Rajasthan High Court - Jaipur
Aravali Minerals And Chemicals (India) ... vs Union Of India (Uoi) on 8 March, 1991
Equivalent citations: 1992(57)ELT269(RAJ)
Author: A.K. Mathur
Bench: A.K. Mathur
ORDER Milap Chandra Jain, J.
1. These writ petitions have been filed (i) for quashing the order (Annexure 10 in the first writ petition and Annexure 2 in remaining writ petitions) of the Superintendent, Central Excise, Udaipur dated October 13, 1986 intimating that the Ministry has decided that the soapstone powder is different than talc, it is not exempt and it is leviable to duty and advising the petitioners to maintain the records and furnish reports and returns as required under the Central Excise Rules, 1944 (hereinafter to be called 'the Rules'), (ii) for declaring that the soapstone powder is covered by exemption Notification No. 23/55-C.E., dated April 29, 1955 and the petitioners are not required to obtain central excise licences and also to pay excise duty thereon; and (iii) for directing the refund of the central excise duty paid to the respondents by the petitioners with interest at the rate of 18% per annum. As the facts are similar and the law involved is the same in these writ petitions, they are being disposed of by this common order. Their facts may be summarised thus.
2. The petitioner's case is as follows. They carry on business of minerals, particularly in soap-stone and have mines in Tehsil Girwa (Udaipur). They have roller-mills for grinding soap-stone lumps into powder. Due to the insistence of the respondents, they have obtained licences under the Central Excises and Salt Act (hereinafter to be called 'the Act') and are paying the central excise duty under protest. They get their licences renewed under protest. An appeal before the Assistant Collector, Central Excise and Customs, Division Udaipur (respondent No. 3) has been filed against the levy of central excise duty on the soap-stone powder. The Indian Soap-stone Producers' Association, Udaipur of which they are members, have submitted memorandums An nexures 2 & 3 before the respondent No. 3 and also to the Ministry of Finance, Government of India, New Delhi stating that soap-stone is talc which has been exempted under Notification 23-CE dated April 29, 1955 and inviting attention towards the problems which the soap-stone industry is facing with regard to the central excise. The Under Secretary, Ministry of Finance, Government of India, New Delhi by his letters (Annexures 5, 6 and 7) has advised the Association to approach the jurisdictional Col-lector and the Assistant Collector, Central Excise for the redress of the grievances of its members. The Assistant Collector, Central Excise & Customs, Udaipur (respondent No. 3) sent letter Annexure 8 informing the Secretary, Udaipur Chamber of Commerce and Industry, Udaipur that the Central Government has taken decision that benefits of Notification No. 23-C.E., dated April 29, 1955 be extended to soap-stone if the conditions specified therein are complied with. Accordingly, they returned their licences to the respondent No. 4 enclosing revised classification list and affidavits stating that the soap-stone powder prepared in their factories is being used as "extenders, suspending agents, fillers and diluents". The Superintendent, Central Excise and Customs, Udaipur (respondent No. 4) has intimated vide his letter dated October 13,1986 (Annexure 10 in first writ petition and 2 in other petitions) that the Ministry has decided that the soap-stone powder is different from talc, it is not exempt and it is leviable to duty and advising them to maintain records and to furnish reports and returns as per requirements of the Rules. It will be a futile exercise to file appeal before the departmental authorities in view of the said decision taken by the Ministry of Finance, Government of India. As such they have got no other adequate legal remedy.
3. The respondents No. 1 to 4 admit in their replies that the petitioners manufacture soap-stone powder from soap-stone lumps at various places in Udaipur district licences were taken by them under the Rules, returns and statements were furnished their Association submitted representations Annexure 2 and 3, the Secretary, Udaipur Chamber of Commerce and Industry, Udaipur was intimated with the said decision of the Government of India that the benefits of Notification No. 23-C.E., dated April 29, 1955 can be extended to soap-stone if the conditions specified therein are complied with vide letter Annexure 8, the petitioners surrendered their licences to the respondent No. 4, submitted revised classification lists and affidavits and the respondent No. 4 has is sued the letter Annexure 10. In the replies, a preliminary objection has been taken that the petitions are not maintainable as petitioners have not availed of alternate remedies available under the Act, letter Annexure 10 is not an adjudication order, petitioners could approach the Assistant Collector for passing an adjudication order and against his order appeal before the Collector (Appeals) and, thereafter, before the Central Excise and Gold Control Tribunal, could be filed.
