TaxTMI 
TaxTMI 
2008 (7) TMI 12
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....ng duty on the said product under Tariff Item 68 with effect from 1st March, 1975. Apparently, the classification list, which was submitted by the appellant, classifying the aforesaid product under Tariff Item 68, was also duly approved. 3. In relation to the aforesaid product, for the first time, the respondent No.1 issued a general show-cause notice to the appellant on 13th July, 1982, asking the appellant to show-cause as to why its "liquid hair dye" should not be classified under Tariff Item 14F and charged with duty accordingly. The notice, however, stated that pending determination of the question raised, the classification of the aforesaid product would continue to be under Tariff Item 68 on a provisional basis and that the appellant would have to execute a bond for provisional assessment under Rule 98. The appellant responded to the notice and filed its written submissions. Despite the above, four specific demand notices dated 2nd August, 1982, 11th October, 1982, 27th December, 1982 and 17th February, 1983, were issued to the appellant. The demand notice dated 11th October, 1982, was subsequently dropped. The remaining three notices covered the period from January, 1982 t....
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....at the appellant had, in fact, collected from the customer the excise duty, which was payable under Tariff Item 14F though camouflaging the same by increasing the price of the product. On behalf of the Excise Department, it was, therefore, submitted by way of an alternate submission that even if the appellant's product was covered under Tariff Item 68, even then the appellant company would be liable to pay duty at the rate of 105%, since the same had been collected from the consumer under the guise of increase in price and had not been passed on to the Excise Department. 9. On consideration of the detailed submissions made on behalf of the parties, the High Court ultimately held that "hair dye" manufactured by the appellant was covered under Tariff Item 14F of the Central Excise Act, 1940, as was existing at the relevant time and that even if the item was not covered under Tariff Item 14F but Entry No. 68, the appellant Company would still have to pay excise duty at the rate of 105% since the same had been collected from the consumers but had not passed on to the respondents. 10. On the basis of the said reasoning and/or finding, the High Court dismissed the writ petition filed b....
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....1974, Godrej Soaps introduced a new product known as "Godrej - Permanent Hair Dye" (Liquid Hair Dye) in the market. The said product was comprised of two components; one being a darkener and the other being a developer, which were required to be mixed in equal proportion to apply on hair for the purposes of darkening gray hair. Mr. Desai submitted that since the said substance was poisonous in nature, very elaborate instructions had been provided along with the product for its application. At that point of time, no excise duty was levied on the said product under Tariff Item 14F. 17. It was then submitted that on 1st March, 1975, Finance Act, 1975, introduced a residuary entry, namely, Tariff Item 68, in the First Schedule to the Central Excise and Salt Act, 1944 which reads as follows:- "68 - All other Goods, not elsewhere specified." Mr. Desai submitted that by virtue of such entry, all goods, including the liquid hair dye manufactured by the appellant became, exigible at the rate of 8%. 18. As submitted by Mr. Desai, the appellant's aforesaid product appears to have been sent for analysis to the Deputy Chief Chemist and by his letter dated 3rd March 1975, the Superinte....
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....e" within the meaning of the Excise Tax Act. Cameron J., who delivered the judgment, posed the test as follows : "...... would a householder when asked to bring home fruit or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously `no'." 21. It was then submitted that various affidavits affirmed by customers regarding what they felt was meant by "hair lotion" and "hair dye" had been placed before the departmental authorities, but had not been given due importance in classifying the products in question. Taking note of the above, the learned Single Judge went on to observe as follows: "13. In my view, the impugned order of the respondent No.2 shows that he has not really applied his mind to the aforesaid affidavits at all. Although he has noticed them, he has not considered properly the effect of these affidavits. These affidavits were relevant pieces of evidence showing as to how the aforesaid products were regarded in trade and commerce parlance. Instead of giving due weight to these affidavits and considering their effect, respondent No.2 has chosen to place undue reliance on the chemical composition of the said prod....
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....eaning of entry 36 of the Andhra Pradesh General Sales Act, 1957 and was, therefore, taxable under the said Act. 24. It was submitted that as required under the Rules, the appellant company as assessee filed Classification List No. 484 of 1979 classifying "Godrej Permanent Hair Dye" (Liquid Hair Dye) under Tariff Item 68 and it had been duly approved by the Department. 25. Despite the above, on 13th July, 1982, the respondent issued a show-cause notice to the appellant as to why the said "hair dye" should not be classified under Tariff Item No.14F. It was also mentioned that while the matter was pending determination the classification of the said product would continue under Tariff Item 68 on a provisional basis under Rule 9D. On 2nd August, 1982, a show cause-cum-demand notice was issued by the Department alleging short payment of duty under Tariff Item 14F for the period from January, 1982 to June 1982. The said notice was followed by two other show- cause-cum-demand notices, for the periods from July to September, 1982 and from October to December, 1982. Mr. Desai submitted that before the Adjudicating Authority several affidavits sworn by various dealers, retailers and....
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...." occurring in C.P. and Berar Sales Tax Act 1947, this Court held as follows:- "This word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning `that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language." 31. The decision of this Court in Commissioner of Sales Tax, Madhya Pradesh, Indore vs. M/s Jaswant Singh Charan Singh, reported in [1967 (2) SCR 720], where this Court was dealing with the word `charcoal', reiterated the same sentiments as were expressed in Ramavtar Budhiaprasad's case (supra). 32. Mr. Desai also submitted that this Court has repeatedly held that affidavits cannot be disregarded, if no evidence to the contrary was produced. 33. It was lastly submitted by Mr. Desai that the use of the word "namely" in Tariff Item 14F would have to be interpreted as exhaustive and confined only to those products specifically mentioned therein against items (i) to (iv). The said ....
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....tem did not mean that only the items specified therein would fall within its ambit. It was submitted that the learned Single Judge had incorrectly held that items or entries in taxing statutes have to be understood according to the meaning given by people in trade and commerce, who were conversant with the subject and that technical and scientific tests offer only guidance within limits. The learned Additional Solicitor General submitted that the affidavits filed before the learned Single Judge were from traders who stated that "Vasmol Products" were hair darkeners and were not sold as cosmetics. Affidavits filed by users stated that "Vasmol" was being used by them as "hair dye" and not as "hair lotion" or "hair cream". Accordingly the learned Single Judge held that the concerned Vasmol products were "hair dyes" and not "hair lotions". 36. The learned Additional Solicitor General submitted that the Division Bench had held that the report of the Deputy Chief Chemist, Mumbai and the Chief Chemist, Central Revenue, New Delhi and several books and periodicals, which had been relied upon by the petitioners during the hearing of the appeal, had been considered by the authorities b....
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....product became taxable on and from 1st March, 1975, under Tariff Item 68. However, while under Tariff Item No. 14F tariff was imposed at the rate of 105%, tariff under Tariff Item 68 was imposed at the rate of 8%. It is subsequent to the introduction of Tariff Item No. 68 that the appellant's company was informed that its above-mentioned product did not fall under Tariff Item No.14F. 38. From the decisions cited by Mr. Desai, it would be clear that there is substantial difference between a hair dye and pomade and that while pomade is an ointment for hair, a lotion is used as a medicinal preparation to cleanse hair or for skin disorders. Since neither of the two definitions answers the description of the appellant's product, the Court came to the conclusion that the said product was merely a colouring material used for blackening gray hair and not a hair lotion which would stand covered by Tariff Item 14F of the First Schedule to the Act. 39. The Division Bench of the Bomaby High Court in the case of Chimanlal Beliram, had no doubt, come to the conclusion that the product in question was a hair lotion. While doing so, the Division Bench had relied on the standard text-books which ....