Bombay High Court
Subhash Chandarnishat vs Union Of India And Anr. on 1 January, 1800
Equivalent citations: 1979(4)ELT212(BOM)
JUDGMENT
1. This is a petition under article 226 of the Constitution of Indiaseeking to impugan an order dated 22nd October, 1971 passed by respondentNo. 2 holding that the two products manufactured by the petitioner andknown as Vasmol Emulsified Hair Oil and Vasmol Pomade are exigible toduty under Item 14 F of the First Schedule to the Central Excises andSalt Act, 1944(hereinafter referred to as "the said Act"), which entrywas inserted in the said Act by the Finance Act, 1961.
2. The petitioner carries on business in Bombay in the name and style of"Hygienic Research Institute" as the sole proprietor thereof and interalia, manufactures emulshfied hair oil and pomade known as "asmol" in thetrade. Both these products contain a small amount of lead acetated B.Pand 2% of sulphur precipitated B.P. In the case of Vasmol Pomade the restof the material is basically petroleum jolly to which are added someherbs and perfumes and in the case of Vasmol Emulsified hair Oil, therest of the contents consists mainly of mineral Oil to which emulsifyingagensts are added and also a small amout of herbs and perfumes, I maymention at this stage this stage that although there is soime differenceas regards the exact amout of lead acetate and sulphur precipitated inthese products, it is common ground that these two products contain about 1.5% to 2% of lead acetate and about 1.5 to 2% of sulphur precipitatedand that the rest of the contents thereof are such as would be found inan ordinary pomade or an ordinary emulsified Hair Oil.
3.The Finance Act, 1961 (Act No. 14 of 1961) came into effect in 1961 andby reasobn of section 13 of that Act the First Schedule of the said Actwas amended, inter alia, by the insertion of Item bno. 14F therein. Ishall come to the contents of this item in some detail a little latter.It may be metioned here, however, that by reason of this item, hairlotions, creams and pomades were included in the ambit of Item 14F. Onthe 6th Mmarch, 1961 the Collector of Central Excise, Bombay issued aTrade Notice, inter alia, stated that under the tariff only face creamand snow, face powder, talcum powder, hair lotions creams and pomadeswere liable to duty and that the opther products coming under Cosmeticsand Toilet preparations would not be liable to duty". The superintendentof Central Excise called upon the Petitioner to declare the stocks as onthe midnight of 28th February/1st March, 1961. In response to thisnotice, the Petitioner submitted a declaration on 8th March, 1961. By hislatter dated 23rd March, 1961 addressed to the Collector of CentralExcise. Petitioner set out the reasons why according to him the aforesaidVasmol products were not subject to taxation under Item 14F of the FirstSchedule to the said Act. The Assistant Collector by his letter dated18th April, 1961 intimated to the Petitioner, inter alia, that theaforesaid Vasmol products were liable to be taxed at the rate of 25% advalorem under the said Item No. 14F. The Petitioner preferred an appealagainst this decision. In support of the appeal the petitioner forwardedan opinion obtained by the petitioner from the Victoria Jubilee TechnicalInstitution. By his order dated 20th December, 1961, the Collector ofEcntral Excise rejected the said appeal. The Collector rejected thecontention of the Petitioner that Vasmol was a hair dye meant solely forthe purpose of darkening hair and was not covered by Item 14F of theFirst Schedule to the said Act. He further rejected the contention of thePetitioner that Vasmol Emulsified Hair Oil and Vasmol Pomade were usedonly by such persons who wanted to change the colour of their hair. TheCollector observed that these two products contained the ingredients of ahair cream and hair pomade and they could be classified as such eventhough they had an additional property of darkening hair. the collecterrelied on the advertisements issued by the Petitioner claiming that theseproducts had the qualities of a hair darkener and a hair tonic. thePetitioner then filed a writ Petitioner in the Court being Special CivilApplication No. 145 of 1962 challenging the aforesaid decision of theCollector. On 11th July, 1962 this Petition was withdrawn and thePetitioner was directed to exhaust the remedy by way of revision. ThePetitioner thereafter filed a revisional application on 16th June, 1962before respondent No. 1. One B. N. Banerji the Additional Secretary to theGovernment of India by his order