1. These two appeals, originally Revision Applications to Government of India against order dated 6-6-1979 passed by the Appellate Collector of Central Excise and Customs, Bombay, primarily related to excisability of what the appellants describe as outer wrapper or outer casing of an Airconditioner and which the Department claims to be a cabinet for Airconditioners. The proceedings against the appellant are the outcome of inspection dated 10-9-1976 made by the Excise authorities in the factory premises of appellant M/s. Moosa Haji Patrawala. During investigation Shri Usman Ghani Moosa Patrawala, Managing Partner of appellant M/s. Moosa Haji Patrawala, inter alia, stated that in their classification list dated 7-7-1972 which was approved by the Supdt.
Central Excise on 17-8-1972 this appellant had declared the outer wrappers (outer casings) as non-excisable. It was also given out that these were supplied to M/s. Voltas Ltd. and M/s. National Airco Pvt.
Ltd. Statements of employees of these two manufacturers were also .recorded. After usual investigation show cause notice dated 10-2-1977 calling upon the two appellants and Messrs National Airco Pvt. Ltd. to show cause why penalty be not imposed for breach of several rules mentioned in the show cause notice and goods under seizure, i.e. 155 cabinets valued at Rs. 26,530/- be not confiscated and central excise duty on 1051 cabinets valued at Rs. 1,72,035/- be not recovered. The two appellants filed replies to the show cause notice, inter alia pleading that these wrappers or casings were not cabinets and taking up various other pleas. The Deputy Collector by his order dated 31st October, 1977 held that the so-called casings or wrappers were cabinets falling under Tariff Item 29-A(3) of the C.E.T. He did not impose any penalty against M/s. National Airco Pvt. Ltd. or appellant M/s. Voltas Ltd. as they were only buyers of cabinets. He also did not impose any penalty against the appellants M/s. Moosa Haji Patrawala as this appellant had acted only after approval of the classification list. He, however, ordered appropriation of a sum of Rs. 1,200/- towards 111 cabinets released to appellants M/s. Voltas on execution of bond-this appellant having failed to produce the cabinets in terms of the bond.
He also ordered confiscation of 33 cabinets seized from the premises of appellants M/s. Moosa Haji Patrawala with option to redeem the same on payment of Rs. 500/-. Similar order in respect of 13 cabinets seized from M/s. National Airco Pvt. Ltd. was also passed, but this manufacturer is not an appellant in these appeals. The Appellate Collector of Central Excise, Bombay, by his order dated 6-6-79 disposing of the two appeals filed by the present appellant set aside the confiscation and the related part of the order. He, however, held that the wrapper or casing was a cabinet and he upheld the findings of the Deputy Collector on this count. But for the modification in the Order relating to confiscation, he otherwise upheld the orders of the Deputy Collector. Aggrieved, appellants filed Revision Applications to Government of India which are now the appeals before us.
2. At the hearing it was given out that the point whether the above described product is an outer wrapper or casing of the airconditioner of a cabinet is of academic importance only so far as the appellants are concerned because if they be treated as excisable as cabinets, appellants M/s. Voltas Ltd. have been allowed to get set off of the duty paid on this item. This is what emerges from the order of the Appellate Collector of Central Excise also. Both the parties, however, were very eager to get a rinding from the Tribunal as to whether the said casing or wrapper is a cabinet within the meaning of Central Excise Tariff. It may be mentioned that under Notification No.80/62-C.E., dated 24-4-62 as amended, parts of refrigerating and airconditioning appliance, other than these mentioned in the Notification, are exempt from duty. Cabinet is Item (viii) specified in the notification. Thus, if the product in dispute be held as a cabinet, it would not be entitled to benefit of the exemption under the notification and if the finding be that it is not a cabinet, then it would be entitled to the exemption.
