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Government of India Vs. English Electric Company of India Ltd., Madras - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtChennai High Court
Decided On
Case NumberW.A. 296 and 368 to 376 of 1978
Judge
Reported in1985(5)ECC182; 1985(21)ELT63(Mad)
ActsIndian Tariff Act, 1934; Central Excise Act, 1944
AppellantGovernment of India
RespondentEnglish Electric Company of India Ltd., Madras
Appellant AdvocateP. Narasimhan, Adv.
Respondent AdvocateC. Natarajan, Adv.
Cases ReferredUnion of India v. Tata Iron and Steel Co. Ltd.
Excerpt:
customs - tariff items--pvc coated periglass sleevings or silicon elastomer coated glass sleevings--do not fall within expression 'textile' in entry 53, indian tariff act--writs under constitution-classification of goods by departmental authorities--high court entitled to interfere if decision of authorities is based on erroneous considerations or on improper interpretation of statutory expressions--central excises and salt act (1 of 1944), schedule i, item 15a--constitution of india, article 226--indian tariff act (32 of 1934), schedule i, items 53, 72c, 73(1), 82(3), 87. - - 73(16) and (burma) 10parts thereof, not otherwise specified per centnamely :ad valorem--electrical control gear and transmission of gear, namely, switches (excluding switch boards) fuses and current breaking..........of years is expressed in pounds for any given yarn. the fibre glass fibres of the owens - corning fibreglass co. are made standard diameters from 00,00028 to 0,008 in staple glass fibres is usually from woven on regular textile machines. fibre glass yarns are marked in various sizes and toists in continuous or staple fibres, and with glass compositions varied to suit chemical or electrical requirements. vitron yarn of glass fibres, inc. is a piled low twist yarn for braided insulation for wire. glass sewing thread has a high twist. the minimum breaking strength of the 0.0014 in. thread is 12 lb.' in employment of textiles, 2nd edn. at page 40, this is what is stated about glass fibres - 'a group of textile fibres and yarns is made of glass. the reason they are pliable and can be woven.....
Judgment:

1. These appeals are directed against the judgment of Mohan J. allowing a batch of writ petitions and remitting the cases for fresh consideration of the question as to whether the items manufactured by the respondent-company such as PVC coated periglass sleevings or silicon elastomer coated glass sleevings will fall within Items 72-C, 73(1) or 87 of the Indian Customs Tariff.

2. The facts which are not in dispute are these : The respondent in these appeals imported Periglass Sleevings or Silicon elastomer coated glass sleevings against invoices of the English Electric Co. Ltd. Stafford, United Kingdom. The goods were styled as raw materials and components by the shippers and were to be of a particular specification. They were assessed at the point of clearance for home consumption under Entry 82(3) of the Indian Customs Tariff. The respondent protested against the said assessments and claimed refund of excess duty. After a personal hearing, an order was passed by the Assistant Collector of Customs holding that the Periglass Sleevings are assessable under Entry 82(3) of the Indian Customs Tariff read with Entry 15A of the Central Excise Tariff and that the same will not fall within Entry 73 as claimed by the respondent. The respondent took the matter in appeal to the Appellate Collector of Customs, the second appellant herein, who confirmed the orders of the Assistant Collector of Customs, the third respondent. Thereafter, revision petition was preferred to the Ministry of Finance, Department of Revenue and Insurance, Government of India, the first appellant herein, which, by its order dated 28-3-1974 held that the Periglass Sleevings were assessable under Entry 53 of the Indian Customs Tariff and that they will not fall either under Entry 73 or under 83 of the Indian Customs Tariff as contended by the respondent manufacturers. It is at this stage, the respondent came before this Court seeking to quash the orders of the first appellant disallowing its claim that the article will fall under Entry 73 or Entry 83 of the Indian Customs Tariff. The learned Single Judge who heard to writ petitions held that the articles in question will not fall under Entry 53 of the Indian Customs Tariff and that therefore the authorities have to go into the question as to whether the article falls either under 72-C, 73(1) or 87 of the Indian Customs Tariff. They said view of the learned Judge has been challenged in these appeals filed by the appellants.

3. Thus, the question for consideration in these appeals is, whether the PVCs coated Periglass Sleevings or Silicon elastomer coated glass sleevings can be treated as a textile attracting Item 53 of the Indian Customs Tariff. Entries 53, 73(1), 82(3) and 87 which are relevant in this connection are set out below :

------------------------------------------------------------------------Item Name of Article Nature of Standard rate PreferentialNo. duty of duty rate of dutyif the articleis the producedor manufacture------------------------------------------------------------------------53. Textile Manufacture Revenue 100 per cent (Burma) 10not otherwise ad valorem per centspecified. ad valorem------------------------------------------------------------------------Entry 73(1) states as follows :Preferential 60 per cent The Unitedrevenue ad valorem Kingdom73(1) The following electrical instruments, 50 per centapparatus and appliances other than ad valoremthose specified in Item No. 73(16) and (Burma) 10parts thereof, not otherwise specified per centnamely : - ad valorem------------------------------------------------------------------------

Electrical control gear and transmission of gear, namely, switches (excluding switch boards) fuses and current breaking devices of all sorts and descriptions designed for use in circuits of less than ten amperes and at a pressure not exceeding 250 volts and regulators for use with motors designed to consume less than 187 watts, insulated copper wires and castles, anyone or more of which not being one specially designed as a pilot core, has a sectional area of less than 8-064 square millimeters and metals and alloys of not more than equivalent conductivity, not otherwise specified, and line insulators including alsocloats connectors leading in tubes and the like, of types and sizes such as are ordinarily used in connection with the transmission of power for purposes other than industrial and the fittings thereof but excluding electrical earthenware, brassware and porceline ware otherwise specified.