dated 10th December, 1964 rejected thesaid revisional application without giving any grounds or reasons. ThePetitioner then filed another petition under article 226 of theConstitution of India being Miscellaneous Petition No. 335 of 1965. Alongwity this Petition the Petitioner also filed certain affidavits to whichI shall have occasion to refer a little later. By his judgment and orderdated 14th September, 1970 in that petition by learned brother S. K. DesaiJ. questioned the said order dated 10th December, 1964 on the ground thatit was not a speaking order and remanded the case back to the CentralGovernment for disposal according to law. The Petitioner by hisAttorney's letter dated 24th July, 1971 requested respondent No. 1 totake up the revision petition. Along with the said letter the Petitionerforwarded to respondent No.1 nine affidavits, copies whereof are annexedto the present Petition and marked Exh. "A" (Colly) to this Petition.These affidavits are of persons who claim to be either in Vasmol Productor consumers of the same, and, briefly, are to the effect that the saidproducts are sold and puchases merely as hair dyes. The revisionalapplication was disposed of by respondent No. 2 who gave a personalhearing to the Petitioner on 31st August, 1971. By his order dated 22ndOctober, 1971 respondent No. 2 rejected the said revisional applicationof the Petitioner. In his aforesaid Order, which propose to referhereinafter as "the impugned Order" respondent No. 2 has noted that thePetitioner had forwarded four affidavits purporting to be from tradersselling the said Vasmol products to the effect that they had suppliedVasmol as a hair darkener and that Vasmol was not sold as a Cosmetic.Respondent No. 2 has also set out that the Petitioner had filed twoaffidavits of persons who claimed to be the users of Vasmol productsstating that they used the same as a hair dye and not as a hair cream ora hair pomade. Respondent No. 2 has pointed out that the basisingredients of the said Vasmol products are the same as those of normalpomades and hair creams, the only difference being that the said Vasmolproducts contained in addition lead acetate and sulphur and couple ofberbal extracts. Respondent No. 2 has referred to the opinion regardingthe oforesaid Vasmol products given by the Victoria Jubilee TechnicalInstitute. Italab Private Limited and the affidavit of Dr. H. R. Nanji,Managing Director of Italab Private Limited. Respondent no. 2 has pointedout that the question before him was whether the aforesaid two productswere covered by the term "Hair lotion, cream and pomade". Afterconsidering the chemical composition of the aforesaid two productsrespondent No. 2 came to the conclusion that they fell within the broadcategory of hair cream and hair pomades. he observed that the bulk of thecontents of these two products were the same as those of an ordinary haircream or hair pomade and that the addition of a portion a lead acetateand sulphur as darkening agents in what was basically a hair cream orhair pomade could not impair, nullify the utility of the rest of theingredients contained in these products. Respondent No. 2 conceded thatit was true that person whose hair is already black would not normallyneed a hair dressing preparation which contain hair dyeing ingredientssuch as lead acetate and sulphur. He has, however, observed that merelyhbecause a restricted section of the public is likely to buy thes Vasmolproducts this would not take out these products from the purview of Item14F of the First Schedule to the said Act, because the wording of thesaid item is wide enough to include all hair creams and hair pomades evenif they contain some ingredients which will make them useful only tocertain sections of the public. Respondent No. 2 placed reliance on theadvertisements issued by the Petitioner which were tendered before himand in which the petitioner claimed for the aforesaid products thequalitites of "Hair Darkener". "Hair Tonic" and "Hair Dressing". On thebasis of these advertisement respondent No. 2 observed that thepetitioner had claimed all the hair dressing virtues for the said Vasmolproducts which could be claimed for ordinary hair creams and hair pomadesin addition to the quality of a hair darkener. Respondent No. 2 came tothe conclusion that the aforesaid Vasmol products were covered by thesaid item 14F of the First Schedule to the said Act and were exigible toexcise duty under the said item. It is this order which is sought to beimpugned in this Petition, which has been filed on 1st February, 1972.
