TaxTMI 
TaxTMI 
1994 (6) TMI 16
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....uch as the Bench entertained a doubt as to the correctness of an earlier decision of this Court in Collector of Central Excise, Calcutta v. M/s. Multiple Fabrics Pvt. Ltd. & Others [1987 (29) E.L.T. 481 (SC) = 1987 (2) S.C.C. 636], [a judgment rendered by a Bench comprising Ranganath Misra, J. (as he then was) and G.L. Oza, J. which constituted the sheet anchor of the respondent's case, the matter was referred to a larger Bench. That is how the appeal is before this Bench. 2. The respondent purchases 100% cotton cloth and coats it with P.V.C. resin and other plasticizers. The product is popularly known in the market as "rexine cloth". The composition of the rexine cloth manufactured by the respondent is to the following effect : "(1) Cotton Fabrics 8.0% (2) PVC resin 24.5% (3) Plasticizers (DIP/DIOP/BBP) 13.0% (4) Other [fillers, (calcium carbonate) secondary plasticizers, pigments, solvents, thinners, foaming agents] 54.5% The above composition is by weight." 3. The main contention of the respondent which found favou....
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..... COTTON BABRICS - "Cotton fabrics" means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chaddars, bed-sheets, bed spreads, counter-panes, table-cloths, embroidery in the piece, in strips and in motifs, fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials and fabrics covered artificially or fully with textile flocks or with preparations containing textile flocks, if (i) in such fabrics cotton predominates in weight, or (ii) such fabrics contain more than 40 per cent, by weight of cotton and 50 per cent, or more by weight of non-cellulosic fibres or yarn or both : Provided that in the case of embroidery in the piece, in strips or in motifs, fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials and fabrics covered partially or fully with textile flocks, such predominance or percentages, as the case may be, shall be in relation to the base fabrics which are embroidered or impregnated, coated or laminated or covered, as the case may be - &nb....
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....hose fibres the predominance of which would render such fabric fall under that Item (hereafter in this Explanation referred to as the applicable Item) among the Item Nos. 19,20,21,22, 22A and 22AA, which, read with the relevant notification, if any, for the time being in force issued under the Central Excise Rules, 1944, involves the highest amount of duty, shall be deemed to be predominant in such fabric and accordingly such fabric shall be deemed to fall under the applicable item. Explanation III: This Item does not include floor coverings, falling under Item No. 22G." 5. The Tariff Item deals with 'cotton fabrics', whether made wholly from cotton or partially from cotton. It includes several other goods within the ambit of the expression 'cotton fabrics'. The items so included are : (a) dhoties, sarees, chaddars, bed-sheets, bed-spreads, counter-panes, and table cloths; (b) embroidery in the piece, in strips or in motifs; (c) fabrics impregnated, coated or laminated with preparations ....
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....lling under sub-item (I) of this item which are impregnated, coated or laminated with preparations of cellulose derivatives or of other plastic materials ..." For a fuller appreciation of the Explanation (I), it would be appropriate to refer to sub-item (I) of the Tariff Item as also sub-items (II), (III) and (IV). Sub-item (I) expressly speaks of "cotton fabrics" other than .... (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials ...." The duty on such cotton fabrics is 20% ad valorem and the special excise duty is 10% of the basic chargeable duty irrespective of the fact whether such cotton fabrics fall under clause (a) or clause (b) mentioned under the said sub-item. Sub-item (I) may be contrasted with sub-item (III) which pertains to "cotton fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials", the rate of duty whereon is the duty for the time being leviable on the base fabric, if not already paid, plus 30% ad valorem. (The special excise duty is retained at 10% of the basic duty chargeable.) It may also be seen that sub-item (II....
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....1981 (2) S.C.C. 528]. It says: "it is well settled that in interpreting items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances, resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted". In this view of the matter, we do not think it necessary to deal with the several decisions cited by Shri Sorabjee regarding the relevance of commercial or common parlance test. 8. It is next contended by Shri Sorabjee that the Government of India, acting as the revising authority under the Act has also taken the view that if the end-product has lost its identity as a cotton fabric, it cannot be said to fall within the expression "cotton fabrics" under Tariff Item ....
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....ticed, its purport was not given effect to while holding that "in view of the higher percentage of P.V.C. compound in commodity, it becomes difficult to treat the ultimate goods as man-made fabrics for holding that it is covered by Item 22". Indeed, the above reason is the second of the two reasons given for holding in favour of the respondent-manufacturer. The first reason is that since the manufacture of fabric and application of P.V.C. compound is simultaneous, there is no pre-existing base fabric for the purposes of and within the meaning of Tariff Item 22. Be that as it may, since the proviso was not brought to the notice of this Court and for that reason the significance of Explanation (I) escaped the Court's notice, it is difficult to hold that the said decision lays down the correct interpretation of Tariff Item 22 or that it helps the respondent before us in interpreting Tariff Item 19. 11. A look at Tariff Item 19 before its amendment in 1969 confirms the correctness of our interpretation. Prior to 1969, the only goods included within the expression "cotton fabrics" were, what we called category (a) goods. Goods in categories (b), (c) and (d) were not there. Yet the pe....
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....nd articles thereof." It may be noticed that the goods referred to under Tariff Item 15A and the coating material referred to in Tariff Item 19 are not identical. Tariff Item 19 speaks of impregnation, coating and lamination by "preparations of cellulose derivatives or of other artificial plastic materials". So far as the Tribunal is concerned, only one Member (Shri P.C. Jain), in his dissenting opinion, deals with this aspect in para 16 of his judgment. He rejects the said argument holding that "P.V.C. formulation being used by the respondent-company is certainly governed by the expression 'other artificial plasticizers'". For the said proposition, the learned Member relies upon the decision in Chemicals and Fibres India Ltd. v. Union of India [1982 (10) E.L.T. 917], a decision of the Bombay High Court wherein it was held that "whereas synthetic resin is a polymer itself, plastic is polymer plus such additives as fillers, colorant plasticisers etc." Pausing here for a moment, we may say that even according to the respondent the coating material is of three categories viz., P.V.C. resin - 24.5%, plasticizers - 13.0% and other fillers, calcium carbonate, secondary plasticizers, pigm....