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1988 Supreme(Mad) 391
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S A KADER
Kalaivani Fabrics - Appellant
Versus
Collector of Customs (Appeals) - Respondent
Case No : Writ Petition Nos. 3059 to 3062 of 1984
Decided On : 07 October 1988
The commercial meaning has to be given to the expression in Tariff items. Where decision (definition) of a word has not been given, it must be construed in its popular sense. Popular sense means that sense which people conversant with the subject-matter with which the Statute is dealing would attribute to it.
Headnote:
EXPORT TARIFF - GROUNDNUT KERNELS - INTERPRETATION - BLANCHED AND ROASTED PEANUTS - WHETHER FALL UNDER GROUNDNUT KERNELS - HELD, NO.
Fact of the Case:
The petitioners, sister-partnership concerns doing business in imports and exports, obtained export licenses for blanched and roasted peanuts in bulk. The Customs Authorities demanded payment of export duty as groundnut kernel falling under Heading No. 20(i) of Schedule n to the Customs Tariff Act at Rs. 3,000/- per metric ton. The petitioners paid the export duty under protest and without prejudice to claim refunds. Their claims for refund were rejected by the Assistant Collector of Exports, Bombay and the appeals preferred to the Collector of Customs (Appeals), Bombay, also failed. Hence these writ petitions.
Finding of the Court:
The court held that blanched and roasted peanuts do not fall under the category of groundnut kernels in item 20(i) of the Export Tariff. The court observed that the process of preparation of blanched and roasted peanuts and the distinction between the groundnut kernel and the processed peanuts are not disputed. However, the court held that despite thereof blanched roasted peanuts continue to be groundnut kernels and fall within the Heading of 20(i) of the Export Tariff.
Issues: Whether blanched and roasted peanuts fall within the category of groundnut kernels under Heading 20(i) of the II Schedule - Export Tariff of the Customs Tariff Act of 1975.
Ratio Decidendi: The court held that the common and commercial meaning of the term 'kernel' found in heading No. 20 (i) of the Export Tariff is the raw seed inside the shell of the groundnut and by blanched and roasted peanut the edible product prepared therefrom and fit for direct consumption. The court observed that the functional character by which a product is identified is also an important factor to be taken into consideration. The court held that groundnut kernels are used as seeds but primarily for extraction of oil, edible or industrial, extraction of protein, isotope in the manufacture of snacks, butter and candy while blanched roasted peanuts are useful only for direct consumption and for nothing else.
Final Decision: The writ petitions were allowed, the impugned orders were quashed, and the bank guarantees and personal bonds executed by the petitioners were ordered to be cancelled.
The short question which arises for consideration in these four connected writ petitions is, whether blanched and roasted peanuts fall within the category of groundnut kernels under Heading 20(i) of the II Schedule - Export Tariff of the Customs Tariff Act of 1975.
2.M/s. Kalaivani Fabrics, M/s. Mala International and M/s. Siva Tex are sister-partnership concerns doing business in imports and exports. Under Export Trade Control Circular No. 159/80, dated 1-11-1980 the Joint Chief Controller of Imports and Exports allowed the export of blanched and roasted peanuts in bulk on first-come-first served basis within a limited ceiling subject to minimum export price of Rs. 9, 000/- per ton. The three sister concerns obtained export licence for 200 metric tons each, but, while the licences in favour of M/s. Kalaivani Fabrics (petitioner in W.P. No. 3059/84 and M/s. Siva Tex (Petitioner in W.P. No. 3062/84) were for 200 tons each, M/s. Mala International (Petitioner in W.P. Nos. 3060 and 3061 of 1984) got two licences for 100 M.T. each. These goods were exported from the Bombay Port. Even though this commodity viz., 'blanched and roasted peanuts' in bulk was not subject to any export duty, the Customs Authorities demanded payment of export duty as groundnut kernel falling under Heading No. 20(i) of Schedule n to the Customs Tariff Act at Rs. 3, 000/- per metric ton. As the goods were of a perishable nature and as the shipments were to be effected within the specified period granted in the licence, the petitioners were constrained to pay the export duty under protest and without prejudice to claim refunds. Each of the three petitioners paid the export duty of Rs. 6 lakhs to the Bombay Customs. They filed applications before the Assistant Collector of Exports, Bombay for refund of the amounts. The claims were rejected and the appeals preferred to the Collector of Customs (Appeals), Bombay, shared the same fate. Though further appeals lay to the Customs, Excise and Gold Control (Appellate) Tribunal, in view of the fact that the said Tribunal had already held that blanched and roasted peanuts were liable to export duty as groundnut kernel, there was no purpose in preferring an appeal before the Tribunal. Hence these writ petitions.
3.The claim is resisted by the respondents and a counter-affidavit is filed by the Assistant Collector of Customs.
4.The first contention raised by Mr. Narasimhan, learned counsel for the respondents is about the maintainability of these writ petitions. It is urged that inasmuch as a further appeal lay before the Customs, Excise and Gold Control (Appellate) Tribunal under Section 129-A of the Customs Act these writ petitions are not maintainable. As explained in the affidavit filed in support of the writ petitions, since the Tribunal had already come to a conclusion in a similar matter, there was no purpose in filing a further appeal before the Tribunal. The availability of an alternative remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution of India. It is a matter of discretion rather than of jurisdiction. This Court has exercised the jurisdiction to admit and entertain these writ petitions and the direction is not liable to be interfered with. This objection must, therefore, fail.
5.We have now to see whether blanched and roasted peanuts come under the category of groundnut kernels falling under Heading 20(i) of Schedule IIo the Customs Tariff Act of 1975. Heading 20 is as follows :-
According to Mr. Habibulla Badsha, Learned Senior Counsel for the petitioner, blanched and roasted peanut is not groundnut kernel but an edible preparation made out of groundnut kernel. The process of preparation is as follows: The groundnut kernels are roasted in an electric furnace under controlled scientific conditions to suit them best for edible purposes. Then the outer red skin is peeled off (blanching) and the round kernel is split into two half beans, the spro
