TaxTMI 
TaxTMI 
TaxTMI 
1967 (9) TMI 153
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....manufactured in its factory, after April 23, 1962. The foundation of the demand was clause (i) of item 26-AA as it was when it was introduced into the schedule by the Finance Act of 1962. That clause as is then stood reads: "Item No. Description of Goods Rate of Duty 26AA IRON OR STEEL PRODUCTS, THE FOLLOWING NAMELY,-- Five per cent, ad valorem plus the excise duty for the time being leviable on pig iron or steel ingots, as the case may be (i) Bars, rods, coils wires, joists girders, angles, channels, tees; flats, beams, zeds, trough, piling and all other rolled forged, or extruded shapes and sections not otherwise specified. (5) When this clause became clause (i-a), the rate of duty was altered. But, with that, we are not concerned. (6) It is undisputed that when item 26-AA was added tot he schedule, the State Government had in its possession in its factory, stocks of iron and steel products, such as, flats, squares, and rods and the like. Those products had been acquired from their manufacturers, when they were not excisable goods. Excise duty on such products became payable only when item 26-AA became part of the First Schedule to the Act. (7) But when the products o....
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....case. It was maintained that this writ petition raises a dispute between the Government of India and the State of Mysore concerning the existence of a legal right and that Article 131 invests the Supreme Court with exclusive jurisdiction to adjudicate upon that dispute. (12) A considerable part of the argument surrounded the question as to how we should understand the expression 'legal right' to which this article refers, and, the words 'subject to the provisions of this Constitution' with which it opens. (13) But the appeal to Article 131 is possible only if the Central Government and the State are the disputants before us. If they are, it becomes necessary to examine the character of the dispute between them. Otherwise not. (14) We think that this writ petition presents no dispute between the Central Government and the State. Whether Mr. Advocate General is right or not, in his argument that not even the State Government is a disputant before us, it is clear that the Central Government is not. The Central Government functioned as a Tribunal when it disposed of the revision petition under Section 36 of the Excise Act, and, a tribunal which disposes of a revision....
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....ts adduced in the proceedings and according to law". (P. 1148) (17) So it is plain that the Government of India which exercised in the case before us revisional jurisdiction under Section 36 of the Central Excise Act, functioned only as a tribunal. (18) Sections 35 and 36 of that Act read: "35. Appeals--(1) Any person deeming himself aggrieved by any decision or order passed by a Central Excise officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue, or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by the Central Government. Such authority or Officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against. Provided that...... (2) Every order passed in appeal under this section shall, subject to the power of revision conferred by section 36, be final. 36. Revision by Central Government- The Central Government may on the application of....
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.... the form of excise duty if the excise duty demanded by the Central Excise is exigible, is far too slender a foundation for the postulate that in every controversy arising under the provisions of the Central Excise Act, the Central Government is necessarily a disputant. The acceptance of such interpretation would make the Central Government a party to every proceeding under the Central Excise Act in the role of a disputant, and, that consequence can scarcely fit into its constitution as a tribunal under section 36 of the Act. (23) The Central Government is before us not because it is a party to any dispute but as the tribunal which decided it. It happens that the revisional jurisdiction was confided to it in the same way in which it could have been bestowed on some one else. (24) So we negative the argument constructed on Article 131 of the Constitution. (25) The discussion so far made takes us on to the real question which concerns the interpretation of clause (i) of item 26-AA of the First Schedule to the excise Act. That clause imposes excise duty on iron or steel products which are enumerated in it. That enumeration is: "Bars, rods, coils, wires, joists, girders, angl....
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....pades and other agricultural implements, etc., duty will have to be paid on the forged products, till such quantity of the bars and rods is stock from 24-4-62 have been utilised and converted into forged implements and cleared from the factory." (30) In the affidavit accompanying this petition, it is stated that the material used for the manufacture was "high carbon steel in the form of flats, squares and rods only". Rods and flats are in clause (I), and, those rods and flats were not excisable articles when they were acquired by the factory, since, item 26-AA was not then in the First Schedule to the Act. It is not disputed that the squares to which the affidavit refers also fall within clause (i) although they are not in the express enumeration of that clause. (31) It was maintained by Mr. Advocate General that the agricultural implements which were not manufactured out of pig iron or steel ingots, but, came into being by conversion of the already manufactured iron or steel products, are not iron or steel products in the sense in which that expression occurs in item 26-AA. (32) We think that the iron or steel products to which item 26AA refers, are products manu....
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....ion which so debilitates the exemption, cannot be true. (36) If a product is manufactured from pig iron or steel, it is an iron or steel product to which item 26-AA refers. But if that product is again used for the manufacture of another product, it would not be correct to regard it as an iron or steel product which had already come into being when the first product was manufactured. It is a product manufactured out of an earlier product and not a product made from the raw material out of which that earlier product was manufactured. That is, precisely the reason why the notification made under rule 8 speaks only of products made from "pig iron or steel ingots", and not of products made out of such products. (37) There is in the other clauses of item 26-AA some guidance for a proper comprehension of the expression "iron or steel products". The products which are enumerated in the enumeration of those other clauses, are manifestly products manufactured out of pig iron or steel ingots, and, none of them is a product manufactured out of an iron or steel product. Mr. Central Government Pleader who did not dispute that it was so, maintained that even a product manuf....
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.... are thus appropriately referred to as "shapes and sections". The description of the unspecified products as "other rolled, forged, or extruded shapes and sections" clearly demonstrates that the named ones are shapes or sections, and, it appears to us that those words have a technical meaning which we shall presently discuss. So the products catalogued retain their character as metal in more than one form although for the purpose of item 26-AA they are iron or steel products. It is so because that item says so. (43) But agricultural implements are tools or instruments which are used as such, for agricultural operations. They are not shapes or sections which the metal of which they are made has become. They constitute merchandise of a very different kind from what the named products are. Unlike the implements in the named products, there is nothing but the metal. (44) The submission of Mr. Central Government Pleader that a joint or a girder or an angle which is within the express enumeration could be used for a building purpose in the same way in which an agricultural implement could be used for an agricultural operation, does not make all of them ejusdem gener....