4. Very briefly the contention of Mr. Desai the learned Advocate for thePetitioner, is that in all matters of taxation it is how a product isknown or regarded in the trade by the consumers and sellers that isrelevant for considering as to whether it falls within a particvular itemrendering it liable to tax under a fiscal statute and that a product isexigible only if it is known in trade in terms of the relevant tariffitem, It was submitted by him that Respondent No. 2 has really notapplied this test at all nor considered the affidavit evidence tenderedby the Petitioner which was the most material evidence on this issues,but has proceeded to decide the matter merely on the basis of chemicalcomposition which is of no relevance. As against this, the submission ofMr. Bhabha, the learned Advocate for the Respondents, was that chemicalcomposition could not be said to irrelevant for the purpose of decidingwhether a particular commodity falls within a particular item renderingit laible to the payment of excise duty. it was submitted by Mr. Bhabhathat it could not be said that respondent No. 2 had ignored the questionas to how the aforesaid products were known in trade parlance. It wasalso urged by Mr. Bhabha that in any event it could not be said impugnedorder was a perverse order or an order which no reasonable person couldpass on the basis of the material on record before him, and hence it wasnot liable to be interfered within a Court of Law. It is these submissioswhich I shall have to analyse in some detail.
5. AS the arguments turn, to some extent, on the construction of item 14Fof the First Schedule of the said Act, it may not be out of place of takenote of the same at this stage. Section 3 of the said Act provides forlevying and collecting duties of excise on all excisable goods productsor manufactured in India at the rates set forth in the First Schedule.The descriptive part of Item 14F of the First Schedule at the relevanttime read thus :-
"Cosmetics and Toilet Preparations not containing Alcohol or Opium, Hempor Other Narcotic Drugs or Narcotics, namely :-
(i) Face cream and shown.
(ii) Face Powder.
(iii) Talcum Powder.
(iv) Hair lotion, cream and Pomade."
It was submitted by Mr. Bhabha that on a proper construction of thisitem, it covered all cosmetics and toilet preparations and that the world"namely" used in the said item, before the description of the sub-itemswhich followed, was merely illustrative and not restrictive of thegeneral words "Cosmetics and Toilet preparations" used earlier. It wasurged earlier. It was urged by him that the said Vasmol productsmanufactured by the Petitioner would certianly fall within the connectionof the terms "Cosmetics" or "Toilet preparations". It was submitted byhim that the said word "namely" was used herein the same sense as theexpression "that is to say" and that both these expressions are oftenused in statutes merely in an illustrative sense. In support of thissubmission Mr. Bhabha relied on the decision of Federal Court in BholaPrasad v. Emperor (A.I.R. 1942 E.C. 17) where it was held that the words"that is to say the production, manufacture, possession, transport,purchase and sale of intoxicating liquors, opium and other narcoticdrugs" in Schedule No. 7 List, 2, item 31 of the Government of India Act,1935, explain or illustrate and do not amplify or limit the words"intoxicating liquors and narcotic drugs" immediately preceding them. Mr.Bhabha also relied on the decision of my learned brother Tulzaapurkar J.in Miscellaneous Petition No. 491 of 1964 decided on 30th April, 1970where it was observed that the use of the expression "namely" or theexpression "the following ,namely" in Item 15A in the First Schedule tothe said Act as amended with effect from 29th February, 1964 isequivalent to "that is to say" and the latter expression has been held tobe explanatory or illustative and not of amplification or limitation or(vide 1942 Federal Court Reports 17 at page 25). In my view, these twodecision are of little assistance to Mr. Bhabha in the present case. Itis undisputed principle of construction that the words in a tariff entryare to be interpreted in their own context. In Bhola Prasad v. Emperor (A.I.R. 1942 F.C. 17) the Entry in questio was entry No. 31 of List 2 inSchedule 7 to the Government of India act, 1935. In the first place, thesaid entry being a legislative entry had to be construed in the widestpossible manner and the same principle of construction cannot be appliedto the construction of entries in an excise tariff, Moreover, theaforesaid Entry 31 of List 2 in Schedule 7 was in very wide terms, aspointed out in the judgment, which was delivered by Gwyer C.J. it was inthe aforesaid context that the expression "that is to say" wasinterpreted as illustative and not restrictive. As far as theaforementioned decision of Tulzapurkar J. is concerned, the opening partof Item 15A(1) of the First Schedule to the said Act ran thus :-
"Artificial or synthetic resins and plastic material in any form, whethesolid, liquid or pasty, or as powder, grenules or flakes, or in the formof mounding powders, the following nemely :-
The expression "in any form" used earlier in the said item makes it clearthat the said item had to be construed in the widest possible manner andit was in this context that the expression "namely" was held to beillustrative and not restrictive. Apart from this, there is one clearindication that the legislature, in the present case, hase used theexpression "namely" not in an illustrative sense but in the restrictivesense and this can be gathered from the manner in which this item 14F hasbeen altered from time to time. I have already set out above as to howthis item stood at the relevant time viz. in 1961.
