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1984 Supreme(Bom) 1
IN THE HIGH COURT OF BOMBAY
Kania M.H. Manohar Sujata, JJ.
Rawji Industrial Corporation .... Appellants.
Versus
Union of India others.... Respondents.
Appeal No. 454 of 1981, decided on 1-1-1984.
Advocates appeared :
I.M. Chagla with P.L. Nain U.A. Rana, for appellants.
V.N. Lokur, for respondents.
The meaning of the term “sheet” in Tariff Item 15-A(2) and Notification No. 68 of 1971 is not confined to things which are relatively thin and flat.
Headnote:
CENTRAL EXCISE - CLASSIFICATION - CORRUGATED ROOFING - WHETHER PLASTIC SHEETS - INTERPRETATION OF TARIFF ITEM 15-A(2) AND NOTIFICATION NO. 68 OF 1971 - MEANING OF "SHEET" - EVIDENCE OF COMMERCIAL PARLANCE - RELEVANCE.
Fact of the Case:
The appellants manufactured fibre glass reinforced polyester corrugated roofings. They sought clarification from the Excise Authorities whether the said roofings would be excisable. The Excise Authorities informed them that the said item would be excisable under Tariff Item 15-A(2) but exempted from the payment of the whole of the duty leviable thereon under Government of India Notification No. 68 of 1971. Subsequently, the Superintendent, Central Excise, informed the appellants that the corrugated roofings being sheets were not entitled to the exemption under the said Notification. The appellants challenged the said decision before the Assistant Collector, Central Excise, who upheld the decision of the Superintendent. The appellants then preferred an appeal to the Appellate Collector of Central Excise, who allowed the appeal and held that the goods were exempted under Notification No. 68/71. The Government of India then served a show cause notice on the appellants calling upon them to show cause why the order of the Appellate Collector should not be reviewed under section 36(2) of the Central Excises and Salt Act, 1944. The Central Government by its order dated 29th August, 1977 set aside the order of the Appellate Collector and restored the order of the Assistant Collector. The appellants filed a writ petition challenging the order passed by the Central Government. The writ petition was dismissed by the High Court.
Finding of the Court:
The court held that the appellants failed to lead the necessary evidence regarding commercial parlance and also some other evidence, which was certainly relevant. The court also held that the Excise Authorities were not perverse or obviously in error in classifying the aforesaid roofings manufactured by the appellants as “plastic sheets”.
Issues: Whether the corrugated roofings manufactured by the appellants were “sheets” within the meaning of Tariff Item 15-A(2) and Notification No. 68 of 1971.
Ratio Decidendi: The court held that the meaning of the term “sheet” in Tariff Item 15-A(2) and Notification No. 68 of 1971 was not confined to things which were relatively thin and flat. The court also held that the appellants failed to lead any evidence regarding the question as to whether in trade parlance or common parlance such roofings were regarded as plastic sheets or not.
Final Decision: The appeal was dismissed.
2. The short facts necessary for the disposal of this appeal are as follows:
The petitioners produce articles of fibre glass reinforced polyester. In or about June, 1973 the petitioners addressed a letter to the Central Excise Authorities, inter alia inquiring whether fibre glass reinforced polyester roofing intended to be manufactured by them would be excisable. The appellants were informed by the Excise Authorities by their letter dated 2nd June, 1973, that the said item would be excisable under Tariff Item 15-A(2) but exempted from the payment of the whole of the duty leviable thereon under Government of India Notification No. 68 of 1971, dated 29th May, 1971. By a letter dated 5th December, 1973, the Superintendent, Central Excise, informed the petitioners that the corrugated roofings being sheets were not entitled to the exemption under the said Notification. The result would be that they would be liable to duty at 50% ad valorem as provided by Item 15-A(2) of the Central Excise Tariff. The petitioners did not accept this view of the Superintendent and made a representation dated 10th July, 1974, to the Assistant Collector, Central Excise, claiming that the classification of the aforesaid product by the Superintendent was not proper. The Assistant Collector gave a hearing to the appellants and came to the conclusion that the article in question was plastic material manufactured by the aid of polyester resin reinforced by fibre glass and was obviously a plastic sheet and would be covered by Tariff Item 15-A(2) of the Central Excise Tariff and was not entitled to exemption.
3. The appellants preferred an appeal against the decision of the Assistant Collector to the Appellate Collector of Central Excise. The said appeal was allowed by an order of the Appellate Collector dated 11th June, 1975, wherein the Appellate Collector held that “Keeping in view the process of manufacture, since the product is directly moulded from resins, which has got profiles and it cannot be re-shaped, I order that the goods are exempted under Notification No. 68/71. I, therefore, allow the appeal and set aside the order passed by the Assistant Collector”.
4. The Government of India then served on the appellants a show cause notice dated 21st May, 1976 calling upon the appellants to show cause why the order of the Appellate Collector should not be reviewed under section 36(2) of the Central Excises and Salt Act, 1944. The appellants were given a hearing in the review proceedings. Unfortunately for the appellants, they did not lead any evidence as to the relative thickness of the various types of fibre glass reinforced polyester roofings manufactured by them nor did they lead any evidence regarding the size of the pieces of roofings manufactured by them. They also did not lead any evidence regarding the extent of corrugation applied to these roofings. What is most important of all is that they failed to lead any evidence regarding the question as to whether in trade parlance or common parlance such roofings were regarded as plastic sheets or not. The appellants also did not dispute that they were covered by Excise Tariff Item 15-A(2) of the Central Excise Tariff but merely claimed exemption under the said Notification. The Central Government by its order dated 29th August, 1977 set aside the order of the Appellate Collector and restored the order of the Assistant Collector. The Central Government held that the fibre glass reinforced polyester corrugated roofings manufactured by the appellants were nothing but sheets, thou
