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Collector of Central Excise Vs. Oswal Agro Mills Limited - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)LC651Tri(Delhi)
AppellantCollector of Central Excise
RespondentOswal Agro Mills Limited
Excerpt:
1. m/s. oswal agro mills limited (hereinafter called the respondents) are the manufacturers of toilet soaps under their brand names "kalpa" and "oasis". regarding their product 'kalpa' the respondents filed classification list no. 46/82 operative from 25-6-1982 in form i under the provisions of rule 173b of the central excise rules, 1944 classifying the same under sub-item (1) of tariff item no. 15 of the first schedule to the central excises and salt act, 1944, chargeable to central excise duty at the rate of 5% ad valorem under notification no.170/79-c.e., dated 24-4-1979' (as amended).2. regarding their product 'oasis', they filed classification list no.9/81 in form i under rule 173b of the central excise rules, 1944 effective from 1-1-1982 classifying this product under sub-item (1).....
Judgment:
1. M/s. Oswal Agro Mills Limited (hereinafter called the respondents) are the manufacturers of Toilet Soaps under their brand names "Kalpa" and "Oasis". Regarding their product 'Kalpa' the respondents filed classification list No. 46/82 operative from 25-6-1982 in Form I under the provisions of Rule 173B of the Central Excise Rules, 1944 classifying the same under sub-Item (1) of Tariff Item No. 15 of the First Schedule to the Central Excises and Salt Act, 1944, chargeable to Central Excise duty at the rate of 5% ad valorem under Notification No.170/79-C.E., dated 24-4-1979' (as amended).

2. Regarding their product 'Oasis', they filed classification list No.9/81 in Form I under Rule 173B of the Central Excise Rules, 1944 effective from 1-1-1982 classifying this product under sub-item (1) of Tariff Item No. 15 of the First Schedule to the Central Excises and Salt Act, 1944. The Central Excise duty payable under the said classification list was shown as 5% ad valorem under Notification No.170/79-C.E., dated 24-4-1979.

3. M/s Oswal Agro Mills Limited, the respondents were, however, called upon vide letters C. No.. V (15) 30/2/81/3417 dated 28-3-1982 and C.No.V (15) 30/2/82/CL/l3804-6 dated 27-11-1982 to show cause to the Assistant Collector of Central Excise as to why their product 'Kalpa' and 'Oasis' soaps should not be classified under Tariff Item No. 15 (2) - "Other Sorts" on which central excise duty was payable @ 15% ad valorem under Notification No. 170/79-C.E., dated 24-4-1979 (as amended) 4. The respondents M/s. Oswal Agro Mills Limited filed written reply alleging therein that their product 'Kalpa' and 'Oasis' soap are household soaps and the scope of household soap is not limited to washing soap only. It has been alleged that 'Kalpa' and 'Oasis' soaps are toilet soaps and toilet soaps are household soaps and Tariff Item No. 15 (1) specifies the rate of duty for household soap and laundry soap. Further they alleged that Tariff Item No. 15(2) C.E.T. covers clinical soaps, soaps used exclusively in luxury hotels etc. They submitted that their product 'Kalpa' and 'Oasis' are all purpose soaps used for washing of clothes, utensils, floors, human-body etc.

5. The Assistant Collector of Central Excise, Ludhiana did not accept the contention of the party and decided that the toilet soaps manufactured by the respondents were correctly classifiable under Tariff Item No. 15 (2) C.E.T. and accordingly ordered modification of the classification lists submitted by the respondents.

6. Aggrieved by the said orders of the Assistant Collector of Central Excise C. No. V (15) 30/2/81/3417 dated 28-3-1982 and C. No. V (15) 30/2/82/CL/13804-6 dated 27-11-1982, the respondents preferred appeals before the Collector of Central Excise (Appeals) New Delhi, and produced some certificates from dealers in Soaps in support of their contentions that in trade parlance 'Kalpa' and 'Oasis' soaps are known as household soaps. The Collector (Appeals) New Delhi accepted the contention of the M/s. Oswal Agro Mills Limited and held that toilet soap is apparently household soap classifiable under Tariff Item No. 15 (1) C.E.T. and, accordingly, he set aside the orders passed by the Assistant Collector of Central Excise, Ludhiana and allowed the appeals.

