TaxTMI 
TaxTMI 
2016 (7) TMI 152
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....t the material time read as follows: - "10. In heading Nos. 39.20 and 39.21, the expression plates, sheets, film, foil and strip applies only to plates, sheets, film, foil and strip (other than those of Chapter 54) and to blocks of regular geometric shape, whether or not printed or otherwise surface-worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut, they become articles ready for use). 15. For the purposes of heading Nos. 39.19, 39.20 and 39.21, the expression film means sheeting of thickness not exceeding 0.25 millimeters." Vide Notification No. 53/88 vide entry No. 35-37 provided following exemptions: - 35. 39.20 Films (other than of regenerated cellulose) 25% ad valorem If produced out of goods falling under heading Nos. 39.01 to 39.15, on which the duty of excise leviable thereon under the Central Excises and Salt Act, 1944 (1 of 1944) or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has already been paid. 36. 39.21 Cellular films or sheets, other than of polyurethanes 25% ad valorem If produced out of goods fall....
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....rials must be duty paid. 8. It has been disputed neither by the CERA nor the Department that the raw materials were indeed duty paid and fell under Headings 39.01 to 39.15. In other words, the two conditions - (ii) and (iii) stood fulfilled. It is also not in dispute that the final product was not of regenerated cellulose and fell under CH 39.20. The only issue in which there was disagreement between the CERA on one hand and the Department and the noticee on the other hand was the description of the final product. The noitcee had described their final product as foils and not as films though the Chapter heading, i.e. 39.20 given, was in accordance with the specification of the exemption Notification No. 53/88. It was CERAs contention that since the final product manufactured and cleared by the noticee was foils and not films, the noticee was not entitled to the benefit of the exemption Notification No. 53/88. 9. The noticee have challenged the view treating foils as different from films and drawn my attention to Chapter Note No. 10 of Chapter 39 of the Tariff. The said note provides that for the purposes of CH No. 39.19, 39.20 and 39.21 (all three of which deal w....
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....lector of Customs 1997 (91) ELT 598 (Tri) (g) Sriram Refrigeration India Ltd. Vs. Collector of Customs 1993 (68) ELT 600 (Tri) It was argued that in the case of K. Mohan & Co. (supra), it was held that the films made of plastics fall in a category of their own and do not fall in the categories of plates, sheets, foils, strips etc. It was argued that the Commissioner has wrongly relied on the said decision to drop the demands. It was also argued that the arguments film is generic, while a foil is a specie thereof, has been rejected by the Hon'ble Bombay High Court in the case of A.V. Jain (supra). It was argued that in Customs and Excise matters reliance is placed not so much on technical and scientific definition, but on the commercial usage. Since the respondent themselves have cleared the said goods by describing them as foils, they cannot now claim that the same are films. It was argued that not all goods of thickness less than 0.25 mm be classified as films. It was also argued that the rules of interpretation are not interpreted while interpreting an exemption notification, but they are applicable only for classification of goods under the tariff. In....
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....addy husk and rice husk do not denote the same commodity. Paddy Husk cannot be treated as rice husk. He argued that every entry is different and distinct meaning from the other entry in the tariff. He argued that any of products of less than 0.25 mm were considered as films as per the expert opinion of Dr. M.A. Shenoy of Department of Chemical Technology, Bombay, that there can be nothing which can be called as a foil. It can be seen from the said expert opinion that foil of thickness of less than 0.25 mm. He argued that if the argument of the respondent is accepted then the term foil in the tariff will become redundant. In so far as the term film or the foils are concerned, they referred to different things as has been held by the Hon'ble Bombay High Court in the case of A.V. Jain (supra). In the said decision, the Hon'ble High Court has observed as under: - para 7, 10 and 12. 7. Before turning to the decision in Precise Impex, the trade usage and the academic or academic world, I will consider the question in the light of a proposition canvassed by Mr. Dhanuka. The proposition is that Ex. A must be considered in the proper context and setting. The context is the ....
