1. The appellants M/s Reckitt Colman of India Limited are engaged in the manufacture of several products, including barleys of different composition, i. e. Pearl Barley, Purity Barley and Robinson's Patent Barley. These three items were brought under Tariff Item 1 B of the Central Excise Tariff with effect from 1-3-1969. But under notification No. 22/69-C.E., dated 1-3-1969 and No. 17/70-C.E., dated 1-3-1970 a general exemption had been granted by Government with reference to goods falling under Tariff Item 1 B, except those mentioned in the Schedule to the said notifications. Pearl barley was mentioned as one of the items in item 10 of the schedule to the notification. There is hence no dispute that it is dutiable. But the appellants had been clearing Purity Barley and Robinson's Patent Barley without observing excise formalities. When they submitted a fresh revised classification list on 19-6-1980, mentioning Pearl Barley as excisable, and the other two as non-excisable being exempted, the Assistant Collector of Central Excise under order dated 14-5-1981 approved of the classification. But subsequently the appellants received a show cause notice dated 25-7-1981 from the Collector of Central Excise, Calcutta as to why the order dated 14-5-1981 should not be set aside and why Purity barley as well as Robinson's Patent barley should not be classified as liable for excise duty under Tariff Item 1 B. After some correspondence the appellants submitted their reply. On adjudication the Collector under order dated 7-4-1984 set aside the order of the Assistant Collector and directed that Central Excise duty leviable on the said two goods mentioned above be demanded from the appellants. It is against the said order that the appeal has been preferred.
2. Sri Somnath Chatterjee, Advocate, assisted by Sri Jatin Ghosh and Sri M. M. Dua, Advocates, appeared for the appellants. Sri N. V.Raghavan Iyer, OSD appeared for the respondent Collector.
3. In respect of the impugned order of the Collector the appellants had filed a Writ Petition also in the Hon'ble High Court at Calcutta and had obtained interim orders against enforcement of the demand arising under the order of the Collector. In the circumstances it was ascertained from Sri Somnath Chatterjee when this appeal was taken up for hearing as to whether there was any order for stay of proceedings before this Tribunal. It was confirmed by him that there was no such order for stay of the present proceedings under any order of the High Court and that we may therefore proceed with the hearing of the appeal.
Accordingly, we have heard both sides on their respective submissions.
4. The show cause notice dated 25-7-1981 was issued under the provisions of Section 35 A (2) of the Central Excises and Salt Act. The said provision on the relevant date stood as follows : "35 A (2) : The Collector of Central Excise may, of his own motion or otherwise, call for and examine the record of any proceeding in which any decision or order has been passed under this Act or the Rules made thereunder by a Central Excise Officer subordinate to him (not being a decision or order passed on appeal tinder Section 35) for the purpose of satisfying himself as to the correctness, legality or propriety of such decision or order and may pass such orders thereon as he thinks fit " Sri Chatterjee contended that the show cause notice violated the provisions of Section 35 A (2) and hence the proceedings following the same were invalid on that ground itself. His contention was that under Section 35 A (2) the Collector may on his own motion call for and examine the record of any proceeding, in which any decision or order has been passed, for the purpose of satisfying himself as to the correctness, legality or propriety of such an order and therefore the basis for such a proceeding must be the material available in the record itself and nothing extraneous. He contended that in issuing the show cause notice in question the Collector had referred to, and relied upon, two reports of the Chemical Examiner which were not before the Asstt. Collector when he passed his approval order. Sri Chatterjee therefore contended that the show cause notice had been issued relying upon materials outside the record also and the same therefore violated provisions of Section 35 A (2). In support of his contention he relied upon two decisions of the Supreme Court which are - In repelling this contention Sri Raghavan Iyer relied upon the following two decisions of this Tribunal : 5. In AIR 1965 SC 1585 it was observed, in the majority Judgement of the Supreme Court, as follows at page 1589 : "There is no doubt that the revising authority may only call for the record of the order or proceeding and the record alone may be scrutinized for assessing the legality or propriety of an order or regularity of a proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional jurisdiction, if the revising authority is satisfied that the subordinate officer has committed illegality or impropriety in the order or irregularity in the proceeding, he cannot make or direct any further enquiry." This was in relation to Section 12(2) of the Madras General Sales Tax Act 9 of 1939 under which "the Deputy Commissioner may_call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him for the purposes of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding and may pass such order with respect thereto as he thinks fit." It may be thus seen that the said provision was similar to the provisions in Section 35 A (2) of the Central Excises and Salt Act as it stood at the relevant time. This majority opinion was subsequently affirmed in AIR 1968 SC 843 in which proceedings arose under the Bombay Sales Tax Act with reference to a similar provision. Thus in both these decisions the principle laid down was that in initiating proceedings the officer concerned may look into the materials available in the record only for ascertaining the correctness, legality or propriety of the order sought to be reviewed though in subsequently passing the order on review he could rely upon other materials also. In the circumstances the contention of Sri Raghavan Iyer, based on the observations of the decisions of this Tribunal cited supra, as if the Collector could look into further materials also than was available to the Asstt. Collector in the records before him at that time, may not be strictly correct.
