Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs J.K. White Cement Works on 23 August, 1994
Equivalent citations: 1994(73)ELT861(TRI-DEL)
ORDER
1. Appeal No. E/4251/91-C has been filed by the Collector of Central Excise, Jaipur being aggrieved by the order passed by the Collector, Central Excise (Appeals). Another appeal No. E/3060/92-C has been filed by M/s. Indian Rayon Industries Ltd. against the order of Collector of Central Excise (Appeals). As the issue involved in these two appeals is the same, therefore, they are being disposed of by this common order.
2. Briefly stated the facts of the case are that M/s. J.K. White Cement Works and M/s. Indian Rayon Industries Ltd. are engaged in the manufacture of cement, which according to the department was white cement falling under Tariff Item No. 23(2) of the erstwhile Central Excise Tariff upto 27-2-1986 and from 28-2-1986, it fell under 2502.90 and that from 1-3-1992 under Tariff Item No. 2502.21 whereas according to the appellants the product manufactured by them fell under 23(1) upto 27-2-1986, under 2502.20 from 28-2-1986 and under 2502.21 from 1-3-1992. In the case of J.K. White Cement Works the adjudicating authority had held that "having regard to the facts and evidence available on record, I order that the classification list effective from 1-1-1986 may be read modified as under :-
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Description of Tariff Item Type of Duty Rate of Duty goods No.
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White Portland 23(2) B.E.D. 40% ad valore Cement
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3. In the case of Indian Rayon Industries Ltd., the adjudicating authority held that "I hold that 'ordinary Portland Cement' and 'White Cement' are two different and distinct commercial commodities." He also further held that, "in view of the foregoing facts I hold that White Portland Cement is a different commercial commodity and is correctly classifiable under sub-heading No. 2502.90 of Central Excise Tariff Act, 1985 and chargeable to duty @ 40% ad valorem and reject the claim of the assessee for classification of White Cement under sub-heading 2502.20. The classification list filed by the assessee w.e.f. 24-4-1991 was approved accordingly."
4. The appellants went in appeal before the Collector, Central Excise (Appeals), against the order of the Assistant Collector on the grounds that the proper criteria was to determine the classification with reference to the specifications prescribed for Rapid Hardening Cement; that RHC property of cement was determinative of the question whether cement manufactured by the appellant was rapid hardening cement; that the ISI specification No. IS 8041-1978 for RHC required the compressive strength to be achieved in 24 hrs. should be a minimum of 160 Kg/Sq. Cm.; that the compressive strength of the product manufactured by the appellant in one day (24 hours) is 230 Kg/Sq. Cm. which fully conforms to the standard prescribed by ISI for RHC and also conforms to the International Standards including the British Standards set out for RHC; that the Assistant Collector has not disputed that cement in question described as White Portland Cement can be used as RHC; that for classifying cement under Tariff Item No. 23 of the erstwhile Central Excise Tariff and under Heading No. 2502 of the new Central Excise Tariff effective from 28-2-1986 proper approach would have been to find out first whether the product manufactured by the appellants falls under any of the items specifically mentioned in Clause (1) of Entry 23/2502; that in Tariff heading if there are some specific headings and then some residuary headings then for appropriate Tariff classification it is the cardinal principle of interpretation that items set out in the specific Entry had to be exhausted first before classification could be done in the residuary entry which in the instant case was sub-heading (2) of Entry 23 of the erstwhile Tariff and the sub-heading 2502.90 of new Tariff; that the product manufactured by the appellants fully met the standards laid down in the International Standards as well as Indian Standards for Rapid Hardening Cement; that it should have been classified as such; that if the product has the properties, qualities and characteristics of Rapid Hardening Cement it would be classified under that appropriate head of the Tariff; that if in the Tariff a product is described by two nomenclatures and if one such nomenclature is specifically covered in the specific entry and the other is not covered then the classification for purposes of Central Excise duty would be done as per the nomenclature appearing in the specific entry and resort cannot be had to the residuary entry in which the other nomenclature may fall; that for the purpose of taxation a product could be taxed only as per the nomenclature which attracted less rate of duty; that the Hon'ble Tribunal in the case of Anmol Trading Corporation v. CC, Bombay had held that, "In order to classify cement reference is to be made to specifications laid down in the ISI then that would be determinative of the category of cement in which the sample falls"; that the Tribunal had held that, "cement which may be described as White Cement was correctly classifiable as ordinary Portland Cement"; that on this analogy, if cement has properties, qualities and characteristics of Rapid Hardening Cement it would be so classified even though it may also be described as white cement; that the Tribunal had also clarified that merely because the sampling question could be used for different purposes, that would not disqualify the sample from being described as ordinary Portland Cement; that the appellant had never claimed classification of the product on the basis of its end-use; that on the contrary the appellant had submitted that end-use was not the decisive test; that in their case for the purpose of marketing the product, its Rapid Hardening qualities were emphasised; that this was done by issue of advertisements in the newspapers; that when an article passes reasonable tests prescribed then it should be classified under an enumerated item under the Tariff Schedule; that it will be against the principles of classification to deny its parentage of a specified entry and consign it to an orphanage of the residuary entry; that white cement can be of two varieties viz. Rapid Hardening Cement and other than Rapid Hardening Cement; that only the cement classifiable as other than rapid hardening cement would be classified under the residuary entry; that the appellant had never contended that the aforesaid cement is not white cement; that what they had contended was that white cement manufactured by them had the characteristics and conformed to the specifications of Rapid Hardening Cement; that under the circumstances it could not be denied the classification as Rapid Hardening Cement; that the contention that the price of White Cement is higher than ordinary portland cement cannot be a factor for classifying it under a particular heading ignoring its quality of Rapid Hardening Cement; that the very fact that there is no such exclusion of white cement from the purview of description of Entry 23(1) of the erstwhile Tariff and sub-heading No. 2502.20 of the subsequent Tariff would go to prove that white cement if it is in the nature of Rapid Hardening Cement would be classifiable under the aforesaid specific entry in preference to the residuary entry of other cement; that the Assistant Collector ignored the relevance of ISI specifications; that ISI specifications alone in the instant case should decide and determine the Tariff classification of the product manufactured by them; that the Revenue placed no evidence on record to show that such cement cannot be described as Rapid Hardening Cement; that the burden of proof was squarely upon the Revenue to prove that the sample was not Rapid Hardening Cement; that the Revenue has not discharged this burden; that there was ample technical literature available which unquestionably proved that white cement manufactured by them qualifies as Rapid Hardening Cement.
5. In the case of J.K. White Cement Ltd. the Collector of Central Excise (Appeals) in his order held, "in view of the above discussion, I therefore find that the impugned order in this case classifying the appellant's white cement under the erstwhile Tariff Item 23(2) and new Tariff Heading No. 2502.90 is not sustainable and I set aside the same. I find that the appellant's white cement conforms to all the properties of the rapid hardening cement and cannot be held other than Rapid Hardening Cement. I, therefore order that the appellants' white cement to be classified for respective periods under the erstwhile Tariff Item No. 23(1) and the new Tariff sub-heading No. 2502.20 as rapid hardening cement."
6. However, in the case of Indian Rayon Industries Ltd., the Collector, Central Excise (Appeals) held, "the appellants placed reliance on two decisions namely M/s. Anmol Trading Corporation given by the Tribunal and one given by me in M/s. J.K. White Cement Works. On perusal of these two decisions, I observe that in those two cases the cement in question was identified with reference to its composition. In other words the physical and chemical compositions were available for determination of their classification under a particular heading/ chapter heading of the Tariff. In the present case no such details are available so as to come to the definite conclusion that Birla White manufactured by the appellants is exactly similar to the product imported by M/s. Anmol Trading Corporation from Korea or the one manufactured by M/s. J.K. White Cement with special reference to their composition and other details. In this view of the matter the Assistant Collector's order classifying the goods covered by the classification list in the not otherwise specified category cannot be held to be incorrect. The appeal therefore has no merits and it is accordingly rejected as unsubstantiated." Consequently, the Department has come in appeal against the order of Collector (Appeals) in the case of J.K. White Cement and M/s. Indian Rayon Industries have come in appeal against the order of Collector, Central Excise (Appeals) in their case before the Tribunal.