4. At the commencement of the arguments, the learned counsel for the petitioners submitted that they do not press their case on the ground that the grinding of soap-stone lumps into soap-stone powder does not involve manufacturing process. They confined their contentions on the point that soap-stone is talc and is thus exempted under Notification No. 23-C.E., dated April 29, 1955. They contended that the formal decision of the Government of India conveyed through the letter Annexure 8 was taken on the various representations of the petitioners and their Association after long protracted negotiations, it has been reversed without hearing the petitioners or the Association, violating the principles of natural justice, the order is also cryptic and non speaking, it does not contain any reason for reversing the previous decision, the Ministry had no jurisdiction to decide so and it would have been a futile exercise to file appeals under the Act as the appellate authority could not have taken any decision contrary to or different from the said decision of the Ministry. They further contended that the soapstone and talc are known and treated as same mineral by the persons who use or deal with them. In support of their contentions they relied upon the literature referred to in paras 13 to 22 and decision referred to in para 23.
5. In reply, it has been contended by the learned counsel for the respondents that talc and soap-stone are two different substances, their characteristic properties are not similar and the subsequent decision of the Government of India is correct. He further contended that the Central Excise & Gold Control Tribunal has held in Oriental Talc Product Ltd. v. Collector of Central Excise, Jaipur, 1984 (18) ELT 657 (Tribunal) that soapstone is not talc and it is not entitled to exemption under the said Notification dated April 29, 1955 and also in the decision given in Appeal No. 158-CE/JPR 84, Udaipur Mineral Development Syndicate (P) Ltd. v. Collector of Central Excise, Jaipur decided on December 9,1987. He also relied upon Encyclopaedia of Chemical Terminology, Third Edition, Vol. XXII published by John Wiley's & Sons, New York.
6. The preliminary objection regarding the maintainability of the writ petition on the ground of having alternate remedy has no substance. In view of the decision of the Ministry of the Government of India, mentioned in the impugned order Annexure 10, the authorities under the Act could not have taken contrary decision and as such agitation of the matter before them would have been futile.
7. In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Rules, the Central Government has exempted vide Notification No. CE - 23/55 dated April 29, 1955, talc if employed either as extender, suspending agent or filler or diluent from the 5. whole of the duty leviable on it under Section 3 of the Central Excises and Salt Act, 1944. Rule 8 has been repealed and Section 5A has been added in the Act incorporating all its provisions with effect from July 1, 1988. The question for consideration is whether talc includes soap-stone.
8. It has been observed in Dunlop India Ltd. v. Union of India, AIR 1977 S.C. 597 paras 31, 32, 33 and 34 as follows :-
"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."
9. In Ramavatar Budhai Prasad v. Assistant Sales Tax Officer, (1962) 1 SCR 279 : AIR 1961 SC 1325, it has been held as follows :-
"But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language."
10. In the Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh, AIR 1967 SC 1454, it was observed as follows :-
"Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense."
11. It has been observed in M & M Trading Corporation v. Union of India, AIR 1972 S.C. 2551 at page 2554 para 6 as follows :-
"Apart from all this it must be remembered that in interpreting items in taxing statutes resort should be had not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in their commercial sense."
12. It has been observed in Porritts & Spencer (Asia) Ltd. v. State of Haryana, AIR 1979 S.C. 300 at para 4 = 1983 (13) ELT 1607 (SC), as follows :-
"It was pointed out by this Court in Washi Ahmed's case (supra) that the same principle of construction in relation to words used in a taxing statute has also been adopted in English, Canadian and American Courts. Pollock, B. pointed out in Grenfell v. l.R.C. (1876) 1 Ex.D.242 at p. 248 that "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 (he strict or technical meaning of the language contained in it, but it 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." So also the Supreme Court of Canada said in Planters Nut & Chocolate Co. Ltd. v. The King (1952) 1 DLR 385 while interpreting the words 'fruits' and vegetables' in the Excise Act. "They are ordinary words in everyday use and are, therefore, to be construed according to their popular sense". The same rule was expressed in slightly different language by Story, J., in two Hundred Chests of Tea (1824) 9 Wheaton 430 at 438 (U.S.) where the learned Judge said that "the particular words used by the Legislature in the denomination of articles are to be understood according to the common commercial understanding of the term used, and not in their scientific or technical sense, for the Legislature does' not suppose our merchants to be naturalists, or geologists, or botanists."
13. As such it is to be seen whether talc and soap-stone are known and treated as different or same minerals by the people who use or deal with them. Item No. XV of Rule 69, Minor Mineral Concession Rules, 1960 runs as under :-
"(XV) Talc (Soapstone Steatite) and Dolomite."
Soapstone and Steatite have been shown in bracket after talc and before dolomite. If soap-stone would have been a different mineral from the talc, it would not have been put in the bracket and would have been shown separately like dolomite.
14. Letter No. DM 6/F4(kh)P&D/14/84/457 dated April 22,1985 of the Director, Mines and Geology, Rajasthan, Udaipur addressed to Indian Soapstone Producers Association, Udaipur (Part of Annexure 2 of first writ petition) runs as under :-
"As per Rule 69(xv) of Mineral Concession Rules, 1960, Talc includes soapstone and Steatite and they are one and the same. Further as per royalty Schedule-II, Steatite, talc and soapstone are one and the same. Therefore, it is certified that legally Steatite, talc and soapstone are one and the same."
