TaxTMI 
TaxTMI 
1977 (7) TMI 53
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.... petroleum jelly to which are added some herbs and perfumes and in the case of Vasmol Emulsified Hair Oil, the rest of the contents consists mainly of mineral Oil to which emulsifying agents are added and also a small amount of herbs and perfumes, I may mention at this stage that although there is some difference as regards the exact amount of lead acetate and sulphur precipitated in these products, it is common ground that these two products contain about 1.5% to 2% of lead acetate and about 1.5% to 2% of sulphur precipitated and that the rest of the contents thereof are such as would be found in an ordinary pomade or an ordinary emulsified Hair Oil. 3. The Finance Act, 1961 (Act No. 14 of 1961) came into effect in 1961 and by reason of Section 13 of that Act the First Schedule of the said Act was amended, inter alia, by the insertion of Item No. 14F therein. I shall come to the contents of this item in some detail a little latter. lt may be mentioned here, however, that by reason of this item, hair lotions, creams and pomades were included in the ambit of Item 14F. On 6th March, 1961 the Collector of Central Excise, Bombay issued a Trade Notice, which, inter alia, stated that un....
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....is order dated 10th December, 1964 rejected the said revisional application without giving any grounds or reasons. The Petitioner then filed another petition under article 226 of the Constitution of India being Miscellaneous Petition No. 355 of 1965. Along with this petition the Petitioner also filed certain affidavits to which I shall have occasion to refer a little later. By his judgment and order dated 14th September, 1970 in that petition by learned brother S.K. Desai, J. questioned the said order dated 10th December, 1964 on the ground that it was not a speaking order and remanded the case back to the Central Government for disposal according to law. The Petitioner by his Attorney's letter dated 24th July, 1971 requested respondent No. 1 to take up the revision petition. Along with the said letter the Petitioner forwarded to respondent No. 1 nine affidavits, copies whereof are annexed to the present Petition and marked Exh. "A" (Colly) to this Petition. These affidavits are of persons who claim to be either dealers in Vasmol Products or consumers of the same, and, briefly, are to the effect that the said products are sold and purchased merely as hair dyes. The revisional appli....
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....f the First Schedule to the said Act, because the wording of the said item is wide enough to include all hair creams and hair pomades even if they contain some ingredients which will make them useful only to certain sections of the public. Respondent No. 2 placed reliance on the advertisements issued by the Petitioner which were tendered before him and in which the petitioner claimed for the aforesaid products the qualities of "Hair Darkener", "Hair Tonic" and "Hair Dressing". On the basis of these advertisements respondent No. 2 observed that the petitioner had claimed all the hair dressing virtues for the said Vasmol products which could be claimed for ordinary hair creams and hair pomades in addition to the quality of a hair darkener. Respondent No. 2 came to the conclusion that the aforesaid Vasmol products were covered by the said item 14F of the First Schedule to the said Act and were exigible to excise duty under the said item. It is this order which is sought to be impugned in this Petition, which has been filed on 1st February, 1972. 4. Very briefly the contention of Mr. Desai the learned Advocate for the Petitioner, is that in all matters of taxation it is how a product....
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....and Toilet preparations" used earlier. It was urged by him that the said Vasmol products manufactured by the Petitioner would certainly fall within the connection of the terms "Cosmetics" or "Toilet preparations". It was submitted by him that the said word "namely" was used herein the same sense as the expression "that is to say" and that both these expressions are often used in statutes merely in an illustrative sense. In support of this submission Mr. Bhabha relied on the decision of Federal Court in Bhola Prasad v. Emperor (AIR 1942 E.C. 17) where it was held that the words "that is to say the production, manufacture, possession, transport, purchase and sale of intoxicating liquors, opium and other narcotic drugs" in Schedule No. 7 List 2, item 31 of the Government of India Act, 1935, explain or illustrate and do not amplify or limit the words "intoxicating liquors and narcotic drugs" immediately preceding them. Mr. Bhabha also relied on the decision of my learned brother Tulzapurkar J. in Miscellaneous Petition No. 491 of 1964 decided on 30th April, 1970 where it was observed that the use of the expression "namely" or the expression "the following, namely" in Item 15A in the Fi....