6. As earlier noted, the contention of Sri Chatterjee is that in so far as the Collector purported to rely on the reports of the Chemical Examiner also in issuing the show cause notice, the said proceedings were not validly initiated. It is not in dispute that though test samples had been drawn and sent for chemical analysis the Assistant Collector had not waited for the receipt of the reports of the Chemical Examiner before he passed his order on 14-5-1981. Reference had been made to this fact in the show cause notice, where it had been observed as follows : "Meanwhile in order to expedite approval of the said classification list the Assistant Collector of Central Excise, Calcutta, X Division approved the said classification list on 14-5-1981." The show cause notice further refers to the fact that the reports of the Chemical Examiner were received subsequent to 14-5-1981. We feel that this very circumstance was sufficient to enable the Collector to initiate proceedings under Section 35 A (2) of the Act. On the materials that were available before the Assistant Collector no proper order on the classification list could have been passed by the Assistant Collector. Samples had been admittedly drawn of Purity Barley as well as Robinson's Patent Barley, evidently to ascertain the nature of the goods in order to come to a conclusion whether they fell under any one of the fourteen items mentioned in the schedule to the notification No. 17/70. Having done that, the Assistant Collector could not arrive at any conclusion on the said question without having the reports of the Chemical Examiner before him. When the Collector found, on the perusal of the records, that the order of the Asstt. Collector had been passed without the benefit of the test reports of the Chemical Examiner, that circumstance itself would be sufficient to enable the Collector to launch proceedings by way of a review show cause notice under the provisions of the Section 35 A (2) of the Act. Therefore, even if the Collector had made reference to the contents of the test reports (which were not before the Assistant. Collector when he passed his order), that circumstance would not vitiate the validity of the proceedings initiated by the Collector under his show cause notice.
Therfore we are satisfied that the submissions of Sri Chatterjee to the contrary are not acceptable and accordingly we overrule the same.
7. Sri Chatterjee contended that the two reports of the Chemical Examiner are both totally unacceptable and no reliance could be placed thereon for a decision of the dispute before us and that the reliance thereon by the Collector was not justified. He contended that the very Test Memos sent to the Chemical Examiner along with the test samples had been incorrectly prepared. He referred to the question under item 8 of the Test Memos, dated 27-4-1981 (one relating to a sample of Purity barley and the other relating to a sample of Robinson's Patent barley).
The said item 8 of the Test Memos reads as follows : "The sample is to be tested for determination whether the product is prepared with the basis of flour, of starch, of malt extract or of malted barley which by simply mixing with or boiling in milk or water can be used for making beverages, invalid foods, gruels, and foods specially prepared for feeding infants." Sri Chatterjee commented that the query in the above form was in the nature of a leading question and invited from the Chemical Examiner an answer which would be favourable to the department only. Sri Iyer on the other hand contended that the query had been properly formulated in order to elicit the necessary information that would be required for considering whether these two barleys fell within item 14 of the schedule to the notification No. 17/70 and the query in that form was not in the nature of a leading question.
