Commercial meaning of tariff terms: CKD cycles remained complete cycles and were not classifiable as separate parts.

Cycles despatched in completely knocked down condition were treated as cycles under item 35 of the First Schedule because the tariff term was undefined and had to be understood in its popular and commercial sense. Trade practice showed that CKD cycles were marketed and transported for convenience, and assembly by the buyer did not amount to a fresh manufacturing process. On that reasoning, the goods did not become mere separate parts falling under the residuary item 68, and the excise duty demand based on the trade notice was not sustainable.

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Issues: Whether cycles cleared and despatched in completely knocked down condition fell within item 35 of the First Schedule to the Central Excises and Salt Act, 1944, and whether the trade notice and consequential demand of duty under the residuary item 68 could be sustained.

Analysis: The term "cycle" was not defined in the Act, so it had to be construed in its popular and commercial sense as understood by persons dealing in the commodity. The prevailing trade practice showed that cycles were commonly marketed and transported in CKD condition for convenience, economy, and avoidance of damage in transit, with the buyer merely assembling the parts without any fresh manufacturing process. On that approach, a cycle sent in unassembled condition remained a cycle for item 35 and did not become a mere collection of separate parts attracting item 68. Support was also drawn from the interpretative aid of Brussels Trade Nomenclature and the cognate nature of tariff legislation.

Conclusion: Cycles despatched in CKD condition were held to fall within item 35, and the demand of excise duty under item 68 pursuant to the trade notice was not sustainable.

Final Conclusion: The appellant succeeded in challenging the classification adopted by the department, and the restraint against enforcement of the trade notice was granted.

Ratio Decidendi: Where a tariff entry uses an undefined commodity name, it must be construed according to its commercial and popular meaning in trade, and goods despatched in knocked down form remain classifiable as the complete article if trade understanding and the nature of the transaction so indicate.

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