TaxTMI 
TaxTMI 
1979 (2) TMI 111
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....ich was in force during the relevant period, that is to say, in 1974 was as follows :- "18. Rayon and Synthetic Fibres and Yarn, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power - Explanation : Rayon and Synthetic Fibres and Yarn shall be deemed to include - (i) Man-made fibres; (ii) Spun (discontinuous) yarn containing not less than ninety per cent by weight of man-made fibres calculated on the total fibre content; (iii) Man-made filament (continuous) yarn; and (iv) Man-made metallic yarn." 2. Under a notification issued by the Government of India on 17th March, 1972, the Central Government exempted yarn spun out of synthetic staple fibre falling under Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 and of the descriptions specified in column 2 of the Table annexes to the said notification from so much of the duty of excise leviable thereon as was in excess of the duty specified in the corresponding entry in column 3 thereof. The relevant portion of Table was as follows :- "Column 1 Column 2 Column 3 2. Yarn Spun - (a) Wholly out of s....
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....h July, 1972, No. 49/73-Central Excise, dated the 1st March, 1973, and No. 28/74-Central Excise, dated the 1st March, 1974 the Central Government hereby exempts yarn spun out of synthetic staple fibres falling under Item No. 18 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and of the description specified in column (2) of the Table hereto annexed from so much of the duty of excise leviable thereon as is in excess of duty specified in the corresponding entry in column (3) thereof : Sl. No. Description Duty 2. Yarn spun - (a) wholly out of synthetic staple fibre of non-cellulosic origin other than acrylic fibre, or (b) partly out of the staple fibre aforesaid and partly any other fibre or fibres (including acrylic fibre) provided that the natural fibre content, if any of the yarn does not exceed 10 per cent of its weight - if the non-cellulosic fibre content of it is- (i) 50 per cent or more Rs. 15.00 (ii) less than 50 per cent but not less than 25 per cent Rs. 12.00 (iii) less than 25 per cent but more tha....
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....the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 52/72-Central Excise, dated the 17th March, 1972, the Central Government hereby exempts yarn spun out of synthetic staple fibres falling under Item No. 18(i) of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), and of the description specified in column (2) of the Table hereto annexed from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entry in column (3) thereof. THE TABLE Sl.No. Description Duty 1. Yarn Spun - Rs. per Kg. (a) Wholly out of synthetic staple fibre of cellulosic origin or (b) Out of staple fibre aforesaid and cotton only, provided that the cotton content of the yarn does not exceed 10 per cent of its weight - (i) of 84 or more counts 4.00 (ii) of 69 or more counts but less than 84 counts 3.00 (iii) of 51 or more counts but less than 69 counts 2.80 ....
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....exed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table. 6. On 20th March, 1975, an order was passed by the Assistant Collector of Central Excise and duty was levied at Rs. 15/- per Kg. In the said order of the Assistant Collector, Central Excise observed that the entire matter was carefully examined in the light of Notification No. 52/72-C.E., dated 17th March, 1972 and it revealed that the Yarn content of the product in question as 93% acrylic and 7% nylon. According to the Assistant Collector it was made out of 100% synthetic staple fibre of non-cellulosic origin. The product, therefore attracted Sl. No. 2(b)(i) of Notification No. 52/72-C.E., dated 17th March, 1972 as it contained more than 50% of synthetic staple fibre of non-cellulosic origin. The order which the Assistant Collector of Central Excise passed was to the following effect :- "Having regard to the facts and circumstances of the case as on record as well as submissions, made and contention taken by the assessee, I am satisfied that the Yarn cleared by the assessee under Gate Pass Nos. 47 dated 23-7-1974 and 48 dated 24-7-....
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.... (ix) of clauses (a) and (b) and in clause (c), for the corresponding entries in column (3), the entries in 3.25, 2.60, 2.30, 1.95, 1.20, 0.55, 0.25,0.15 and 9.75 shall should respectively be substituted. (2) In column (2) against S.No. 2(i) for the description against clause (a), the following description shall be substituted :- (a) wholly out of synthetic staple fibre of non-cellulosic origin including acrylic fibre; or (ii) from the description against clause (b), the brackets and words `(including acrylic fibre)' shall be omitted. (3) S. No. 3 and the entires against it shall be omitted. 9. The effect of the said notification on the relevant item of the said table is set out hereunder and indicated in red ink (hereunder lined). Column 1 Column 2 Column 3 2. (a) wholly out of synthetic staple fibre of non-cellulosic origin including acrylic fibre; or (b) Partly out of the staple fibre aforesaid and- partly any other fibre or fibres provided that the natural fibre content, if any, of the yarn does not exceed 10 per cent of its weight. If the fibre contents of it is - ....
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....tion. Accordingly the party added, that acrylic fibre should be considered as inclusive of non-cellulosic fibre only after amendment of the present Notification by 73/76, dated 16-3-1976. Government of India have considered structure of Notification No. 52/72 and held that a yarn made out of either 100% synthetic fibre of non-cellulosic origin or such staple fibre and any other non-cellulosic fibre is covered by Sl. No. 2 of the Notification. A acrylic fibre is non-cellulosic in origin, the acrylic part of this should also be included, in determining the non-cellulosic fibre content of a mixed yarn. Government of India, therefore, confirm the tentative view already contained in the show cause notice and order that the order-in-appeal be set aside and order-in-original of the Asstt. Collector be restored." 12. It is mainly the validity of this order, which is under challenge in its application under Article 226 of the Constitution. 13. On behalf of the petitioner it was contended that prior to the amendment of the notification on the 16th March, 1976 which I have set-out hereinbefore, in order to be entitled to exemption yarn spun-(a) wholly out of synthetic staple fibre....
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....in the expression used should be resolved in favour of the assessee or tax-payer. Counsel also drew my attention to three affidavits of Bhupendra Singh Boid, Mangal Singh and S.K. Guin filed in support of this rule claiming to be the dealers in these types of goods and who have alleged that acrylic fibre is not known in the trade as non-cellulosic fibre. In this connection reliance was placed on the decision in the case of Union of India v. Delhi Cloth and General Mills, AIR 1963 S.C. 791, where the Supreme Court has reiterated that in construing expressions of this nature, it is not the technical meaning that should be adhered to but rather preference should be given to the expression as understood in the world of commerce. 14. Counsel also submitted that impugned order suffered from lack or paucity of reason and he drew my attention to the observations of the Supreme Court in the case of Hochtief Gammon v. State of Orissa, AIR 1975 S.C. 2226. So far as the last mentioned point urged on behalf of the petitioner is concerned, in view of the context - of the facts of this case and in the light of the show cause notice I do not think that the impugned order can be condemned as lac....