TaxTMI 
TaxTMI 
1990 (10) TMI 74
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....ium and small sizes are separated. Dust and husk are cleaned out and other foreign material removed. The commodity then goes to a dry roaster where it is roasted at a temperature of 1500C. This results in reduction of the moisture and destruction of enzymes to a considerable extent. It is also stated that by this process any fungus or aflotoxin is removed. After dry roasting, the product is cooled down with the aid of a blower so that the skin of the groundnuts become loose and the groundnut contracts. Thereafter, it goes through automatic blanching machines. This separates the skin of the groundnut and on removal of the skin it becomes white. Thereafter, the seeds are put on running tables and picked, according to uniform sizes, with the aid of an electric eye sorter. The commodity thereafter goes to a frying section for being subjected to deep oil bath frying in an automatic fryer. They are then subjected to anti-oxidant chemicals and thereafter sent through the blower for being cooled down. The extra oil is sucked out. They are then subjected to a glazing process and are given permeated chemicals and salt treatment and are packed in packets and tins. 3. The goods thus exported ....
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.... the Collector of Customs, on appeal by the Central Board of Excise and Customs and, on further revision, by the Government of India under the then existing procedure. So far as the subsequent periods of exports were concerned, the contentions of the appellant were considered and rejected by a Full Bench of the Customs, Excise & Gold Control Appellate Tribunal. The appellant preferred a Special Leave Petition from the order of the Central Government in revision dated 14-2-1978, which was admitted and numbered as Civil Appeal No. 390 of 1979. Against the other orders of the Tribunal, the appellant has preferred appeals to this Court under Section 130-E of the Customs Act, 1962. 6. On behalf of the appellants, a number of circumstances have been relied upon to justify the distinction sought to be made between groundnut kernel simpliciter and blanched and roasted groundnuts exported by the assessee. It will be convenient to summarise the points made on behalf of the appellant here : (1) In the Indian Trade Classification (I.T.C.), which has been published by the Government of India for purposes of foreign trade, there is a bifurcation in the classification between the oil seed....
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....is to be taken to apply, inter alia, to groundnuts, soya beans, mustard seeds, oil poppy seeds, poppy seeds and copra. It is to be taken not to apply to coconuts or other products of Heading No. 08.01 or to olives (Chapter 7 or Chapter 20) Heading 12.01 reads : "Oil seeds and oleaginous fruit, whole or broken - This heading covers seeds and fruit of a kind used for the extraction (by pressure or by solvents) of edible or industrial oils and fats, whether they are imported for that purpose, for sowing or for other purposes. It does not, however, include olives (Chapter 7), coconuts (Heading 08.01) or certain seeds and fruits from which oil may be extracted but which are primarily used for other purposes, e.g., walnuts and almonds (Heading 08.05), apricot, peach and plum kernels (Heading 12.08) and cocoa beans (Heading 18.01)". It is also stated that the heading covers, inter alia, groundnuts (except roasted groundnuts - Heading 20.06). As against this Heading 20.06, which deals with fruit otherwise prepared or preserved, whether or not containing added sugar or spirit, carries the following sub-heading : (3) Almonds, ground-nuts, areca (or betel) nuts and other nuts, dry-roasted....
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....pellant vehemently contend that the entry in the export tariff should be given a restrictive interpretation. Reliance is placed in this context on a judgment of the Madras High Court in Kalaivani Fabrics v. Collector, 1989 (44) E.L.T. 219 a direct decision on the present issue. Reference is made also to the cases cited therein and, in particular, to the ruling of this Court in M/s. Healthways Dairy Products Co. v. Union of India & Ors. - 1978 (2) E.L.T. (J 457) (S.C.) = (1976 - 2 S.C.C. 887). Shri Diwan submits that if there is any ambiguity or doubt it should be resolved in favour of the assessee. He contends that, while the taxing authorities, on whom the onus lies, have merely rested on the dictionary meaning of the word `groundnut kernel', the assessee has placed a lot of material to show that there are two different commercial varieties of groundnut kernel. He submits that, in matters of export and import, the functional test is slowly replacing other tests, an approach clearly indicated by the classifications under the BTN, ITC and the import tariffs. Shri Dholakia, appearing on behalf of the appellant in one of the appeals, very strongly urges that the commodity known as....
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....r contention that, so far as export tariff is concerned, the legislature intended no limitations whatsoever. In support of her contention as to the wide meaning of the expression `groundnut kernel', she relied on certain observations of this Court in State v. Shanmagha Vilas Cashewnut Factory, 1953 - 4 S.T.C. 205 and of the Madras High Court in Dinod Cashew Corporation v. Deputy Commercial Tax Officer, 1986 - 61 S.T.C. 1. She submitted that the interpretation sought to be placed on the entries in the export tariff by the appellant will carve away a substantial category of the goods described in the wide tariff entry from its scope. So far as agricultural cess is concerned, she pointed out, rightly, that it was leviable only in respect of "seeds", an expression that imports a concept of capacity to germinate, particularly, in an agricultural context. Obviously, the groundnut kernel, roasted and salted, could not be described as `seeds' and, therefore, the Government of India had rightly exempted them from agricultural cess. The very fact that the export tariff uses the expression `groundnut kernel' instead of `seed' also points to the distinction between the two. Acc....
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....ed to only one of them. It can and should cover both unless one can say that the commodity marketed by the appellant is not `groundnut kernel'. 13. We are not convinced that the goods exported by the assessee have ceased to be groundnuts in the ordinary acceptation of the term or that they have become a different commodity, say, a processed food (indeed, there is no such classification in the tariff entry). The decision in Diwan Chand Chaman Lal (1977-39 S.T.C. 75) turned on the description of groundnuts in Schedule C of the Punjab Sales Tax Act as a species of oil seeds and it was held that parched groundnuts constituted a different commodity. But the fact is that, though the raw groundnut kernel has undergone a drying, roasting and frying process, its identity as groundnut is not lost. Even in the market to which it is exported and where it is marketed, it is purchased only as groundnuts (or peanuts, as they are called in the U.S.A.). May be there are two different commodities but both are known only as `groundnuts'. The argument that the scope of the entry should be restricted because of the two-fold classification existing elsewhere between groundnuts as "oil-seeds" an....