By the Finance Act, 1965 the said item was amended and the descriptivepart of the said item in 1965 read thus :-
"Cosmetics and Toilet preparations not containing Alcohol or Opium,Indian Hemp or Other narcotic Drugs or Narcotics, namely "-
(i) Preparation for the care of the skin including beauty creams,vanishing creams, cold creams, make up creams, cleaning creams, skinfoods and tonics, face powders, baby powders, toilet powders, and talcumpowders.
(ii) Hair lotion, creams and pomade."
By the Finance Act, 1975 the descriptive part of the said item wasamended, inter alia, to cover, in express terms, perfumed hair oils,shampoos whether or not containing saop or detergent and shaving creams.If the expression "namely" had been used in the said item merely asillustrative, then perfumed hair oil would have been always includedwithin the connotation of the word "Cosmetics" or the expression Toiletpreparations" hence there would have been no need to include the same inthe descriptive part of the item by amendment of the statute. The same isthe position regarding shampoos and shaving creams, skin foods andtonics. The very fact that these goods had to be specifically included inthe said item by way of amendements shows that the word "namely" was usedin the said item not in an illustrative sense but in a restrictive sense.The aforesaid submission of Mr. Bhabha must, therefore, be rejected.
6. This bring to the question is to how the aforesaid Item 14F has to beinterpreted. It is common ground that the question which really arises inthis connection is whether the aforesaid Vasmol products can be said tobe covered by sub-item (iv) of Item 14F viz, whether they can be said tobe a hair lotions, creams or pomades. In this regard the submission ofMr. Desai is that the said Act is not an Act applied to any particularscience or art but in general Act whose object is to raise revenue andfor that purpose to classify substance according the general use andknown denomination of the trade and hence the correct principle ofinterpretation of the items or entries occurring in the First Schedule tothe said Act would be that these items, or entries should be construednot in the sense in which they would be understood in technical mattersor scientific laboratories but in the sense which the people dealing inor commercially coversant with the items would attribute to them. Insupport of this submission Mr. Desai has cited a number of authorities.As can be presently seen from the few authorities which I purpose tocite, the principle enunciated by Mr. Desai seems to have beenunequivocally accepted. In view of this, I do not propose to discuss allauthorities cited in this connection before me, because such a discussionwould serve only as a display of erudition. Some of the authoritiescould, however, be usefully referred to, because they set out the mannerin which items or entries in similar legislation have been constued. InThe King v. Planters Nut and Chocolate Company Ltd. (1951 Canada LawReports-Exchequer Court p. 122), a leading case on this point, thequestion was whether salted peanuts and cashew nuts could be consideredto be "fruits' or "vegetables" within the meaning of the Excise Tax Act,R.S.C. 1927. In that case, the Exchequer Court of Canada has held thatParliment in enacting the Excise Tax Act Part XIII and Schedule III wasnot using words which were applied to any particular science or art andtherefore the words used are to be construed as they are understood incommon language. It was further held that what constitutes a "fruit" or"vegetable" within the meaning of the Excise Tax Act is what wouldordinarily in matters of commerce in Canada be included there in and notwhat would be a botanist's conception of the subject matter. The Courtobsered that it could be asserted that in Canada both peanut and cashewnut where considered by almost everyone (except possibly by botanists) asfollowing within the categery of "nuts" and that the words "fruit" and"vegetables" used in their obvious and popular meaning would not include"nuts of any sort", or the peanuts, salted peanuts or cashew nuts sold bythe defendant. Cameron J.,, who delivered the judgment, posed the testas follows: (page 129) "....Would a household when asked to bring home fruit or vegetables forthe evening meal bring home salted peanuts, cashew nuts or nuts of anysort? The answer is obviously `no'".
