P.D. Mulye, J.
1. The petitioner M/s. Hind Syntex Ltd., which is a Company duly registered under the Companies Act, 1956, which has a factory in village Bibrod, district Dewas, where they are engaged in the manufacture of manmade yarns with different blends such as cellulosic spun fibre and non-cellulosic polyester waste. According to the petitioner the raw material for the above blended yarn is cellulosic fibre and non-cellulosic polyester waste; that the petitioner has been importing in India the non-cellulosic polyester waste as polyester waste through the Customs Department and that the petitioners have purchased the same polyester waste from the Indian Market. Further according to the petitioners, in order to keep the Industry running the petitioners decided to use non-cellulosic waste, the cost of which is considerably less than that on non-cellulosic fibre and thus started manufacturing yarn from the above waste by blending the same with cellulosic fibre by describing the product as 'non-cellulosic waste-cellulosic blended yarn'. In the said blended yarn, according to the petitioner, there is always predominance of cellulosic fibre.
2. Further according to the petitioners under mistake and impression that the said product was dutiable under Tariff Item 18(III)(ii), paid duty on the said blended yarn under the said sub-clause (ii) of Tariff Item 18 (III) from 4-11-83. Thereafter the petitioners came to know from other industries, namely M/s. Madhumilan Syntex (P.) Ltd., Biora and M/s. Rajasthan Syntex Ltd., Udaipur who are manufacturing identical yarn as the petitioners are manufacturing, that the said product was dutiable under sub-clause (i) of Tariff Item 18(111) and not under sub-clause (ii) of Tariff Item 18(111) and accordingly their classification had been approved provisionally by the proper authorities. Further, according to the petitioners they submitted the classification list of their product on 29-10-83 to the Superintendent, Central Excise, Range Dewas (Annexure-4). In the said classification list they claimed that their product would be dutiable under Tariff Item 18(III)(i) of the Central Excise Tariff as the product manufactured by them was a blend of Cellulosic fibre and non-cellulosic waste in which the cellulosic fibre predominates in weight.
3. The classification list was returned by the Superintendent, Central Excise, Range Dewas, as per Annexure-5 dated 8-11-83. The petitioners, therefore, sent a letter to the Superintendent, Central Excise, Dewas requesting him to forward the classification list to the Assistant Collector, Central Excise Division, Ujjain, who is the proper officer to approve or reject the classification list (Annexure-6). However, the Superintendent, Central Excise, Dewas, did not forward the said classification list to the Assistant Collector, Central Excise, Ujjain, deliberately, though he was duty bound and obliged to forward the same to the Assistant Collector, Central Excise, Ujjain.
4. The petitioners, therefore, submitted a classification list to the Assistant Collector, Central Excise, Ujjain, respondent No. 3 vide Annexure 7. The Assistant Collector, Central Excise, Ujjain, by his letter dated 7-2-84 as per Annexure-8 ordered that the product manufactured by the petitioners would fall under Tariff Item 18(III)(ii) and would attract duty at the rate of Rs. 9/- per Kg. as basic duty and 10 per cent special duty plus 15 per cent additional duty of the basic duty. By this petition filed under Article 226 of the Constitution of India the petitioners have challenged this order Annexure-8 dated 7-2-84 with a prayer to quash the same. Thus, according to the petitioners the rejection of the classification list filed by the petitioners is patently illegal and untenable, that respondent No. 3 has decided the matter of classification without considering the provisions of Tariff Item 18(111) and (IV) and the Notification No. 275/82 dated 13-11-82. Thus, he has acted illegally and without jurisdiction.