7. Shri M.L. Lahoti, the ld. Advocate appearing for M/s. Indian Rayon Industries Ltd. submitted that the period involved in their case was from 26-4-1991 to 28-2-1992; that there were two competing entries in the Tariff during the period; that entry against the Tariff Heading 23(1) for the period preceding 28-2-1986 is para materia to the entry against the Tariff Heading No. 2502.20 on or after 28-2-1986; that reading the two entries it would be seen that there is no difference in the description of the goods specified in these two entries; that the law laid down by the Tribunal in M/s. Anmol Trading Corporation v. CC reported in 1990 (49) E.L.T. 395 (Trib.) is good law and should have been followed in their case as it squarely covers their case and was binding on the appellate authority also; that w.e.f. 1-3-1992 the entry has been changed as : Sub-heading No. 2502.21 reading as, "White Cement, whether or not artificially coloured and whether or not with Rapid Hardening properties" and another entry with sub-heading 2502.29 reading as, "Portland cement other than white cement whether or not artificially coloured and whether or not with rapid hardening properties."; that Doctrine of Contemporaneous Exposition was very clear from this that prior to this period white cement was a part of the ordinary Portland Cement classifiable under 2502.20; that entry under subheading 2502.20 provides for an inclusive definition which reads, "Gray Portland Cement (including Ordinary Portland Cement, Portland Pozolana Cement and Portland Slag Cement), Masonary Cement, Rapid Hardening Cement, Low Heat Cement and Water Proof Cement"; that this clearly shows that all varieties of cement are covered by this entry; that this does not need any specific interpretation to arrive at this conclusion; that alternatively if their product was not ordinary portland cement then it was rapid hardening cement; that a simple reading is sufficient for the purpose; that 2502.90 is the residuary item; that residuary item is selected only when a particular product does not fall in the specific item; that 2502 is a sub-heading based on technical parameters; that the Hon'ble Supreme Court in the case of Akbar Badrudin Jeewani v. CC reported in 1990 (47) ELT 161 (SC) observed that when classification is based on technical parameters only technical requirements are examined for classifying a product; that the Hon'ble Supreme Court in this case had held :-
56. "Considering all these aspects, there is no other alternative but conclude that the slabs of the calcareous stone imported by the appellant are not marble as mentioned in Entry No. 62 of Appendix 2 of the Import and Export Policy for April 1988 - March 1991 and so it is covered by Open General Licence. The imported goods cannot be confiscated by the Government under Section 111(d) of the Customs Act, 1962 nor the appellant can be given the option to clear the said goods for home consumption on payment of fine of Rs. Five Lakhs in lieu of confiscation under Section 125 of the Customs Act, 1962. The appellant cannot be said to have imported calcareous stones without an import licence and as such there being no violation of the Import Control Policy the imposition of penalty of Rs. 10 lakhs under Section 112 of the Customs Act, 1962 is also unwarranted and not sustainable."
57. "Before we conclude it is relevant to mention in this connection that even if it is taken for arguments sake that the imported article is marble falling within Entry 62 of Appendix 2, the burden lies on the Customs Department to show that the appellant has acted dishonestly or contumaciously or with the deliberate or distinct object of breaching the law."
That the Collector, Central Excise (Appeals) had committed factual error in saying that no test report was available; that there were three test reports in favour of the appellants. Summing up his arguments, the ld. Advocate submitted that the Doctrine of Contemporaneous Exposition also supports their contention that their product fell under Tariff Item No. 2502.20 as it was evident from exemption Notification No. 24/91-C.E. dated 25-7-1991 wherein the Government clearly stated that the exemption includes all items falling under Tariff Heading 2502.20 but does not include "White Cement". That all varieties of cement like Ordinary Portland Cement and Rapid Hardening Cement will fall under 2502.20, that the product manufactured by the appellant was Ordinary Portland Cement with properties of Rapid Hardening Cement; that the only difference was that in the appellants' product namely the white cement, Iron Oxide was less than 1% and that for Rapid Hardening Cement the fineness was more than 3250 Gms/Sq. Mts.; that the fineness of the white cement manufactured by them was more than 3250 Gms/Sq. Mts.; that hardening was a characteristic of compressive strength, that there was no restriction or rider in the Tariff in respect of Rapid Hardening Cement; that both colour and use have been discussed by the Tribunal in the judgment of M/s. Anmol Trading Corporation cited supra; that major varieties of cement have been described under 23(1) of the Tariff before 28-2-1986 and under Heading 2502.20 of the Tariff after 28-2-1986; that Tariff description was further changed from 1-3-1992 but there is no question of this description being given effect to retrospectively; that the Doctrine of retrospective effect was not applicable to their case; that the Tariff does not prescribe end-use for classification. In support of his various contentions, the ld. Counsel referred to the case law reported in 1985 (21) E.L.T. 673, 1990 (47) E.L.T. 161, 1982 (10) E.L.T. 917, 1989 (44) E.L.T. 775, 1989 (43) E.L.T. 660,1985 (20) E.L.T. 70,1987 (27) E.L.T. 187 and 1988 (37) E.L.T. 152.
8. Smt. J.M.S. Sundaram, the ld. SDR desired to deal with both the appeals by common arguments which she was permitted. She submitted that the basic issue for determination before the Tribunal was whether the white cement manufactured by M/s. Indian Rayon Industries and M/s. J.K. White Cement Works is classifiable under Tariff Entry No. 23(2) of the Tariff prior to 28-2-1986 and 2502.90 on or after 28-2-1986 as claimed by the department or it was classifiable under Tariff Entry No. 23(1) in accordance with pre 28-2-1986 Tariff and 2502.20 on or post 28-2-1986 Tariff as claimed by the contestants. The Ld. SDR submitted that in the case of J.K. White Cement Works, the Collector Central Excise (Appeals) says that ISI specification is irrelevant but at the same time he relies on it for arriving at the decision; that the ratio of the decision in the Indian Aluminium Cables case reported in 1985 (21) E.L.T. 3 could not be taken against the department inasmuch as the Apex Court in para 9 held that specifications issued by ISI are used for ensuring quality control and have nothing to do with the class to which the goods belong in a tariff schedule; that the question is whether common parlance or ISI specification should be the deciding factor for classification; that to rely on ISI specifications alone in preference to common parlance, commercial parlance for purpose of classifications, is not correct; that White Portland Cement and RHC are two distinct items; that deciding test should be as to how the product is known to the trade, to the assessee and to the consumers; that the product manufactured by the appellants is 'White Cement' according to the technical literature; that in the technical bulletins issued by the J.K. White Cement emphasis was on colour; that technical bulletins are not advertising material; that though physical properties may conform to a particular use but in trade parlance the product is known as 'White Cement' which is a distinct item; that special composition and processing difference make them different commodities; that opinion of ISI as expressed in glossary of Cement Terms must be preferred to the opinions of other technical experts as has been held in the decision reported in 1991 (51) E.L.T. 434; that technical literature nowhere shows that 'White Cement' can be equal to or identical to ordinary portland cement; that even the writing on the packages showed that the product was 'White Cement'; that even ISI specification for white cement is different from Ordinary Portland Cement and Rapid Hardening Cement; that Cement Control Order was relevant on the analogy that Properzi Rods are mentioned as Wire Rods in Aluminium Control Order in Indian Aluminium Cables case; that Cement Control Order defines 'White Cement'; that ratio of the decision of the Bluestar and Lucoplast case will be applicable to the present case; that Akbar Badruddin case will not be applicable to the facts of the present case; that word 'Gray' is the adjective and qualifies all varieties of cement classified under Tariff Entry No. 23(1) of the erstwhile Tariff and Tariff Item No. 2502.20 of the Tariff effective from 28-2-1986; that whatever is not Gray will be covered by the entry of 'other cement' (2502.90). Summing up the ld. SDR submitted that Collector, Central Excise (Appeals') order in the case of J.K. White Cement case should be set aside because the Hon'ble Supreme Court in the Indian Aluminium case relied on commercial parlance because the facts in the Akbar Badruddin's case are not contradictory to the trade parlance test that cement was of different varieties; that there is nothing commonly sold in the market called White Rapid Hardening Cement; that ISI specifications are not exhaustive test for classification; that ISI specifications are to be read in its entirety; that selection of a particular property of a product according to the ISI specifications does not necessarily qualify the product for classification based on that property; that white cement is equal to or identical to RHC is not laid down under ISI specifications; that alternate classification as claimed by M/s. Indian Rayon Industries cannot be claimed because the ld. Advocate in the case of Indian Rayon argued that if their cement was not Ordinary Portland Cement, then it was Rapid Hardening Cement; that Tariff change indicates legitimate intent; that an exemption Notification cannot be used for determination of Tariff classification; that notification is not a change but interpretation; that notification was issued that white cement is different from Ordinary Portland Cement and RHC; that over special use, ordinary and common use will prevail. The ld. SDR wanted to introduce some additional papers at this stage. The additional papers consisted of Price lists, classification lists and gate passes of the respondents (J.K. White Cement) however, the advocate of the respondent objected to the introduction of Additional evidence at this stage and therefore they were not discussed, the ld. SDR prayed that the order of Collector, Central Excise (Appeals) in the case of Indian Rayon Industries may be upheld.
9. Shri R.K. Anand, Sr. Advocate with Shri Arun Birbal, Advocate appearing for M/s. J.K. White Cement Works Ltd. referred to various paragraphs of the show cause notice, reply to the show cause notice, adjudication order passed by the Asstt. Collector and order-in-appeal passed by the Collector of Central Excise (Appeals) and submitted that the principles relevant to classification are that the onus is on the department to prove that the product manufactured by the appellant was classifiable only under the heading under which the department chose to classify; that this onus has not been discharged by the department; that the department is required to examine every conceivable tariff entry in the Tariff before deciding the classification under a residuary entry; that use is not relevant to classification under the Tariff; that advertisement of a product is no ground for classifying a product under the Tariff; that in case of ambiguity the case should have been decided in favour of the assessee; that ISI specification is a good guide to find out whether a product falls under a particular Tariff Head; that trade parlance can be depended only when the Tariff Entry so reflects; that when a classification list in respect of product is submitted to the department, the department is duty bound to investigate as to the nature of the product before coming to a conclusion as to its classification; that if Tariff is clear then trade parlance cannot be relied upon; that marketability of the product is not relevant for the purpose of classification. Referring to the allegations in the show cause notice, the ld. Counsel for M/s. J.K. White Cement submitted that there was no mention whether there was any change in the process of manufacture; that in the adjudication order it has been held that ISI is not relevant without assigning any reason as to why ISI is not relevant; that though the decision of the adjudicating officer is based on Trade Parlance however, there is no allegation in the show cause notice about this; that use of the product has been taken as ground for classification which is not the deciding factor that if white cement is marketed as talc powder does it mean that it was Talc; that in the adjudication order it has been held that compressive strength is not the criteria for classification without giving any cogent reasons; that the Cement Control Order was not mentioned in the show cause notice and therefore cannot be relied upon; that the grounds on which the adjudication order is passed was not ISI specification but marketability and end-use which are not the deciding factors.