In S.B. Sugar Mills v. Union of India , the question related to the interpretation of Item 14H ofthe First Schedule to the very Act which is under consideration before meviz., the Central Excises and Salt Act, 1944. The observations inparagraph 16 of the said report make it clear the interpretation of theitem which commended itself to the Court was according to sense in whichthe commodity was known to the commercial community. Tulzapurkar J. inhis judgment delivered on 30th April 1970 in Miscellaneous PetitionNo.491 of 1964 in this Court Nirlon Synthetic Fibres and Chemicals Ltd.v. R. K. Audim and Ors. held that the said Act is not an Act applied toany particular science or art but is a general statue, whose object is toraise revenue and for this purpose to classify substances according togeneral usage and known denomination of trade and therefore, the properrule of consruction applicable in respect of the items or entriesoccurring in Schedule I to the said Act would be that these items orentries inclusive of the words and expressions comprised in sub-clausesthereof will have to be construed not in the scientific or technical orlaboratory sense but in the sense which a person dealing with orcommercially conversant with those items or sub-items would attribute tothem. In Commissioner of Sales Tax v. Associated D. & M. Supply Co. (37S.T.C. 336) a Division Bench of this Court has held that the meaning ofterms describing goods in the entries in the Schedules to the Sales TaxAct prescribing rates at which commercial articles have to be taxed hasto be gathered from the trade parlance or the common parlance in trade. The question as to what is meaning given to term used to an entry incommon parlance is a question of fact to be determined on evidence and,in the absence of such evidence, the entries could be construed accordingto their dictionary meaning. In Sales Tax Commissioner, U.P. v. S.N.Bros. , the Supreme Court has held that the words"Dyes and colours" used in entry No. 10 in a Notification issued undersection 3A of the U. P. Sales Tax Act, 1948, and the words "scents andperfumes" used in entry No.37 therein have to be construed in their owncontext and in the sense as ordinarily understood and attributed to thesewords by people usually conversant with and dealing in such goods. TheSupreme Court has further held that the words "food colours"and "syrupessences" which are descriptive of a class of goods the sales of whichwere to be taxed under the U. P. Sales Tax, 1948, have to be construed inthe sense in which they are popularly understood by those who deal inthem and who purchase and use them. In Dunlop India Ltd. v. Union ofIndia (A.I.R. 1977 S.C. 597) the Supreme Court has held that meaningsgiven to articles in a fiscal statute must be as people in trade andcommerce, conversant with the subject, generally treat and understandthem in usual course. But once an article is classified and put under adistinct entry, the basis of classification is not open to question. Technical and scientific tests offer guidance only within limits. InUnion of India v. G.W.F. Mills the Supreme Courthas sheld that the well-known rule in interpreting items in statues likethe Central Excises and Salt Act, 1944, is that "report should be had notto the scientific or the technical meaning of such terms but to theirpopular meaning or attached to them by those dealing in them, that is tosay, their commercial sense".
7. As against this, Mr. Bhabha placed strong rlience on certian obseration Dunlop Indaia Ltd.v. Union of India referred to by me earlier.It was submitted by Mr. Bhabha that in that case the Supreme Court in its judgment had taken note of the chemical composition of the products in question before the court and held that scientific and technical teste are material in the interpretation of items in fiscal statutes. It was urged by him that by the expression "popular meaning " was meant not the sence a layman might understand an experession used in describing an item to be taxed under a fiscal statute, but the sence in which a person who is conversant with such an item in trad and commerce would understand the same. As far as the latter submission of Mr. Bhabha is concerned, there can be no controversy about it. The questuion used in a fiscal statute describing the article to be taxed are to be interpreted not in the sence in which a laymen having nothing to do with those articles might understand these expression, but in the sence in which persons conversant with such articles in the course of trade and commerce might understand the same. As far as the question of technical an scientifice teste are concerned, however, I am afraid thast the decison is at all helpful to Mr. Bhabha. The decision nowhere lays down or even suggests that the meaning suggested by technical and scientific teste can ever be preferred to be meanig gathered from the common parlance of the people in trade and commerce conversant with the subject-matter. In fact, the emphasis in the judgment is on the principle that technical and scientific tests offer guidance only whithin limits. The obsrvations in the judgment make it quite clearthat technical and scientific teste are treated as being of only marginaimportance as far as the interpretation of items in fiscal statues are concerned.It is true that chemical position of the product in question has been noted by the Supreme Court in that case. This, however, makes no difference, because generally speaking in discussing facts all Courts do note the chemical composition of the products in question before them. This does not mean that the Supreme Court has relied on the chemical composition of the product to determine the article in the fiscal statute under which it should fall.