5. Further, according to the petitioners Tariff Item 18 deals with man-made fibre and yarn, which have been divided into four distinct and independent sub-items. No. 1 deals with man-made fibre other than mineral fibres; sub-item II deals with man-made filament yarn; sub-item III deals with cellulosic spun yarn and sub-item IV deals with non-cellulosic waste all sorts; that sub-item III of Tariff Item 18 has been divided into two parts ; (i) deals with spun yarn in which fibres of cellulosic origin predominates and not containing any fibre of non-cellulosic origin and (ii) deals with yarn in which fibres of cellulosic origin predominates but it contains man-made fibre of non-cellulosic origin. Therefore, according to the petitioners they mix some quantity of non-cellulosic waste falling under sub-item (IV) of Item 18 in the man-made fibre of cellulosic origin, but they do not mix any man-made fibre of non-cellulosic origin falling under sub-item I and, therefore, the petitioners are rightly entitled to claim clearance of their product under Clause (i) of sub-item (III) of Tariff Item 18 as the Assistant Collector of Customs has committed an error in not distinguishing between polyester waste and polyester fibre.
6. Further, according to the petitioners Clause (ii) of sub-item (iii) of Tariff Item 18 deals with cellulosic spun yarn containing man-made fibres of non-cellulosic origin, which is covered by sub-item I of Tariff Item 18 and not by sub-item IV of Tariff Item 18 and in view of this position the cellulosic spun yarn manufactured by the petitioners from man-made fibre of cellulosic origin (which predominates in weight) cannot be assessed under Clause (II) of sub-item III of Tariff Item 18 even if yarn is manufactured in admixture with some quantity of non-cellulosic waste falling under sub-item No. IV of Tariff Item 18. Therefore, the interpretation given by the Assistant Collector in his letter dated 7-2-84 (Annexure-8) is entirely incorrect and baseless as he has ignored the explanation attached to Tariff Item 18(111) which has to be read together and cannot be ignored. Thus the predominance in the product has to be judged in the light of the said explanation. Thus, in short the grievance of the petitioners has been that the impugned order passed by respondent No. 3 is violative of fundamental rights and the constitutional rights of the petitioners and that the same is illegal, void and without jurisdiction.
7. The respondents have contested the said petition on various grounds. According to them the socalled non-cellulosic polyester waste is nothing but waste of man-made fibre of non-cellulosic origin as admitted by the petitioners in their letter dated 28-2-84 (Annexure-Rl). Thus, according to the respondents the petitioners are utilising polyester fibre and not synthetic waste in the manufacture of their yarns. Therefore, the spun yarn can be manufactured only out of fibres. Even if non-cellulosic synthetic waste is used as a raw material it is to be converted into fibres and only out of these fibres yarn can be spun. Further, the tariff classification and the rates of duties depend not on the initial raw material used but on the contents of the yarn which can be nothing but fibres. Therefore, the tariff description of man-made yarns under Tariff Item 18(III)(i) and (II) allows for classification strictly on the basis of the fibre contents of the yarns; that the respondent No. 3 on 14-3-84 as per Annexure-R4 passed an order, which being speaking and reasoned one, the petitioners' remedy was to prefer an appeal with the Collector (Appeals) Central Excise, New Delhi. Thus, they having not availed of the alternative remedy, coupled with the fact that this being a disputed question of fact, the writ petition deserves to be dismissed.
8. Further, according to the respondents what the petitioners call synthetic waste is nothing but polyester fibre as would be clear From the contents of Annexure-Rl and Annexure-R2; that even assuming that the petitioner used non-cellulosic synthetic waste falling under T.I. 18(1V) as the initial raw material this has necessarily to be converted into fibre by process of mixing, blowing, cording, etc., before it can be used for spinning into yarn and the spun yarn can be manufactured only out of fibres. Thus they have prayed for the dismissal of the petition.
9. The learned counsel for the petitioners, after referring to Annexure-8, which is a letter dated 7-2-84 sent by the Assistant Collector, Central Excise, Ujjain to the petitioners submitted that in this letter it has been mentioned that:
'It cannot be denied that the waste of polyester fibre is nothing but polyester fibre which is a man-made fibre of non-cellulosic origin. T.I. 18(III)(i) covers cellulosic spun yarn not containing any man-made fibre of non-cellulosic origin. The yarn in question would certainly fall under T.I. 181II(ii) i.e. yarn in which man-made fibre of cellulosic origin predominates in weight and which also contains man-made fibre of non-cellulosic origin. Such yarn is presently assessed under Notification No. 75/82 dated 28-2-1982 at the rate of Rs. 9/-per Kg. as basic duty. This would also attract special duty at the rate of 10% and additional duty at the rate of 15% of the basic duty.'
