Kerala High Court
Cannanore Spinning And Weaving Mills ... vs Collector Of Customs And Central ... on 22 November, 1965
Equivalent citations: AIR 1967 KERALA 62, 1966 KER LJ 23
JUDGMENT
1. The petitioner in O.P. No. 2359 of 1963, the Cannanore Spinning and Weaving Mills Limited, is the appellant before us. The first three of the respondents in that petition and in this appeal are officers of the Central Excise Department The 4th and last respondent is the Union of India.
2. Cotton yarn is liable to excise duty under the Central Excises and Salt Act, 1944. It comes under item 18-A of the First Schedule to that Act.
3. The sole question for determination in this appeal is whether the coils of cotton yarn cleared out of the appellant's factory during the period from 17-8-1962 to 14-11-1962 are exempt from the excise duly under Ext. P-2, a notification of the Government of India dated 13-6-1962 and Ext. P-3, a notification of the Government of India in supersession of Ext. P-2 dated 15-9-1962. Under both the notifications cotton yarn of 17 or more counts but less than 35 counts is exempt from the excise duty "if cleared out of the factory in hunks."
4. The contention of the Department is that the expression "hanks" in the cotton trade means coils of cotton yarn with the definite length of 840 yards each. It is common ground that the coils with which we are concerned were of double that length; and if the contention of the Department is correct, the coils concerned are not exempt from the excise duty under any of the two notifications mentioned above.
5. The judgment under appeal has accepted the contention of the Department and we are not satisfied that there is any reason for coming to a different conclusion. The word "hank has come to mean at least from 1560, as is seen from the Shorter Oxford English Dictionary, "a definite length of yarn or thread in a coil'; and it cannot be disputed that as far as cotton yarn is concerned that length is 840 yards.
6. "Count" is the term used to express the fineness of cotton yard. The number of hanks--coils of 840 yards each--that makes up a pound in weight is the count of the yarn. That is why the finer the thread the lighter is the weight of a hank. The Encyclopaedia Britannica sums up the position as follows:
"The cotton spinning industry which started from England adopted from the first a hank (or skein) of 840 yards and the hanks per ib, as the 'count' and this has obtained world wide acceptance." (1939 Edition, Volume 23, Page 880)
7. In view of the universal acceptance of the meaning of the term "hank" in the cotton trade we must hold that the conditions to be satisfied to earn the exemption provided by Exts. P-2 and P-3 are:
(a) that the coils of yarn must be cleared out of the factory; and
(b) that the clearance must be in the form of hanks, that is, in coils of a length of 840 yards each.
The two conditions are not satisfied in the case before us and the appeal must, therefore, fall and has to be dismissed.
8. Ext. P-3 has been amended by Ext. P-12, a notification of the Government of India dated 16-2-1963, with retrospective effect from 17-8-1962. Ext. P-12 added an explanation to Ext. P-3 which said that for the purpose of that notification the term "hank" means hank which does not contain more than 768.00 metres of yarn in plain (straight) reel. 768.00 metres is equal to 840 yards.
9. According to the appellant the retrospective effect conferred on the explanation by Ext. P-12 is of no effect as the statute which supports the notification does not confer a power for delegated legislation with retrospective operation. We fake the view that the word 'hank" without the aid of any explanation whatsoever means in the cotton trade a coil of a definite length of 840 yards. In that view it is unnecessary to consider whether the retrospective operation sought to be conferred on the explanation is of effect or not. The contention of course, is based on the assumption that what is embodied in the explanation is not an explanation at all, but a substantive provision affecting the content of Ext. P-3.
10. All the aspects of the case have been discussed in the judgment under appeal and it is unnecessary to go over the ground afresh.
The appeal fails and is hereby dismissed. No costs.