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TMI Blog1991 (1) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... e of those articles and they were removing the said articles without payment of any duty. 2. The Superintendent of Central Excise visited the petitioner's factory on 30th March, 1973 and after ascertaining which articles were manufactured by the petitioner, wrote a letter to the petitioner on 30-6-1973 drawing their attention to the requirement of taking out a central excise licence for manufacturing those articles. On July 4, 1973, the petitioner wrote to the Superintendent that they were manufacturing solution administration sets, blood administration sets, blood donor sets, tubes and catheters and the basic raw materials used are PVC resin for tubes, catheters and sets. It also assured the Superintendent that it would apply for a licence in form L-4 immediately. The petitioner then applied for the licence and it was accordingly granted on 20-7-1973 for manufacturing solution administration sets, blood administration sets, tubes, catheters and blood donor sets of plastic. Thereafter the said licence has been renewed from year to year till 1977. The petitioner then applied for renewal of the licence for the years 1977 to 1979 on November 9, 1976. But it appears that it was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 68/71 dated May 29, 1971. 3. Though in the petition, the said show cause notice is challenged also on the ground that in absence of any change in the pattern of manufacture from 1973 till the date of the notice, the Assistant Collector had no basis whatsoever for changing his opinion and, therefore, could not have lawfully issued the show cause notice, that contention has been given up at the time of hearing of this petition. So also the learned Advocate General did not press the contention raised in the petition that because of the doctrine of promissory estoppel it should be held that the respondent cannot be permitted to change the classification of the said articles from Tariff Item No. 15A to Tariff Item No. 68. Only two contentions were pressed and they are: (1) The articles manufactured by the petitioner are articles made from plastic and as there is a specific entry being Tariff Item No. 15A covering such articles, they cannot justifiably be classified as "goods not elsewhere specified" and thus falling under Tariff Item No. 68 of the First Schedule to the Act and (2) Even if they are properly classifiable under Tariff Item No. 68, the respondent cannot recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods as falling under Tariff Item No. 15A. The petitioner was called upon to take out the manufacturing licence on the ground that the items manufactured by it were excisable goods falling under Tariff Item No. 15A. The department having thus classified the plastic administration sets as falling under a specific Entry cannot now turn round and say that they are properly classifiable under Tariff Item No. 68 merely because such a residuary Entry has now been inserted in the Schedule. It was submitted by him that if the goods in question can be brought under any of the specific Items mentioned in the Tariff, resort cannot be had to a residuary Item. He submitted that according to the department's own understanding and interpretation of Tariff Item No. 15A, the plastic sets manufactured by the petitioner were treated all along as covered by Tariff Item No. 15A till 1977 i.e. even after the introduction of Tariff Item No. 68 on 1-3-1975. He submitted that the tubes manufactured by the petitioner are nothing else but articles of plastic. When administration set is manufactured, what is done is adding catheter at one end and a needle at the other end of the tube. Aluminium clamp which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not amount to estoppe against operation of a statute. Therefore, it cannot be said that on this ground issuance of the impugned notice by the department is either unfair or bad in law. 7. In the case of Indian Metals Ferro Alloys Ltd. (supra), the Supreme Court, on merits, came to the conclusion that the transmission and lighting poles manufactured by the said company were correctly classifiable as falling under Item 26AA and, therefore, were rightly classified as such on earlier occasions when classification lists were submitted for approval by the department. After coming to that conclusion, the Supreme Court further held that since the poles manufactured by the said company were rightly classified under Tariff Item 26AA, the question of revising the classification cannot arise merely because Item 68 was introduced to bring into the tax net items not covered by the various items set out in the Schedule. It is further held that it does not and cannot affect the interpretation of the items enumerated in the Schedule. Ultimately, what is held by the Supreme Court in that case is that if an article is rightly classified as falling under a specific tariff item, then the said class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ministration sets. It has a specialised use and thus has a distinct name and use. It is, therefore, a different item. In our opinion, these articles can rightly be classified under Tariff Item No. 68. They maybe described as articles made from plastic material but they are not articles of plastic as contemplated by Tariff Item No. 15A. 9. As held by the Supreme Court in Geep Flashlight Industries Ltd. v. Union of India Ors. -1985 (22) E.L.T. 3, "articles made of plastic" means article made wholly of commodity commercially known as plastic and not articles made from plastics along with other material. The Supreme Court in that case has further pointed out that Tariff Item No. 15A(2) would include articles such as tubes, rods, sheets etc. of plastic materials which are really plastic materials in different shape and form. Applying the noscitur a sociis principle of interpretation, the Supreme Court in that case held that "articles made of plastic" means articles made wholly of commodity commercially known as plastics and not articles made from plastics along with other material. While interpreting an item in a taxing statute, the meaning which is generally given to it by a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the factory of the petitioner and taken samples of administration sets manufactured by it. Whatever information he wanted was supplied to him from time to time. Even by their letter dated 27-1-1977, the department had written to the petitioner that the administration sets and tubes manufactured by the petitioner were falling under Tariff Item No. 15A and, therefore, classification list to that effect should be filed by the petitioner. The petitioner was also called upon to disclose the method of process and the raw materials used by the petitioner in manufacturing those sets. He, therefore, submitted that this is not a case where it can be said that the petitioner had evaded payment of duty by reason of fraud, collusion or any wilful mis-statement or suppression of facts or that it had done so by contravening any of the provisions of the Rules with intent to evade payment of duty. It was submitted that the department can change the classification and on that basis recover excise duty only for a period of six months prior to the date of issuing the notice and for the period subsequent to the date of the notice and they cannot call upon the petitioner to pay duty right from 1-3-197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department had called for regarding the raw materials used and the method of production, the petitioner had made the same known to the department in 1973 itself as is evident by its letter dated July 4,1973, Annexure "B" to the petition. It is not the case of the department that thereafter any change in the process had been effected by the petitioner. It is, therefore, not possible to accept the contention that the petitioner had not supplied the relevant information called for by the department and that it had done so with an intention of evading payment of duty. Moreover, in the show cause notice itself we do not find a single averment to the effect that the petitioner had committed any fraud or had made any wilful mis-statement or suppressed any relevant fact. So also, it is not mentioned in the show cause notice that the petitioner had committed breach of any rule. For this reason also the contention raised by Mr. Naik deserves to be rejected. 12. In that view of the matter, we declare that the proviso to Rule 10 is not attracted in this case and, therefore, it will be open to the department to recover duty for a period of six months prior to the date of the notice and not ..... 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