TaxTMI 
TaxTMI 
2002 (9) TMI 787
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....ken up together for hearing and this common judgment covers all the writ applications. 2. These writ applications have been filled basically with the following prayers: (i) for a declaration that there is no levy of any Central Excise duty on tea in unit containers of 20 Kgs. or more; alternatively a declaration that there is no levy of excise duty on bulk tea removed in unit containers of tea chests or the like containing more than 20 Kgs. of tea; (ii) for a declaration that the order/direction dated 13th October, 1998 is illegal, ultra vires and void; (iii) the impugned show cause notice of different dates issued in the month of November, 1998 being different annexures to different writ application [Annexure-H to WP(C) 3088/99] are illegal, ultra vires and void; (iv) for a declaration to withdraw the show cause notices issued by the authority. 3. The order/letter dated 13th October, 1998 issued by the Director, Ministry of Commerce is [Annexure-G to WP(C) No. 3088/99] (this is the common order in all the writ applications, but the annexure ....
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....as it does not have a brand name as required under the statute. 7. The facts of the cases, in brief, are as follows: Petitioners carry on business of producing, manufacturing and selling tea. Petitioners remove tea in bulk in chests or gunny bags containing 20 Kgs or more. Petitioners challenge the levy and/or collection of duty on bulk tea removed/sold in the above way (20 Kgs. and above) for the period from June 2, 1998 to June 23, 1998. The basic contention is that the tea manufactured in tea estate cannot be sold in loose form. It is to be removed either in small packages or in gunny bags containing 20 Kgs or more and for the purpose of identification, in the gunny bags or in tea chest, names of the garden only is written and it is not a brand name. This is done only for the purpose of facilitating transportation so that the same are not mixed up with other tea and/or goods sent in the same truck or in the warehouse. The package tea with brand name stands on a different footing. The Central Excise Act, 1944 levies duty of excise on all excisable goods which are produced and manufactured in India at the rate set forth in the Schedule of the Central Excise Tariff Act, ....
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....ity of that person.' Significantly, in the Explanatory Memorandum under the section on "Union Excise Duties" under the heading "Major Changes in Duty Rates" the particular item reads as follows : "Chapter No. Description Change in rate duty 9 Packaged tea, From To branded 0% 8%" By the notification dated 2nd June, 1998, the Central Government, in exercise of the powers conferred by sub-section (1) of Section 5A of the 1944 Act exempted diverse excisable goods from so much of the duties of excise as specified in the said notification. In that notification tea was not specified and it is submitted that there was no necessity to specify it as tea was already exempted under the Tariff Act. 11. Some representations were filed by the different bodies mainly by Indian Tea Association and United Planters Association of Southern India and they wanted to know what is the meaning of unit container, what is the maximum weight of unit container and what is the brand name. They wanted necessary clarification by the Central Excise Department. The basic contention of the petitioners is that is was all along the intention of the Legislature o....
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....ceeding 20 kgs. between 2nd June, 1998 and 24th June, 1998 are without jurisdiction. 15. On the other hand, Mr. Bipul Sarma, learned Addl. CGSC makes the following submissions : (i) That these writ applications are not maintainable in view of the fact that Section 11A of the Excise Act provides a concrete machinery and without exhausting those remedies, these writ applications cannot be filed. (ii) To sell the bulk tea it has to be put into container (either in gunny bags or in a wooden chest) with the name of the garden, net weight/tare weight/emblem or any embose affixed in the container and that will come within the brand name as per Chapter 9, Note 5 of the Finance Act, 1988-89. Brand name simply means any identity mark. (iii) In interpreting the Finance Act, 1988-89 there is no relevancy to the earlier Legislative history prior to 1998-99. In interpreting the statute, the court is to interpret the enactment made by the Parliament and it cannot go to the intention of the Parliament. In a taxing statute there is no room for any intendment but regard must be had to the clear....