8. As earlier mentioned, notification No. 17/70 exempted prepared or preserved foods falling under item 1 B other than those specified in the schedule thereto. Item 10 of the schedule read "Corn Flakes, Wheat Flakes, Pearl Barley, Oats and Beans." Item 14 read "Preparations with a basis of flour, of starch, or malt extract, or of malted barley, and milk foods, which by simply mixing with or boiling in milk or water, can be used for making beverages, invalid foods and gruels, whether or not containing cocoa but excluding baby foods, that is to say, foods specially prepared for feeding of infants." Evidently, the department was of the opinion that Purity Barley and Robinson's Patent Barley would be comprised in item 14 of the schedule to the notification and therefore wanted the opinion of the Chemical Examiner on that matter, including his opinion on the question whether these two could be called foods specially prepared for feeding of infants. Whenever the report of a technical expert is required for assisting the authority in question to decide a contested matter before him, it is but natural that the attention of the Technical Expert would be drawn to the particular matters on which opinion would be required from him. This is so since otherwise, in the absence of the attention of the Chemical Examiner being drawn to the particular matters on which his opinion would be required, his report may possibly omit to deal with those matters, in which event the opinion of expert would not be of any value for resolving the dispute by the concerned authority.
Therefore, we do not see any impropriety in the query in item 8 of the Test Memos having been formulated in the manner above noted. We do not agree with the contention that the query was in the form of a leading question and that itself was a defect in the preparation of the Test Memos.
9. Sri Iyer in this connection wanted to rely upon the reference (in the photostat copy of the classification list before us) to "Sl. No.14" (in handwriting) in column 9 opposite the entries relating to Robinson's Patent Barley and Purity Barley. We find that opposite these entries the words typed in column 9 are "exempted as per notification No. 17/70-C.E., dated 1-3-1979." Below this we find in manuscript the words "Sl. No. 14." Sri Iyer contended that the appellants themselves having thus made reference to sl. No. 14 in claiming the exemption under the notification, the authorities were justified in extracting the words in Sl. No. 14 in their query so as to arrive at a conclusion whether the further exemption provided in Sl. No. 14 would operate or not. But Sri Chatterjee contended that the typed words alone were entered by the appellants in submitting their classification list and that the manuscript writing (sl. No. 14) was not that of the appellants and evidently had been made by the authorities themselves. In support of this contention Sri Chatterjee showed us the office copy of the classification list in which the words in manuscript were not found. We are prepared, for purposes of this case, to accept this submission of Sri Chatterjee, since it would not have been necessary for the appellants to refer to Sl. No. 14 when they were claiming the general exemption for all articles under notification No. 17/70, except with regard to Pearl barley which alone was specifically mentioned in item 10 of the schedule to the notification.
10. But, for the reasons mentioned earlier, we are satisfied that no adverse inference need be drawn against the department on the basis of the manner in which the query in item 8 of the Test Memos had been formulated. Sri Iyer no doubt further contended that the Test Memos had been countersigned by the representative of the appellants also and therefore it would have been open to the appellants to object to 'the formulation of the query in item 8 and they not having done so no objection could be raised on that score at present. But as we find from the endorsement in the Test Memos the counter-signature on behalf of the appellants was only in confirmation of the drawn samples and its composition only. Further it does not appear to us to be proper to expect that the oppellants would be allowed to object to the manner in which the query was formulated in the Test Memos or to have had it varied to their choice.
11. Sri Chatterjee then contended that the test reports of the Chemical Examiner were extremely unsatisfactory and could be of no assistance at all in resolving the dispute before us. The reports read respectively as follows : "The sample is in the form of white powder based on starch (Barley powder) in original, air-tight unit container labelled as "Purity Indian Barley" for Infants and Invalids. The use of the material has been indicated as for Barley water, Barley gruel (after mixing with sugar, lime juice, salt or milk, etc., according to taste)'and for young infants (after mixing with sugar and milk). Thus it may be seen that the product is not specially prepared for use as a Baby food." Attention is invited to Board's letter M.F. (DRI) F. No. 182/6/72-CX. 3. dated 28-7-1975 giving a schedule, wherein Robinson's Patent barley and similar preparations are listed, under invalid foods and not as a baby food." "The sample is in the form of white powder based on starch (Barley powder) together with Calcium and Iron, packed in a original unit container labelled as "Robinson's Patent Barley" for Infants and Invalids. The use of the material has been indicated for use with milk (as a cooling drink together with flavour like lime and fruit juice and sugar) and as light diet (during stomach disorder, fever and other ailments and when fed to infants it should be mixed with milk and sugar). Thus it may be seen that the product is not specially prepared for use as a Baby food." Atttention is also invited to Board's letter MF (DR&I) F. No. 102/6/72-CX. 3 dated 28-7-1975 giving a schedule wherein Robinson's Patent barley and similar preparations are listed under invalid foods and not as baby food." (1) that the opinion in the first sentence is without disclosure of the grounds on which the said opinion was based; (2) that the observation in the second and third sentences were merely a repetition of what the Chemical Examiner had found on the tins; and (3) that the Chemical Examiner had made reference to a letter of the Board which had been issued in quite a different context and for quite a different purpose and would not have been relevant for the present dispute.