10. Arguing further, the ld. Counsel for the respondent submitted that Rapid Hardening Cement can be White or Gray; that in their case Sri Ram Institute clearly held that the sample was Rapid Hardening Cement; that RHC can be Gray or White; that for Rapid Hardening Cement the deciding factors are compressive strength within 24 hours and fineness; that the product manufactured by them passes the test of these two qualities. Citing examples from the technical literature, the ld. Advocate for the respondent submitted that there are various types of cement; that 'White Cement' was one of them; that whiteness is not the deciding factor as no colour is mentioned in the Tariff Entry and therefore the physical composition should be the deciding factor.
11. Coming to the Cement Tariff, the ld. Advocate submitted that there are two types of entry in the Tariff, the first is the specific entry and the second is residuary entry. Elaborating his arguments he submitted that the department when presented with the classification list had to exhaust all the conceivable means to find out whether the Item mentioned in the classification list fits in a slot for common entry specified in the Tariff. After exhausting this method then only the residuary entry is considered; that ordinary Portland Cement is a generic term and Gray Portland Cement is a species. On the question whether the word 'Gray' stands for all the descriptions indicated in the specific Tariff Entries, the ld. Counsel submitted that it goes with Portland Cement alone but not with others; that specific entries described in the Cement Tariff are different commodities; that Masonary Cement contains dolomite, in addition to other ingredients; that other specific entries described in the Tariff are used in technical sense and hence technical specification and literature has to be referred to investigate the classification of entries mentioned there against; that even from the harmonious construction point of view the word 'Gray' does not cover all the species given in the specific entries; that Notification No. 2/92-C.E. dated 2-1-1992 read with Notification No. 24/91-C.E. dated 25-7-1991 excludes white cement falling under 2502.20; that according to the Doctrine of Contemporaneous Exposition white cement according to the understanding of the persons concerned with the administration of Central Excise law fell under Tariff Heading No. 2502.20; this view is supported by the ratio of the decision in the cases reported in 1989 (40) E.L.T. 266 and 1991 (51) E.L.T. 165.
12. The ld. Counsel further submitted that we go to the residuary item in the Tariff only when the product does not fit in any of the slots provided in the specific entries. Elaborating this further, the ld. Counsel submitted that the product manufactured by them precisely fitted in the slot Rapid Hardening Cement and therefore there was no question of classifying it under the residuary entry; that end-use is irrelevant as was held by the Hon'ble Supreme Court in the case reported in 1983 (13) E.L.T. 1566; that a distinctive name or badge of identification in the market does not necessarily lead to classification under that heading; that under a residuary entry only such goods are covered which cannot be brought under the various specific entries in the Tariff. In other words the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the specified Tariff items, resort cannot be had to the residuary item, as was held by the Hon'ble Supreme Court in the case reported in 1990 (45) E.L.T. 525; that the onus was on the department as was held in the cases reported in 1985 (22) E.L.T. 244 and 1989 (39) E.L.T. 175.
13. Explaining the circumstances under which the respondents had classified the product of M/s. J.K. White Cement Works to fall within 23(2) of the old Tariff and then subsequently submitted a request for its classification under 2502.20 of the new Tariff which is para materia to the Tariff Item 23(1) of the erstwhile Central Excise Tariff; the ld. Counsel submitted that under the mistaken belief of law the respondent classified it under Tariff item 23(2) but when they came to know of the decision of the Tribunal in the case of Anmol Trading Corporation they immediately submitted a request to the department for classification of their product under 23(1); that the Hon'ble Supreme Court in the case of Dunlop India Ltd. v. U.O.I. and Ors. reported in 1983 (13) E.L.T. 1566 (SC) held that "since there is no estoppel in law against a party in taxation matters, therefore much significance should not be attached to the fact that the appellants themselves treated the imported VP Latex under ITC Item No. 87 because they may have given the classification under some mis-apprehension or in accordance with the wishes of the authorities;" that in the same case the Apex Court held that when there is no reference to the use or adaptation of the article, the basis of end-use for classification under a Tariff entry is absolutely irrelevant; that advertisements should not form the basis for assessment of a particular item under Tariff. In support of this contention the ld. Advocate referred to the case law reported in 1987 (27) E.L.T. 187; that an advertisement by way of attracting customers can be no criterion for deciding duty liability in a particular Tariff item because it is usual for an advertiser of a product to claim all possible virtues for the product; it would be erroneous to rely on all those virtues for classification of the product; that this is supported by the ratio of the decision contained in the case reported in 1985 (21) E.L.T. 917 (Trib.).
14. Shri M.L. Lahoti, in his rejoinder submitted that it was strange that the department was not agreeing with the fact that Anmol Trading Corporation case is a good law. Reiterating his arguments that there was no distinction in the description of the specified items under 23(1) of the erstwhile Central Excise Tariff and 2502.20 under the new Tariff that the entries were para materia; that Rapid Hardening Cement is a technical quality and therefore ISI specifications and technical literature must be consulted and relied upon as indicated in technical literature and scientific books; that in this view of the matter common parlance will not be applicable in deciding the Tariff classification of Rapid Hardening Cement; that RHC is nothing but a property of cement; that removal of impurities will not create any new product. Concluding his arguments the ld. Counsel for M/s. Indian Rayon submitted that product described as White Cement manufactured by them was nothing but ordinary portland cement conforming to the property of Rapid Hardening Cement and therefore was classifiable under 2502.20.
15. Shri R.K. Anand, the ld. Advocate for M/s. J.K. White Cement Works Ltd. continuing his arguments submitted that for interpretation of any Tariff Entry we have to go by every punctuation mark provided for therein; that between different descriptions the punctuation mark 'comma' has been used which clearly indicates that every product described therein is independent. On the question whether the word 'Gray' will go with every item described in the specific entry, the ld. Counsel submitted that 'Gray' will not go with other words. Challenging the consideration of the Cement Control Order and Trade Parlance test, the ld. Counsel submitted that the show cause notice did not mention these things and therefore they cannot be argued at the appellate stage. In support of his contention he relied on the decision of cases reported in 1985 (19) E.L.T. 493,1986 (26) E.L.T. 676 and 1992 (61) E.L.T. 477.
16. Arguing further, the ld. Counsel submitted that there are four-five cases decided so far in respect of cement; that in all these cases ISI specification and chemical analysis has been relied upon for determining the classification that these cases are reported in 1989 (44) E.L.T. 552,1988 (36) E.L.T. 135,1987 (27) E.L.T. 617,1984 (60) E.L.T. 528,1985 (21) E.L.T. 110,1977 (1) E.L.T. 199,1992 (58) E.L.T. 321,1985 (21) E.L.T. 3,1990 (49) E.L.T. 395,1985 (21) E.L.T. 673,1992 (53) E.L.T. 32 and 1988 (36) E.L.T. 500; that any view contrary to that taken in these cases will unsettle the whole settled issue and will open the flood gates of controversy.
17. Ms. J.M.S. Sundaram, the ld. SDR replying to the arguments of the ld. Counsel submitted that the department had not taken up any new grounds and arguments which were not advanced earlier. Reading from the show cause notice and the adjudication order, the ld. SDR submitted that common trade parlance has already been indicated as one of the deciding factors for classification; that the Hon'ble Supreme Court in the case of Dunlop India relied upon by the other parties also held that it is well established that in interpreting the meaning of words in a taxing statute the acceptance of a particular word by the trade and its popular meaning should commend itself to the authorities, that the impugned orders show that ISI has been held to be relevant; that compressive strength has already been taken into consideration and that technical bulletins have been mentioned in the show cause notice as well as adjudication order; that it is well settled law that the chemical report or the ISI specification has to be read in its entirety as one of the tests for determination of classification; that one or two properties cannot be chosen or picked up for determining the classification; that only part criteria cannot be relied upon nor can it be the sole basis for determining the classification of the product; that the contention of the respondents in the case of J.K. White Cement and the appellant in the case of Indian Rayon Cement that there is no difference in chemical composition of different types of cement is not correct inasmuch as the presence of Iron-oxide in White Cement should not be more than 1%; that for classification of a particular product the entire set of chemical, physical and other properties are to be taken into consideration; that in the case of 'White Cement' the first distinguishing property is that Iron-oxide should be less than 1% and that whiteness should be above 70%; that if all the physical and chemical properties are taken in their entirety it would be seen that 'White Cement' and 'Rapid Hardening Cement' are two distinct and different commodities; that ISI specifications for these two commodities are different clearly indicates that they are so recognised in the market.
