Excise classification of fabrics: commercial meaning controls, and bleached or dyed yarn fabrics were treated as processed goods, not grey fabrics.

For excise classification, commercial and popular understanding governs, and a taxing notification must be construed strictly in favour of the assessee where two views are possible. Fabrics woven from bleached or dyed yarn were not treated in trade as grey fabrics merely because bleaching or dyeing occurred at the yarn stage; they were regarded as processed fabrics instead. The Court also declined to reject the writ petition on the ground of an alternative revision remedy, holding that the pendency of the writ for a long period made the technical objection inappropriate in the circumstances.

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Issues: (i) Whether fabrics woven out of bleached and/or dyed yarn can be classified as grey fabrics for the purpose of excise duty under the relevant notification; (ii) Whether the writ petition should be refused on the ground that the petitioner had an alternative remedy by way of revision.

Issue (i): Whether fabrics woven out of bleached and/or dyed yarn can be classified as grey fabrics for the purpose of excise duty under the relevant notification.

Analysis: The classification depended on the commercial and popular understanding of the goods and on the language of the taxing notification. The Court applied the settled principle that a taxing provision must be construed strictly and that, where two views are possible, the one favourable to the assessee must be adopted. On the material before it, fabrics woven from bleached or dyed yarn were not understood in trade as grey fabrics, and the fact that bleaching or dyeing had occurred at the yarn stage did not justify treating the finished fabric as unprocessed grey goods. Such fabrics were more appropriately regarded as processed fabrics.

Conclusion: The classification as grey fabrics was and the demand of higher excise duty was not sustainable; the issue was decided in favour of the assessee.

Issue (ii): Whether the writ petition should be refused on the ground that the petitioner had an alternative remedy by way of revision.

Analysis: The objection based on alternative remedy was not accepted at that stage. The Court declined to sustain the technical objection after the writ petition had remained pending for a long time, and held that the availability of revision did not warrant refusal of relief in the circumstances.

Conclusion: The objection failed and the writ petition was maintainable; the issue was decided in favour of the assessee.

Final Conclusion: The impugned excise demand was quashed and the writ petition was allowed with costs.

Ratio Decidendi: For excise classification, the commercial and popular meaning of the goods governs, and fabrics woven from bleached or dyed yarn cannot be treated as grey fabrics merely because bleaching or dyeing did not occur after weaving.

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