13. With reference to the third objection the appellants appear to have addressed the Collector who, under his letter dated 4-11-1981, sent a copy of the Ministry's letter (the correct number being 102/6/72-CX. 3, dated 28-7-1975). A copy of the said letter has been filed as pages 19 to 21 of the Paper Book II filed by the appellants. That letter proceeds on the basis that so far as Robinson's Patent barley is concerned the same was being treated as a food in connection with the Central Services (Medical Attendance) Rules, 1944 so as to constitute the same an inadmissible drug for purposes of reimbursement and therefore for purposes of Central Excise 'Jevy also the same practice may be followed, calling for information as to the existing practice in that connection. But as Sri Chatterjee rightly contends any such opinion expressed in the said letter would not be binding on the Collector as a Quasi Judicial Authority in determining the question of classification for purposes of levying duty under the Central Excises and Salt Act. But from the mere fact that the Chemical Examiner had drawn attention of the Collector to the said letter it cannot be said that the entire test report of the Chemical Examiner should be rejected as prejudiced.
14. As regards the second objection above noted it may be seen that one of the matters on which the Chemical Examiner was called upon to give his opinion was whether the test samples sent to him would be foods specially prepared for feeding infants. Therefore, in offering the opinion on that point he cannot be said to have been incorrect in referring to the material printed by the appellants themselves on their tins. Therefore, the second criticism above noted cannot be said to be valid.
15. No doubt the Chemical Examiner's reports as communicated to the Collector, (a copy of which had been given to the appellants when they required the same) did not contain details of the tests conducted by the Chemical Examiner for arriving at the composition of the goods. But Sri Iyer contends that the test reports need not contain details of all the tests done and the results obtained by each of the tests but that it would be sufficient if the Chemical Examiner indicates his final conclusions on the question referred to him. He contends that if the appellants were dissatisfied with the said opinion they could have asked for cross examination of the Chemical Examiner in order to obtain from him the details of the tests conducted by him and then cross examine him with reference to the correctness of his conclusions based on the test results. He points out that the appellants had not chosen to adopt such a course and had not asked for cross examination of the Chemical Examiner and in the absence of any such step by them their criticism about the omission of the Chemical Examiner to mention in his test report itself about the details of his test, is not valid. In this connection Sri Chatterjee no doubt points out that the appellants had asked for from the Collector, copies in full of the chemical examiner reports (under their letter dated 17-2-1981) and had under their subsequent letter dated 29-9-1981 asked for details of chemical analysis also. In reply to their first letter the Collector had sent the copy of the full report of the Chemical Examiner. Since the Collector had not before him the details of the tests or details of chemical analysis found on such tests he could not furnish such details to the appellants. In the circumstances, the Collector cannot be said to have withheld any information available with him, causing prejudice to the appellants. As pointed out by Sri Iyer the appellants had been furnished with all the information available with the Collector and if they were dissatisfied with the conclusion of the Chemical Examiner they could have availed of the opportunity to cross examine him to establish the unreliability of the final opinion expressed by him. But the appellants had failed to exercise any such option open to them.
Therefore, we have to proceed on the basis of the materials available to decide the dispute, rather than holding that the Collector was not entitled to draw any conclusion on the said materials available before him.
16. But Sri Chatterjee points out that the report of the Chemical Examiner could be acted upon only with reference to the factual details, if any, found by him on test and that his expression of opinion on the question of classification will have to be ignored. In this connection he relies upon the decision of the Gujarat High Court in Stadfast Paper Mills, v. Collector of Central Excise (1983 ELT 744).
It had been observed at page 751 as follows : "Here it should be recalled that the evidentiary value of the report of the Chemist lies only in so far as it suppliesjthe data obtained by him through the Chemical analysis. It is none of the functions of the Chemists to give an opinion as to whether the goods in question would be covered by a particular item of the tariff schedule".