18. On the question of the ld. Advocate illustrating by an example that if cement is marketed as talc would it mean that it would be classified as talcum powder. The ld. SDR submitted that the market consists not only of seller but there is to be a buyer and a consumer; that how a thing is known in the market and what picture the consumer has in his mind of a particular product is very relevant for determining the classification of a product that even if cement is sold as talcum no consumer will purchase it as talcum and therefore the illustration given by the ld. Counsel for M/s J.K. White Cement is quite irrelevant. The ld. SDR therefore submitted that classification of cement cannot be decided by ISI specification alone or expert's opinion given by a scientist but there are other factors which are to be taken into consideration before deciding the classification of white cement. Referring to the case law contained in Indian Aluminium case decided by the Supreme Court and the Poorvanchal case decided by the Hon'ble Calcutta High Court, the ld. SDR submitted that these two cases have persuasive value. In view of the decisions in these two cases the law laid down in M/s Anmol Trading Corporation case becomes a bad law in as much as the Hon'ble Supreme Court's decision in the Indian Aluminium case and the Hon'ble Calcutta High Court's decision in the Poorvanchal case were not considered by the Tribunal while deciding the case of Anmol Trading Corpn. In the Poorvanchal case the Hon'ble Calcutta High Court had held, from the ratio of the judgment of the Hon'ble Supreme Court in Dunlop India Ltd. v. U.O.I. reported in 1983 (13) E.L.T. 1566 (SC) holding that "in interpreting the meaning of words in a taxing statute, the acceptance of a particular word by a trade and its popular meaning should commend itself to the authority. In my view, therefore it is not the botanist's conception as to what constitutes a fruit or vegetable which must govern the interpretation to be placed on the words but rather what would ordinarily in matters of commerce in Canada be included. Botanically Oranges and Lemons are berries but otherwise no one would consider them as such. So meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand the same in the usual course and that technical and scientific test offer a guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry." The ld. SDR submitted that in the instant case in view of the definition of cement as provided in paragraph 2(a) of the Import Cement (Control) Order, 1978 read with Press Note issued by the Central Government and the authoritative Publication made in the Indian Standard Institution treating white Portland Cement as different commercial commodity to that of ordinary low-heat Portland Cement, it must be held that in commercial parlance the two commodities are known as two different commercial commodities and that there is no scope for contending merely on the basis of some chemical test contrary to the chemical analysis published by the ISI to hold that white cement and ordinary cement are same commodity. The important test for determining whether white cement and ordinary cement is one commercial commodity or not is that if a customer asked for cement from the cement dealer, whether, the cement dealer will give him or offer him white cement or not, certainly, the cement dealer will not offer him white cement in such a case. The value of the two commodities is different, its chemical composition and uses are quite different. In commercial parlance these are treated as two different commercial commodities even the Central Government treated the same as two different commodities. It is also well established principle of law that in interpreting the meaning of a particular term the dictionary meaning and technical meaning should alone not be adhered to in the taxing statute, but must be understood by their meaning in commercial parlance. Further, what the Hon'ble Supreme Court in the case of Porrits & Spencers v. State of Haryana reported in 1983 (13) E.L.T. 1607 (SC) relied upon by the Hon'ble Calcutta High Court in the case of Poorvanchal International had held "if a statute contains language which is capable of being construed in a popular sense, such a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning, of course, by the words popular sense that which people conversant with the subject matter with which the statute is dealing would attribute to it. "The Hon'ble Calcutta High Court had held that, "in view of the above decision of the Supreme Court and in view of the Statutory definition of cement under the Import Cement (Control) Order 1978 and booklet issued by the ISI is no longer open to the Collector of Customs to ignore such definition and to contend that the cement in the market parlance also includes white cement. Such a view taken by the Collector of Customs is without any basis or materials on record and such a finding on the face of it is perverse. A perverse view taken contrary to the view prevailing in the market parlance and commercial parlance in the facts and circumstances of the case cannot be accepted;" that ordinary Portland Cement is different from White Portland Cement and others; that they are separate commodities.
19. In regard to residuary entry the ld. SDR submitted that residuary word has been used in most of the decisions cited and relied upon by the respondents in relation to Tariff Item 68 of the erstwhile Central Excise Tariff before 28-2-1986 that in the cement Tariff 'others' could not be treated as residuary entry, it is only an enumerated entry.
20. It was also argued on behalf of the respondent in the case of J.K. White Cement that what is known to the trade and ordinarily sold in the market is included in the specific entries under the Tariff. The ld. SDR argued that this argument is not correct, which is supported by the fact that when the Tariff was changed in 1992, one of the entries against Heading No. 2502.21 was 'White Cement' whether or not artificially coloured and whether or not with Rapid Hardening Properties and sub-heading No. 2502.29 reads as 'others.' The ld. SDR emphasised that this clearly shows that contention of the respondents is not correct because if we go by what the respondents argued does it mean that items classifiable under the Tariff sub-heading 2502.29 reading as 'other' are not known to the trade or the consumer. On the question of punctuation and use of comma, semi-colon, etc. the Id SDR submitted that commas and other punctuations are used to distinguish the different commodities; that to avoid confusion punctuation marks are used; that specifications are based on the requirement of the trade; that hardening was only incidental property of white cement. On the question that in case ISI specifications are not considered by the Tribunal in the instant case as necessary for classifying the cement then the entire case law on cement which has developed so far will be thrown out of gear as in all the cases ISI specification has been considered as the deciding factor. In reply to this argument of the respondents/appellants the ld. SDR submitted that though ISI specification was quoted yet only Glossary has been followed. In the case of Nageshwar Pozzolana Works Pvt. Ltd. v. CCE reported in 1992 (58) E.L.T. 321 the Tribunal had held that, "it is also well settled that ISI specification should be preferred unless there are strong reasons to the contrary as has been laid down by the Supreme Court in the case of CCE v. Krishna Carbon Paper Co. reported in 1988 (37) E.L.T. 480." The ld. SDR pointed out that the Hon'ble Supreme Court in the case of Krishna Carbon Paper Co. had observed that "where no definition has been provided in the statute itself for ascertaining the correct meaning of a fiscal entry, reference to a dictionary is not always safe. The correct guide, it appears in such a case is the context and the trade meaning. The trade meaning is one which is prevalent in that particular trade where that product is known or traded. If special type of goods is subject matter of fiscal entry then that entry must be understood in that context of that particular trade. Where however there is no evidence either way then the definition given and the meaning flowing from particular statute at particular time would be the decisive test. Similarly, where a word has a scientific or technical meaning and also an ordinary meaning, the ordinary meaning should be preferred unless contrary intention is clearly expressed by the legislature. Where no trade evidence is available but ISI specifications are available, they should be relied upon for interpretating a Tariff Entry." For this purpose the Apex Court relied on their decision reported in AIR 1973 SC 78,1977 (1) E.L.T. 199 and 1951 CLR 122. That this observation of the Hon'ble Supreme Court clearly indicated that ISI specification is a last resort. The ld. Counsel in his arguments had submitted that in case ISI specification was not considered as a decisive factor in classification of the cement then all the decisions rendered by the Tribunal will be rendered as nugatory and that the present Bench of the Tribunal was bound to follow the Tribunal's earlier decisions; that in case of Digvijay Cement Co. Ltd. v. CCE it was held by the Tribunal "after perusing the respective Indian standard for Rapid Hardening Cement, and Ordinary Portland Cement we are inclined to agree with the submissions of the ld. Advocate that ordinary Portland Cement is required to achieve compressive strength of 160 Kg./Sq.Cm within a period of 3 days whereas Rapid Hardening Cement is required to achieve at least the same strength within 1 day. There is no evidence that the samples in question answered this test. This position has not been disputed by the ld. JDR. It appears to us that the quality of Rapid Hardening Cement is that which achieves the same compressive strength much faster as compared to ordinary Portland Cement. Once this is kept in mind the test certificates issued by the National Test House explain themselves fully. This Test House is under the Government of India and is one of the highly respected institute specialising in testing. After examining the samples, the test clearly recorded that the samples conformed to ISI specification No. 269 : 1967 for ordinary Portland Cement. In the light of what we have observed above, we hold that there is no reason at all to depart from the findings of the National Test House, Bombay." The ld. SDR argued that in this case the dispute was whether the cement manufactured by the appellant was ordinary Portland Cement or Rapid Hardening Cement, whereas the issue before the Bench in the present case is whether the product was white cement conforming to ISI specification 8042 : 1915 - or Rapid Hardening Cement conforming to ISI specification 8041:1978 and thus the facts in the two cases are different. The ld. SDR also cited and relied upon the decision of the Tribunal in the case of Cement Corporation Ltd. v. CCE, Patna in order No. 299/93-C wherein the Tribunal held, "the ultimate test of classification is how the product is known in trade parlance." That Cement Tariff in particular and entire Tariff in general is based on use/functions of the product and therefore common parlance test namely how the product is known in the trade and the consumers and how the product is used will be the deciding factor.
21. Heard the submissions of both sides, perused the case law cited and relied upon in abundance by both sides and considered them.
