TaxTMI 
TaxTMI 
1958 (7) TMI 1
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....r that what was intended was Wood-Naptha, to be used as a solvent under the trade name 'Calsol' (solvent) which was the factory name of Wood-Naptha used by the petitioner company. It is against this order that 7 drums of Wood-Naptha were imported from Germany per s.s. 'Cream' and for which customs duty had already been paid. It was found that there had been a short-levy. A demand was therefore made under Section 39 of the Sea Customs Act 1878 for the deficiency amounting to Rs. 48,457-3-0 which should be paid within 15 days from the receipt of the notice. The petitioner company thereupon made an objection on the 21st Jan 1952 maintaining that the imported goods being a solvent used in industrial and research purposes and unfit for human consumption had been correctly assessed at 37.8% at the time of clearance. It was alleged that there was no short-levy. On the 5th Feb. 1952 another communication was received from the Assistant Collector stating that on chemical test of the samples drawn from the consignment of 'calsol' (solvent) valued at Rs. 1.229/- c.i.f. imported per s.s. 'Cream' from Germany it appeared that the article in question was Methyl-Alcohol which was correctly assess....
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....on the 30th July, 1952 after the expiry of the prescribed time limit. It was also pointed out that under the provisions of Sec. 189 of the Sea Customs Act, the entire duty that had been assessed had to be deposited before an appeal could be heard, but no such deposit had been made. On these two grounds the appeal was dismissed. I must mention here that in their petition of appeal, the petitioner company inter alia, stated that the value of the goods imported was only Rs. 1,229/- and it was very hard for the petitioner to deposit the large amount of Rs. 48,457/3/- immediately before the hearing of the appeal and requested that the payment may be waived as a special case. Against the order of the Collector of Customs, a revision petition was made to the Government of India but by its order dated the 22nd March, 1953 the Government of India declined to interfere. 2.This Rule was issued on the 14th June, 1955 calling upon the opposite parties to show cause why a Writ in the nature of Certiorari should not issue quashing and/or setting aside the decision or order to levy extra or additional duty complained of in the petitioner, and/or why a Writ in the nature of Mandamus should not i....
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....rovisional assessment. Item 22(4) appears in Section IV of the Tariff Schedule which is entitled 'Products of the food-preparing industries beverages, alchoholic liquors and vinegars; tobacco" Item 28 is in Section VI which deals with chemical and pharmaceutical products etc. I think it would be convenient to set out the two items side by side. 22 (4) Spirits (other than denatured spirit) (a) Brandy, gin whisky and other sorts of spirits not otherwise specified, including wines containing more than 42% of proof spirit. 28. chemicals Drugs and Medicines, all sorts not. otherwise specified. (b) Liquors, cordials, mixtures and other preparation containing spirit not otherwise specified (c) entered in such a manner as to indicate that the strength is not to be tested (ii) not so entered. 4.Under item 22(4), the rate is Rs. 95/10/- per imperial gallon. Under item 28, as it had been first valued, the rate is 37.8% ad valorem. The question is whether the authorities are correct in trying to appraise the goods under item 22(4) (b) of ....
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....olvent. At first it was appraised as Wood Naptha under item 28, that is to say, as a chemical. It has been stated that it was a provisional assessment. But even so, it is clear that according to the Provisional Assessment, it was possible to treat Wood-Naptha as a chemical. Then there seems to have been a chemical test. In fact, in this case there have been several chemical tests and, if I may say so, with differing results. In the first official test, it was declared that the sample was not of Wood-Naptha but of impure Methyl-Alcohol. As stated above, at a subsequent stage there was a second test in which four samples were taken. The result of the second test was a declaration that the four samples were absolute Methyl-Alcohol and not denatured. In spite of this declaration, which by the way is dated the 23rd September, 1952 find that on the 23rd Dec. 1952 the Assistant Collector writes to say that the samples tested show that the four drums contained 'impure Methyl-Alcohol'. Also in the appellate order we find mention of the fact that the article in question was impure Methyl-Alcohol. I find further chemical report dated the 24th Sep. 1953 although it is not clear how this came i....
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.... product is known as wood-spirit. The product of the distillation is a colourless liquid besides which there are other by-products. The crude wood-spirit is called Wood-Naptha, but contains a very small percentage of Methyl-Alcohol. There is a number of other substances, the chief being Acetic Acid. This is neutralised with lime and the Methyl-Alcohol is extracted. Methyl-Alcohol has the well-known property of being mixable with water and is used for denaturing other spirits, that is to say, for rendering them unfit for human consumption, that is to say, for the purposes of drinking, Methyl-Alcohol is poisonous. As a matter of fact, given internally, even 60 minims has caused permanent blindness and one fluid ounce has proved fatal, Methyl-Alcohol is used industrially as a solvent. I find the following passage from Holleman's Text Book of Organic Chemistry "On account of the extensive use of alcohol for manufacturing processes, some industries would be paralysed if the necessary spirit were subject to the same excise duty as alcohol intended for consumption. The alcohol used in manufactures in some countries is accordingly made unfit for drinking (denatured or methylated) by the ad....
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....ule. It is argued by Mr. Roy appearing on behalf of the respondents that item 22(4) is a general item and when it speaks about "Brandy, gin, whisky and other sorts of spirits not otherwise specified" or "liquors, cordials, mixtures and other preparations containing spirit not otherwise specified", that would include all kinds of spirits not specified whether potable or not. He has also drawn my attention to section 21 of the Sea Customs Act which lays down that if there is no express provision under which an article can be assessed, then if the goods contain any particle which is liable to duty under the Act, then it must be assessed, as if the whole of it was composed of that article and at the highest rate. It is however not the case of the petitioner company that the article did not come under an express heading. According to them, it comes under item 28. The whole point resolves itself into an interpretation of item 22(4). Are the words so general in import that all kinds of spirits including non-potable spirits are included within the words "other sorts of spirit not otherwise specified" "or other preparations containing spirit not otherwise specified"? In my opinion, it canno....
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....ed to be restricted to things of the same class as those previously specified, and therefore the seizure was illegal. Let us examine item 22(4)(b), under which it is said that the matter would fall. Tha item starts by an enumeration of certain potable spirits, namely, liquors, cordials. Then there is mention of mixtures and other preparations containing spirits. In my opinion, the rule of ejusdem generis should be applied, and the other preparations must be in the nature of liquors and cordials. Both of them are potable drinks. The same result would follow if we apply item 22(4)(b). The three items mentioned there are all potable drinks, and the other sorts of spirits' mentioned therein must relate to similar kind of potable drinks, and not to spirits which are not potable. As a matter of fact, if we come to 22(5), we again find the mention of potable spirits, drugs and medicines containing spirit which also are capable of being imbibed. Some arguments have been made with regard to the words "perfumed spirits" but as Mr. Chaudhury assures me that there are in existence potable spirits which may be called "perfumed spirit". Coming to 22(6) we find mention of "denatured spirit" which....