The learned counsel for the petitioners, after referring to the said letter also submitted that in this letter it has further been mentioned that :
'The Superintendent, Central Excise, Range I Dewas has been directed to accept your classification list and submit the same to this office for further necessary action. It is obviovs that the Superintendent has returned the classification list to you for amendments by way of correct advice. However, it is your right to claim the classification and duty rates as desired by you and in case it is necessary to approve the classification or rates which are not in accordance with your claim then such different rates would be approved after giving you due opportunity to explain your stand, and by way of passing an appealable order. However, in view of your urgency for starting clearances pending final approval of classification list which is yet to be received from the Range I Dewas I permit you to clear the said yarn containing by weight man-made fibre of cellulosic origin 85% or 52% and waste of non-cellulosic fibre 15% or 48% at the rate of Rs. 9/- per kg. Basic duty pins special duty at the rate of 10% and additional duty at the rate of 15% of the basic duty under Notification No. 75/82 dated 28-2-82. The classification of such yarn would be under T.I. 18III(ii).'
9. The learned counsel, therefore, submitted that thus it would appear that this was just an interim permission and concession to the petitioners to clear their goods in view of the urgency expressed by them even prior to the receipt of their classification list by respondent No. 3. He, therefore, submitted that in compliance with the directions of respondent No. 3 in his letter dated 7-2-84 (Annexure-8) the respondent No. 4 submitted the classification list dated 29-10-83 of the petitioners to the respondent No. 3 with his comments. That the petitioners by their letter dated 21-2-84 (Annexure-R2) stated that they had explained their contentions before the respondent No. 3 and did not want any personal hearing and that they also requested for an appealable order in this case, and taking into consideration the submissions of the petitioners a formal order was passed by respondent No. 3 on 14-3-84 though the copy thereof was served on the petitioner on 31-5-84 after they had filed the present writ petition. The learned counsel did not dispute this fact that this is a speaking and well reasoned order against which the petitioners can prefer an appeal with the Collector (Appeals) Central Excise He also did not dispute that no appeal even thereafter has been filed by the petitioners.
10. However, the learned counsel for the petitioners further contended that the yarn in question about the classification of which the petitioners have raised a dispute has been claimed by them to be cellulosic spun yarn containing cellulosic fibre predominant in weight and non-cellulosic polyester waste. The socalled non-cellulosic waste is nothing but waste of man-made fibre of non-cellulosic origin. He further submitted that the petitioners have been purchasing polyester staple fibre which establishes that the material which they received under the name of 'synthetic waste' from abroad is nothing but polyester fibre. He, therefore, submitted that the spun yarn can be manufactured only out of fibres and even if non-cellulosic synthetic waste is used as an initial raw material it has necessarily to be converted into fibres and only out of these fibres yarn can be spun and such yarn would contain fibres only. He, therefore, submitted that the tariff classification and rates of duties depend not on the initial raw material used but the contents of the spun yarn which can be nothing but fibre. He, therefore, urged that the tariff description of the man-made yarns under T.I. 18(lII)(ii) allows classification strictly on the basis of the fibre contents of the yarn.
11. In order to appreciate this contention it would be useful to quote Item 18III of Schedule I :
'18. III. Cellulosic spun yarn : Yarn, in which man-made fibre of cellulosic origin predominates in weight and, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power-
(i) not containing, any man-made Six paise per countfibres of non-cellulosic origin. per Kilogram.(ii) containing man-made fibres of Eighteen rupees pernon-cellulosic origin. Kilogram.Explanation I.-'Count' means the size gray yarn (Excluding any sizing material) expressed in English Count.