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....c. etc." Significantly, while the CESTA and C.T.A. Items both refer to films, it is only in the C.T.A. Item that films and foils are both mentioned. In the CESTA Item, there is no reference to oils. According to the Explanation given in Ex. A, the exempted articles are to be construed in the same manner as they have been dealt with by CESTA. The necessary implication is that films are covered by the umbrella of all articles, in contradistinction to the exclusions spelt out in the Table. Mr. Dhanuka submitted that the reference to CESTA was inappropriate as the sources of power being considered arose from different enactments. But if there is a reference to a statute when exercising power under another statute, the first cannot be ignored and treated as if totally inappropriate as a device for construction of the 2nd statutes language. prima facie, therefore, petitioner establishes that a film is within the exemption and not the exclusion clause of Ex. A. This satisfies the basic requirement in construing fiscal statutes that a person who wants to take the advantage of a provision relating to a concession or advantage must satisfactorily show that he falls within that pr....
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....etallised polyester film of a thickness of 25 micron (0.025 mm) therefore fall within the term foil. ... ... ... The expression Foil scientifically and technically means very thin material or sheeting or film having a thickness upto 0.025 mm." Reliance is placed upon an opinion given by the Chief Chemist of the Customs. A copy of the report has been made available and therefrom I reproduce the portion relied upon :- Film :- A sheeting having nominal thickness not greater than 0.25 mm. Foil :- Note. In the case of some materials this term is reserved for the thinner materials, e.g., unsupported PVC film is less than 0.003 inch (0.0762 mm). Modern Plastics by Harry Barron (Page 355) defines technically foil, film and sheet, according to thickness. Foil is the term applied to materials which are made in continuous rolls and is less than 1/l000h of an inch thick (0.0254 mm). Foil is familiar as the well-known wrapping materials such as Cellophane. In the book Basic Chemistry of Textile Preparation by S.R. Cockett and K.A. Hilton (page 73) it is stated that thinnest sheet plastics of thickness upto 1 mil (0.025 mm) are termed as foil. ....
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.... the expression film is generic, while a foil is a specie thereof. If this interpretation is accepted, very few articles made of plastic would escape the tabular exclusions, for every article could somehow be fitted into the words tubes, rods, sheets, foils, sticks, etc. etc.. The legislative intent was to maintain a distinction between the two expressions. This is clear from what has been stated above vis-a-vis the words used in the C.T.A. and CESTA entries. Additional Duty under C.T.A. is in lieu of excise. Excise is leviable under CESTA. Under CESTA, the Indian manufacturer describes a film as being of 24 micron thickness. The ISI Glossary accepts sheetings of a thickness not greater than 0.25 mm. as being a film. Scientifically and commercially, the imported article would, therefore, be a film, and, not in the generic sense of including a foil, but something distinct and different, therefrom. This brings me to the Precise Impex decision. 2.3 Learned AR also argued that in terms of decision of K. Mohan & Co. (supra), relied by the Commissioner, also the film and foils are separate and different items, and therefore Commissioner has wrongly interpreted the said decision.....
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....d only as thin sheets of plastic material, they can be more accurately described only as sheetings and not sheets. It is pointed out that the goods are in the form of large rolls containing films several metres long. Such huge lengths can only be called sheetings for the expression sheets, it is said, connotes only smaller lengths or bits cut out from sheetings which mean sheets of immense lengths. Also, being in the form of rolls, they cannot be said to be articles of rectangular shape merely because, when cut into segments, they may fall into rectangular pieces. 7. The answer given by the Bombay High Court to the contention that the goods were `foils was that while it may be that, technically and scientifically speaking, the articles in question may be capable of being characterised as `foils, one is concerned in a customs or excise matter not so much with the technical or scientific definitions of these terms but rather with commercial usage. One has to see how the trade understands the expression films and one should also bear in mind in this connection that the expressions set out in the table are applicable not merely to the articles with which we are at present ....
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....ings. Actually, we also think that there is a factual confusion on this aspect. While one of the Collectors has referred to the goods as being of thickness varying between 0.025 mm and 0.501 mm, it is seen from another of the orders that the goods are 3000 metres in length, 0.501 mm in width and 0.025 mm in thickness. If the latter is the correct version and all the goods are only 0.025 mm in thickness, the question now posed will not at all arise. However, as indicated above, there is force in the contention of Shri Ganesh that if the articles be held not to be `films', because they exceed 0.25 mm in thickness, they would be `sheetings' rather than `sheets' and would therefore not fall within the meaning of the expression 'sheets' in the table. He argued that the interpretation adopted by the Commissioner obliterates the identity of foils from the tariff in so far as to foil would be covered by the term film. 3 Learned Counsel for the respondent argued that the films is generic and foils is species thereof, he argued that all foils would be covered in the description of films. He argued that the decision of Hon'ble Supreme Court in the case of A. Mohan & Co. is clearly a....