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....he skin including beauty creams, vanishing creams, cold creams, make up creams, cleaning creams, skin foods and tonics, face powders, baby powders, toilet powders, and talcum powders. (ii) Hair lotion, creams and pomade." By the Finance Act, 1975 the descriptive part of the said item was amended, inter alia, to cover, in express terms, perfumed hair oils, shampoos whether or not containing soap or detergent and shaving creams. If the expression "namely" had been used in the said item merely as illustrative, then perfumed hair oil would have been always included within the connotation of the word "Cosmetics" or the expression "Toilet preparations" hence there would have been no need to include the same in the descriptive part of the item by amendment of the statute. The same is the position regarding shampoos and shaving creams, skin foods and tonics. The very fact that these goods had to be specifically included in the said item by way of amendments shows that the word "namely" was used in the said item not in an illustrative sense but in a restrictive sense. The aforesaid submission of Mr. Bhabha must, therefore, be rejected. 6. This brings to the question as to how the a....
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....e asserted that in Canada both the peanut and cashew nut were considered by almost everyone (except possibly by botanists) as falling within the category of "nuts" and that the words "fruit" and "vegetables" used in their obvious and popular meaning would not include "nuts of any sort", or the peanuts, salted peanuts or cashew nuts sold by the defendant. Cameron J., who delivered the judgment, posed the test as follows (page 129) "......Would a householder when asked to bring home fruit or vegetables for the evening meal bring home salted peanuts, cashew nuts or nuts of any sort ? The answer is obviously `no'". In S.B. Sugar Mills v. Union of India (A.1.R. 1968 S.C. 922) = 1978 E L.T. (J 336), the question related to the interpretation of Item 14H of the First Schedule to the very Act which is under consideration before me viz., the Central Excises and Salt Act, 1944. The observations in paragraph 16 of the said report make it clear that the interpretation of the item which commended itself to the Court was according to the sense in which the commodity was known to the commercial community. Tulzapurkar J. in his judgment delivered on 30th April, 1970 in Miscellaneous Petition No.....
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....t and understand them in usual course. But once an article is classified and put under a distinct entry, the basis of classification is not open to question. Technical and scientific tests offer guidance only within limits. In Union of India v. G.W.F. Mills (AIR 1977 S.C. 1548) the Supreme Court has held that the well-known rule in interpreting items in statutes like the Central Excises and Salt Act, 1944, is that "report should be had not to the scientific or the technical meaning of such terms but to their popular meaning or attached to them by those dealing in them, that is to say, their commercial sense". 7. As against this, Mr. Bhabha placed strong reliance on certain observations in Dunlop India Ltd. v. Union of India referred to by me earlier. It was submitted by Mr. Bhabha that in that case the Supreme Court in its judgment had taken note of the chemical composition of the product in question before the Court and had held that scientific and technical tests are material in the interpretation of items in fiscal statutes. It was urged by him that by the expression "popular meaning" was meant not the sense a layman might understand an expression used in describing an item to....
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....Central excise duty as falling under item 14F(iv) in the First Schedule to the said Act, which is the very item in question before me. The petitioners came to this Court by way of Miscellaneous Petition No. 465 of 1966, but this petition was summarily rejected by K.K. Desai, J. (as he then was). The Petitioners then went in appeal. The appeal Court took the view that by reason of the composition and ingredients of the said product manufactured by the petitioners it would not be possible to accept the contentions of the petitioners' Counsel that the said product should not be regarded as a hair lotion and also took the view that the use of the product as a hair darkener, though a relevant factor, would not be determinative of the matter. In coming to this conclusion the Court has relied undoubtedly on the chemicals composition of the said product. It was urged by Mr. Bhabha that in view of this decision, the question before me was practically concluded against the Petitioner. I am afraid, on a closer scrutiny, this Judgment is of no assistance to Mr. Bhabha at all. A perusal of the judgment shows that the Collector of Central Excise in that case had before him the report of the Depu....