7. Aggrieved by the said orders No. 7-CE/CHG/83 dated 21-1-1983 and No.311-CE/CHG/83 dated 5-10-1983 passed by the Collector of Central Excise (Appeals), New Delhi the appellants i.e. the Department preferred two appeals before this Tribunal. As common questions of law and fact are involved in both these appeals, so both these appeals are disposed of by this single order.

8. We have heard Shri A. K. Jain, S.D.R. for the department and Sarvashri Soli Sorabjee, Sr. Advocate assisted by A.K.S. Bedi and Rajiv Datta Advocates for the respondents and have gone through the record.

9. The dispute is whether the toilet soaps manufactured by the respondents under brand names 'Kalpa' & 'Oasis' are classifiable under Tariff Item No. 15 (1)CET-"Soap, Household and Laundry" or under Tariff Item No. 15 (2) CET-'Other Sorts'? 10. Shri A.K. Jain the learned S.D.R. drew our attention towards the legislative history of Tariff Item 15-CET. According to him, this Tariff Item 15 'soap' was added to the First Schedule to the Central Excises and Salt Act, 1944 as early as 28-2-1954. Further changes were made in the definition of soap in the Finance Act, 1955 and 1964. In the tariff of 1955, soap, household and laundry was under sub-item (1) of Item 15 CET whereas 'toilet soap' was under sub-item (2), showing thereby household and laundry soap was a distinct and different product from toilet soap.

11. In the year 1964, sub-item (2) 'Toilet' was omitted and it was merged with sub-item 'Other sorts'. The sub-item of soap, household and laundry remained as before. Shri Jain took us to the explanation appended to the Finance Bill, 1964, extract of which the appellant has given in the memorandum of appeal as under :- "The tariff item relating to the power operated sector is being amended to provide for two rates of duty, one for all types and sizes of household and laundry soap and other for the remaining varieties including toilet soap." As per the submission of Shri Jain, the intention of the legislature throughout was to keep toilet soap separate from household soap and that is why toilet soap was mentioned in a separate sub-item pf the tariff entry in the year 1955. According to Shri Jain, the tariff description of soap, household and laundry includes all forms of soap ordinarily employed in any process of washing other than the toilet of the human body. Household and laundry soap includes not only soap intended for washing of garments but also for washing of floor and utensils etc. Household and laundry soaps are produced not only in the form of cakes but in the form of chips and flakes etc. and that is why in the explanation of the Finance Bill, 1964, the words 'all types and sizes of household and laundry' soap have been used.

12. The tariff description toilet soap had a different connotation and included all forms of soap ordinarily employed in the use of the toilet of the human body. Till 1973, even liquid soap, perfumed shaving sticks and cakes were assessed as toilet soap under Tariff Item No. 15 (I) (2) Other Sorts. It was only in the Finance Act, 1973 that the scope of Tariff Item 14 F "Cosmetics and Toilet Preparations" was enlarged to include Shaving Creams whether or not containing soap or detergent.

13. Shri Jain took us through the Budget instructions of the year 1964 which are available at page 31 of the Paper book. According to the Budget Instructions, the rate of duty on household and laundry soap continued to be Rs. 18/- per quintal as earlier but toilet soap which was having higher rate of duty was merged in the other variety of soap in the slab of higher rate of duty. According to Shri Jain, the Budget Instructions indicate the intention of the Legislature that toilet soap have been kept separate from household and laundry soaps. According to him, these Budget Instructions are admissible under the rule of Contemporanea-expositio. He cited a decision of Supreme Court reported in AIR 1981 S.C. 1982 (K.P. Verghese v. I.T.O.) in support of his contention. He also drew our attention towards the speech made by Dy.