22. For the correct appraisal of the entire issue it is necessary to see what the Tariff Entry for Cement during the relevant period was. Reproduced below is the Tariff Entry for Cement for the period (a) Prior to 28-2-1986, (b) From 28-2-1986, (c) From 1-3-1992 :-
(a) Prior to 28-2-1986
-----------------------------------------------------------------------------
23. CEMENT ALL VARIETIES Rs 250/- 10% of the
(i) Gray Portland Cement (including Ordinary Per MT basic duty Portland Cement, Portland-Pozzolana Cement chargeab-
and Portland slag cement), masonry cement, le
rapid hardening cement, low heat cement and
waterproof (hydrophobic) cement.
ii) All Others 40% ad -do-
valorem
-----------------------------------------------------------------------------
(b) From 28-2-1986
-----------------------------------------------------------------------------
Heading Sub- Description of goods Rate of
Heading Duty
-----------------------------------------------------------------------------
25.02 Cement Clinkers; cement, all sorts
2502.10 Cement clinkers 12%
2502.20 Gray Portland Cement (including Rs. 225 per
ordinary portland cement,
tone Portland pozzolana cement
and portland slag cement),
masonry cement, rapid hardening cement,
low-heat cement and water-proof
hydrophobic cement
2502.30 Aluminous cement (cement foun- 12%
du)
2502.40 Sagol;Ashmoh Nil
2502.50 High alumina refractory cement 10%
2502.90 Other 40%
-----------------------------------------------------------------------------
(c) From 1-3-1992
-----------------------------------------------------------------------------
Heading Sub- Description of goods Rate of
Heading Duty
-----------------------------------------------------------------------------
25.02 Cement clinkers; cement, all sorts
2502.10 Cement clinkers Portland Cement 10%
2502.21 White Cement, whether or not ar- 40% + Rs
tificially coloured and whether or 250 per
not with rapid hardening proper- tonne
ties
2502.29 Other 40% +
Rs 250 per
tonne
2502.30 Aluminous cement (cement foun- 10%
du)
2502.40 Sagol; ashmoh Nil
2502.50 High Alumina refractory cement 10%
2502.90 Other 40%
-----------------------------------------------------------------------------
23. From the Tariff Entry it would be seen that prior to 28-2-1986 there were two items. Whereas the first item specified certain commodities, the second Item only was listed as 'all others' for the sake of convenience, therefore the first entry which describes the goods shall be called the 'specified entry' and the other shall be called as 'enumerated entry.' Wherever so required this enumerated entry has been called as the residuary entry by the assessees. It was argued on behalf of the assessees that all the Items known to the trade/market are listed under the specified entry and that only such items as are not so described shall be classifiable under the residuary entry; that the cement manufactured by them was conforming to RHC and that as RHC was specifically mentioned in Tariff Entry 23 (1), therefore, there was no question of consigning it to the residuary category of 'all others' falling under Tariff Entry 23(2) prior to 28-2-1986 and under Tariff Entry 2502.90 from 28-2-1986; that the cement manufactured by the assessees conformed to the ISI specification laid down for Rapid Hardening Cement and, therefore, the Department should have classified the cement under the specified Entry which prior to 28-2-1986 was Tariff Item 23(1) and from 28-2-1986 the specified Entry for cement was 2502.20; that Tariff Entry 23(2) and 2502.90 covered only 'others' which was a residuary Entry; that the Hon'ble Supreme Court in the case of Supdt., Central Excise v. Vacmet reported in 1985 (22) E.L.T. 330 had held that when an article falls within a specific entry such goods must necessarily be excluded from the general category. The assessees also relied on the judgment in the case of Dunlop India v. U.O.I. where the Hon'ble Supreme Court had held that when an article is by all standards classifiable under a specific item in the Tariff Schedule it would be against the very principles of classification to deny it the parentage and consign it to the residuary item; that in the case of Bharat Forge & Press Industries reported in 1990 (45) E.L.T. 525, the Apex Court held that the question before them is whether the Department is right in claiming that the items in question are dutiable under Tariff Entry 68. This as mentioned already, is the residuary entry and once such goods as cannot be brought under the various specific entries in the Tariff should be attempted to be brought under the residuary entry. In other words, 'unless the department can establish that the goods in question can by no concievable process of reasoning be brought under any of the Tariff Items, resort cannot be had to the residuary item'. However, opposing this claim of the assessees the Departmental Representative submitted that the claim of the assessees that all the Items known in the market are listed in the specified entry that is Tariff Entry No. 23(1) before 28-2-1986 and from 28-2-1986 under Tariff Item 2502.20 is not supported by the fact which will be crystal clear from the fact that after 1-3-1992, the Tariff Entry was amended to read as Tariff Item "2502.21 - White Cement, whether or not artificially coloured and whether or not with Rapid Hardening Properties." "2502.29 - Other". Thus it was pointed out by the ld. SDR that in case contention of the assessees is accepted, then the only Item known in the trade regarding cement was 'White Cement' because no other cement has been specified and they have been clubbed and classified under the Tariff Item No. 2502.29 as 'others.' On the question of specific entry and residuary entry, the ld. SDR submitted that in all the decisions cited and relied upon by the ld. Advocates residuary entry has been used in relation to TI 68 of the erstwhile Central Excise Tariff and that what we are concerned with the classification under one of the sub-items of the same tariff item and hence, those decisions can be clearly distinguished. On the question of specific entry the ld. SDR submitted that White Cement was not covered by the items described under the specified items as the qualifying word was 'Gray' and the product with which we are dealing is White Cement.
24. We observe that the decision of the Apex Court in the cases of Vacmet, Dunlop India and Bharat Forge & Press Industries cited supra, it was a matter of classification between two different Tariff headings whereas in the case before us we have to decide the classification of the goods between two sub-items of the same Chapter Heading and hence distinguishable. We also observe that in the case of Dunlop India, the Hon'ble Supreme Court had observed that it is well established that in interpreting the meaning of words in a taxing statute the acceptation of a particular word by the trade and its popular meaning should commend itself to the authority. On the analysis of the contentions of both sides we find that there is force in the arguments pleaded by the ld. SDR.
25. On the question that Tariff Entry 23(2) before 28-2-1986 and Tariff Entry No. 2502.90 from 28-2-1986 are residuary entries, it was argued on behalf of the assessees that on submission of the classification list by the assessees the department was bound to investigate and examine thoroughly that the Item mentioned in the classification list did not fall under any of the Items mentioned in the specified entry; that resort to the residuary entry can be taken only when the Item did not fall under any of the specified Items. It was argued on their behalf that the product manufactured by them was known as Rapid Hardening Cement, it conformed to the ISI specification for Rapid Hardening Cement; that Rapid Hardening Cement was specifically mentioned in the specified entry for the periods and no evidence has been brought on record by the Revenue to prove as to why their claim for classification of their product under the specified Tariff Entry was not acceptable. It was, therefore, argued that the department was required to exhaust every concievable means for finding out and that the onus was on the department that this product was not classifiable under the specified entry which the Department has not discharged. As against this, it was argued on behalf of the Department that the product manufactured by the assessees was White Cement conforming to ISI specification 8042 :1978; that the product was known to the trade and user as White Cement; that the assessees had taken ISI mark [too for] (sic.) as White Cement and that the technical bulletins described the product as white cement which was marked on the bags also; that there was no specific entry for White Cement as claimed by the assessees; that the Entry claimed to be residuary entry actually was not a residuary entry but an enumerated entry under which the products were classified; that the term residuary entry in most of the decisions cited and relied upon by the assessees pertain to Tariff Entry 68.
26. We have carefully considered the arguments and perused the case law. We observe that the Hon'ble Supreme Court in the case of Krishna Carbon Paper Co. reported in 1988 (37) E.L.T. 480 had observed that :-
"Head Note:- Where no definition is provided in the statute itself for ascertaining the correct meaning of a fiscal entry, reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. The trade meaning is one which is prevalent in that particular trade where the goods is known or traded. If special type of goods is subject matter of a fiscal entry then that entry must be understood in that context of that particular trade. Where however, there is no evidence either way then the definition given in the meaning flowing from the particular statute at particular time would be decisive test. Similarly, where a word has a scientific or technical meaning and also an ordinary meaning, the ordinary meaning should be preferred unless contrary intention is clearly expressed by the Legislature. Where no trade evidence is available but ISI specifications are available they should be relied upon for interpretating a Tariff Entry."
27. Further, the Hon'ble Supreme Court in the case of Oswal Agro Mills Ltd. v. CCE reported in 1993 AIR SCW 1782 held that:-
"Doctrine of placement of particular goods in a particular Tariff Item or Residuary Item is not attracted in the case of sub-classification within the same Item. They held as under :-
"7. The ratio in Indo Metal case, therefore, is inapplicable. As rightly contended by Sh. Ganguly that the Doctrine of Placement of a particular goods in a particular Tariff Item or residuary i.e. parentage or orphanage i.e. in placement of toilet soaps in other sub-items is not attracted to the facts as it is not a case of residuary items but of sub-classification within the same item."
In the light of the above decisions we hold that the question of placement of White Cement was not a case of residuary item but of sub-classification within the same item.