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....cision of the Supreme Court in V.V. Iyer v. Jasjit Singh (AIR 1973 S.C. 194). It has been held in this case that where two alternative interpretations are possible of the scope and applicability of item 74(vi) of Part V of Schedule I to Imports (Control) Order, 1955 made under section 3(1) of Imports and Exports (Central) Act, 1947, and Customs authorities adopt a reasonable view relating thereto which is favourable to Revenue, such finding of the authorities cannot be interfered with by the High Court under article 226 of the Constitution of India, even though another view contrary to the one adopted is in favour of the subject. The Supreme Court observed that there was nothing in the decision of the Collector, which was the impugned decision, which could warrant its condemnation as perverse or unreasonable. It is undoubtedly true that where two views are reasonably possible regarding the scope and applicability of an item in an Excise Act or Customs Act and one of these views is taken by the authorities concerned the Court cannot interfere with the same. It cannot, however, be said that unless the decision is totally perverse or such as no reasonable person could ever take, the C....
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....ble under the said item 14F of the First Schedule, but if they cannot be so regarded, they cannot be held liable for payment of excise duty under that item Coming to the question as to how these products were known in trade or commerce parlance, in my view, the most important evidence is furnished by the affidavits produced by the petitioner before respondent No. 2. The petitioner has also produced certain opinions before respondent No. 2 which will have to be taken into account. I may make it clear that although the petitioner has also sought before me to rely on certain further opinions and as alleged classification by the Indian Standard Institute, which have been obtained by the petitioner after the decision of respondent No. 2, in my view, it is not necessary for the disposal of this petition to go into these opinions and the said classification by the Indian Standard Institute, with the result that I am not concerned with the question as to whether the petitioner is entitled to rely on the said opinions or the said classification in this matter. As far as the aforesaid affidavits are concerned, some to these affidavits were annexed to the Miscellaneous Petition No. 355 of 196....
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.... made an affidavit to the same effect. Govindji C. Sunderji of Bombay has made an affidavit stating that he has been using the product "Vasmol" for about four years purely as a hair dye. Affidavits have also been filed by one K. Kade Mohideen of Bangalore and one P.V. Gopala-krishnan of Madras to the same effect. As against these affidavits the Excise authorities had not filed any affidavits before the respondent No. 2 at all. Even as far as the present petition is concerned, the respondents have not filed any affidavit of any dealer or consumer of the aforesaid Vasmol products. As far as the impugned order is concerned, I find that respondent No. 2 has referred to four affidavits from traders selling Vasmol products to the effect that they have supplied Vasmol as a hair darkener and that Vasmol is not sold as a cosmetic, and he has also noted that two affidavits have been filed by persons using Vasmol saying that they use it as a hair dye and not as a hair lotion or hair cream. The question which I have really to consider is whether the effect of these affidavits has been considered by respondent No. 2. Respondent No. 2 in his order has stated that the Counsel for the Petitioner d....
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....ost of the information regarding a product that a consumer gets is from advertisements and, of course, from how much of it he is prepared to believe. Respondent No. 2 has pointed out that the labels on the cartons and bottles of Vasmol Emulsified Hair Oil and Vasmol Pomade described these products as "Hair Darkener, Hair Tonic, Hair Dressing". He has pointed out that the advertisements also claimed that Vasmol helps remove dandruff, relieves itching scalp and checks falling hair. He has relied on the following statement appearing in the advertisements : "Use `Vasmol' as you would any hair dressing; rub it thoroughly down to the hair roots and then brush or comb the hair. `Vasmol' can be used more than once a day according to individual dressing requirements. `Vasmol' is an ideal hair darkener, hair dressing and hair tonic combined in one formula." Respondent No. 2 has pointed out that in the advertisements all the hair dressing virtues are claimed for the Vasmol products such as to be claimed for ordinary hair creams and pomades, besides claiming a hair darkening effect. On the basis of the advertisements, respondent No. 2 has observed that Vasmol products can, therefore, really....