Prime Minister and Minister of Finance on 28-2-1979 while piloting the Finance Bill of the year 1979-80. A perusal of this speech shows that a distinction has been drawn between household soap and toilet soap.

According to him, from the very beginning, 'household and laundry' soap is different from the 'toilet' soap. 'Kalpa' and 'Oasis' soaps are toilet soaps and are different from household and laundry soaps and, therefore, their correct classification is under Tariff Item 15 (2) C.E.T. and not under Tariff Item 15(1) C.E.T. He also pointed out from various technical literature that "household and laundry' soap does not include 'toilet'soap. In "The Wealth of India"-a dictionary of Indian raw materials and industrial products published by the Directorate of Publications and Information, New Delhi, toilet soaps and household soaps have been described as distinct and different products. Toilet soap in any one of its forms has to be of high quality and mild on skin as it is used for personal cleaning whereas household soaps have been described to comprise of various types of laundry soaps available in various forms of bars, cakes, chips, flakes, powder etc. Another technical literature "Soaps-Their CHEMISTRY AND TECHNOLOGY" written by J.G. Kane published by the Indian Central Oil Seeds Committee also shows that laundry and household soaps are distinct and different from toilet soaps. In the technical book "SOAP " published by Inter Science Publishers, Inc. New York, household and laundry soaps have been shown as different and distinct product from toilet soap.

14. Shri Jain pointed out that the popular toilet soaps available in the market viz. (1) Lux (2) Hamam, (3) Rexona, (4) Godrej and (5) Cinthol are being classified under Tariff Item No. 15 (2) C.E.T.'Kalpa' and 'Oasis' being toilet soaps are also classifiable under Tariff Item No. 15 (2) C.E.T. Shri Jain wanted to produce some certificates from certain dealers in soaps in support of his contention that household and laundry soaps are used only for washing and laundry purposes or for cleaning of household articles and floors etc. 'Kalpa' and 'Oasis' soaps being toilet soaps do not fall under the category of household and laundry soap. However, the production of these certificates at this late stage, when the matter was part heard, was not allowed.

15. Shri A.K.S. Bedi, Advocate who opened the arguments on behalf of the respondents drew our attention towards the Tariff Entry No. 15(1) C.E.T. which reads as under :- According to Shri Bedi, household and laundry soap are two different varieties, of soap and the word AND used in this tariff item is not conjunctive but it is disjunctive. The word AND has joined two dis-similar words and under Taxing Statute the word AND separates the two different products. He drew our attention towards Tariff Item Nos.

14F, 22F, 23A, 29A and 32 C.E.T. in support of his contention that the use of the word AND has been made to join two different and distinct products. According to Shri Bedi, in Tariff Item 15 (1) the use of the word AND shows that household and laundry soap are different and distinct products and the word AND is disjunctive and not conjunctive.

He also pointed out that in Notification No. 19/84, household and laundry soaps have been shown differently because exemption was granted to laundry soap only and not to household soaps.

16. Shri Soli Sorabjee, Senior Advocate who supplemented the arguments of Shri Bedi submitted that the words of exclusion cannot be used while interpreting the tariff entry. According to him, in a taxing Statute there is no room for any intendment but regard must be had to the clear meaning of the words. According to him, the Tariff Item 15 (1) C.E.T.clearly lays down that household and laundry soaps are two different products. 'Kalpa' and 'Oasis' soap in commercial parlance, are household soaps and the scope of household soap is not limited to washing soap only. According to Shri Soli Sorabjee, in the absence of any word of limitation, the term should be given full scope and, therefore, the products 'Kalpa' and 'Oasis' soaps manufactured by the respondents should fall under household soaps and classifiable under Tariff Item No. 15 (1) C.E.T. He drew our attention towards some certificates produced from dealers of soaps in support of his contention that 'Kalpa' and 'Oasis' soaps are used for household purposes and they are generally known as household soaps. Drawing our attention towards the Dictionary meaning of the word 'Household', he pointed out that Household means pertaining to the house and the family. 'Kalpa' and 'Oasis' soap are used for bathing purposes in the house by the family and, therefore, they are household soaps falling under Tariff Item No. 15(1)-C.E.T. He cited a decision of Supreme Court M/s. Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise, Surat [AIR 1970 S.C. 755] in support of his contention that the words of exclusion cannot be used while interpreting the tariff entry.