28. The question that the word 'Gray' used in specified entry did not qualify all the Items mentioned in the entry was agitated by the ld. Advocates for the assessees saying that ordinary portland cement is a generic term and Gray portland cement is a species; that the word 'Gray' qualifies portland cement alone; that harmonious construction also precludes the coverage of all items by the word 'Gray.' It was also argued on behalf of the assessees that the term 'Gray' was followed by a comma after each entry which clearly indicated that each Item followed by comma was a distinct item; that the word including used in the specified Tariff Entry enlarges the scope of coverage and a wider meaning should be given to this word and relied on the judgment in the case of Heeral Enterprises v. CCE reported in 1986 (25) E.L.T. 269 wherein it was held that :-
"Including not only enlarges scope of a term but also what comes after it cannot be read in isolation from what comes before it."
Whereas it was argued on behalf of the department that the word 'Gray' used in the specified entry covered all the Items specified against that entry; that the Punctuation marks are used for the sake of convenience and do not at all mean that after every comma a new item which is distinct from the other is indicated.
29. After hearing the arguments carefully and considering them in the light of the ratio of the decision in the case of Oswal Agro Mills v. CCE reported in 1993 (66) E.L.T. 37 (SC), wherein their Lordships held that :-
"Doctrine of reading down in the case of Utkal Construction v. State of Orissa reported in 1987 (3) SCC 279 . There is no quarrel with the proposition that in ascertaining the meaning of the word or a clause or sentence in the statute in its interpretation, everything which is logically relevant should be admissible. It is no doubt true that Doctrine of Noscitur A Sociis meaning thereby that it is a legitimate rule of construction to construe the words in an Act of Parliament with reference to the words found in immediate connection with them, i.e. when two or more words which are susceptible to analogous meaning are clubbed together, they are understood to be used in their cognate sense. They take as it were, their colour from each other the meaning of the more general is restricted to a sense analogous to a less general. The philosophy behind it is that the meaning of doubtful words may be ascertained by reference to meaning of the words associated with it. This Doctrine is broader than the Doctrine ejusdem generis. This Doctrine was accepted in catena of cases but its application is to be made to the context of setting in which the words claimed to be used or associated in the statute or the statutory Rule." and the Hon'ble Supreme Court's observation in the case of CIT (AP) v. Taj Mahal Hotel reported in 1979 ITR 44 holding that :-
"The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the word or phrases occurring in the body of the statute. When it is so used these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import were also those things which the interpretation clause declares that they shall include."
We hold that the word 'Gray' qualifies each and every item mentioned in the specified entry.
30. On the question of ISI specification and its acceptance for classification of goods, detailed arguments were submitted by the Advocates of the assessees stating that proper criterion was to determine classification on the basis of ISI specifications on the ground that the Entry in the Tariff indicated that scientific meaning was attracted, that in the case of J.K. White Cement the Collector (Appeals) has rightly accepted their contention that the product conforms to all properties of RHC and hence was classifiable under Tariff Item 2502.20; that the product manufactured by them conformed to ISI standard set out for Rapid Hardening Cement; that a prestigious institution like the Sri Ram Institute has confirmed that Rapid Hardening Cement could be Gray or White; that there was no indication that only Gray cement could be Rapid Hardening Cement which could be classified under that specified entry; that experts have opined in their case that the White Cement manufactured by them conformed to the specification for RHC laid down by the ISI. The ld. Advocates submitted that Rapid Hardening Cement in specified Entry has been mentioned without colour; that Rapid Hardening Cement may be White or Gray; that technical books support their contention that White Cement fulfils the requirements of most countries to Rapid Hardening Cement; that the British Standards set out that the most essential difference from Rapid Hardening Cement is Whiteness and particularly low alkaline content, that the technical books further mentioned that Danish White Portland Cement is of the Rapid Hardening type and it complies with the requirement of International Standards of Rapid Hardening Cement; that certificate issued by Prof. Kaushik of Roorki University establishes that Ordinary Rapid Hardening Cement may be gray or white. The ld. Advocate argued that it is incorrect to suggest that merely because cement is white or when it is described as white cement it cannot be treated as Rapid Hardening Cement, that appraisal report of Shri Mohan Shenoy of the Department of Chemical Technology of the University of Bombay refers to compressive strength figures for one day, 3 days and 7 days and concludes that J.K. White Cement conforms to Rapid Hardening Cement. Relying on the ratio of Anmol Trading, the ld. Counsels submitted that the Tribunal relied on the ISI specifications. They also relied on the decisions of the Tribunal in cases reported in 1977 (1) E.L.T. (J199), 1988 (36) E.L.T. 500 (Trib.); 1992 (58) E.L.T. 321 and 1990 (49) E.L.T. 395. The Department as against these arguments submitted that ISI specifications laid down a number of properties; that one of the chemical properties for white cement was its Iron content and physical property was percentage of whiteness; that it has not been explained by the assessee why only they have selected the Rapid Hardening Property and not the whiteness of the cement for purpose of assessment. The Department also argued that there are different ISI specifications for white cement and Rapid Hardening Cement; that these two different specifications clearly indicate that White Cement and Rapid Hardening Cement are two commercially different commodities and, therefore, cannot be identical or equal to one another; that chemical properties of both portland cement and white cement are different in as much as the Iron Oxide content should be less than 1%, that the process of manufacture was different as coal was used for ordinary portland cement whereas fuel oil is used for manufacture of White Cement. In support of their contention the ld. SDR relied on the case of Purvanchal International reported in 1985 (21) E.L.T. 3.
31. For the purpose of classification on the basis of ISI specification the assessee relied on the decision of the Hon'ble Supreme Court reported in 1977 (1) E.L.T. (J 199) in the case of U.O.I. v. D.C.M. in which in the Head-note it has been mentioned that :-
"The view of the ISI in regard to how a particular product is known to Indian Trade should be preferred to view of foreign authors and experts."
The assessees also relied on the decisions of the Tribunal in the case of Digvijay Cement Co., Anmol Trading Corporation, Vageshwara Pozollana Works and Others. As against this, the department relied on the judgment of M/s. Purbanchal International case and Indian Aluminium Cables case.
32. We find that, Hon'ble Supreme Court in the case of Dunlop India observed that it is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand them in the usual course but once an article is classified and put under a distinct entry it is not open to question. Technical and scientific 16/734 tests offer guidance only within limits.
33. On careful consideration of the submissions made by both sides on the question of accepting ISI specifications as the means for classifying a product we have to find out as to what is the purpose of ISI specifications. We find that ISI specifications are meant for maintaining the purity or standard of the product and therefore, it can be used for identification of a product as a last resort when other tests of common or trade parlance etc. are not available. We also find that it is well settled in law now that the ISI specifications for any particular product can be accepted only when the other tests namely Trade/Commercial Parlance is not available to authorities. The Hon'ble Supreme Court in the case of Indo International Industries v. Commissioner of Sales Tax, U.P. reported in AIR 1981 SC 1079 held that :-
"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 the Revenue and for which purpose they classified 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, i.e. 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, the common parlance or commercial parlance has to be adopted."
Having regard to all the case law on the subject, we hold that ISI specification can at best be one of the tests for classifying a product and not the only test as contended by the assessees. But even for relying on ISI specification a particular property cannot be picked up out of so many others and also that the particular commodity specified in the ISI specification must be a distinct one and falling only under one of the ISI specifications. In this view of the matter, we hold that ISI specification in the instant case before us cannot be the deciding factor as the goods are sold in the market and are understood as White Cement by those dealing in them.
34. The next issue discussed at length during the course of Oral arguments was the Trade/Commercial Parlance. It was argued on behalf of the assessees that there was no mention of Commercial/Trade Parlance in the show cause notice, that once the goods conformed to ISI specifications and attracted assessments under the specified entry, there was no question of referring to the Trade Parlance. He relied on the decision of the Tribunal in Anmol Trading and Others and similar decisions rendered by the Tribunal in the case of cement factories; and submitted that in all these cases the Tribunal had held that, 'classification of cement should be on the basis of the ISI specification.' As against this the Department contested that the law laid down in the judgment of Anmol Trading Corporation is not good law inasmuch as it is against the law laid down by the Hon'ble Supreme Court in the case of Indian Aluminium Cables and the Hon'ble Calcutta High Court in the Poorbanchal International case that the goods cannot be classified solely on the basis of ISI specifications. Referring to the judgment of the Hon'ble Supreme Court in the case of Dunlop India, the ld. SDR submitted that the Hon'ble Supreme Court had very clearly held that :-
"for classification of goods it is well established that interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the trade and its popular meaning should commend itself to the authority." and further that, "it is clear that meanings given to articles in fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand them in the usual course. Once the articles are in circulation and came to be described and known in common parlance we then see no difficulty for statutory classification under a particular entry. Technical and scientific tests offer guidance within limits."