3. During arguments a sample of the product was shown to us.
Photographs of the same have also been filed. Three affidavits-one by Shri Rampal Sharma, working as Commercial Manager with M/s. Lloyds Sales Corporation, who are manufacturers of room airconditioners; second, from Shri Jagdish Sahjwani who is a partner of the firm Messrs National Agencies situated at 59 Mohamadali Road, Bombay, and carrying on the business of dealing in air-conditioners and third, Shri Bhupinder, Son of Shri Bupendrabhai Mahyavanshi who is an airconditioning mechanic, have been filed in evidence. These three affidavits would show that the wrapper or casing by those dealing with air-conditioners is not called a Cabinet. From these affidavits it would also appear that the article in question is called an outer wrapper. The affidavit of Shri Bhupinder also states that no article answering to the description of cabinet is required in airconditioner.
The appellants also rely on Brussels Tariff nomenclature, Section 16, Entry Nos. 84,12 and 84.15-Air-conditioning Machines-for their submission that there is no cabinet in air-conditioners. Catalogue of Voltas Crystal 1500 Model Room Airconditioner has also been filed to show that the entire airconditioner is fixed on a base plate as a chassis and covering is provided only as a protective cover and that it is not a cabinet. It has been urged that the airconditioner comes into existence without the cover and that the so-called cabinet is not an integral part of the same.
4. From the orders of the lower authorities it appears that they concluded that the aritcle is a cabinet primarily on its dictionary meaning. By our order dated 27-8-84 we called upon the appellants to produce evidence regarding the trade parlance of the subject goods. The department was also called upon to ascertain how these goods are being described and assessed by other manufacturers and time was granted to the parties till 15-11-1984. Ultimately, the case was heard on 13-2-1985. By this date, while the appellants had filed affidavits as mentioned above, the department had not filed the evidence and information called for by our order dated 27-8-1984. On this hearing, Shri Kunhikrishnan, representing the Respondents, informed us that communication had been addressed to the Collectors but no replies to the same had been received. He prayed for more time to place the necessary information before the Bench. It was felt that nearly six months' time had been granted for the purpose and if the department failed to collect the necessary information, they were themselves to blame for it. Further grant of time was considered unnecessary and this oral application was rejected. We proceeded to decide the appeal on the available material.
5. Shri Kunhikrishnan argued that applying the dictionary meaning there can be no doubt that the article is a cabinet. He further submitted that ordinary dictionary meaning should not be discarded just because it is in a dictionary. That would mean destroying the literal rule of interpretation. According to him, it is basic rule to rely upon ordinary dictionary meaning which should always prevail unless there are special reasons to justify departure. He argued that casing or wrapper is nothing but cabinet by another name and for the purpose he relied on dictionary meaning of the same given in Webster Dictionary.
About omission of cabinet in Brussels Tariff nomenclature notes under heading 84.12 Airconditioners and mention of the same on Refrigerators heading 84.15, he submitted that this special mention became necessary because there are refrigeration cabinets like the ice boxes, could storage furniture, etc., which are not parts of refrigerators. It was further submitted that there could be more than one casing or cabinet for an airconditioner one to secure or fix i.e. chassis and another to cover and protect. It was further urged that cabinets could be with sides open like TV cabinets, radio cabinets, where back and bottom covers arc separate from the cabinet. Shri Kunhikrishnan relied on the following : 6. It is well settled that scientific, technical or dictionary meanings should not be made basis for classifying tariff items as Parliament in enacting these does not use words which are applied to any particular Science or art. The words in Taxing statutes should be interpreted in their ordinary sense. When the matter is examined on this touch-stone, while the appellants have filed affidavits of persons dealing with the article in question, the Department has not placed any material on record to controvert these affidavits in spite of sufficient time having been granted for the purpose. Added to this, in BTN which has considerable persuasive value, we find that there is no mention of cabinet as a part of airconditioners. For the purposes of these appeals, it would, therefore, have to be held that the Department has failed to prove that the article in question in commercial or trade parlance is a cabinet. We hold accordingly.
7. It is, however, made clear that the findings given in these appeals that the article is not proved to be a cabinet is for want of adducing evidence by the Department. This would not preclude the Department from contending for a subsequent period that the article is a cabinet should they be able to substantiate this contention with requisite evidence.
With these observations, the appeal is allowed and the impugned order set aside with consequential relief, if any, admissible to the appellants.