Explanation II.-For multiple fold yarn, 'count' means the count of the basic single yarn.
Explanation III.-Where two or more of the following fibres, that is to say,
(a) man-made fibre of cellulosic origin;
(c) wool or acrylic fibre, or both;
(d) silk (including Bimlipatam) jute or mesta fibre);
(e) jute (including Bimlipatam);
(f) man-made fibre of noneellulosic (Jute or mesta origin, other than arcylic fibre; (fibre);
in any yarn are equal in weight, then, such one of those fibres, the predominance of which would render such yarn fall under that sub-item or Item (hereafter in this Explanation referred to as the applicable sub-item or Item), among the sub-items and Item Nos. 18-111, 18A, 18B, 18C, 18D, 18E, 18F-I and 18F-II, which, read with the relevant notification, if any, for the time being in force issued under the Central Excise Rules, 1944, involves the highest amount of duty, shall be deemed to be predominant in such yarn and accordingly such yarn shall be deemed to fall under the applicable, sub-item or Item, as the case may be.'
12. It is not in dispute that in determining the meaning or connotation of words and expressions describing an article or commodity, there is one principle fairly well settled which is that the words or expressions must be construed in the sense in which they are understood in the trade by the dealer and the consumer. It is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the Legislative intention when the Statute was enacted, as has been held in the decision reported in AIR 1979 S.C. 300 (Porritts & Spencer (Asia) Ltd. v. State of Haryana).
13. The dictionary meaning of 'yarn' is fibre, as of cotton, wool, silk, flax, spun and prepared for use in weaving, knitting etc. As the learned counsel for the petitioners frankly conceded that this Court cannot go into the question of facts in a writ petition, this Court is not called upon to decide whether the product of yarn manufactured by the petitioners is in fact covered by Item 18 III(i) or 18 III(ii) of the First Schedule.
14. It is also clear that Section 11A of the said Act is in substitution of Rule 10 of the Central Excise Rules. This section was introduced by the amending Act 25 of 1978 and became operative from 17th November, 1980. The term 'levy' appears to be wider in its import than the term 'assessment'. It may include both 'imposition' of a tax as well as 'assessment'. The term 'imposition' is generally used for the levy of a tax or duty by legislative provisions indicating the subjectmatter of the tax and the rates at which it has to be taxed. The terms 'assessment' on the other hand is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax or duty on account of particular goods or property.
15. Section 3, which is included in Chapter II of the said Act, relate to levy and collection of duty, under the heading 'Duties specified in the First Schedule to be levied'. Sub-section (3) of the said section provides that different tariff values any be fixed : (a) for different classes or descriptions of the same excisable goods ; or (b) for excisable goods of the same class or description (i) produced or manufactured by different classes of producers or manufacturers; or (ii) sold to different classes of buyers; Provided that in fixing different tariff values in respect of excisable goods falling under sub-clause (i) or sub-clause (ii), regard shall be had to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such goods. This makes it clear that different tariff values may be fixed for different classes or descriptions of the same excisable goods. Therefore, this is the charging section.
16. This section imposes the duty at the rates set forth in the Schedule on all excisable goods produced or manufactured in India. It does not lay down the stage at which the duty is to attach or the date with reference to which the rate has to be applied. This section impliedly also does not indicate that the rates of duty as in force on the date of manufacture or production is to be considered, for the reason that though excise duty is a tax on manufacture or production it need not necessarily be levied at the stage of manufacture or production and it may even be levied at the stage the excisable article reaches the retailer. The inference is further supported by Section 4 of the Act, which deals with the determination of the value for purposes of duty. The material point of time with reference to which the value is determined under that section is the time of removal of the article chargeable with duty from the factory and not the time when it is manufactured or produced. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, i.e. its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the Taxing Authority the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture, or production, is not lost. The manner of levy and collection of the duty is, however, left to be prescribed by Rules. This is the effect of the words 'there shall be levied and collected in such manner as may be prescribed' as they occur in Section 3.