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....11. There is one other factor also which has to be acted in this connection. From the impugned order it appears that the Drugs Controller, Bombay, stated in his letter dated 16th December, 1958 addressed to the Petitioner that on perusal of the formulas of the products Vasmol Emulsified Hair Oil and Vasmol Pomade, it was observed that both these preparations contained 1% of lead acetate. However lead and its salts were considered to be cumulative poisons. In these circumstances, the Drugs Controller requested the petitioner to forward to his office scientific data to show that lead acetate would not be injurious to health if used continuously in the said Vasmol preparations. By a subsequent letter dated 26th October, 1961, the Director, Drugs Control Administration, Maharastra State, informed the petitioner that there should be a caution statement to the effect that the said Vasmol products were for external use only and use thereof should be avoided on unintact asking or by mouth. This caution statement appears on the bottles of the aforesaid Vasmol products. In connection with this caution statement respondent No. 2 has observed that such a caution statement, cannot take the said....
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....ms Department. Against this decision, the petitioners appealed to the Appellate Collector. In their written reply to the Assistant Collector it was not stated by the petitioners that these dumpers were mining machinery. But the petitioners contended before the Appellate Collector, for the first time, that the correct classification of the said dumpers would be as mining machinery falling under item 72(18) of the Indian Customs Tariff. It was in these circumstances that Deshmukh J. rejected certain affidavits which were filed by the petitioners alleging that classification of the said dumpers as conveyances under item 75 was erroneous. It is significant that some of these affidavits were never presented before the Appellate Collector. Deshmukh J. has also referred to the fact that although, if the said dumpers were classified as mining machinery falling under item 72(18), they would have invited a much lower customs duty than if they were classified as conveyances falling under item 75, yet the petitioners there had classified them as conveyances. It was in these circumstances that the conduct of the petitioners was regarded as negativing the correctness of the advantage as contain....
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....rd in this petition. In my view, therefore, the decision of respondent No. 2 is liable to be quashed. 14. The next question which arises is as to whether in view of the decision of respondent No. 2 being quashed, the matter should be remanded for consideration by respondent No. 1 or whether I should proceed to decide it myself. In this connection, it must be noted that this matter has a somewhat chequered history. The Petitioner has gone through the full gamut of hearing before the Excise authorities. In the aforesaid Miscellaneous Petition No. 355 of 1965 my brother Desai J. had quashed the decision of the Central Government, and directed the case to be remanded to the Central Government with a direction that it should be disposed of in accordance with law. It is on such remand that respondent No. 2 has passed the impugned order. In view of this, it appears to me that it would be unduly harsh to the petitioner to remand the case and direct him to go back to the revisional authority viz. respondent No. 1. Notwithstanding this I would have remanded the matter, if I had come to the conclusion that although the order of respondent No. 2 was bad in law on the relevant material before ....
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.... of the grant of a permit to ply a bus on a particular route, a single Judge of the High Court undertook an evaluation of the merits on his own, that was beyond his jurisdiction. It was held that even if there were errors of law vitiating the Tribunal's finding, the question about the grant of the permit could not be finally decided by the High Court itself and the case must go back to the Tribunal for fresh consideration as a matter of law and in the interests of justice. This decision relates to a grant of permit where there is a certain amount of discretion involved and considerations are altogether different from those which might prevail in the question of construction of an item in an excise Tariff. Moreover, this decision does not in any manner weaken the authority of the aforesaid two decisions referred to by me. In fact, in a more recent case viz. Health ways Dairy Products Co. v. Union of India [1978 E.L.T. (J 457) = AIR 1976 S.C. 2221] the Supreme Court took into account the evidence on record and came to the conclusion on that condensed skimmed milk prepared from skimmed milk could not be considered to be condensed milk within the meaning of the said term in item 13 in ....