considerable amount of wearing out of the wall of the cycle tyre by the operation of the Dynamo. It has been stated that the Cycle Dynamo Lighting Sets manufactured by the company is specially designed for bicycles and cannot be used for any other purpose. The Dynamo Set cannot be used even in a Motor Cycle as the speed of the wheel and consequently the spindle of the rotor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia under which "Cycles and Parts thereof" were incorporated in the Schedule annexed to the Notification No. 55/75-Central Excise dated 1st March, 1975. 6. The case of the Respondents is that the petitioner has always treated Cycle Dynamo Lighting Set as a bicycle accessory manufactured by it and did not offer the same for taxation under T.I. No. 35. It has been argued that therefore deletion of T.I. No. 35 will not be of any benefit to the petitioner. The Cycle Dynamo Lighting Sets manufactured by the petitioner are really accessories to cycles and are not eligible for exemption which has been granted to cycle and cycle parts only. 7. It has further been contended that the petitioner even after issue of the notification granting exemption to cycle and cycle parts from excise duty has been collecting excise duty on its products as cycle accessories from its customers regularly. The bills submitted by the petitioner to its customers including excise duty have been annexed to the affidavit-in-opposition in support of the case of the Respondents. It has further been contended that in any event, the petitioner has suppressed these facts in the petition and this writ petition shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be regarded as an accessory. Reliance was placed to the meaning of "accessory" given in the Websters Seventh New Collegiate Dictionary where the meaning of "accessory" has been given as under :- "(a) a thing of secondary or sub-ordinate importance; adjunct; (b) an object or device not essential in itself but adding to the beauty, convenience or effectiveness of something else." 12. Lastly, it was contended by Mr. Bajoria that the object behind granting the exemption of bicycle and cycle parts from excise duty was stated by the Finance Minister in his budget speech for the year 1980-81 in the following words :- "The cycles are the poor man's conveyance. I, therefore, propose to totally exempt cycles and cycle parts falling under Item 68 from excise duty." 123 I.T.R. 17, 29 (Statute). 13. The contention of Mr. Bajoria is that this should be liberally construed. The object was to lighten the burden of a poor man and to enable the poor man to acquire and use a bicycle at a cheap rate. If the contention of the Excise Department was correct, then all the lighting devices whether dynamo light or not will come within the mischief of the Excise Act. This will add to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly by a motorist. Can it be said that since it is sold separately, a bumper has ceased to be a part of a Motor Car ? This approach is wholly unsatisfactory. 17. In my opinion, none of the tests mentioned above is very satisfactory for the purpose of resolving the controversy that has arisen in this case. These tests have been applied in some cases in entirely different context of facts and law. In my opinion, the proper approach in a case like this will be to find out whether a Dynamo Lamp is regarded as a bicycle part by the people engaged in the business of manufacture and sale of bicycle and bicycle parts. The expression "Cycle and Parts of Cycles" should not be understood in any strict or technical sense. The words "Parts", "Accessories" and "Parts of Cycle" have not been defined or explained under the Statute. These words, therefore, must be understood in the popular and commercial sense. The Supreme Court has applied this test in several cases. 18. In the case of State of U P. and Anr. v. M/s. Kores (India) Ltd-AIR 1977 S.C. 132, the question that fell for determination was whether a typewriter ribbon was a part of the type-writer. That case was decided under the U.P. Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Council for the twenty-eight Bicycle Parts as annexed hereto" one of which is "Dynamo and the tail Light". 22. Engineering Export Promotion Council, India also in a letter dated July 30, 1973 informed the petitioners that a special feature display was being organised in the month of September on Bicycle and Bicycle components in the U.K. A list of items were given which had scope in the U.K. market. The list was as under :- 1. Bicycle Chains 1/2" x 1/8" - 112 - 114 Links. 2. Raching Chains 1/2" x 3/32" - 114 Links 3. Single and Multispeed Free Wheels. 4. Cranks 5. Radals - Reflector Type 6. Bells. 7. Dynamo Lighting Sets. 8. Caliper Brake Brake Shoes. 9. Hubs. 10. Rims. 11. Accessories It is significant to note that the accessories came under Item 11 and Dynamo Lighting Sets were not included in accessories but were shown as a separate item. 23. In the glossary of term used in the Bicycle Industry published by the Indian Standard Institution, Bicycle Dynamo has been mentioned under the head "Miscellaneous Components" along with, inter alia, saddle, stand, quarter chain guard, half chain guard, full chain guard and bicycle belt. 24. In the booklet, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty on Tariff Item No. 68 on the articles manufactured by the petitioner and not under Tariff Item No. 35. A large number of documents have been annexed to the petition showing that the Customs authorities as also the Excise authorities, from time to time, have treated the goods manufactured by the petitioner or similar goods manufactured or imported by others as bicycle parts. 27. It will, therefore, appear that the term "Cycle Parts" has been used broadly in the trade circle and also in the Government Departments. As has been noticed earlier, the term has also been broadly used so as to use Dynamo Lamps in various Government publications, notifications and circulars. There is nothing to indicate that the Government intended to depart from the sense in which the term has been used when the notification dated 1st March, 1979 was issued. 28. It must be borne in mind that in a taxing statute if two interpretations of a term are possible, the one more favourable to the tax payer must be preferred. I am, therefore, of the view that the expression "Cycle and Parts thereof" will include "Cycle Dynamo Lighting Sets" manufactured by the petitioner. 29. Mr. Bajoria in his usual fairne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax and Others v. Union Carbide India Ltd., Madras-38 Sales Tax Cases 198, the Kerala High Court held that the leakproof or drycell batteries could not be regarded as normally used only for transistors. Similarly, cinema are carbons also could not be regarded as normally used only for cinematographic projectors. The Kerala High Court held that the commodities were neither accessories nor parts. In deciding this case, the Kerala High Court referred to the judgment of the Supreme Court in the case of Commissioner of Sales Tax v. Jaswant Singh Charan Singh, AIR 1967 S.C. 1454 wherein it was held that "It is now well-settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them that is to say, to their commercial sense." 33. In my opinion, the decisions on the cases of Amkar Engineering Works v. Superintendent of Central Excise (1979) 4 Excise Law Times 145 and International Tractor Co. of India Ltd. v. Union of India and Others-(1977)1 Excise Law Times 133 do not throw any light on the controversy before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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