Referring to the judgment of the Hon'ble Calcutta High Court in the case of Poorbanchal International v. U.O.I. reported in 1985 (21) E.L.T. 673 (Cal.), the ld. SDR submitted that the Hon'ble Calcutta High Court very clearly held that:
6. In this connection reference may also be made to the decision of Supreme Court of India, in Dunlop India Ltd. v. Union of India reported in 1976 (2) SCC page 241 Cen-Cus-150C/75 in which it was held by the Supreme Court that in interpreting the meaning of word in a Taxing Statute, the acceptance of a particular word by the trade and its popular meaning should commend itself to the authority. So meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject generally treat and understand the same in the usual course and that technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, the Court should find no difficulty for statutory qualification under a particular entry. In the instant case, in view of the definition of cement as provided in paragraph 2(a) of the Import Cement (Control) Order, 1978 read with a Press Note issued by the Central Government and the authoritative publication made in the ISI treating white portland cement as a different commercial commodity to that of ordinary low heat portland cement, it must be held that in commercial parlance the two commodities are known as two different commercial commodities and that there is no scope for contending merely on the basis of some chemical test contrary to the chemical analysis published by the ISI to hold that white cement and ordinary cement are same commodity. The important test for determining whether white cement and ordinary cement is one commercial commodity or not, is that if a customer asks for cement from a cement dealer, whether, the cement dealer will give him or offer white cement or not. Certainly, a cement dealer will not offer white cement in such a case. The value of the two commodities is different, its chemical composition, and uses are quite different. In commercial world it is treated as two different commercial commodities. Even the Central Government treated the same as two different commodities. It is also well-established principle of law that in interpreting a particular commodity the dictionary meaning and the technical meaning should not be adhered to and that in a Taxing Statute word of everyday use must be construed not in their scientific or technical sense, but as understood in commercial parlance. Reference may be made in this connection to the decisions of Supreme Court of India in Ramavatar Budhai Prasad v. Asstt. Sales Tax Officer, Akola, AIR 1961 SC 1325 ECR-633-SC, M/s Motipur Zamindary Company v. State of Bihar, AIR 1962 SC 660 and the State of West Bengal v. Washi Ahmed, AIR 1977 SC 1638 and Porrits and Spencers (Asia) Ltd. v. State of Haryana, reported in AIR 1979 SC page 300. In view of the above decisions of the Supreme Court and in view of the statutory definition of cement under the Imported Cement (Control) Order, 1978 and the booklets issued by the Indian Standard Institution, it is no longer open for the Collector of Customs to ignore such definition and to contend that the cement in the market parlance also includes white cement. Such a view taken by the Collector of Customs is without any basis or materials on record and such a finding on the face of it is perverse. A perverse view taken contrary to the view prevailing in the market parlance and commercial parlance in the facts and circumstances of the case cannot be accepted."
"7. Considering the facts and circumstances of the case and the materials disclosed in the petition and the authorities produced before this Court, I hold that ordinary portland cement and white cement are two different and distinct commercial commodities and as such the importation of white cement was perfectly valid and cannot be said to have been imported in violation of the provision of Section 3 of the Imports Control Order, 1947 and/or any other law in this behalf. Since the petition succeeds on the sole ground that white cement and ordinary cement are two different commercial commodities and there is no bar on the importation of white cement, it is not necessary to decide other points raised by Mr. Gupta in this behalf."
In view of the ratio of the decisions in the above two cases, it is very clear that the finding of the Tribunal in the case of Anmol Trading relied upon by the assessees is not a precedent and cannot be binding on this Bench.
35. Considering the detailed arguments of both sides on this issue, we observe that in the absence of statutory definition of an article its classification has to be based on understanding in common parlance and its primary function and utility. We find that the show cause notice makes a mention of Trade/ Commercial Parlance. We also find that the word 'White Cement' has not been specified in the Tariff. The Apex Court in the case of Krishna Carbon Paper Co. cited supra, had very clearly held that, 'the correct guide in such a case is the context of trade meaning'; that the Hon'ble Supreme Court in the case of CCE v. Fuse Base Eltoto Ltd. reported in 1993 (67) E.L.T. 30 (SC) had held :-
"The Collector (Appeals) upheld the above quoted findings of the Asstt. Collector. The Tribunal did not touch the question as to how the product called Broadcast TV. Receiver Set is identified by the Class or Section of people dealing or using the product, i.e., the test to be followed when the relevant Notifications do not contain any definition of the products. Identity of article is associated with its primary function and utility. The names of certain products have Functional Association in the minds of consumers. There is a mental association in the mind of the consumer in respect of certain products keeping in view the utility of the product and also the reputation, the name of the product has acquired in the market and among the consumers."
We also find that white cement was mentioned in the Technical Bulletins issued by the manufacturer specially in case of J.K. White Cement. We also observe that the product was known in the trade as White Cement. We also find that ISI specification 8042 :1978 was marked on the bags and that this ISI specification is for White Cement. Reading all these together coupled with the fact that the product was known as 'White Cement' among the persons, who bought it or used it, we therefore, hold that even from the trade parlance test, the product manufactured by the assessees was White Cement. As White Cement was not specifically mentioned in the Entries specified against the Tariff Item 23(1) or 2502.20, therefore, the Item in dispute is correctly classifiable under Tariff Item 23(2) before 28-2-1986 and under Tariff Item 2502.90 from 28-2-1986.
36. A lot of emphasis was laid by the Advocates of the assessees that the product manufactured by them fell under Tariff Item 23(1) and 2502.20, if we take Contemporaneous Exposition into consideration. Referring to Notification No. 24/91-C.E., dated 25-7-1991 which prescribed concessional rate of duty for cement falling under 2502.20 of the Schedule to CETA, 1985, under the conditions mentioned in the notification. However, the amendment by Notification No. 2/92, dated 2-1-1992 clarified that for the words 'exempts Cement' the words "exempts Cement other than White portland cement conforming to its specification No. 8042 : 1989" and shall be substituted. That this amendment was very clear to show that Tariff Item No. 2502.20 covers white cement. As against this the department referred to Cement Control Order issued under Essential Commodities Act in which White Cement was excluded from the purview of this order while Rapid Hardening Cement was included. It was also argued on behalf of the department that Cement Control (Regulation of Production) Order, 1981 also issued under the Essential Commodities Act made a clear distinction between the Rapid Hardening Cement or ISI8041: 1978 and White Portland Cement conforming to ISI 8042 : 1978. It was also argued that w.e.f. 1-3-1992 White Cement was placed under a specified Item, clearly indicating that White Cement was classifiable under the enumerated entry immediately before 1-3-1992.
37. After hearing the various submissions made by both sides, we find that the Tribunal in the case of Godrej Soaps Pvt. Ltd. v. CCE reported in 1992 (62) E.L.T. 337 [Paras 24 & 25] had held :-
****** Further, the Hon'ble Supreme Court in para 6 of their decision in the case of Oswal Agro Mills Ltd. v. CCE reported in AIR 1993 SCW 1782 had held as under :-
"The Doctrine of Contemporanea Expositio is also being invoked to cull out the intendment by removing ambiguity in its understanding of the Statute by the Executive. This Court in a latest case Mitra Prakashan (P) Ltd. v. CC, 1991 (51) E.L.T. 111 cited all the decisions up to date and applied the Doctrine to the understanding by the Revenue of the provisions in the Income tax Act."
In Deshbandhu Gupta v. Delhi Stock Exchange reported in 1979 (3) SCR 373; AIR 1979 SC 1049, this Court had held :-
"This principle can be invoked though the same will not always be decisive on the question of construction. But Contemporaneous construction placed by the Administrative or Executive Officers charged with executing the statute, although, not controlling, is nevertheless entitled to considerable weight as highly persuasive. We may also add that if the interpretation is erroneous, Court would without hesitation refuse to follow such construction. This Court also equally expressed the view that its application was in restricted sense to ancient legislation in J.K. Cotton Spinning and Weaving Mills v. UOI reported in 1987 Supp. SCC 350 and in Doypack System (P) Ltd. case AIR 1988 (2) SCR 962. In State of Madhya Pradesh v. G.S. Ball and Flour Mills (1992) Supp. SCC-150 at p. 153, this Court doubted the application of the Doctrine of Contemporanea Expositio as given to the construction or its applicability to a recent statute that too in the first few years of its enforcement. In this case also the question whether Toilet soap is a household soap had arisen, within a short period after the Amendment Act of 1964 came into force. Therefore, the understanding by the Executive and its interpretation in bringing toilet soap in Sub-Item (2) 'Other Sorts' instead of Item 1 'household' being of formative period of statutory operation, the Doctrine became inapplicable."
38. Agreeing respectfully with the above ratio of the decision, we hold that the doctrine of Contemporanea expositio will not be applicable to the present case as the notification was issued on 25-7-1991 and it was amended on 2-1-1992.
39. It was argued at length on behalf of the assessees that end-use is not a criterion for classification of the product. The counsels relied on the decision of the Hon'ble Supreme Court in the case of Dunlop India and Madras Rubber Factory v. UOI cited supra. As against this, the ld. SDR submitted that Market parlance or Trade parlance invariably takes into consideration the picture that is implanted of a particular product in the mind of the consumer or user and thus end-use becomes relevant to understand trade parlance or common parlance meaning of a particular product. After considering the submissions made by both the sides we hold that end-use is necessary only to understand the Trade/commercial parlance meaning of the product and thus in this particular case end-use has become relevant. We hold that in the instant case, end-use although not entirely reliable yet is all the same relevant.
40. Another point that was agitated by the advocates was that advertisement of their product has been relied upon by the Revenue for classifying it; that this dependence of the Revenue is not warranted as was held by the Tribunal in the case of Toshiba Anand Batteries v. CCE reported in 1987 (27) E.L.T. 187 wherein the Tribunal had held :-
"We should particularly mention that we agree with Mr. Koshoy that advertisement should not form the basis for assessment. We do not propose to find our decision on their advertisement."