17. However, the learned counsel for the petitioners relying upon a number of decisions submitted that though the petitioners had an alternative remedy of filing an appeal under Section 35 of the Act, this Court in exercise of the writ jurisdiction can still give a finding as to whether the yarn manufactured by the petitioner is covered by Item 18III(i) or (ii) as according to the learned counsel for the petitioners they are manufacturing the same type of yarn which is also manufactured by Madhumilan Syntex (P) Ltd., Indore which has also filed a similar petition. The facts of that case cannot be applied to the case of the petitioners as in that case the classification of their product was already approved under tariff Item 18 III(i) and it is only on the basis of the report of the Chemical Examiner of the samples taken that the authorities, immediately without giving any proper opportunity straight-way demanded the excess duty at a higher rate which is not the case here as admittedly the petitioners have been paying excess duty at the higher rate as their product has been classified as covered by Item 18 III(ii).
18 The expression 'predominance in weight' can have two different meanings one is that the fibre should be the major constituent of the fabric, that is, it should comprise more than 50 per cent of the weight of the fabric and the other is that it should be the single largest constituent of the fabric. The normal and logic approach in deciding such a question would be to consider whether a particular fibre constitutes the bulk of the fabric not whether it happens to be the single largest constituent irrespective of its quantum.
19. The word 'yarn' is neither defined in the Central Excise Act nor in the Rules. In the ordinary commercial sense the fibre in order to answer the description of yarn must have two characteristics. Firstly it should be a spun strand and secondly such strand should be primarily meant for use in weaving, knitting and rope making.
20. According to the learned counsel for the petitioners they mix some quantity of non-cellulosic waste falling under sub-item IV of Item No. 18 in the man-made fibre of cellulosic origin. But they do not mix any man-made fibre of non-cellulosic origin falling under subitem I and, therefore, they rightly claimed clearance of their said product under Clause (i) of sub-item III of T.I. 3 8. The learned counsel, therefore, submitted that the learned Assistant Collector has not distinguished between polyester waste and polyester fibre. Consequently, the cellulosic spun yarn manufactured by the petitioners from man-made fibre of cellulosic origin (which predominates in weight) cannot be assessed under Clause (ii) of sub-item in of T.I. 18 even if the yarn is manufactured in admixture with some quantity of non-cellulosic waste falling under sub-item No. IV of T.I. 18.
21. It is well settled that in interpreting a taxing statute one should bear in mind that it is to be construed strictly according to the plain words used therein. Section 3 of the Act, which is reproduced below, is quite clear on this point, as stated above :-
'Section 3. Duties specified in the First Schedule to be levied.-(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into and part of India as, and at the rates, set forth in the First Schedule :
Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured in a free trade zone and brought to any other place in India shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962) on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). Explanation /.-Where in respect of any such like goods any duty of customs leviable under the said Section 12 is leviable at different rates, then such duty shall, for the purpose of this proviso, be deemed to be leviable under the said Section 12 at the highest of those rates.
Explanation II.-In this proviso, 'Free Trade Zone' means the Kandla Free Trade Zone and the Santa Cruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(1 A) The provisions of Sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India, by or on behalf of Government, as they apply in respect of goods which are not produced or manufactured by Government.
(2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of leving the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and 'may alter any tariff values for the time being in force.
(3) Different tariff values may be fixed :-
(a) for different classes or descriptions of the same excisable goods; or
(b) for excisable goods of the same class or description;
(i) produced or manufactured by different classes of producers or manufacturers;
(ii) sold to different classes of buyers;
Provided that in fixing different tariff values in respect of excisable goods falling under sub-clause (i) or sub-clause (ii), regard shall be had to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such goods.'
22. Thus, it would appear that even according to the petitioners themselves the ingredients of the yarn manufactured by them are not in conformity with Item 18 III(i). It would further appear that when they had raised a dispute, they had made it clear to the Assistant Collector of Customs that they have not to make any other submission and that he should pass a speaking order which has been done in the present case. It was, therefore, necessary for the petitioners, in our opinion, to file an appeal against that order.