Entry 82(3) is as follows :-82(3)(a) Artificial or synthetic resins andplastic materials in any form, whether solid,liquid or pasty or as powder, granules or flakesor in the form of moulding powders Revenue 100% ad valorem(b) Articles made of plastics the following,namely, tubes, rods, sheets, foils sticks,other rectangular or profile shapes, whetherlaminated or not and whether rigid or flexibleincluding lay flat tubings and polyvinylchloride sheets .... Revenue 100% ad valoremEntry 87 runs thus -87. All other articles nototherwise specified. Revenue 60% 10%ad valorem ad valorem

Item 53 of Customs Tariff deals with textile manufacture not otherwise specified. Item 73(1) deals with electrical instruments, apparatus and appliances other than those specified in item 73(16) and parts thereof not otherwise specified. Item 82(3) deals with Synthetic resins and plastic materials in any form, whether solid or liquid or pasty or as powder. Item 87 is a residuary class dealing with all other articles not otherwise specified. If the Periglass sleevings which is a fabric material coated with PVC could be constructed as a textile, then, it will come under item 53 dealing with textile manufacture not otherwise specified. If the same is considered as not a textile, then it will not fall under item 53 and naturally the authorities have to consider whether it falls under either 72, 73 or 87 as has been directed by the learned Judge. Therefore, the controversy is only as regards the question as to whether the Periglass Sleevings which is coated with PVC can be considered to be a textile. The word 'textile' has not been defined in the statute. The Concise Oxford Dictionary defines 'textiles' as 'of weaving, woven, suitables for weaving, fabrics materials'. The Chambers Dictionary of Science and Technology Volume II defines textiles at page 1174 as 'Term used loosely to describe any fibres, yarns or clothes, woven, felted or bonded.' The Chambers Dictionary of Science and Technology - Volume I at page 518 defines 'glass fibre' as follows -

'(Glass, textiles). Glass melted and the drawn out by steam through special bushings into fibres of 5.10 micrometres diameter, which may be spun continuously into threads and woven into tapes and clothes by normal process, or may be formed into pads and quiltings, rigid, bitumen bounded or loose'.

While dealing with glass fibre, George S. Brady in his book 'Materials Handbook' at page 366 says as follows -

'The fine flexible fibres made from glass used for heat and sound insolation, fire proof textiles, acid resistant fabrics, retainer mats for storage batteries, panel boards, filters, and electrical insulating tape cloth and rope. It is distinct from mineral wool in that it is a glass made to define formulation with a uniformity not found in mineral wool. Molten glass strings cut easily into thread like standards, and this spun glass was earlier used for ornamental purposes, but the first long fibres of fairly uniform diameter were made in England by spinning ordinary molten glass on revolving drums. The original fibre was about 0.0001 in diameter. It was called Glass Silk and Glass Wool and the loose blankets for insulating purposes of were called Navy wool. The term navy wool is used still for the purposes of insulating blankets faced on both sides flamesproofed fabric, used for duct and pipe insulation and sound proofing. Glass fibres are now made by letting the molten glass drop through tiny orifices and blowing with air or stream to attenuate the fibres. The usual composition is that of a soda lime glass, but it may be varied for different purposes. The glass low in alkali have high electrical resistance while those of higher alkali are more acid resistant. They have very high tensible strength, up to about 400.0000 psi but the breaking strength, of years is expressed in pounds for any given yarn. The fibre glass fibres of the Owens - Corning Fibreglass Co. are made standard diameters from 00,00028 to 0,008 in staple glass fibres is usually from woven on regular textile machines. Fibre glass yarns are marked in various sizes and toists in continuous or staple fibres, and with glass compositions varied to suit chemical or electrical requirements. Vitron Yarn of glass fibres, Inc. is a piled low twist yarn for braided insulation for wire. Glass sewing thread has a high twist. The minimum breaking strength of the 0.0014 in. thread is 12 lb.'

In Employment of Textiles, 2nd Edn. at page 40, this is what is stated about Glass Fibres -

'A group of textile fibres and yarns is made of glass. The reason they are pliable and can be woven when most glass is brittle is that the individual fibres are extremely fine so fine that it takes from 100 to 12,500 filaments fibres to make a fine yarn. The finest filament is one quarter denier or B-2 micrones in diameter'.

In the Book 'The Manufacturing Technology of Continuous Glass Fibres, by K. L. Leavenstein at page 259 it is stated as follows -

'A large proportion of glass fibre reinforcing material is sold as woven roving......'