They also relied on the decision of the Tribunal in the case of CCE v. Devidayal Aluminium Industries reported in 1985 (21) E.L.T. 917, wherein the Tribunal had held :-
"It has been urged that in the advertisement the respondents have claimed several virtues for Tandoor; therefore, this would not merit classification as aluminium utensil. The classification of goods in a particular tariff item depends on the facts and circumstances of each case as held by Bombay High Court in Blue Star Ltd. v. UOI and Ors.. An advertisement by way of attracting the customers can be no criterion for deciding duty liability in a particular tariff item because it is usual for an Advertiser of a product to claim all possible virtues for the product; it would be erroneous to rely on all these virtues for classification of the product."
41. In reply to the above contentions of the Advocates, the ld. SDR submitted that they had not relied on the advertisement but they had relied on the technical bulletins. It was argued that technical bulletins cannot be treated as advertisements and, therefore, the case law relied upon and cited by the Advocates is not relevant to the present case. It was submitted by the SDR that technical bulletins specified the technical qualities and not anything else.
42. Having considered the submissions of both sides, we find that what was relied upon was the technical bulletins. There is no reference to advertisement. We also observe that technical bulletins cannot be treated as advertisements. They are in the form of catalogue which may be utilised for identifying the product of the assessees, we, therefore, hold that these technical bulletins were not advertisements, they were in the nature of catalogues/pamphlets by which the product can be identified and therefore were correctly relied upon by the Revenue for identifying the goods.
43. On behalf of the assessees it was also argued that the onus was on the department to conclusively prove that the product manufactured by them was not classifiable under the specified Tariff Entry and that this onus was not discharged by the department. In support of their contention they cited and relied upon the ratio of the decision of the Tribunal in the case of Smt. Sindhu Ganesh Bali and Ors. v. CCE reported in 1985 (22) E.L.T. 242 in which the Tribunal had held that:
"20. As will be seen from the entries, which have been reproduced in para 2 above, entry (1) is specific and covers a number of varieties of cotton fabrics which have been described thereunder. Entry (2) is a residuary entry, and covers all other cotton fabrics (apart from those falling under entry (1-A). As between entries (1) and (2), entry (1) carries a higher duty liability - firstly, because the statutory rates of duty on some goods falling under entry (2) are lower; and secondly, because goods falling under entry (1) are excluded from the benefit of assessment at the compounded levy rate vide para 2 above. Therefore, when the question is whether any goods would fall within entry (1) which carries a higher duty liability, or entry (2) which carries a lower duty liability, the burden is clearly on the Excise authorities to bring the goods within the scope of entry (1), in accordance with well-known authorities."
The Advocates also cited and relied upon the ratio of the judgment of the Hon'ble Supreme Court in the case of CCE v. Calcutta Steel Industries reported in 1989 (39) E.L.T. 175 in which the Apex Court had held :-
"4. It has also to be borne in mind that the very nature of the mill was a creteria to decide the nature of the product manufactured. Further, however taking into account the nature and type of the mill cannot itself be the determining factor in the issue in dispute. The Tribunal also took into account that these are produced in a mill which cannot produce hoops or strips. The Tribunal found the fact that they were produced in a mill that could produce hoops and strips. Their lengths are not such as to place them in the same class as hoops. Having, therefore, regard to this and the relevant tariff item, the Tribunal came to the conclusion that it will be more appropriate to assess them under Section 26AA(ia) than Section 26AA(ii). The Tribunal has considered all the relevant facts. There was no misdirection on the facts. All proper and relevant materials relevant for the determination of the question before the Tribunal have been applied to. Reliance was placed on certain observations of this Court in South Bihar Sugar Mills Ltd. v. UOI and Ors., 1968 (3) SCR 21. There, this Court was dealing with Item 14A and the appellants manufacturing mixture of gases containing carbon dioxide by burning lime stone with coke in using only the carbon dioxide from the mixture for refining sugarcane juice and for producing soda ash by solvay amonia soda process. Whether the mixture of gases was kiln gas or compressed carbon dioxide covered by Item 14-H in Schedule I to the Act. It was held by this Court that the gas generated by the appellant companies was kiln gas and not carbon as known to the trade, i.e., to those who deal in it or who use it. The kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14-H in the First Schedule. It was held that it was incorrect to say that because the sugar manufacturer wants carbon dioxide for carbonisation purposes and sets up a kiln for it that he produces carbon dioxide and not kiln gas. In fact what he produces is a mixture known both to trade and science as Kiln gas one of the constituents of which is, no doubt, carbon dioxide. The kiln gas which is generated in these cases is admittedly never liquefied nor solidified and is therefore neither liquefied nor solidified carbon dioxide, assuming that it can be termed carbon dioxide. It cannot be called compressed carbon dioxide as understood in the market among those who deal in compressed carbon dioxide. If the Revenue wants to tax a particular goods known as such then the onus is on the Revenue. That they have failed. The Tribunal has analysed all the aspects. In appeal, we have to see the propriety and the correctness of adjudication. Having examined the aspects from all angles, we find that there was no misdirection in law nor any non-consideration of facts. There is no exclusion from consideration of legitimate proper materials. In the premises, we have also examined the ultimate conclusion of the Tribunal. That conclusion appeals to us. It follows irresistibly from the other premises as indicated hereinbefore. In the premises, the appeals fail and are accordingly dismissed."
44. On behalf or the Department it was argued that the Department clearly discharged the burden on the basis of the evidence, facts and circumstances of the case that White Cement manufactured by the assessees was a different product from RHC as it was known as White Cement in the market and specified by the ISI by providing a separate ISI specification and also by the decision of the Hon'ble Calcutta High Court in the case of Poorbanchal International. It was, therefore, contended that the department had clearly discharged the onus.
45. On consideration of the evidence and the arguments submitted by both sides we find that the department had submitted that the word 'Gray' used in the specified Entry qualifies each and every word following it. We also observe that there were two ISI specifications, one for White Cement and other for Rapid Hardening Cement. We also notice that the assessee was using ISI specification 8042 : 1978 and marking it on the bags. We also find that the department had by various arguments clearly made out that White Cement was not covered by the specified entry in the Tariff. Having regard to all these facts and circumstances we hold that the department had discharged the onus of proving that White Cement manufactured by the assessee was classifiable under Tariff Item 23(2) before 28-2-1986 and 2502.90 from 28-2-1986.
46. Another point that was argued was whether Cement Control Order which was used by the Department to explain Contemporanea Expositio could be taken as an evidence for the first time at the Appellate stage, which according to them was not warranted by law. As against this the SDR submitted that in the case of Poorbanchal International v. UOI, the Hon'ble Calcutta High Court had already considered the Cement Control Order and Department was relying on the ratio of this judgment. They have quoted and relied upon the Cement Control Order issued by the Government of India from time to time. It was also submitted by the ld. SDR that in the Indian Aluminium Cables case the Hon'ble Supreme Court had considered Aluminium Control Order to decide the issue of whether Aluminium Wire Rods - Properzi Rods are species of Wire Rods and, therefore, the ld. SDR submitted that the relevant orders issued during the material time may be taken into consideration for deciding the issue, if necessary. In this case, as Contempornea Expositio was to be considered reliance is required to be placed on similar other material issued by the Government, we therefore, hold that there was nothing wrong in citing and relying upon the Cement Control Order even at the appeal stage as Indian Aluminium Cables and Poorbanchal case was relied upon and cited by the Advocate on behalf of the assessees.
47. Before concluding their arguments, the ld. advocate submitted that in case ISI specification is not accepted as the deciding factor for classification of their product then the entire case law developed so far in the cases decided in respect of Cement will be nullified and that this Bench of the Tribunal was bound by its earlier decisions. On the other side the ld. SDR submitted that the only case in which ISI specification alone was relied upon was Anmol Trading case which according to the ld. SDR was not a precedent inasmuch as it neither considered the ratio of judgment in the case decided by the Hon'ble Calcutta High Court in Poorbanchal International case or the ratio of the judgment in the Indian Aluminium Cables case.
48. We find that the Advocates for the assessees had drawn our attention to the case of Digvijay Cement Co., Vageshwar Pozollona Works, Anmol Trading Corpn. and Poorbanchal International case. The Poorbanchal International case is definitely a case in which ISI specification has not been relied upon and, therefore, this case is clearly distinguishable. The only case in which ISI specification is relied upon by the Tribunal is the case of Anmol Trading Corporation. As this case only considered ISI specifications without considering Trade/Commercial Parlance as also in view of the fact that on identical issue there is an order of the Hon'ble Calcutta High Court, we respectfully follow the ratio of the decision of the Calcutta High Court, therefore, we hold that Anmol Trading Corporation decision is not binding on us as the Hon'ble Calcutta High Court had already decided and settled the issue on the question of acceptance of ISI specifications. Digvijay Cement and Vageshwar Pozollona Works are clearly distinguishable as facts in the two cases are different.
49. On consideration of the detailed findings on various issues agitated before us we hold that the product manufactured by the assessees was 'White Cement; that there was no specified entry for White Cement and was therefore classifiable under Tariff Item 23(2) before 28-2-1986 and under Tariff Item 2502.90 from 28-2-1986.
50. In view of the above findings the order of the Collector (Appeals) in the case of J.K. White Cement is set aside and the appeal allowed. Whereas in the case of Indian Rayon the order passed by the Collector, Central Excise (Appeals) is upheld and appeal is rejected.