23. It appears that on knowing the fact that Madhumilan Syntex (P) Ltd. have filed a similar petition, they immediately rushed to this Court without caring to file an appeal against the order passed by the Assistant Collector of Central Excise. It was not disputed that the Assistant Collector had jurisdiction to make the classification. In fact when he had made a provisional assessment, it was for the petitioners to satisfy him that the yarn manufactured by them is covered by Item 18 III(i) and not Item 18 III(ii). Therefore, every case of misconstruction of law is not a case of' noncompliance with the provisions of law nor of excess of jurisdiction. The reason is that the jurisdiction to decide a matter imports a limited power to decide that matter incorrectly. Therefore, in the present case, in our opinion, considering the facts and circumstances of the case the remedy of writ is not available only on the ground of mere misconstruction of law. In a writ petition the High Court is not a Court of fact and is not entitled to assess the evidence or to sit in judgment on the findings of fact reached by the authorities. It is primarily for the authorities to investigate facts and reach findings relevant to the case.
24. It is no doubt true that assessment is a quasijudicial function and has to be determined or quantified in accordance with the express provisions of law. It is primarily for the authorities to determine the head or entry in the tariff schedule under which a particular commodity falls. If in the course of classifying, the authorities, adopt a construction which no reasonable person could adopt, that is, if the construction is perverse, then the Court is competent to interfere. If, however, there are two constructions which an entry could reasonably bear, and one of them which is in favour of the Revenue is adopted, in our opinion, the Court has no jurisdiction to interfere in a writ petition, merely because the other interpretation favourable to the subject appeals to the Court as the better one adopt because a Court dealing with a petition under Article 226 doe., ot sit in appeal over the decision of the authorities and, therefore, the correctness of the conclusion reached by these authorities on the application of the Tariff Item could not be challenged in a writ court.
25. If a taking provision is ambiguous and is reasonably capable of more than one interpretation, then certainly that interpretation which is more beneficial to the subject must be adopted. This is a well accepted rule of construction. But where the schedule Item itself provides the ingredients to classify the product, it is not for this court to interfere in the view taken by the Department. Whether a product could truly come under the description of a particular item would undoubtedly require some evidence to be taken at the leval of the taxing authorities, provided, however, there was an identifiable uniformity and determinate test by which the product could be distinctly classified.
26. It also now cannot be disputed that the Court's power to interfere with the classification fixed by the Department is not restricted to cases where a decision of the Department is totally perverse or such as no reasonable person could ever take but the Court could interfere if the conclusion arrived at is totally unreasonable, the decision is based on patent misconstruction of the entry when the findings of the Department as to whether the particular goods are covered by particular item in the excise tariff, are patently erroneous, that the decision is arrived at on the basis of irrelevant facts or irrelevant construction, that the decision is a result of ignoring relevant facts or relevant material though available on record and that when the decision discloses a wholly erroneous approach to the problem on the part of the Department.
27. In the present case, apart from the oral contentions of the petitioners, there is no material on record on the basis of which, as argued on their behalf, it could be inferred that their product falls under Item 18 III(i) and not under Item 18 III(ii). In fact after the provisional assessment was made the petitioners had the opportunity to satisfy and convince the authorities concerned by leading evidence to the effect that their product, though produced with the raw material of waste, in fact is covered by Item 18 III(i) The petitioners could get their sample analysed by an Expert and could also prove before the authorities concerned that they have been using non-cellulosic waste, the cost thereof being considerably less than that of non-cellulosic fibre and that thus they started manufacturing yarn from the above waste by blending the same with cellulosic fibre by describing the product as 'non`cellulosic waste cellulosic blended yarn'.
28. Thus, as a result of the aforesaid discussion we are of opinion that this is not a fit case in which the extraordinary powers under the writ jurisdiction deserve to be exercised. In the result this petition fails and is dismissed with no order as to costs. The amount of security after verification be returned to the petitioners.