TaxTMI 
TaxTMI 
1986 (3) TMI 94
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....nt in A. Nos. 266 & 2431/83-D), are the importers of the PVC/PU Leather Cloth/PVC Flocking-sheets. All the appellants imported PVC/PU leather cloth/PVC flocking-sheets and paid import duty @ 100% plus 25%+CVD and, thereafter, applied for refund of duty on the ground that PVC/PU leather cloth/PVC flocking-sheets is an embellishment for footwear and, therefore, under Notification No.29/79-Cus., dated 10th February, 1979, the same is assessable at concessional rate of duty @ 40%. The Assistant Collector of Customs rejected the claims of the appellants on the ground that PVC/PU leather cloth/PVC flocking-sheets was imported in running length and, as such, it cannot be considered as an embellishment. All the appellants pursued the matter in their separate appeals before the Collector of Customs (Appeals), but without success. The appellate authority, while confirming the orders of the Adjudicating Authority, held that the PVC/PU leather cloth/PVC flocking-sheets in running length is not an embellishment in itself. They are not in the nature of glass chatons or glass beads which serve no purpose whatever beyond embellishment and which are simply fitted on the article which is supposed to....
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....d neats foot oil or chlorinated neats foot oil or sulphonated fish oil or sulphated fish oil or oxidised fish oil or chlorinated fish oil or mixtures thereof. 2. Syntans. 3. Pigment finishes for leather. 4. Synthetic fat liquors (with or without hydro carbons non-ionic fat liquors and mixture thereof). 5. Self basifying chrome tanning agents, aluminium tanning agents, oil tanning agents, resin tanning agents, ziroconium tanning agents. 6. Sole leather from ox hides and cut soles and units thereof. 7. Polyurethane soles cut to size. 8. Steel reinforced insoles. 9. Leather and plastic heels. 10. Thermoplastic toe caps and counters. 11. Belts made from leather or plastic. 12. Buckles and other embellishments for footwear. 13. Shoe eyelets. 14. Shoe finishing polishes in solution or in blocks. 15. The following solvent soluble dyes : ......... ......... (Underlining ours) On a bare perusal of the said Notification, it is clear that before the benefit of the Notification is claimed, what has to be established, inter alia, is that - 'the goods imported must answer the de....
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....C flocking-sheets is in itself a raw material for the manufacture of shoes and it is also used as such. This is further not disputed by the learned Counsel for the appellants that PVC/PU leather cloth/PVC flocking-sheet is used as a material for the purpose of manufacturing footwear as raw material. But the main thrust of his arguments is that PVC/PU leather cloth/PVC flocking-sheet is considered as an "embellishment" in the trade and, for this purpose, he relies upon a Certificate dated 27-2-1980, said to have been issued by the Officiating Regional Officer, Export Promotion Council for Finished Leather and Leather Manufactures, Bombay. He further submits that in interpreting the items in the Statutes, like the one we are concerned with, the cardinal rule of interpretation is that "resort should be had not to the scientific or the technical meaning of such term but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense". The appellants also rely upon the Import Policy for Registered Exporters (Vol. II) for the period April, 1979 to March, 1980. They also rely upon the following decisions of this Tribunal, whi....
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....sible by law as laid down by the Hon'ble High Court of Bombay in the case of M/s. Mechanical Packings Industries P. Ltd. v. C.L. Nangia & Ors., 1981 E.L.T. 144 - we find that the word 'embellishment' is derived from the French word "Embellir", "Embellissant-em: in, bel (beau) beautiful". The Chambers Twentieth Century Dictionary defines the word 'embellish' as follows: to make beautiful with ornaments: to decorate: to make graceful: to illustrate pictorially. The same Directory defines 'embellishment' as a Noun of embellish as follows: act of embellishing or adorning; decoration: ornament. The word 'embellish' as a Verb Transitive is defined in the Concise English Dictionary, to which we may resort for the purpose, of finding out its meaning as a matter of plain language as meaning "to beautify, to adorn". From this definition, it is clear that when the word 'embellishment' is used as a Verb, it connotes a positive act of imparting beauty or adornment to the footwear. (ii) Whether PVC/PU leather cloth/PVC flocking-sheet is "used" in the leather industry as other embellishment for footwear and is known as such in the trade - To understand the controversy in hand, it would be usef....