8. Mr. Bhabha next placed strong reliance on the decision of division Bench of this Court in O. S. Appeal No. 12 of 1967 in Miscellaneous Petition No. 465 of 1966 (chemanlal B. Metha and Anr. versus M.G. Vaidya and Ors. decided on 23rd/24th January 1973. In this case, the two petitioner manufactured a product knows as "Encola Cone". This product was manufactured inthe form of two liquds which had to be mixed in equal quantities and the mixture applied to the hair externally to give the hair a black colour. The said product was undoubtedly a hir dakener. The excise authorities held that the said product was liable to central excise duty as falling under Item 14F (iv) in the First Schedule to the Act, which is the very item in question before me. The petitioners came to this Court by way of miscellanceous Petition No. 465 of 1966, but this petition was summarily rejected by K.K. Deasai J. (as he then was ). The pertitioners then went in appeal. The appeal Court took the view that by reson of the composition and ingredients of the said product manufactured bythe peititioners it would not be possible to accept the contentions of the petitioners' counsel that the said product should not be regarded as a hir lotion and also took the view that the use of the products as a hair darkener, though a relevent factor, would not be determinative of the matter. In coming to this conclusion the Court has relied undoubtedly on the chemicals composition of the said product. It was urged by Mr. Bhabha that in view of this decision, the question before me waws parctically concluded against the Petitioner. I am afaird, on a closer scrutiny, this Judgment is of no assistance to Mr. Bhabha at all. A perusal of the judgment shows that the Collector of Central Excise in that case had before him the report of the Deputy Chief Chemist, Bombay, as well as the reportof the chief Chemist, Central Revenue, New Delhi and several books and treatises. The Division Bench took it as a well-settled principle that when a Court in dealing with entries appearing in the statutes like the Court Excise Act or the Sales Tax etc., the entries appearing in such statutes are to be undestood not in their technical or scintific or laboratory sense, but they are to be understood in the commercial sense, that is in the sense in which the persons dealing with those items in the market understood them. The Court has stated in categorical terms that no material whatscoever was placed by the petitioners there either before the Court Excise authorites or before the Central Government or before the trial Court when they preferred their petition. the petitioners themselves had resouse to special works on pharmaceutical formulats or on commation. In other words, as observed by them Division Bench, no attempt was made to place before the concerned authorities any material to establish the commercial sense in which the persons in the trade understood the term "Hair Lotion", but the petitioners themselves resorted to seientific or technological works' to show the meaning of the term "Hair Lotion" and even in the appeal it was only this material which was relied on by Petitioners. All that had happened in that case was that the petitioners sought to challange the decision of the excise authorities mearly on the ground of chemical composition of the product and the technical or scientific meaning attributed to them "Hair Lotion" and that the challenge was negatived. In the present case, in my view, there is ample evidence regarding the meaning attributed by persons in trade and commerce to the words used in clause(iv) of Item 14F of the First Schedule and hence this decision has no application to the case before me.
9. The next submission of Mr. Babha was that interference by this court with the impugned order passed by respondent No. 2 should be made only if it was found that respondent No. 2 had taken a view which was preverse or which no reasonable possible it was open to the excise authorities to take any one of them and Court should not interfere with the same. In this regard. Mr. Bhabha relied on the decision of the Supreme Court in V. V.lyer v. Jasjit Singh . It has been held in this case that where two alternative interpretationsare possible of the scope and applicability of item 74(vi) of Part V of Schedule I to import (Control) Order, 1955 made under section 3(1) of Imports and Exports (Control) Ac, 1947, and Customs authorities adopt a resonable view relating therto which is fovourable to Revenue such finding of the authorities cannot be interfreed with by the High Court under ariticle 226 of the Constitution of India, even through another view contrary to the one adopted is in fovour of the subject. The Supreme Court observed that there was nothig in the decision of the collectior, which was the impugned decision, which could warrant its condemnation as perverse or unresonable. It is undoubtedly true that where two view are resonably possible regarding the scope and applicability of an item in an Excise Act or Customs Act and one of these views is taken by the authorities concerned the Court cannot interfere with the same. It cannot, however, be said that unless the decision is totally preverse or such as no resonable person could ever take, the Court is not entitled to interefere with it at all. The cottect principle in this regard has, with respect, been laid down by the Supreme Court in Union of India v. Tarachand Gupta & Bros. . This principle is set out in paragraph 21 of the aforsaid report. There the Supreme Court has set out with approval the statement of Lrd Reid in Anisminic Ltd. v. The Foreign Compensation Commission [919690 1 Ali E.R. 208] which lays down that if a tribunal having juridiction has refused to take into account something which it was required to take into account or based its decision on some matter which, under the provisions setting it up, it had no right to take into account, the Court would be entitled to interfrer with the decision of the tribunal. the principle on which interfernce can be made has been, with respct, correctly laid down Deshmukh J. in O.S. Miscllaneous Petition No. 530 of 1969 (with Miscellaneous Petitions Nos. 631 to 635 and 668 of 1969). Deshmukh J. has taken the view that interference by the Court is called for when the a particluar item in the excise tariff is patently and obviously erroneous. Interference is alos calle dfor when the conslusions arrived atatre totally unreasobable. Another case of interference would be where the decioson is given on the basis of erroneous contruction of the entry concerned or is result, of ignoring relevant facts and relevant material though available on the impugned order will have to be considered.