But in the present instance it may be seen that the test reports of the Chemical Examiner (extracted earlier) do not contain his opinion as to the item of the Tariff Schedule within which the goods would fall or even the item of the Schedule to the notification No. 17/70 within which the goods would fall. The first part of his report contains the opinion based on his findings, the second part refers to the information he found on the unit container in which the goods were sold and the third part drew attention of the Collector to a letter of the Board which, according to him, would be relevant on the question whether the exclusion from item 14 of the schedule to the notification would be available. Therefore, in the present instance the Chemical Examiner cannot be said to have erred in the manner mentioned in the Judgement of the Gujarat High Court.
17. Another argument which we could take note of at this stage is that according to Sri Iyer the burden was, in the present instance, on the appellants to establish that they were entitled to the particular exemption claimed by them and the onus was therefore on them to discharge that burden in order to obtain relief. This was on the basis that the goods in question (Purity Barley and Robinson's Patent Barley) fell within item 14 of the schedule to the notification No. 17/70 and therefore if the appellants were to claim exemption, that could be only on the basis that they were foods specially prepared for feeding of infants. This is the basis on which the Collector had also proceeded in passing the impugned order. But Sri Chatterjee contends that in accordance with the normal rule the burden is always on the department to establish the classification of the goods and in the persent instance the classification being accepted by the department also to be under Tariff Item 1 B the appellants were entitled to the general exemption granted under notification No. 17/70, and therefore, it was for the department to establish that the two goods fell within item 14 of the schedule to the notification and not for the appellants to prove that the goods fell within the exemption mentioned in item 14. As earlier noted, the appellants do not appear to have mentioned this item 14 in submitting their classificatin list but had referred only to the general exemption under notification No. 17/70. Sri Chatterjee stated, in answer to a specific question, that in the present case the appellants were not claiming that the goods were not excisable at all but only that they were exempted under notification No. 17/70. In the absence of any concession on their part that the goods in question fell within item 14 of the schedule to the notification Sri Chatterjee is correct in his contention that the onus was on the department to establish that though the goods (falling under Tariff Item 1 B) were entitled to the general exemption under notification No. 17/70 they were liable to duty in view of the fact that they fell within item 14 of the schedule to the notification but not within the exemption mentioned in the said item 14. It is therefore on this basis that we have to consider that question for arriving at a proper decision. Sri Chatterjee further contended that even if, alternatively, it is to be held that the initial onus was on the part of the appellants to establish that the two goods in question were not liable for duty they must be deemed to have discharged their burden when the Assistant Collector accepted their contention and approved the classification, list filed by them and, thereafter, the burden was on the department only in the proceedings before the Collector to establish the contrary.
18. Sri Chatterjee contended that, the Purity Barley and Robinson's Patent Barley manufactured by the appellants were being cleared as non-dutiable articles ever since they were brought under Tariff Item 1 B and that the department was itself aware of the same and had permitted it and having so permitted the same for over fifteen years they couldjnot be allowed to suddenly change the stand when there were no change of circumstances. He further submitted that when the dutiability of these articles came up for consideration in another proceeding before the excise authorities they themselves accepted that these woarticles were exempted, though excisable, and in view of such a specific stand by the department itself in these earlier proceedings it was not open to the Collector to issue the review show cause notice or thereupon pass the order that he did.
19. In support of his contention above said he relied upon the decisions in In the first decision the Calcutta High Court had observed that the Customs Officers were bound by the earlier orders on assessment of the same goods of another party and could not change the assessment with reference to the subject goods at a later date. In the second decision the question at issue was the validity of the show cause notice the purport of which was at variance with an earlier order of the Appellate Collector. These judgments proceeded on the basis that once a finding is given by a superior authority on contentions raised before it, the same will be binding upon the subordinate authorities in subsequent proceedings. In the present instance it is not so much as any findings recorded by any superior authority that are relied upon by the appellants but the uniform course of conduct pursued by the department in allowing the clearance of the two goods in question as exempted from payment of duty till objection was taken by issue of the review show cause notice by the Collector. In the circumstances the ratio of the two decisions cited above would not strictly apply, as there has been no finding by any superior authority which would have to be followed by the Collector.