According to him the findings of the Assistant Collector that the terms Household soap excludes the toilet soap cannot be said to be legal and justified. Household soaps also include toilet soap.

17. The next submission made by Shri Soli Sorabjee, Senior Advocate is that, for purposes of interpretation of fiscal statute, if two interpretations are open, the one which is beneficial to the assessee should be adopted. Burden is always on the revenue to show and prove that a particular product is to be classified under a particular tariff item. In this case the revenue has not discharged the burden of proof by producing any evidence of commercial understanding in trade parlance that 'Kalpa' and 'Oasis' are not covered in the category of Household soap.

18. The next submission made by Shri Soli Sorabjee the learned advocate, is that the rule of contemporanea expositio cannot be made applicable in the present case because the approach to be adopted in construeing excise tariff is the principle of commercial understanding in trade parlance. It is the commercial understanding in trade parlance which prevails and there is no sense in applying the executive instructions when the evidence of commercial understanding in trade parlance is available. Referring to the decision of the Hon'ble Supreme Court in Verghese case (Supra) the learned advocate pointed out that ratio of that decision is not applicable in the present case. That case was under the Income-tax Act where the question of commercial understanding in trade parlance was not involved. According to Shri Soli Sorabjee the learned advocate, the Budget Instructions are in the shape of executive instructions and cannot be made applicable by invoking the rule of contemporanea expositio.

19. Regarding the speech of the Minister of Finance made by him on 28-2-1979 while piloting the Finance Bill, 1979-80, Shri Soli Sorabjee argued that the speeches made on the floor of the House cannot be made use of for interpreting a particular tariff item. He cited three decisions of the Hon'ble Supreme Court reported in AIR 1952 S.C. 369, AIR 1976 S.C. 10 and AIR 1973 S.C. 1214 in support of his contention that speeches made in the Legislature cannot be made use of for the purpose of interpreting statutory provisions.

20. The last submission made by Shri Soli Sorabjee is that in 'Encyclopaedia of Chemical Technology', Third Edition-Volume 21 by Kirk Othmer at Pages 178 and 179, toilet soaps have been shown to be household soaps. According to Mr. Soli Sorabjee, there are only two types of soaps-household soaps and non-household soaps. Bathing soaps i.e. toilet soaps like 'Kalpa' & 'Oasis' come within the purview of household soaps and the Collector (Appeals), New Delhi has rightly classified them under Tariff Item No. 15(1)-CET, as household soaps.

There is no justification for reversing the findings of the Collector (Appeals) which are based on merits of the case.

21. Whether the word 'and' used in the Tariff Item 15(1) appearing between the words 'household' and 'laundry' is conjunctive or disjunctive does not matter much in deciding the controversy before us.

Assuming that the word 'and' is not conjunctive but is disjunctive as alleged by the respondents, we have to find out whether the product 'Kalpa' and 'Oasis' soaps, manufactured by the respondents, which are admittedly toilet soaps used for bathing purposes, fall within the heading Household soaps or not 22. A perusal of the record shows and it is also not disputed that as per Finance Act, 1955, the Tariff Item 15-CET was as under :- This tariff item shows that soap, household and laundry was put in a separate sub-item (1) whereas toilet soap was put in another separate sub-item (2) meaning thereby the Legislature considered household soap as a distinct and different product from toilet soap.