15. Director of Mineral Consumers in India published by India Bureau of Mines states at page 368 as under :-
"Talc is a hydrated silicate of magnesium, 3 Mgo 4SiO2H2O and formed due to alterations of Magnesium rich rocks. It possesses the distinction of being the softest mineral and has a characteristic soapy feel. Its hardness being 1 in the Moh's scale of hardness, can be easily cut and scratched by nail. Steatite, talc and soapstone are the 3 terms used in trade for one and the same mineral. Talc is the common word used for the hydrous silicate of magnesium. Steatite is designated to indicate a purer variety of a compact and massive talc. The use of the word soapstone is restricted to a slightly impure variety of steatite containing 50 to 80% talc, potstone is synonymous with soapstone mainly used for carving out pots etc. It can be regarded as a slightly inferior variety of soapstone."
16. The Government of India, Central Board of Revenue issued Supplement to the Manual of Departmental Instructions of Manufactured Excisable Products Paints, Pigments and Varnishes (for departmental use only). Its relevant portions at page 115 run as under :-
"Soapstone Same as Talc Steatite Same as Talc Talc A natural mineral which can be described as a hydrated magnesium silicate. In powder form it is white to grey used generally as a filler in paints."
17. Rutley's Elements of Minerology, 25th edition, by H.H. Reed published by Thomas Murby & Company, London states at page 408 'Steatite, Soapstone is a massive variety of talc."
18. Dictionary of Ceramics by A.E. Dodd, published by George Newnes Limited, London, defines at pages 263, 273 and 281 Soapstone, Steatite and Talc as under :-
"Soapstone. A popular name for STEATITE Steatite. Massive form of the mineral talc, Mg3Si4O10(OH)2. The chief sources are in USA, France, Italy, India, Austria and Norway. The natural rock can be machined and the shaped parts fired for use as electroceramics. A far greater proportion is ground and shaped in the usual way with a clay bond to produce low-loss electroceramics and refractories. Talc. See STEATITE."
19. Chapter 36 of Industrial Minerals by R.K. Sinha of Indian Bureau of Mines, published by Oxford & I BH Publishing Co., New Delhi, deals with Talc/Steatite/Soapstone. Its first para runs as under:-
"Talc is a hydrated magnesium silicate, 3MgO.4SiO2.H2) also written as H2Mg3(SiO3)4 which corresponds to 4.8 per cent H2O 31.7 per cent MgO and 63.5 per cent SiO2. It is essentially a secondary mineral formed by the hydrothermal actions and regional metamorphism or magnesium-rich rocks like dolomite, pyroxinate, amphibolice, serpentine, dunite and chlorite. It is distinguished by its soapy and smooth texture. It is the softest mineral known being 1 in the Moh's scale of hardness. It is whitish to greenish in colour, sometimes tined brown. In purverised form it is whiter in appearance. The compact variety of talc is called steatite. It is sometimes called 'lava' talc. Soapstone is a massive, soft, greenish talcose rock containing a mixture of talc and various other magnesium mineral. The word soapstone has been named probably due to its soapy feel. The impure and hard variety is called potstone, which is mainly utilised for making models, decorative vases, carvings, utensils, pots and the like and hence the name potstone."
20. Elementary Economic Geology by H. Ries (1930 Edn.) deals with Talc and Soapstone together at page 183-185. Their properties are as follows :- "Talc, a hydrous magnesium silicate (H2Mg3 (SiO3)4 is characterized by its extreme softness and soapy feel. It is white, grey or green in colour, and has a foliated or micaceous structure. Steatite is the name applied to the massive, compact, cryptocrystalline to finely granular variety. Agalite is a fibrous talc from New York State. Soapstone is a term ordinarily applied to a dark-gray bluish or greenish rock, composed essentially of talc, but containing other minerals as impurities, such as chlorite, serpentine, amphibole, enstatite, and also quartz, magnetite, pyr-rhotite and pyrite. It is usually somewhat foliated, and like talc is soft enough to be easily cut with the knife."
21. Mineralogy by A.V. Milovsky and O.V. Kononov published by Mir Publishers, Moscow describe Talc as under :-
"Talc (steatite, soap rock soapstone) Mg3 (Si401o(OH)2. This mineral usually contains the impurities of Fe " and sometimes of Cr . The structure of talc comprises alternating three-layered packets with weak van der Walls bonds between them. The octahedral (brucite) layer of Mg(OH)2O4 octahedrons is between two tetrahedral layers of (Si4O1o)4 - (Fig.110)."