Based on the above definition of textiles occurring in the various dictionaries and also the definition of glass fibre, it is contended on behalf of the appellant that the PVC coated glass fabric made of glass fibre will have to be taken as textile and therefore, it should be taken to fall under item 53. The learned counsel for the respondent, on the other hand, contended that when the statute does not define 'textiles' that expression has to be understood in a popular sense i.e., the sense in which it is used in common parlance and that in common parlance a glass fibre or a fabric made of glass fibre has never been understood as a textile. According to the learned Counsel for the respondent an expression occurring in statute in the absence of a definition cannot be understood either in the dictionary sense or in the technological sense but in a popular sense. In support of the said submission, reliance is placed on the decision of the Supreme Court in Indo-International Industries v. Commissioner of Sales Tax, U.P. - 1981 ELT 325, where the Supreme Court has observed -

'It is well settled that in interpreting items in statutes like Excise Tax Acts or Sales Tax Act, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms of expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any terms or expressions has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given to the enactment the meaning of the term in common parlance or commercial parlance has to be adopted.'

Reliance is placed also in Ramavatar Budhiaprasad etc. v. Asst. Sales tax Officer, Akola - : [1962]1SCR279 , wherein the question arose as to whether betel leaves fell within item 'vegetables' so as to earn exemption from sales tax and the Supreme Court had held -

'that word 'vegetable' had not been defined in the Act, and that the same must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance and so construed it denoted those classes of vegetable matter which are grown in kitchen garden and are used for the table and did not comprise betel leaves within it and, therefore, betel leaves were not exempt from taxation.'

4. The respondent also relied on the decision of this court in Standard Batteries Ltd. v. Appraiser, Appraising Dept. - 1981 T.L.R. 2792, wherein the identical question came up for consideration and Padmanabhan J. has held -

''Fibreglass sleevings' do not come within the ordinary meaning of the word 'textile' or the sense in which the word 'textile' is commonly understood in ordinary parlance. The fibre glass sleevings used in the manufacture of plastic glass tubes, are in turn used in the manufacture. Therefore, the fibre glass sleevings do not fall within the category of textiles manufactures covered by item 53 of the Customs Tariff.'

We are in entire agreement with the view expressed by Padmanabhan J. in that case as also the view taken by Mohan J. which has been questioned in these writ appeals. Though as pointed out by the learned counsel for the appellants that in a technological sense the glass fabrics which is made of glass fibre could be treated as textiles, yet, it will not fit in with the popular sense or a sence in which it is used in common parlance. We, therefore, hold that the PVC coated periglass sleevings or silicon elastomer coated glass sleevings will not fall within the expression 'textile'.

5. The learned counsel for the appellants then contends that whether an item of manufacture will fall within a particular entry is a question to be decided by the departmental authorities and such a classification cannot be interfered with by this Court acting under Article 226 of the Constitution. We are not, however, inclined to agree with the said submission. It is true that the High Court cannot interfere with the decision of the Central Excise authorities in the matter of classification unless the decision is perverse or mala fide or it is based upon a wrong test. But, if on arriving at the finding the concerned authorities proceeded on erroneous view or on an improper interpretation of the statutory expression, this Court is entitled to interfere with the decision arrived at by the Excise authorities. The following observations of the Supreme Court in Union of India v. Tata Iron and Steel Co. Ltd. - : 1978(2)ELT439(SC) are pertinent in this connection :-

'It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp that, undoubtedly, would require some evidence be taken at the level of the taxing authority, provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. In the mass of documents filed before us and the extensive arguments addressed at the Bar with regard to the definitions called from various dictionaries, hand books and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests. A particular type of strip may according to certain definitions be skelp and according to others not skelp. This, however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding controversy as in this case unless the matter is beyond doubt in view of the popular meaning or meaning ascribed to the term in commercial parlance. In the absence of any clear criterion to determine what is skelp and not strip, no useful purpose would be served by even remanding the matter to the Excise authorities for a decision after taking necessary evidence. It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip or skelp it may be possible for the authorities to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test. This is, however, not possible in this case in view of the fact that there is no identifiable standard. The best way to define the product for the purpose of excise duty in appropriate terms demarcating clearly the distinction between the two terms.'

6. As we had held that the articles in question do not fall within item 53 of the Customs Tariff, the question will arise as to under what tariff item they will fall. It is for that purpose, the learned single Judge had remitted the matter to the authorities concerned. The order of Mohan J. has, therefore, to be upheld. The writ appeal is, therefore, dismissed with costs. Counsel's fee Rs. 500 one set.

* * * *

The matter has been posted before us for being mentioned. It is pointed out by the learned counsel on either side that because of the pendecy of the appeals, no orders could be passed by the authorities in pursuance of the earlier order passed by the learned single Judge and that as such this court may fix a time limit for the disposal of the matter finally, as directed by the learned Single Judge. We direct the third respondent to whom the matter has been remitted by the learned Single Judge to pass final orders in the matter classifying the goods in question within six months from this day.


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