Delhi High Court
Woodcrafts Products Limited vs The Superintendent (Technical) And ... on 1 January, 1800
Equivalent citations: 1980CENCUS463D, 1980(6)ELT684(DEL)
JUDGMENT V.S. Deshpande, C.J.
1. The petitioner is a manufacturer of Flush Doors. From April/May, 1973 onwards the respondent Excise Authorities are demanding the sometimes collecting excise duty from it under Entry 16B of the First Schedule to the Central Excises and Salt Act, 1944, as amended from time to time. Entry 16B is as follows :-
Item No. Description of goods Rate of duty.
16B Plywood, blockboard, laminboard,
batten board, hard or soft wall
boards or insulating board and
veneered panels; whether or not
containing any material other than
wood; cellular wood panels,
building boards of wood pulp or of
vegetable fibres, whether or not
bonded with natural or artificial
resins or with similar binders; and
artificial or reconstituted wood
being wood shavings, wood chips,
saw dust, wood flour or other
ligneous waste, agglomerated with
natural or artificial resins or
other organic binding substances,
in sheets, blocks boards or the
like -
(i) Plywood for tea-chests when cut Ten percent ad
to size in panels or shooks and valorem.
packed in sets.
(ii) All others Twenty seven
and half per
cent ad valorem
In this writ petition , the order dated 31st May, 1977 by the Joint Secretary to the Government of India, at page 45 of the paper book is challenged as being without jurisdiction as it purports to say that the petitioner is liable to pay excise duty on Flush Doors under Entry 16B.
The demand and levy have been justified in the counter affidavit on the ground that the Flush Door is nothing but a board with an inner core contained in a frame and covered on sides with plywood.
2. After hearing the arguments of the learned counsel, Dr. Shankar Ghose for the petitioner, and Mr. M. Veerappa for the respondents, it is clear that the board and plywood are two kinds of materials which form part of a Flush Door are included in Entry 16B, but the wooden frame which encloses the board and on which the plywood panels are put on the top and on the back of the frame and the board is not included in Entry 16B.
3. The question is whether the finished article namely, the Flush Door, is merely a combination of board and plywood both of which are mentioned in Entry 16B. The question has to be answered in the negative for more than one reason. Firstly, we have to see in common parlance and commercial sense as to what Flush Door is. If one wants to know Flush Door it will not do mentioning board or plywood. A board and plywood may be two of the chief materials which would go to make up a Flush Door. In the first instance they are not the only materials. Secondly, the finished articles are differently known altogether. If, therefore, one goes to the market to buy Flush Door one will have to avoid mentioning purchase mere boards or plywoods. Raw materials or even finished materials which form parts of a different finished product cannot be confused with the finished product, particularly when something else, namely, the timber or the wooden frame which is also a part of Flush Door is not included in Entry 16B at all.
4.Thirdly, the appearance of a Flush Door is not the same as the appearance of a board or a plywood. A definite arrangement of the board being the core of the door encased in a frame and covered on sides with plywood panels has to be made and this transforms the materials, like plywood and board, into a totally different product differently known to the market and to the common people. It is not possible, therefore, to agree with the view taken by the Government in the impugned order that the frame round the inner core does not take it out of the categories mentioned in Entry 16B. The reason is that it is not merely putting the frame around the board but making a different object thereby which is the result of the manufacture of Flush Door.
5. To take an illustration, if an Entry in the Schedule were to levy a certain rate of duty on the item "paper", it would not be possible to levy excise duty under that item on "books". The reason is that though the books may be mostly of paper yet in common parlance or in commercial sense, the books are different from paper. Paper sheets are first cut to size, then they are printed upon, then they are bound together and the hard-board or the paper binding is added. This makes it a different item altogether. After all this processing the item "paper" cannot continue to include the new article, namely, the books. Similarly, the combination boards and plywood which are included in Entry 16B with other materials like glue and other adhesives and also a wooden frame is so made as to combine all of them into a totally different object. The new object can no longer be called by the name of any of the materials which go to make it.
6. It was then argued for the respondents that the Flush Doors would be included in Entry 16B by the last words "or the like". We are unable to agree with this argument. A careful reading of Entry 16B would show that "plywood, block board, lamin board, batten board, hard or soft wall boards, or insulating board and veneered panels; whether or not containing any material other than wood," from one category, which is separated from the other category by a semicolon. We then come to " cellular wood panels, which is also a category by itself. It is followed by " building boards of wood pulp or of vegetable fiber whether or not bounded and natural or artificial resins or with similar binders." Then follows separated from the previous category by the words "and artificial or reconstituted wood being wood shavings, wood chips, saw dust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances, in sheets, blocks boards or the like." The words "or the like", therefore, qualify the last category, namely, "artificial or reconstituted wood shavings, wood chips, saw dust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances, in sheets, blocks, boards." They do not qualify the preceding categories which have been separated from the last category by the word "and". The Flush Door, of course, has nothing to do with the last category of words "or the like".
7. The learned counsel for the petitioner showed us the ISI specifications for Block Board and Flush Doors. They also show that the Flush Doors include the wooden frame and plywood face panels in addition to a board.
8. In the rejoinder filed by the petitioner are brought out the salient differences between Flush Doors and the Boards at page 77 of the paper-book. Taking all these circumstances into account we are of the view that Flush Doors as they are known to the market and bought by the public are not included in Entry 16B.
9. The writ petition is, therefore, allowed and the impugned order is quashed. The respondents will adjust the amount of excess excise duty on Flush Doors collected from the petitioner from April, 1973 onwards and revise the assessment of the petitioner, so that the excess duty recovered under Entry 16B is either refunded to the petitioner or adjusted with any existing liability of the petitioner to pay excise duty on Flush Doors. In short, the assessment on the Flush Doors manufactured by the petitioner with effect from 1st April, 1973 is not to be made under Entry 16B, nut under the residuary entry. No order as to costs.