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....aid order for a period of three weeks from the date of communication to the petitioner". 17. As against this order, a writ appeal being GA No. 1081/2002 and APOT No. 183/2002 have been filed before the Division Bench of Calcutta High Court and the Division Bench admitted the appeal and passed the following order: "After considering the application and hearing the learned Counsel appearing for the parties, we are not inclined to stay the order passed by the learned Single Judge in the manner it has been asked for. We are of the view that without prejudice to the rights and contentions of the parties to the appeal the appellants shall give reply to the show cause notice and the respondents also shall be at liberty to come to a decision after giving a hearing to the writ petitioner. In accordance with law but no effect to such decision shall be given till the disposal of the present appeal". 18. I have looked to the judgment of the learned Single Judge of Calcutta High Court, but in that judgment there is absolutely no discussion with regard to the submissions of the parties and he simply came to the following finding : (a) the respo....
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....from him by the notice and will be fully entitled to approach the High Court for invoking its extraordinary remedy under Article 226 of the Constitution for quashing the notice." Relevant observations by the Supreme Court appear in paras 20 and 21 of the report which need to be reproduced below : "Much water has flown beneath the bridge but there has been no corrosive effect on these decisions which, though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution in spite of the alternative statutory remedy, is not directed specially in a case where the authority against whom the writ is filed is shown to have had not jurisdiction or had purported to usurp jurisdiction without any legal foundation. That being so, the High Court was not justified in dismissing the writ petition at the initial stage without examining the contention that the show cause notice issued to the appellant was wholly without jurisdiction and the registrar in the circumstances of the case was not justified in acting as the TRIBUNAL." Earlier addressing the question in relation to the prac....
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....ent). That was a case where a proceeding was initiated under the Imports and Exports (Control) Act, 1947 and Section 167(8) of Sea Customs Act. The statute itself provided for show cause and appeal. The majority view of the Supreme Court is that if on true construction, the court comes to a finding that the authority has no power to initiate proceeding or make an enquiry under the said Section, but the respondents can certainly be prohibited for proceeding with the same, writ petition is maintainable. The preliminary objection there was rejected by the majority view. (IV) 1988 (36) E.L.T. 445 (Cal.) (S.A. International v. Collector of Customs). That is a case from Calcutta High Court wherein the learned Single Judge held that an application under Article 226 of the Constitution shall be maintainable if it is shown that the concerned authority acted without jurisdiction. 21. On the other hand, Mr. Bipul Sarma, learned Addl. CGSC places reliance on the following decisions: (I) AIR 1983 SC 603 (Titaghur Paper Mills Co. Ltd. and another, petitioners v. State of Orissa and another, Respondents). That was a case under th....
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.... & Ors.). That was a case where the proviso to Section 11A was considered. The Division Bench of this court pointed out that the dominant motive of the assessee to evade the tax with a view to defeat the provision of law is the essence of the proviso to Section 11A of the Act. So, this is not an authority for the proposition sought to be advanced. (IV) 1985 (19) E.L.T. 22 (S.C.) = AIR 1985 SC 330 (Assistant Collector of Central Excise, Chandan Nagar, West Bengal, Appellant v. Dunlop India Ltd. and others, Respondents) wherein the Supreme Court in para 3 pointed out as follows : "It was not for High Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution ignoring as it where the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Art. 226 is not meant to short circuit or circumvent statutory remedies are entirely ill suited to meet the demands of extraordinary situations as for instance where the very vires of the statute is in question or where the private or public....
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....all varieties of the produce known commercially as Tea, and also includes "Green Tea" and "instant tea". Tea, all varieties except 'package tea' and 'Instant tea' (falling within sub-items (2) and (3), respectively of this item Package tea, that is to say tea packed in any kind of container containing not more than 27 Kgs. Net of tea but excluding 'instant tea' 3. "Instant Tea" Not exceeding Rs. Two per kg paise Eight as the Central Government per Kg. may by notification in the Official Gazette, fix. One rupee and twenty-five paise per kg plus duty for the time being leviable under sub-item (1) of this item, if not already paid. Ten per cent ad valorem plus the duty for the time being leviable on tea falling under sub-item (1) of this item, if not already paid and if such tea is used in the manufacture of such "Instant tea". From 1986-87 to 1988-89 the position was as follows : Tea, including tea waste Green tea and Black tea : 0902.11 - Packed in unit containers of content not exceeding 25 grams and ordinary intended for sale to consumers in that pack. &nbs....