"In Item No. 15, under "I" for sub-items (1), (2) & (3), the following sub-items shall be substituted, namely :-"(1) Soap, household and Eighteen rupees per Quintal, laundry.(2) Other Sorts.

Thirty-eight rupees per Quintal.

A perusal of this amendment shows that sub-item (1) Soap, household and laundry and sub-item (3) Other sorts were kept intact while sub-item (2) toilet was omitted.

In the memorandum explaining the provisions in the Finance Bill, 1964, which forms part of the Budget documents, it is stated that the 'existing' tariff (i.e. pre-existing tariff) has been rationalised and 'present' classifications (i.e. pre-existing classifications) have been reduced to 2. Earlier, there were 3 sub-classifications under sub-item (1) of Item 15, i.e. : The pre-existing classification of soap, household and laundry, was retained but with the sub-divisions being omitted. The sub-classificat on "toilet soap" was omitted. The third sub-classification "other sorts" of soap was retained. The clear implication, to our mind, in the absence of any indication to the contrary, is that the sub-classification of toilet soap got merged into and included in the sub-classification "other sorts" of soap. We say this because the sub-classification for household and laundry soap which is a specific description remained unchanged. That this was the correct position is supported by the Budget Speech of the Deputy Prime Minister who was also the Minister of Finance on 28-2-1979, while introducing the Finance Bill, 1979, in which he stated that excise duties would go up on household and laundry soap from 5.25% to 20%, on low priced toilet soap from 10.5% to 15% and on high priced toilet soap from 15.75% to 20%. Thus the intention of the Legislature to differentiate between household and laundry soap on the one hand and toilet soap on the other can be clearly gathered.

23. Now the question arises whether it is permissible to look at the legislative history of Tariff Item 15, the explanatory memorandum to the Finance Bill, 1964, the Budget Speech of the Finance Minister in 1979 in order to ascertain the scope and coverage of the tariff entry and sub:entries and to arrive at a correct interpretation thereon. The appellant has invoked the rule of contemporenea exposition The rule of construction by reference to con-temporeneous document is a rule for interpreting the statue by reference to the exposition it has received from the contemporary authority, but such exposition must give way to plain and unambiguous language.

24. The Supreme Court in K.P. Verghese v. ITO-(AIR 1981 S.C. 1922) at Page 1932 stated as follows :- "The rule of construction by reference to contemporenea expositio is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. This rule has been succinctly and felicitously expressed in Crawford on Statutory Construction (1940 ed) where it is stated in paragraph 219 that 'administrative construction, (i.e.

contemporeneous construction placed by administrative or executive officers charged with executing a statute) generally should be clearly wrong before it is overturned, such a construction, commonly referred to as practical construction, although non-controlling, is nevertheless entitled to considerable weight; it is highly 'persuasive'. The validity of this rule was also recognised in Baleshwar Bagarti v. Bhagirathi Dass whereby Mookerjee, J. stated the rule in these terms : "It is a well-settled principle of interpretation that Courts in constructing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it." From these findings of the Hon'ble Supreme Court, it is clear that it is not only permissible to look at contemporary documents in order to ascertain the intent and meaning of words in the statute but they can be used as aids in arriving at a proper understanding of the statute.

The legislative history of Tariff Item 15 and the relevant documents concerning this Tariff Item 15 i.e. explanatory memorandum are relevant for interpretation of this tariff item on the basis of this rule of contemporenea expositio, because these documents do not do violence to the language of this tariff item.

25. The objection of the learned counsel of the respondents that the speech of the Finance Minister who piloted the Finance Bill for the year 1979-80, cannot be taken note of is also not tenable. No doubt, the speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision, but the speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the Legislature and the object and purpose for which the Legislation is enacted.

