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1997 Supreme(SC) 1573
1998(1) Supreme 57
Supreme Court of India
S.P. Bharucha, Suhas C. Sen, JJ.
M/s. STP Limited -Appellant
versus
Collector of Central Excise, Patna & Others -Respondents
Civil Appeal No. 3234 of 1991
Decided on 2-12-1997
Counsel for the Parties :
For the Appellant, S.C. Birla, Subrat Birla, Ms. Vipin Gupta, Advocates.
For the Respondents, K.N. Bhat, Additional Solicitor General, K.N. Bajpai, R.N. Verma, V.K. Verma, Advocates.
Important Points
Subject
Tax Law - Central Excise
Act Referred
Headnote
Held : The Tariff heading speaks of “Asphalt, Bitumen and Tar”. “Tar” has been given an expanded definition in clause (5). Tar distilled from coal or lignite or any other mineral will come within the ambit of this definition. The inclusive clause, thereafter, extends the definition to partially distilled tars and blends of pitch with creosote oils or with other tar distillation products. It is not in dispute that pitch is obtained by distillation of tar. It has been argued on behalf of the respondents that the residue of distillation of tar is pitch. We fail to see this fine distinction. Pitch is brought about by distillation of tar. If the contention of the respondent is to be upheld, it will have to be held that even though pitch is brought forth by distillation of tar, it is not “tar distillation product”. (Para 7)
Further held : We are unable to uphold this distinction for another reason. According to “Webster Comprehensive Dictionary International Edition “coal tar” means “the black viscid pitch distilled from bituminous coal, and yielding a large variety of organic compounds used in the making of dye stuffs explosives flavoring extracts, drugs, plastic etc.”. Therefore, in a sense, coal tar itself is a variety of pitch. By distillation of coal tar, a type of pitch is obtained. That must come within the phrase `tar distillation product’. Moreover, if there is any doubt in the construction of any provision of a taxing statute, that doubt must be resolved in favour of the assessee. (Para 8)
Legal Category Hierarchy
-
tax law
-
indirect tax
-
central excise
- tariff classification
- exemption notifications
-
central excise
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indirect tax
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administrative law
- statutory interpretation
Judgment
Sen, J.-The appellant is a Company engaged in manufacture of coal tar products. An exemption notification was issued by the Central Government exempting tar falling under Tariff Item 11 of Central Excise Tariff from the whole of excise duty leviable thereon, Tariff Item No. 11 is :
‘‘ Item No. Description of Rate of duty Goods
11. Coal (Excluding lignite) and coke all sorts, including calcined petroleum coke: asphalt, Bitumen and Tar-
(1) Coal and coke not Ten rupees elsewhere specified. per metric tone
(2) Petroleum coke, Twenty per-other that calcined cent and vao-petroleum coke. Rem plus two
thousnad ru- pees per met-
ric tone
(3) Calclined petro- Twenty per- leum coke. cent and valo-
rem.
(4) Asphalt and bitu- Two hundred men (including cut- rupees per back bitumen and metric tone. asphalt) natural or
produced from petro-
leum or shale.
(5) Tar distilled from One hundred coal or lignite and rupees per other mineral tars, metric tone.
including partially
distilled tars and
blends of pitch with
creosote oils or with
other tar distillation
products.
The Exemption notification is as follows :
“Tar is exempt from duty
Tar 121/62-CE dt.13.6.62
In exercise of the powers conferred by Rule 8(1) of the Central Excise Rules. 1944, the Central Government hereby exempts Tar falling under Item 11 with effect from the 24th April, 1962, from the whole of the excise duty leviable thereon.”
2. The appellant’s case before the excise authority was that its products were fully exempt from excise duty by virtue of the above notification. The case of the Department on the other hand, is that the goods manufactured by the appellant did not come within the ambit of Tariff Item 11. Therefore, there is no question of granting any exemption from excise duty to these products. The dispute ultimately went to the Tribunal. The Tribunal, after hearing the parties and taking into consideration the report of the Chemical Examiner, came to the conclusion that some of the goods manufactured by the appellant came within the ambit of clause (5) of Tariff Item 11 and, therefore, were exempt from excise duty. The Tribunal, however, held that no relief could be given to the assessee in respect of some of the products in view of an earlier decision in the case of Indian Aluminium Co. Ltd. v. Collector of Customs, Cochin1. The relevant part of the order of the Tribunal is as under :
“We do not see any reason to deviate from the above-referred to decision. Respectfully following the same, we uphold the classification of items at serial Nos. 3 to 8 under Item 68, CET. Notification No. 121/62 applies only to tar falling under Item No. 11(5). Therefore, it does not apply to the subject pitches.”
The goods mentioned in Serial Nos. 3 to 8 of the Chemical Examiner’s Report were as under :
SI. No. Description Gist of the results in the of the of chemical test Classi- product
fication list
1. xxx xxx
2. xxx xxx
3. Soft Pitch The sample is coal tar pitch
4. Soft Medium -do- Pitch
5. Hard Pitch -do-
6. Hard Medium -do- Pitch
7. Special Hard The sample is coal Pitch