20. The proceedings before the Appellate Collector referred to in the second contention noted above was the order of the Appellate Collector under order-in-appeal No. 940/CAL/82, dated 14-10-1982. That dispute dealt with notification No. 71/78 and 80/80. The order therein proceeded on the basis that Purity Barley and Robinson's Patent Barley were not dutiable, being exempted. But that finding was not on any contention raised to the contrary but proceeded as if the fact was admitted. This was because, as already noted, the department itself had been permitting these two goods to be cleared without payment of duty, accepting them to be exempted from duty. Sri Chatterjee points out that even when an appeal was preferred against the said order to this Tribunal the grounds of appeal proceeded on the basis that Purity Barley and Robinson's Patent Barley were exempted though excisable. Sri Chatterjee contends that when this appeal was preferred by the very Collector who had passed the impugned order dated 7-4-1984 it was not open to that Collector to have issued a review show cause notice as if these two goods were not exempted.
21. The review show cause notice had been issued on 25-7-1981. The order of the Appellate Collector is dated 14-10-1982. But the earlier proceedings related to a period when admittedly the department itself had been permitting removal of Purity Barley and Robinson's Patent Barley as not dutiable, being exempted. Therefore, naturally, in the said proceedings, which related to a period prior to the issue of the review show(cause notice, the department could not alter its stand with reference to non-dutiability in relation to the applicability of notifications No. 71/78 and 80/80. That is why apparently in the appeal preferred to this Tribunal against the order of the Appellate Collector the department chose to adopt the same stands that the goods were exempted, though, in the meanwhile, the review show pause notice had been issued. It should also be noted that the order following the review show cause notice had been passed on-7-4-1984 only, long after the filing of the appeal against the order of the Appellate Collector.
Therefore, we see no inconsistency which would, for that reason, affect the validity of the order dated 7-4-1984.
22. Both sides are agreed that Purity Barley as well as Robinson's Patent Barley manufactured by the appellants, and sold in unit containers by them, fall within Tariff Item IB. As mentioned earlier, notification No. 17/70 exempted all goods falling under Tariff Item 1B except those specified in the schedule to the notification as items 1 to 14 thereof. While the appellants contend that the abovesaid two goods did not fall within any of the items 1 to 14 of the schedule to the notification, the case for the department is that they fall within item 14 of the schedule to the notification. The said item 14 reads as follows : "Preparations with a basis of flour, of starch, of malt extract, or of malted barley, and milk foods, which by simply mixing with, or boiling in, milk or water, can be used for making beverages, invalid foods and gruels, whether or not containing cocoa, but excluding baby foods, that is to say, foods specially prepared for feeding of infants." It is thus seen that this item 14 contained within itself an exemption with reference to infant foods. Sri Chetterjee contends that it had never been the claim of the appellants that the two goods in question were infant foods. That means the appellants do not put forward any claim for exemption within item 14 but deny the very applicability of item 14. Thus, both parties are agreed that the two goods in question are not infant foods. Therefore, the only dispute is as to whether the said two goods are covered by item 14 of the schedule to the notification No. 17/70. In so far as the notification exempts all goods falling within Tariff Item 1B, except those specified in the schedule to the notification, .;.it would be, in the present case, for the department to establish that the two goods fell within the description of item 14. It is therefore with this basis of approach that the dispute in the present case has to be studied.
23. It is in this connection that Sri Chatterjee points out that the learned Collector had approached the question from an entirely wrong angle since in the discussion portion of the order in paragraph 8 the Collector starts by observing that the moot point in the case is whether the said goods can be treated as Baby foods. Sri Chatterjee contends that this approach was totally wrong since it had never been the claim of the appellants that the two goods in question were baby foods and were therefore entitled to the exemption mentioned in item 14 of the notification. On the other hand, it had been already seen that the true dispute is whether the said two goods fall within item 14 at all.
24. After enumerating the point at issue in the manner abovestated the Collector in his order has proceeded to consider the materials available, mainly by way of the Chemical Examiner's reports. He had thereafter concluded that as the said reports established that the two goods in question were in the form of white powder based on starch (barley powder) and in addition Robinson's Patent Barley has Calcium and Iron also added thereto, both the goods fell within item 14 and were therefore dutiable as they were not further exempted as infant foods. Sri Chatterjee contends that the finding of the Chemical Examiner was itself not acceptable and in any event the further conclusion drawn by the Collector on the basis thereof was also incorrect.