10. It must be borne in mind, at this stage, in the present case that although the arguments, to some extent, proceeded on the question whether the aforesaid two products viz. Vasmol Emulsified Hair Oil and Vasmol Pomade, should be regarded as hair lotions or pomades, on the one hand, or, on the other hand, these products should be regarded as hair dyes, there is no sppecific items in the First Schedulle of the said Act in respect of hair dyes as such, and hence really speaking, the question I have to consider is whether these products could be fairly regarded as hair lotions or hair pomades. If they could be so regarded, theyo are exigible under the said item 14F of the First Schedule, but if they xannot be held liable for payment of excise duty under that item. Coming to the question as to how these products were known in trade or commerce parlance, in my view, the most imporart evidence is furnished by the affidavits produced by the petitioner before respondentNo. 2. The petitioner has also produced certain opinions before respondent No.2. which will have to be taken into account. I may make it clear that althought the petitioner has also sought before me to rely on certain further opinions and as alleged classification by the Indian Standerd Institute which have been obtained by the petitioner after the decision of respondent No. 2, in my view, it is not necessay for the disposal of this petition to go into these opinious and the sad classification by the Indian Standerd Institute, with the result that I am not concerned with the question as to whether the petitioner is entitled to reply on the said opinions or the said classification in this matter. As far as the aforsaid affidavits are concerned, some of these affidavits were annexed to the Miscellaneous Petition No. 355 of 1965 filed by the petitioner in this Court as aforsaid. A copy of the said petition along with the copies of the said, affdavits was forwaded by the petitioner to respondents No. 1 with his letter dated 24the July, 1971. Certain other affidavits have been forwarded with the said letter to respondent No.1. I propose to refer first to the addidavits filed by person who are dealers in or concerned in selling the aforesaid products. The first of thse affidavits is of Akhter Faqruddin Shamsi, who states that he is a Manager in Akbarally's Department Stores as Veer Nariman Road, Bombay, which is a well-known department store. In the said affidavit it has been stated that M/s Akbarally Ebrahimji are distributors of Vasmol hair dye for the last about ten years Albarally's Department Stores sells Vasmol hair dye as also other preparations for the hair such as hair crems, hair lotions and hair pomades and other commotion. Akhtar Shamsi has stated that of a customer comes tothe counterand asks for a hair crems or hair lotion or hair pomade, he would never be given the product Vasmol, and the said products is only sold as a hair dye and only to those customers who ask for a hair dye or a hair darkener. The next affidavit, which is on similar lines, is that of one C.K. Misrchandani, a dealer in pharmaceuticals, provisions, toilet preparations and general merchendise carring on business as a partner in the firm of Messrs. Sorabji Hormusji &Co.,at 22m Mangaldas Road, Bombay. The next such afficavit is of one S. C. Sheth, who is the proprietor of a concern distributing Vasmol Products as well as other hair dyes, hair crems and hair pomades at Bannglore, the said affidavit is also to the effect that Vasmol is sold solely as hair darkener and not as hair crems, hair lotion or hair promade. Another deler in Bangalore, S. A. Meera Sahib, has filed an affidavit to the same effect as S. C. Sheth. V. S. Fernado, a counter saleman in a dealing in cosmetics, consumer goods and perfumes at Madras, has filed an affidavit stating inter alia, that Vasmol is a hair darkener and a hair dye and is sold to such customers as ask for a hair dye or hair darkener. He has further stated that if a customermearly asks for hair cream, lotion or pomade, he would never be given Vasmol products. One A. Mudaliar, who is a proprietor of a firm distributing Vasmol products at Madras, has also made as affidavit to the same effect. Govindji C. Sunderji of Bombay has made as affidavit stating that he has been using the product "Vasmol" for about four years purely as a hair dye. Affidavitshave also been filed by one K. Kade Mohideen of Bangalore and one P.V.Gopalakrishnan of Madras to the same effect. As agaist thses affidavits the Excise authorities had not filed any affidavits before the respondent No. 2 at all. Even as far as the present petition is concerned, the respondents have not filed any affidavit of any dealer or consumer of the aforsaid Vasmol