1975 Supreme(SC) 395

SUPREME COURT OF INDIA
A. ALAGIRISWAMI, P.K. GOSWAMI AND N.L. UNTWALIA, JJ.
Dunlop India Ltd. (In C. A. No. 1446 of 1972); Madras Rubber Factory Ltd. (In C. A. No. 2746 of 1972), Appellants
Versus
Union of India and others (In both the Appeals), Respondents.
Civil Appeals Nos. 1446 and 2746 of 1972,
D/- 6-10-1975.
Advocates appeared
M/s. S. Choudhry and S. J. Sorabji, Sr. Advocates (Mr. D. N. Gupta, Advocate, with them), for Appellant in C. A. No. 1446/72; Mr. S. J. Sorabji, Sr. Advocate, (M/s. V. J. Taraporawala and K. R. Nambiar, Advocates with him), for Appellants (in C. A. No. 2746/72; Mr. G. L. Sanghi, Sr. Advocate, (Mr. Girish Chandra, Advocate, with him), for the Respondents (in both appeals); M/s. G. Mukhoty and H. K. Dutt, Advocates, for Intervener No. 1 (Incheck Tyres Ltd.; Mr. S. J. Sorabji, Sr. Advocate, (M/s. Ravinder Narain, K. K. Master, Advocates of M/s. J. B. Dadachanji and Co., with him), for Intervener No. 2 (Firestone Tyres Ltd.); Mr. S. J. Sorabji, Sr. Advocate (M/s. Ravinder Narain, K. J. John and R. D. Divan, Advocates of M/s. J. B. Dadachanji & Co., with him), for Intervener No. 4 (Burkib Fibres Tyres Ltd.); Mr. I. N. Shroff, Advocate, for Intervener Nos. 3 & 5 (Ceat Tyres Ltd. and Premier Tyres Ltd.).

Headnote:

Central Excises and Salt Act, 1944 - Tariff Act - Section 2A - Customs Act, 1962 - Section 131 (2) - Purpose of imposition of customs duty - Order of Assistant Collector – Claim of compensation - Whether substance known as Pyratax-Vinyl Pyridine Latex is not rubber raw classifiable under item of the Indian Tariff Act, 1934 - Whether solid liquid or pasty or as powder granules or flakes or in form of molding powders - Whether synthetic rubber latex could be classified as raw rubber assessable under item irrespective of its usage known commercially or in industry - Appellant in Civil Appeal imported sometime in April consignments of V. P. Latex - In appeal from the proceedings before the Assistant Collector of Customs for appraisement of the said consignments for the purpose of imposition of customs duty and/or countervailing duty Appellate Collector of Customs Calcutta upheld the appellants contention and classified V. P. Latex under item of I.C.T. as raw rubber - Classification made by the Appellate Collector was revised by the Central Government in a proceeding initiated under Section 131 (2) of the Customs Act, 1962 - Central Government held, by the impugned order, that the said V. P. Latex was an aqueous dispersion of synthetic resin and hence classifiable under item of I.C.T. prior to March and thereafter under the new item I.C.T - Central Government by the same order further held that the said goods were liable to countervailing duty under item C.E.T. both before and after 1st March - It is apparent that if V. P. Latex were to be classified under item higher duty will be leviable and that is the reason for the controversy in these appeals - In Civil Appeal is directed against the order of August of Appellate Collector of Customs dismissing a batch of appeals of the Company - Appellate Collector confirmed the order of the Assistant Collector of Customs Appraising rejecting the appellants claim for refund of duty on the basis that V. P - Latex should be classified under item I.C.T. and not under item 82 (3) of I.C.T - Appellant did not go in revision before the Central Government as already similar claims had been rejected by the Central Government – Held, Court are however unable to accept the submission - It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand them in the usual course - But once an article is classified and put under a distinct entry basis of the classification is not open to question - Technical and scientific tests offer guidance only within limits - Once articles are in circulation and come to be described and known in common parlance court then see no difficulty for statutory classification under a particular entry - It is good fiscal policy not to put people in doubt and quandary about their liability to duty - When a particular product like V. P. Latex known to trade and commerce in this country and abroad is imported it would have been better if the article is eo nomine put under a proper classification to avoid controversy over the residuary clause - As a matter of fact in Red Book under Item in Section II which relates to rubber raw and synthetic latex including vinyl pyridine latex and copolymer of styrene butadiene latex are specifically included under the sub-head "Synthetic Rubber - Court do not see any reason why the same policy could not have been followed in I. C. T. book being complementary to each other - When an article has by all standards a reasonable claim to be classified under an enumerated item in Tariff Schedule it will be against very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause - Question of competition between two rival classifications will however stand on a different footing - In this case there is rather voluminous evidence from the standard authorities in favor of V. P. Latex being a component of SBR which is admittedly classified under rubber raw - But assuming and only assuming that evidence is balanced best course in a fiscal measure is to decide and fix the entry under which the article comes otherwise it will give rise to adoption of varying standards where uniformity should be the rule - Court are clearly of opinion that in state of the evidence before revisional authority no reasonable person could come to the conclusion that V. P. Latex would not come under rubber raw - Basis of the reason with regard to end-use of the article is absolutely irrelevant in the context of the entry where there is no reference to the use or adaptation of the article - Orders of the authority are therefore set aside - Appeal allowed