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....n, in our opinion, would be whether an article or thing imported is used as embellishment for footwear in the Leather Industry. Capability of being used as embellishment for footwear without anything further would not be relevant for consideration because it is the article which is ordinarily used as an embellishment for footwear which is relevant. If the contention, as advanced on behalf of the appellants, that mere import of an article capable ot being used as an embellishment, which in fact is not ordinarily used as an embellishment, attracts the provisions of the Notification, is accepted, then the use of the words "used in the Leather Industry" in the Notification would be redundant and we would be reading the Notification leaving aside the expression 'used in the Leather Industry', which is not permissible. For, it is the cardinal rule of construction that no word should be considered redundant or surplus in interpreting the provisions of a statute. It is the primary rule of construction that the language used in a statute has to be understood in its grammatical and ordinary sense without addition or substraction or substitution, as held in Stock v. Frank Jones (Tipton) Ltd. ....
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....n. Because for claiming the benefit of the Notification, the article imported must ai least look like an embellishment as in the case of Stamping Foils, Buckles. Admittedly, in the instant case, the PVC/PU leather cloth/PVC flocking-sheet was imported in rolls of 50 metres which do not look like embellishment and it is not the case of the appellant that the said rolls were cut in size and shape for the purpose of use as an embellishment for footwear. On the other hand, when asked about the use of the imported PVC/PU leather cloth/PVC flocking-sheets in question, the learned Counsel for the appellant candidly stated that it is immaterial whether the goods imported by them were used as an embellishment for footwear or not because, according to him, it is the goods imported which attract the provisions of the Notification. According to him, the importers are not required to show or prove that the goods imported were actually used as an embellishment. Even, according to him, it is not necessary to show or prove that the imported PVC/PU leather cloth/PVC flocking-sheet is ordinarily used in the leather industry as an embellishment for footwear. In other words, according to him, the conc....
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.... are understood in the trade by the dealer only. On the other hand, the meaning of that principle is that the words or the expression must be construed in the sense in which they are understood in the trade not only by the dealer but by the consumer also. Recently, their Lordships of the Supreme Court in the case of Delhi Cloth & General Mills Co. v. State of Rajasthan, AIR 1980 S.C. 1552, after reiterating their earlier view, expressed in the case of Porritts & Spencers (Asia) Ltd. v. State of Haryana, AIR 1979 S.C. 300, observed in paragraph 7 that in determining the meaning of connotation of words and expressions describing an article or commodity to be taxed, if there is one principle fairly well-settled, it is that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statutes were enacted, as the liability of the tax falls on the seller, who in his turn passes it on to the consumer. As we have seen earlier that PVC/PU leather cloth/PVC flock....
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....mpetent authority, it does not say that the PVC/PU leather cloth/PVC flocking-sheet is used in the Leather Industry as an embellishment for footwear. It is pertinent to note that in the Certificate, Synthetic backers for shoes are stated at item No.9 as one of the items used in the manufacture of leather footwear and considered as embellishment, but, to our great surprise, against the said item, that is to say, after the words "synthetic backers for shoes", the words "viz PVC/PU leather cloth/PVC flocking-sheets" appear to have been added. This does not stand to common sense because synthetic backers for shoes and PVC/PU leather cloth/PVC flocking-sheets are quite independent and distinct commodity. Not only this, the said Certificate contains as many as 14 items which are said to be used in manufacture of leather footwear and are considered as embellishment. At Sl. No. 2, this Certificate speaks of hooks, studs and bars which cannot, by any stretch of imagination, be said to be an embellishment for footwear because that is in itself a component of footwear and are always known in the trade as boot and shoe grindery. Similarly, at Sl. No. 13, the certificate speaks of Bifurcated (w....
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....7 at page 132), articles which are trimmings and embellishments for leather goods are mentioned and Buckles are mentioned as trimmings and embellishment for leather goods. At Sl. No. (vi) Nylon backed reinforcement tapes and backers, snythetic backers for shoe are also mentioned as trimmings and embellishment for leather goods. In other words, the said policy does not speak of PVC/PU leather cloth/PVC flocking-sheets as an embellishment for footwear. Even otherwise, the Import Policy uses the joint expression "trimmings and embellishment" without making any distinction between the two. But, in the Notification in hand, only the expression 'embellishment' has been used. Hence, it is clear that the ambit and scope of the Import Policy is much wider than the Notification in hand. 13.At the outset, it would be relevant to mention here that the law is well-settled that it is for the assessee who claims exemption to establish his claim, and the onus is not on the Taxing Authority to prove its admissibility or otherwise. In support of this view, the following observations of the Supreme Court, made in the case of I. Commissioner v. Ramkrishna Dev, AIR 1959 S.C. 239, are pertinent:- ....
