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TMI Blog1988 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... a total value of Rs. 7,67,498.40 without payment of any duty under the Act. The Superintendent of Central Excise, Lakhimpur Kheri, issued notice to the respondent demanding Central Excise duty on carbon paper cleared during the aforesaid period under Section 11 -A of the Act. The respondent submitted a written reply stating that the notice was without jurisdiction because the respondent had taken out the Central Excise licence immediately on the direction of the department and it was only after February 28,1982 that the product was subjected to duty under sub-item (3) of Item 17 by the Central Excise Budget of 1982. In support of this contention, the respondent relied on Notification Nos. 107/82 and 69/82, both dated 28th February, 1982. It was contended that the carbon paper was a new item which was specified under sub-item (3) of Item 17 of C.E.T. According to the revenue, however, that the recasting of Tariff Item 17 in 1976 was irrelevant and that the carbon being akin to coated paper (one side or both side) was covered under sub-item (2) of Item 17 of the C.E.T. since 1976. The submission of the respondent was that sub-item (3) of Item 17 of the C.E.T. covering the carbon pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of Section 11A of the Act. In view of the fact that the Tribunal did not decide this question if we are persuaded to reject the revenue's contention in this appeal, the matter has to be remanded back to the Tribunal to decide this question as to limitation, as there is no decision of the Tribunal on this aspect of the matter. 3. Before the contentions are appreciated, it will be appropriate to refer to the position of Tariff Item 17 at three different phases, namely, in 1975, after the amendment in 1976 and after the further amendment to Item No. 17 by the Finance Act of 1982. Item No. 17 was amended with effect from 27th February, 1982 and two specific entries were added. These were (3) and (4). It is necessary to set out the position at different points of time. It was as follows : "Tariff Item 17 - Position in 1975 Item No. Description of goods Rate of duty 17. Paper, all sorts (including paste board, mill-board, straw-board and cardboard), in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power - Cigarette tissue(1) Rs. 3 per kg. Blotting, toilet, target, tissue other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a previous decision in Sai Giridhara Supply Co. v. Collector of Central Excise, Bombay (supra). There, the Tribunal had discussed the various aspects of the matter and felt itself bound by the decision of the Karnataka High Court to which reference will be made later. The Tribunal has referred to the observations of Buckley L.J. where the Lord Justice observed that once a precedent was held to be a binding one, then no deviation therefrom was permissible within the judicial polity except in the well accepted categories of cases enumerated in the judgment. Those contingencies, the Tribunal found, were not applicable to the facts of this case. 6. It is well-settled that in order to ascertain the correct meaning of a fiscal entry reference to a dictionary is apt to be a somewhat delusive guide, as it gives all the different shades of meaning. In the instant case, our attention was drawn to the extract from the Oxford English Dictionary, Volume III, page 436 where the meaning of the word "paper" has been given. It reads as follows : Paper (pei'per), sb. Also 4 papure, 4-6 papir, 5 papire, papyre, (paupire, 5-6 pauper, 5-7 papyr, 6 papre. [a. AF. papir = OF, Papier (= Pr. Papier, Cat. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, curt, or other defects, and must give a good impression on the copy paper. The coating must be hard enough not to smear in hot weather, but the exact degree of hardness depends upon the intended use, that is, whether the paper is designed as a pencil carbon, a typewriter carbon, or a one-time carbon. The amount of coating varies from a very thin coating used in making one-time carbons to a very heavy coating used in making high-grade typewriter carbons for multiple use. The latter, in which the paper may be reused upto 40 to 50 times, must have a coating of very high color value and the coating must be compounded so that only a small amount is transferred to the copy sheet. A simplified formula for a typewriter carbon would be as follows: Carnauba wax 34% Ozokerite 6% Beeswax 7% Petrolatum 6% Mineral Oil 25% Carbon black 13% Toners 6% Oleic acid 3% In the coating of carbon paper, the molten was mixture is applied to the paper at a temperature of about 200°F. Coating is done on a carbon paper coater which consists of an inking roll which is supplied with coating directly from a bath or from a heated fountain. The inking roll revolves in a direction opposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular trade, bearing in mind that particular word. Where, however, there is no evidence either way then the definition given and the meaning following from particular statute at particular time would be the decisive test. 10. In the famous Canadian case in King v. Planters Nut and Chocolate Company Limited (1951 C.LR. Ex. 122) Cameron J. observed that it is not botanist's conception as to what constitutes a fruit or vegetable... but rather what would ordinarily in matters of commerce in Canada be included there should be the guide. Similarly, this Court has held in Union of India and Anr. v. Delhi Cloth and General Mills Co. Ltd. [1977 (1) E.L.T. 199 (S.C.) AIR. 1963 S.C. 791 ] at page 794 para 12 that the view of the Indian Standard Institute as regards what is refined oil as known to the market in India must be preferred in the absence of any other reliable evidence. It must be emphasised in view of the arguments advanced in this case that the meaning should be as understood in the particular trade. In this case, we are construing not paper as such but a particular brand of paper with a meaning attributed to it. Sub-item (2) of Item 17 as was the position in 1976 paper referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding papers subjected to coating, impregnating etc.": If there is a market meaning or trade meaning of that kind of a paper that should be adhered to. In this case, there is no direct evidence how these peculiar goods are dealt with in the particular market dealing with those goods. But there is evidence how these are to be understood in the light of the specifications of the Indian Standard Institute which we have mentioned before. It is instructive to refer in this connection a passage of the Tribunal's decision in Kores (India) Ltd., Thane v. Collector of Central Excise, Thane (29 E.L.T. 627), where the Tribunal observed that on the point whether carbon paper is understood as a coated paper in trade, there is authority of the Indian Standards Institute's publication "Glossary of Terms used in Paper Trade and Industry" - IS : 4661. Therefore, understood in the accepted notion of construing entries of fiscal Statute not from a technical or scientific point of view but from the point of view of the people in the trade dealing with that particular type of goods and having regard to the evidence of the Indian Standard Institute and in the absence of any other evidence to the contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in the principles of law as prevailing in 1976 papers of all kinds including paper with coating and impregnating and the views of the Indian Standard Institute, would include carbon papers. 13. Learned counsel drew our attention to the decision of the Karnataka High Court in Khoday Industries Ltd. v. Union of India and Ors. [1986 (23) E.L.T. 337) where the learned Single Judge held that carbon paper is an article of stationery classifiable under Item 68 of the Central Excise Tariff and not under Item 17(2) as coated paper prior to its amendment with effect from 27th February, 1982. He took into account the Trade Notice No. 56/76 and Tariff Advice No. 5/76. The Trade Notice No. 56/76 issued by the Collector was based on the instructions issued by the Board as per Tariff Advice No. 5/76. Carbon paper was commercially recognised only as an article of stationery falling under Item 68 of the Central Excise Tariff and not under Item 17(2). This was in respect of the position as it stood prior to 1976 when paper did not include coated paper or impregnated paper. It appears from the said judgment of the High Court that the Trade Notice 56/76 was issued by the Collector on 2nd March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was there then there was no purpose for introducing two sub-items by the Finance Act of 1982. The Finance Minister, however, observed in his speech (extract of para 123 at page 38-39 of Part 'B' dated 27th February, 1982 as follows :"123. I also propose to rationalise and restructure the tariff relating to paper and paper boards, the primary objective being to exempt small scale paper converters from payment of excise duty and to release them from excise control. In order to recoup the consequent loss in revenue, I propose to raise the basic excise duty on industrial varieties of paper and paper boards by a small margin of 2 1/2 per cent ad valorem. However, certain converted papers of high value-added categories are proposed to be subject to basic excise duty at 32 1/2 per cent ad valorem. Similarly, specified articles made of paper and paper board are proposed to be brought within the purview of the tariff item but effectively restricting the levy to printed cartons and printed boxes." It appears that the Finance Minister was adding two items, one was 17(3) - carbon and other copying papers and the second was 17(4) - boxes, cartons, bags and other packing containers. He mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tariff Items relying on ISI specifications. There was authority of the Indian Standards Institute's publication "Glossary of Terms used in Paper Trade and Industry" - IS : 4661. In view of the facts as appeared in paragraph 14 of the Tribunal's judgment in Kores (India) Ltd., Thane v. Collector of Central Excise, Thane (supra), where the basis of the classifications of ISI in its specifications is explained, we are of the opinion that the carbon paper fell under Item 17(2) as it stood at the relevant period germane for this appeal, before 1982, and not in residuary Item No. 68 of C.E.T. 17. Learned Solicitor General submitted that this amendment so far as Item 17(3) was concerned was mere clarificatory and was introduced ex abundanti cautela. Our attention was drawn to the decision of this Court in Md. Qasim Larry, Factory Manager, Sasamusa Sugar Works v. Muhammad Samsuddin and Anr. (1964 7 S.C.R. 419), where the Court was concerned with the question whether the term "wages as defined by Section 2 (vi) of the Payment of Wages Act, 1936 including wages fixed in an industrial dispute between the employer and the employee. The question had to be answered in the light of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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