26. The Hon'ble Supreme Court in the case of K.P. Verghese (Supra) held that the speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. According to their Lordships, this is in accordance with the recent trend in juristic thought not only in Western Countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. The plea of the learned counsel of the respondents that the decision of K.P. Verghese case (Supra) cannot be made applicable in the present case concerning the interpretation of tariff item in Central Excises and Salt Act, is not tenable. Whether the findings are on a matter under the Income-tax Act or under the Central Excise Act, it shall be relevant and binding as far as this proposition of law is concerned that a speech made by the mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislature and the object and purpose for which the legislation is enacted. The decisions of the Supreme Court reported in AIR 1952 S.C.369, AIR 1973 S.C. 1214 and AIR 1976 S.C. 10, as cited by the learned counsel of the respondents do not help the respondents because it has not been laid down in any one of these decisions that the speech made by the mover of the Bill explaining the reasons for the introduction of the Bill cannot be referred to for the purpose of interpreting a statute.

27. A perusal of the speech made by the Minister of Finance while piloting the Finance Bill of 1979-80 shows that the Finance Minister had explained the reason as to why he wanted a change of duty in different varieties of soap i.e. household and laundry soap from 5.25% to 20% and on low priced toilet soap from 10.5% to 15% and on high priced toilet soap from 15.75% to 20%. From this speech of the Finance Minister, it is apparent that the legislature never intended that toilet soap should come within the ambit of household and laundry soap.

Household and laundry soap was always considered a distinct and different product from toilet soap.

28. The letters (incidently these letters are of a stereotyped nature) obtained by the respondents from various persons dealing in soap which are at Pages 8 to 11 in the Paper book supplied by the respondents to show that 'Kalpa' and 'Oasis' soaps are used for household purposes and are generally known as household soaps are not sufficient to hold that 'Kalpa' and 'Oasis' soaps, which are admittedly toilet soaps used for bathing purposes, can be included within the ambit of household soap.

In all the technical literature produced before us, household soaps and toilet soaps have been shown as distinct and different products. In the technical book "SOAPS-Their Chemistry and Technology" written by J.G.Kane, Department of Chemical Technology, University of Bombay, published by the Indian Central Oil Seeds Committee, the process of manufacture of toilet soaps and household soaps has been given and discussed separately. The book classifies toilet soaps in a category apart from household soaps, based on the end-use criterion. Similarly, in the other technical book "Soap Manufacture" published by Interscience Publishers, Inc., New York, the process of manufacture of household and laundry soaps and that of toilet soap has been given separately. It has been stated that settled soap for household for laundry purposes (not for toilet soap bases) should contain at least 30% of soaps non-susceptir-ble to electrolytes of types of coconut oil, palm kernel oil, or babassu fat. It shows that toilet soaps are quite distinct and different from household and laundry soap. The ordinary dictionary meaning of the word 'Household' cannot be adopted as a criterion for classifying toilet soap under the heading 'household and laundry soap'.

The dictionary meaning is a delusive guide. A dictionary gives various meanings. Therefore, words in the section of a statute are not to be interpreted by having these words in one hand and the dictionary in the other. The correct guide is the context and the trade meaning. Hon'ble Mr. Justice Tulzapurkar (whilst a Judge of Bombay High Court) in the leading case of Nirlon Synthetic v. Audim (Bombay High Court dated 30-4-1970 Misc. Petition 491/64) observed that Excise Act was enacted to raise revenue. For this purpose, substances should be classified according to the general usage and known denominations of trade. The principal concern of classification is how a product is known in trade parlance. The wrapper of Oasis soap describes it as a toilet soap and that of Kalpa soap as a Bath soap. This is a clear proof of the fact that in common parlance, trade and commercial understanding the products, 'Kalpa' and 'Oasis' soaps are known as toilet soaps which fact has also not been disputed by the respondents. As such, these soaps do not come within the purview of the heading "Soap, household and laundry".