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....ar back as 1584 when Heydon's case (1584) 3 Co. Rep-7a was decided that ".......For the sure and true interpretation of all statutes in general.....four things are to be discerned and considered: "(1) What was the common law before the making of the Act, (2) What was the mischief and defect for which the common law did not provide, (3) What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and (4) the true reason of the remedy and then the office of all the Judges is always to make such construction as shall suppress the mischief and advance the remedy". In re. Mayfair Property Company, (1898) 2 Ch 28, Lindley, M.R. in 1898 found the rule "as necessary now as it was when Lord Coke reported Heydon's case." The rule was reaffirmed by Earl of Halsbury in Eastman Photographic Material Company v. Comptroller General of Patents, Designs and Trade Marks, 1898 AC 571 in the following words: "My Lords, it appears to me that to construe the Statute in question, it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the r....
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....terials would be to give effect to, rather than thwart through ignorance, the intentions of Parliament and not to question the process by which such legislation was enacted or to criticise anything said by anyone in Parliament in the course of enacting it." 27. Dr. Pal, learned Counsel argues that package and bulk teas are distinct and separate concept and product and this was known to the Legislature and that received judicial consideration in 1992 (60) E.L.T. 88 (Guj.) (Brooke Bond India Ltd. v. Union of India). That is a case from Gujarat High Court and there challenge was made that the rate of duty of excise on package tea is illegal and ultra vires. This was with regard to Central Excise Tariff Act, 1985 and the Heading was 9.02 and it provided as quoted above. The Gujarat High Court considered the definition of tea and they referred to Encyclopaedia Britannica. The concept of package tea as of different variety was introduced for the first time by the provisions of the Central Excises and Salt (Amendment) Act, 1953 (Act 15 of 1953). The package tea was considered as different varieties of the product commercially as tea itself having distinct character and use and nam....
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....ackage tea through a mechanical method and was observing excise. formalities, including taking out licence for manufacture of excisable product, viz, package tea, falling under tariff item No. 3(2). According to the deponent, the said firm were manufacturing package tea after holding L-4 licence since 1982 and were paying proper central excise duties on their production up to 24th February, 1983. It has been stated that package tea as manufactured or produced by the said firm and various other persons, were and are well known as such product in the market and also in the commercial and trade parlance and such products are known and treated as distinct and different from loose tea, with different prices and marketability. It was claimed by the deponent that the fact as mentioned above, was and is well known to the said firm and with that knowledge they had been voluntarily paying excise duty on such package tea. The writ petition was claimed to be wholly misconceived, speculative, and not maintainable." It was also stated in para 10 of the judgment as follows : "It was also the case of the deponent that package tea is a product, which is known in the trade parlance and is boug....
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....rked with name of the garden and it cannot be called a brand name. Note 5 of Chapter 9 read with Note 4 will also put of pointer that 0902.90 was not concerned with any brand name. Another aspect to the matter must be borne in mind that if the argument of the learned Counsel for the Union of India is accepted that tea despatched/removed from the garden with the name of the garden in the tea chest or gunny bags are to be included in 'tea put up in unit container with a brand name', then the word 'other' shall be redundant and it is the law of interpretation that no word of a statute should be considered to be redundant. In support of this contention, we may have a look at the following decisions : (I) AIR 1952 SC 369 (Aswini Kumar Ghose and another v. Arabinda Bose and another) wherein it has been pointed out as follows. "It is not a sound principle of construction to brush aside works in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute." That was a case with regard to right of a advocate to practise. (II)  ....
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.... in making a law of acquisition or requisition shall provide for a just equivalent of what the owner has been deprived of or specify the principles for the purpose of ascertaining the "just equivalent" of what the owner has been deprived of. If Parliament intended to enable a Legislature to make such a law without providing for compensation so defined, it would have used other expressions like "Price", "consideration" etc. In Craies on Statute Law, 6th Edn., at p. 167, the relevant principle of construction is stated thus : "There is a well known principle of construction that where the Legislature used in an Act a legal term which has received judicial interpretation, it must be assumed that the term is used in the sense in which it has been judicially interpreted unless a contrary intention appears'. 30. The words 'package tea and other' received judicial interpretation and the Legislature must be deemed to have used the same expression and did not depart from the meaning given by the courts earlier. If that was the intention of the Legislature, would have used other words. Further the definition of the 'brand name' as given in Chapter 5 Part-I quoted above will show t....