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....ing this argument, as it appears that these backers are used functionally to lend strength at the seam where the two parts are joined. In that view, they would not be embellishments. In any event, what was presented before us, on the present occasion, as a sample to show that PVC/PU leather cloth/PVC flocking-sheets could be used as embellishments, was something quite different. We were shown pieces of PVC/PU leather cloth, shaped somewhat as shown below :- It was seen that it was about an inch wide at the top and about 4 to 5 inches wide at the bottom. It was not the narrow strip one usually finds used in shoes as a backer. This piece, it was said, with the narrow side being on top and the broad si2de at the bottom, would form the back of the shoe upper. It appears to us that such a piece, which would really form a functional part of the shoe upper, having the necessary strength to be such, could not be considered an ornamentation or embellishment. 15.So far as the cases, relied on by the appellants, are concerned, it would be useful to mention at the outset that Entry No. 12 - Buckles and other embellishments for footwear - occurring in the Notification in question came up ....
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....ri H.R. Syiem, Member (T), took a different view and held that PVC/PU leather cloth is not an embellishment for footwear within the meaning of entry No. 12 of the Notification in question. But the majority basing its decision on the earlier cases of M/s. Allibhoy Mohamed, M/s. Raj Industries, Bombay and M/s. Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, supra, held that PVC/PU leather cloth is an embellishment for footwear. It further deserves to be mentioned here that the question, as to whether Jacquard supported with laminated pattern, Polyurethene sheeting, PVC leather cloth and sponge leather in running length are embellishments for footwear within the meaning of entry No. 12 of the Notification in question, came up for consideration before a Bench of three Hon'ble Members of this Tribunal, in the case of Handicraft Exports, Bombay v. Collector of Customs, Bombay (Order No. C-282/85, dated 2-4-1985). In that case, our learned brother, Shri H.R. Syiem, held that it is not embellishment for footwear, but the majority held that it was so. The other case, that is to say, the case of M/s. Leather Goods House, Bombay v. Collector of Customs, Bombay (Order ....
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.... Bombay, supra, is also distinguishable because that case relates to Polyester Plastic (Polyester Supported) and, in that case also, there was no dispute that the appellants of that case imported the goods to impart embellishment to the footwear manufactured by them. So far as case of M/s. Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay (Order No.220/83, dated 21-4-1985) reported in 1985 ECR 894-D(CEGAT) is concerned, no doubt it relates to PU leather cloth but it is pertinent to note that that case was decided only on the basis of the trade practice and the opinion of the persons conversant with the use of the goods in question and the nature of the PVC/PU leather cloth and its use was never considered and decided and the plea raised by the Revenue regarding the use of the PVC/PU leather cloth was regatived by reproducing the case of M/s. P. Hira, supra, in extenso and by holding that the plea of the Revenue regarding use was considered in paragraph 4 of the judgment rendered in M/s. P. Hira's case. But when we turn to the case of M/s. P. Hira, Bombay, we find that capability of imported Polyester Plastic (Polyester Supported and not of PVC/PU leather cloth....
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....ur learned brother, Shri H.R. Syiem, dissented from the majority view and reiterated his earlier view. 19.Thus, in our opinion, the majority, deciding the case of M/s. Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, Order No. 220/83 reported in 1983 ECR 894-D and the cases of M/s. Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. 397/83 dated 24-8-1983) and M/s. Nehal International, Bombay v. Collector of Customs, Bombay, 1985 ECR 404, stretched the provisions of the Notification, if we may say with respect, too far to hold that PVC/PU leather cloth is an embellishment for footwear. We have read the judgment rendered in the case of M/s. Allibhoy Mohamed, supra, with considerable care and attention which it deserves. In that case, the question as to whether the goods imported, that is to say, Stamping Foils were embellishments for footwear in themselves was not disputed and it was an admitted position that the Stamping Foils were used for imparting beauty, adornment and ornamentation to footwear. Moreover, this case was decided with the aid of Import Trade Control Policy Book, where Stamping Foils were also listed as an embellishment as on....