29. The submission of the learned counsel of the respondents that in the "Encyclopedia of Chemical Technology (Third Edition) Volume 21 by Kirk Othmer" toilet soap has been shown under the heading of household soaps and as such household soaps include toilet soaps is also without force and cannot be accepted as correct. At page 179 of this book, a table containing different varieties of soaps has been given showing the quantity and value of shipments by all producers in 1977 for statistical purposes. It nowhere suggests that toilet soaps are to be classified under the heading 'household' being one and the same product. For statistical purposes, one may group different varieties of soap in any number of groups as has been done here by putting several items in a particular group but it does not mean that these products are intrinsically classifiable under that heading of the group. The purpose and rationale of statistical classification are not the same as those of tariff classification.

30. From wherever point of view we may approach the subject, there cannot be any doubt about the fact that household soaps and toilet soaps are two distinct and different products. Even in the Explanatory Notes contained in the C.C.C.N. (Customs Co-operation Council Nomenclature-an internationally adoped tariff nomenclature) under heading 34.01 household soaps and toilet soaps have been shown and described differently.

Regarding the submission of the learned counsel of the respondents that, in common parlance and trade understanding 'Kalpa' and 'Oasis' are household soaps as is evident from the various certificates produced by the respondent from the various dealers of the soaps, it has also no force in the circumstances of the present case. These certificates were not produced by the respondents before the Assistant Collector who decided the matter originally. It was for the first time that these certificates were produced before the Collector (Appeals).

These certificates are not in the shape of affidavits but are stereotype letters written by some dealers of Punjab mentioning that 'Kalpa' and 'Oasis' soaps are used for household purposes and are generally known as household soaps. No reliance can be pieced on such stereotype evidence produced for the first time before the Collector (Appeals) where the department had no opportunity to rebut the same.

Besides this, the certificates are from some dealers of Punjab only and not from consumers. A dealer cannot give a certificate regarding the use of any particular product. If a customer comes to him, he would not ask that dealer to give him a household soap or a non-household soap.

He would make a demand either for a bathing or laundry soap or for a washing soap. No evidence from any consumer has been placed on record to show and prove that in common parlance and trade understanding this product 'Kalpa' and 'Oasis' soaps are used for household purposes. The wrappers of Oasis and Kalpa soaps described them as toilet and bath soaps respectively. However, the dealer's letters produced by the respondents described them as household soaps. If these are indeed household soaps, there is no explanation forthcoming why the wrappers do not describe them as such. According to the respondent's contention before the Assistant Collector, as seen from the Asstt. Collector's Order-in-Original No. 7/CL/82, Kalpa soap is an all-purpose soap used for washing of clothes, utensils, floors, human body, etc. If Kalpa soap is, as claimed, such a versatile soap, one should have thought it would have been advertised as such and not merely as a bath soap. This claim was not made before us in the course of the hearing and it was admitted that Kalpa soap as well as Oasis soap are toilet soaps. The shift in the stand of the respondents is not without significance. The claim that Kalpa soap was an all-purpose soap was evidently so thin as to tax credulity and it was evidently for this good reason that this claim was not made before us. The mere fact that these soaps i.e.

'Kalpa' and 'Oasis' are used in the house for bathing purposes does not make them household soaps. They would still retain their identity as toilet soaps.

32. The Collector (Appeals) in both the appeals before us has gone wrong while holding that toilet soap is apparently household soap classifiable under T.I. No. 15(1). The findings should be on the basis of the established facts available on record and not on the basis of appearance. The Collector (Appeals) completely ignored the basic aspects and the most important material like legislative history of T.I. No. 15, Explanatory Memorandum to the Finance Bill, 1964 and technical literature before arriving at his conclusion.

33. Under these circumstances, we have got no other alternative but to set aside both orders of the Collector (Appeals) New Delhi No.7-CE/CHG/ 83, dated 26-3-1983 and No. 311-CE-CHG/83, dated 5-10-1983 and accept both these appeals filed by the Department and confirm both orders passed by the Asstt. Collector, Central Excise, Ludhiana.


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