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....ese cases, the question is altogether different. The question in these cases is that under the parent Act itself there was no liability to pay tax and as such, the notification issued by the Ministry of Commerce on 13-10-98 and the subsequent notices are absolutely without jurisdiction. So, this case is of no help to the respondent. 1997 (89) E.L.T. 452 (S.C.) = (1997) 3 SCC 398 (Shrijee Sales Corporation and another v. Union of India). There also the same notification was challenged and the question was that the imposition of taxes and withdrawal thereof are legislative function and there can be no estoppel against the Legislature. So, this case is also no help to the respondents. AIR 1972 SC 1168 (M/s. Sitaram Bishambhar Dayal etc. Appellants v. State of U.P. Respondent). That was a case under the U.P. Sales Tax Act and that was with regard to the power to delegate certain things i.e. fixing the rate of tax. This case is absolutely irrelevant for the purpose of determination of the present controversy. (1979) 2 SCC 409 (M/s. Motilal Padampat ....
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....shtra and others, Respondent) wherein the Supreme Court pointed out that the proposition of interpretation of a statute. 1990 (47) E.L.T. 500 (S.C.) = AIR 1991 SC 2049 (Union of India & Ors. v. M/s. Wood Papers Ltd & Ors.) That also was with regard to interpretation of a fiscal statute and the exemption provision and the same proposition as indicated earlier is reiterated by the Supreme Court in 1994 (73) E.L.T. 769 (S.C.) = (1994) Suppl. (3) SCC 606 (Novopan India Ltd., Hyderabad v. Collector of Central Excise and Customs, Hyderabad) wherein the Supreme Court pointed out that while interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed, it must, however, be borne in mind that absurd results of construction should be avoided. The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language. (1999) 8 SCC 266 (Chandra Kishore Jha v. Mahabir Prasad an....
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....bsp; If a word is defined in the Act it is that meaning which must be adhered to. But if a word is not defined in the Act, the word must be construed in that sense so that the people can understand the subject-matter in respect of which it is used in a statute. If the word has received judicial interpretation it is the preponderance of judicial opinion which must be accepted. (ii) The statement, object and reasons are ordinarily not used as an aid to the construction of a statute. It is sometimes referred to for the limited purpose when all other modes of interpretation fails. (iii) If there is an ambiguity in a taxing statute the benefit should be given to the tax-payer. 32. In interpreting the statute as pointed out by the Supreme Court in 1996 (8) SCC 1 (Nagar Mahapalika, Meerut v. Prem Nath Monga Bottlers Pvt. Ltd. and another). The Supreme Court pointed out that a mineral water and aerated water/cold drinks are different and distinct articles, whether in common parlance or in the commercial parlance and this always may be taken into consideration. In the instant case also tea with....
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.... Trade and Merchandise Marks Act, 1958 (43 of 1958) or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person. Explanation II. - "Alcohol," "Opium", "Indian Hemp", "Narcotic Drugs", and "Narcotics" have the meanings respectively assigned to them in Section 2 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (14 of 1955).' The Supreme Court after considering that in paragraph 5 has pointed out as follows: "The medicine manufactured by the appellants is not registered under the Trade and Merchandise Marks Act. Therefore, it would attract levy only if its container or packing carried any distinctive marks so as to establish the relation between the medicine and the manufacturer. But the identification of a medicine should not be equated with the produce mark. Identification is compulsory under the Drug Rules. Technically, ....
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....an to-day no longer be applauded and legitimised as splendid work by a wise man but has to be condemned and punished with the severest of penalties." 35. But the question in this case is that whether tax at all was levied on the date of removal through tea chests or gunny bags. On careful examination and scrutiny I hold that they do not come within the entry. They must be deemed to be included in tea and others. 36. It is correct that legislative intendment, speech of Finance Minister or parliamentary proceeding or legislative history, all are irrelevant when the language of the statute is clear, in such a situation it is the language which must be taken care of. But if there is ambiguity, doubt or legislation is not clear the external aid must be taken into account. In the case in hand there is no definition of 'unit container', the "brand name" also does not clinch the issue and in such a situation the court in order to have the correct interpretation must take the external aid. 37. It has been found that there was no tax on tea removed in tea chests or gunny bags and as such tea does not come within the sweep "tea put up in unit container with brand names....