25. As regards the Chemical Examiner's test reports the contention for the appellants is that the same were fallacious and not supported by any factual data obtained on analysis as to composition, etc., and therefore the said test reports were wholly valueless. On the other hand, the contention of Sri Iyer, as earlier noted, is that it was not obligatory on the part of the Chemical Examiner to incorporate in his report the details of the tests carried out by him or the results obtained on such tests regarding composition, etc., but that it was sufficient for him to indicate his conclusions based on the tests done by him and that if the appellants were dissatisfied with the said conclusions of the Chemical Examiner it was open to them to challenge the said conclusion and request for cross examination of the Chemical Examiner during adjudication. He has pointed out that in the absence of any such step by the appellants the conclusions staled by the Chemical Examiner were entitled to acceptance and were therefore rightly accepted by the Collector to draw his own further conclusions.
26. It is not denied that whenever any samples are drawn for purposes of chemical analysis the assessee had a right to challenge the report of the Chemical Examiner and to request for permission to cross examine the Chemical Examiner during the adjudication proceedings. Admittedly the appellants had not exercised this right in the present case. In their reply to the show cause notice they had challenged the correctness of the opinion expressed by the Chemical Examiner, mainly on the basis that no supporting data had been given by him as to how the opinion was arrived at. They had further contended that while the two goods in question contained starch, they were neither based on starch nor were preparations of starch. But even after taking such a stand they had not asked for permission to cross examine the Chemical Examiner. There-fore nothing has been elicited during adjudication as to why the conclusion of the Chemical Examiner, if otherwise found acceptable, should not be acted upon merely for the reason that the details of the tests carried out by him have not been furnished in his reports themselves.
27. As regards the constituents of Purity Barley as well as Robinson's Patent Barley they have been furnished by the appellants in their memorandum of appeal and no objection had been taken by the department to the facts so stated as to the composition. It is seen therefrom that Purity Barley as well as Robinson's Patent Barley consists of 70% to 80% volume by Volume Carbohydrates. Carbohydrates, as mentioned in the Glossary of Chemical Terms by Clifford A. Hampel and Gessner G. Hawley, include both simple compounds (sugars) and Polymers of these (starches and cellulose). The question therefore would be whether on the basis of the composition as given by the appellants themselves the two goods (Purity Barley and Robinson's Patent Barley) could be held to be preparations with a basis of starch (as held by the Collector) and thus falling within item 14 of the schedule to the notification No. 17/70.
The contention for the appellants is that there is a world of difference between preparations on the basis of starch or preparations based on starch and preparations containing starch or goods containing starch. The appellants contend that Purity Barley and Robinson's Patent Barley are neither preparations, nor based on starch. According to them they are merely goods containing starch, as barley itself contains starch and the powdered barley also naturally, therefore, contains starch.
28. But Sri Iyer contends that the word "preparations" (as used in item 14 of the schedule to the notification No. 17/70) would only mean an adaptation of the original commodity and need not mean it should contain something in addition to the original commodity. He further contends that the words "based on" do not mean "manufactured from". He contends that "based on starch" would only mean that starch is the principal ingredient of the goods. In this connection he relies upon the meaning of the word "basis" in the Chamber's Concise English Dictionary, Websters Lexicon Dictionary and Black's Law Dictionary. On the basis of these meanings he contends that "based on starch" would only mean that starch is the principal constituent or the principal component of the goods in question. He contends that 'in that view, even on the basis of the composition as given by the appellants themselves, starch would be the principal ingredient of both the goods in question and hence they would be based on starch. As earlier noted, his further contention is that the word "preparation" would only mean an adaptation of the original commodity to produce the commodity in question and in that sense the powdered barley would be a preparation of the original commodity. He therefore contends that both the goods satisfy the description of a preparation based on starch.
29. Sri Chatterjee no doubt contends that dictionary meanings are not to be preferred in decisions on excise matters. But that proposition would strictly apply when construing the words in a Tariff Item, which are to be understood as they are understood by the people in the trade rather than by way of the dictionary meaning. But what we are concerned with at present is not the meaning of the words in Tariff Item but the meaning of the words in the notification, especially the meaning of technical words such as "preparation", "based on starch", etc.
Therefore, it would not be proper to ignore the dictionary meaning in such a connection. No doubt if the common meaning attached to these words by the man in the trade would be different from the meaning given in the dictionaries that may be a relevant consideration. But no such meaning as given by the trade, different from the meaning given in the dictionaries, has been put forward on behalf of the appellants.