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.... us by its learned counsel, Shri Soli Sorbajee is that in commercial or in common parlance, rexine cloth is not understood or dealt with as a cotton fabric but as a distinct commodity. It cannot, therefore, be called a cotton fabric and even if it is treated as one by virtue of Tariff Item 19, the predominance or percentages referred to in the said Tariff Item should be applied in relation to the final product and not with reference to the cotton cloth which represents a very minor portion of the final product. The contention of the Revenue, on the other hand, is that coated fabric (in the case of the respondent, rexine cloth) is expressly placed within the purview of the cotton fabric by the Parliament. In the face of such express inclusion, there is no room for arguing that the rexine cloth or coated fabric is not cotton fabric. May be that rexine cloth is not called or dealt with as a cotton fabric in the commercial world or in common parlance but that does not prevent the Parliament from treating it as a cotton fabric for the purposes of the Act and indeed the Parliament has chosen to include it within the ambit of cotton fabrics for the purposes of levying excise duty. Since t....
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....ine was examined. It was held that though Urea was not used as fertilizers, still it was to be considered as fertilizer in terms of the Heading 31.02 in terms of the Chapter Note 31 of Chapter 38. The Hon'ble Supreme Court in the said case observed as follows: - "12. Consequently, on a conjoint reading of the express terms of Notification No. 40 of 1985 and the relevant headings and sub-headings of Chapter 31 of the Tariff Act, it must be held that the appellant by captively consuming ammonia had manufactured molten urea, a chemical fertiliser. It is difficult to appreciate the contention of Shri Bhat, learned Additional Solicitor General that the spirit of the notification was to give the benefit only to soil fertilisers as final product which could be utilised by the cultivator in agriculture and with that end in view the notification was promulgated. On the express language of the notifications, it is not possible for us to agree with this contention. If that was the view of the Central Government while promulgating the said notification, nothing prevented the Central Government from indicating that it was not seeking to cover the goods mentioned in Chapter Heading ....
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....emical fertiliser. If the contention of Shri Bhat, learned Additional Solicitor General, is accepted, Condition No. 2 as laid down by the said notification will have to be redrafted by adding the restrictive words `soil fertiliser instead of the wide word `fertiliser as employed by the exemption granting authority in its wisdom. It is obvious that the term `fertiliser is genus which may consist of various species of fertilisers, namely, chemical fertiliser, soil fertiliser, animal or vegetable fertilisers, as seen from description of various types of fertilisers found in Chapter 31 of the Tariff. It has also to be noted that the chapter notes of the Chapters referred to by the said notification have to be read as a part and parcel of the said notification. In this connection, we may usefully refer to a decision of this Court in Fenner (India) Ltd. v. Collector of Central Excise, Madurai [1995 (77) E.L.T. 8 (S.C.)] wherein one of us S.P. Bharucha, J. speaking for a two-Member Bench of this Court observed that the Tariff Schedule contained rules for its interpretation which required that for legal purposes classification would be determined on terms of the headings and any relative S....
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....licitor General that the term `fertiliser' employed by the said notification must be understood by adopting the common parlance test to be referred to soil fertiliser only." 3.2 Learned Counsel also argued that the individual rate prescribed in the Notification are exclusively for the purpose of countervailing duty and are not intended for the levy of Central Excise duty. 4. We have gone through the rival submissions. We find that the order of Commissioner is based on two grounds: - (i) That the CERA has dropped their objection, and (ii) That Hon'ble Supreme Court in the case of K. Mohan & Co. (supra) has held that the term film is wide enough to cover foil and sheets. We find that the dropping of objection by CERA has no relevance whatsoever for the purpose of adjudication. 4.1 It seen that the sole ground in the entire proceedings to allege that the respondents have cleared Foil is the description on the invoice. No definition of Foil has been relied upon by the appellants in the review order. It has not been stated how the Foil is different from Film. It has not been disputed that the products cleared by the respondents are of less than 0.....