22. India Bureau of Mines, Ministry of Steel & Mines, Government of India has issued "End-use grades of Important Minerals". At page 22 and 23, talc, Steatite and Soapstone have been dealt with together in connection with paper, ceramics, textile cosmetic, frence chalk, insecticide and rubber industries in respect of their (industries) several items.
23. In the following decisions, the Central Excise and Gold Control Appellate Tribunal has held that soapstone and talc are same :-
(1) Collector of Central Excise, Jaipur v. Oriental Products (P) Ltd., 1987 (28) ELT 147.
(2) Appeals No. 4188 and 4189 of 1989 Telchem International & Jai Prakash Minerals v. Collector of Central Excise, Indore decided on October 8,1990.
24. The last para of the letter No. IV (16)/MP/86/2704 dated August 8,1986 of the Central Excise and Customs Division, Udaipur addressed to the Secretary, Udaipur Chamber of Commerce and Industry, Udaipur (Annexure 8) runs as under :-' "Issues raised by the Soapstone manufacturers have been duly considered by the Government. This is to clarify that the benefit of NOTIFICATION No. 23-C.E., dated 29-4-1955 AS AMENDED can be extended to soapstone, if the conditions specified therein are complied with."
25. The learned counsel for the respondents has placed great reliance on pages 523 and 524 of Volume XXII (Third Edition) of Kirk Othmer's Encyclopedia of Chemical Technology published by John Wiley & Sons, New York dealing with talc to show that the physical and Chemical properties and uses of talc and soapstone are different. Different physical and chemical properties and use of a commodity go to make it of different varieties. Here the question is not regarding the physical and chemical properties and use of talc and soapstone but whether both these minerals are known and treated as same or different commodities by the people who use or deal with them. In start of page 524, it is stated that talc, soapstone and pyrophylite are grouped together by the U.S. Bureau of Mines for reporting purpose. It is not the case of the respondents that this Encyclopedia has separately dealt with soapstone elsewhere.
26. In Oriental Talc Products v. Collector, Central Excise, Jaipur, 1984 (18) ELT 657, relied upon by the learned counsel for the respondents, it has been observed that when this soapstone does not fall under item 14-F as per the own case of the appellants, it does not seem to reason as to how they are entitled to the benefits of these exemption notifications. There is no discussion that talc and soapstone are same or different minerals.
27. Decision of the Tribunal in Appeal No. 158-CE/JPR 1984 - Udaipur Development Syndicate (P) Ltd. v. Collector, Central Excise, Udaipur is based on Oriental Talc Products Pvt. Ltd. v. Collector, Central Excise, Jaipur, 1984 (18) ELT 657.
28. In view of these facts, it is reasonable to conclude that talc and soapstone are known and treated as same mineral by the people who use or deal them and thus soapstone is included in the term 'talc'. The petitioners are entitled to get the benefits under the said Notification No. 23/55-C.E., dated 29th April, 1955, if other conditions mentioned therein are fulfilled by them.
29. Before parting with the case, we may observe that Ministry had no jurisdiction to take the decision (Annexure 10 of first writ petition and Annexure 2 of other writ petitions) that the soap-stone powder is different than talc, it is not exempt and is levi able to duty. This jurisdiction vest in the statutory authorities under the Act. Till June 30, 1988, the Central Government could amend the said Notification No. 23/55-C.E., dated April 29,1955 under Rule 8 of the Rules excluding soap-stone therefrom. No such gazette notification was brought to our notice. It has been observed in Oriental Paper Mills v. Union of India, AIR 1969 Supreme Court 48 at page 51 as follows :-
"If the power exercised by the Collector was a quasi-judicial power - as we hold it to be - that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of judicial or a quasi-judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the per-sons who are called upon to pay duty and the Department. It is true that the assessing authorities as well as the appellate authorities are Judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a misnomer to call their orders as their judgments; they would essentially be the judgments of the authority that gave the directions and which authority had given those judgments without hearing the aggrieved party."
30. It has been observed in Purtabpur Company Ltd. v. Cane Commissioner of Bihar and Others, AIR 1970 S.C. 1896 at page 1902 para 17, as follows :-
"The power exercisable by the Cane Commissioner under Clause. 6(1) is a statutory power. He alone could have exercised that power. While exercising that power he cannot abdicate his responsibility in favour of anyone - not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner. In this case what has happened is that the power of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by clause. (6) read with clause. (11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner."
31. Consequently, the writ petitions are partly allowed and it is held and declared that soap-stone is included in the word 'talc', it is covered under Exemption Notification No. 23/55-C.E., dated April 29, 1955 and it is exempted from payment of excise duty, if it is employed either as extender, suspending agent, filler or diluent.
32. Central Excise duty paid by the petitioners will be refunded with interest 12% per annum from the date of payment to the date of refund, if it is held by the competent authority that soapstone was employed in any one of the aforesaid manners.
33. No order as to costs.