30. But Sri Chatterjee further contends that the word "starch" as used in item 14 of the schedule to the notification would refer to starch as a manufactured commodity and not to starch as a natural ingredient of any commodity. He drew our attention to the fact that starch as such is itself the subject matter of a separate Tariff Item (15C) of the Central Excise Tariff. He therefore contends that the "preparations with basis of starch" would refer to preparations in which starch as a manufactured commodity had been used. He contends that the said words cannot refer to Purity barley or Robinson's Patent barley which would at best be articles containing starch and would not be preparations with a basis of starch. In this connection Sri Chatterjee further pointed out that barley is mentioned as a cereal in IS: 2813-1970 as also in the Prevention of Food Adulteration Rules. In this connection he referred to the classification under the Explanatory Notes to the CCCN Chapter X as well as Chapter Note IIA of Chapter XL 31. We have carefully considered the submissions of both sides on the above matter. It is in this connection that a query was raised from the Bench whether the two goods in question could not be called preparations with a basis of flour. Flour as mentioned in IS : 9374-1979 would mean the final ground meal of grains. From IS : 1157-1957 (Indian Standard Specification for Barley Powder) it is seen that barley powder is comparatively a much finer material than the whole-meal barley flour. Therefore, the difference between barley powder and barley flour is only in the fineness and not in the essential constituents. There is no dispute that Purity Barley as well as Robinson's Patent Barley both essentially consist of barley powder, (calcium and iron being added to the same for production of Robinson's Patent Barley).
32. We take note of the fact that the words used in item 14 of the notification are "preparation with a basis of flour, of starch, etc.,".
Since in the said entry itself in the notification, flour is mentioned as distinct from starch, the two cannot be equated. We are of the opinion that Purity Barley should be considered as consisting of flour rather than starch. But even if flour is treated as starch, Purity Barley is not a preparation of either.
33. That is why the Bench had enquired during arguments whether these two goods would not fall within the description "preparation with a basis of flour". The answer of Sri Chatterjee at that stage was that the word "flour" in item 14 of the schedule to the notification would refer to wheat flour and, in any event, the words will refer to preparations with basis of flour and not commodities in the form of flour. We have also noted that in IS: 1157-1957 barley powder has been noted to be a comparatively much finer material than the whole-meal barley flour, such powder being manufactured by gradual reduction of barley grains, Pearl barley or barley grits in roller milling process similar to that employed in milling wheat to maida (or flour).
Therefore, the contention that the words "flour" used in item 14 of the schedule to the notification should be confined to wheat, flour only and not to any other flour (including barley flour) does not appeal to us. We have already noted that the difference between the powder and the flour is only in the degree of its fineness. In the circumstances it appears to us that Purity barley as well as Robinson's Patent barley could be properly described as "on the basis of flour" if not "on the basis of starch" as concluded by the Chemical Examiner and the Collector.
34. But then the further question is whether they could be further called preparations on the basis of flour. As mentioned earlier the contention for the department is that the word "preparations" would only mean the end result, giving rise to a product, and not necessarily to a product arrived at by way of a process of addition to the original material. But, in the context of the words used in item 14 this meaning does not appear to us to be appropriate. We feel so since flour itself is a product obtained by grinding the grain. If therefore the grain in the form of flour is itself to be treated as a preparation, then the words "preparation with a basis of flour" would appear to be a tautological repetition. Therefore, in the context of the use of the words in the notification it appears to us that "preparations" as used in the said item 14 would have to be a product prepared by addition, mixing or other such similar process to the original commodity in order to derive a new commodity. In that sense mere grinding of barley grain to prepare barley flour or barley powder (as in the case of Purity Baley) would not appear to us to amount to a preparation.
35. We are therefore satisfied that so far as Purity Barley is concerned (which consists of barley powder only) it would not fall within the description of "preparation with a basis of flour" as mentioned in item 14 of the schedule to the notification. But so far as the Robinson's Patent Barley is concerned this admittedly consists of barley powder to which calcium and iron had been added, the actual process not being disclosed. Therefore, this would appear to us to fall within the description of "preparation with a basis of flour" though not 'a preparation with a basis of starch" as held by the Collector. As earlier noted, the appellants do not claim Robinson's Patent Barley to be an infant food to qualify for exemption within item 14 of the schedule to the notification No. 17/70.
36. Therefore, on a careful consideration of the submissions on both sides we hold that the order of the Collector has to be upheld (for the reasons given earlier) in so far as it related to Robinson's Patent Barley but the same has to be set aside so far as it related to Purity Barley. The appeal is accordingly allowed in the above terms and order of the Collector modified with consequential relief.