products. As far as the impugned order is concerned, I find that respondent No.2 has referred to four affidavits from traders selling Vasmol products to the effect that they have supplied Vasmol as a hair darkener and that Vasmol is not sold as a cosmetic, and he was also noted that two affidavits have been filed by persons using Vasmol saying that they use it as a hair dye and nor as a hair lation or hair crem. The question which I have really to consider is whether the effect of these affidavits has been considered by respondent no. 2. Respondednt No. 2 in his order has stated that the counsel for the Petitioner drewhis attention to the said affidavits from consumers and sellers of vasmol products, but respondent No.2. has therafter gone to state that it was pointed out to the petitoner's counsel that the basic ingredients of the Vasmol products were the same as those of all normal creams and pomades except that the Vasmol products contained in addition lead acetate and sulphur and a couple of herbal extracts. In paragraph 11 of the impugned order respondent No. 2 has in terms admitted that it is true that persons whose hair is already black will not normally need a hair dressing preparation which contains hair darkening ingredients such as lead acetate and sulphur, and has gone on to state that mearly because a restricted section ogf the public is likely to buy these Vasmol products that does not takes them out of the purview of Item 14F of the First Schedule of the Central Excise Tariff. There is no further discussion in the impugned order regarding these affidavits at all. There is no finding that the correctness of these affidavits has been accepted by respondent No. 2. It appears very doubtful as to whether respondent No. 2 could have rejected these affida\avits without calling upon the Petitioners to produce the deponents for being cross examined or without the correctness of the affidavits being tested in some other manner. In this regard it may be pointed out that a somewhat similar question arose in M. Parikh & Co. v. I.T.Commissioner . The observations of the Supreme Court in paragraph 13 of the aforsaid report clearly suggest that where affidavits are filed before an officer, normally speaking, if he desires to challenge the correctness of the averments made in these affidavits, he should call the deponents for being cross- examined or test the correctness of the averments by any other means open to him, and it would not be proper for the said Officer to arbitarily reject these affidavits as incorrct. In the present case, however, this question does not arise because it appeares to me that respondent no. 2 has not rejected thses affidavits. Mr. Bhabha strongly contended that respondent NO. 2. had rejected these affidavits placing reliance on the advertisement in respect of the said products and the labels on the cortons produced by the Petitioner before him. In paragraph 13 of theimpugned order,respondent No. 2. has observed that most of the information regarding a product that a consumer gets is from advertisements and, of couse, from how much of it he is prepared to believe. Respondent No. 2 has pointed out that the lables on the cartons and bottles Respondent No. 2. has pointed out that the lables on the cartons and bottles of Vasmol Emulsified Hair Oil Vasmol Pomate described thses products as "Hair Darkener, Hair Tonic, Hair Dressing". He has pointed out that the advertisment also claimed that Vasmol helps remove dandruff, releves itching scalp and checks falling hair. He has relied on the following statement appearing in the advertisements:
"Use `Vasmol' as you would any hair dressing; rub it throughly down to the hair roots and then brush or comb the hair.`Vasmol' can be used more than once a day according to individul dressing requirments. `Vasmol' is an ideal hair darkener, hair dressing and hair tonic combined in one formula."
Respondents No. 2. has pointed out that in the advertisements all the hair dressing virtues are claimed for the Vasmol products such as to be claimed for ordinery hair crems and pomades, besides claiming a hair darkening efect. On the basis of the advertisements, respondents No. 2. has observed that Vasmol products can, therefore be bought and sold as hair cream-cum-hair darkener/hair pomade-cum 0hair darkener and not purely as a hair dye, This discussion shows that respondents No. 2. has placed relance on these advertisement to come tothe conculaton that Vasmol products could have been sold as hair crems or hair pomades. but thses observations do not indicate that respondent No.2. has rejected the evidence tendered by the petitioner on affidavits. Morever, I find that the relance placed by respondents no.2. on the advertisement is somewhat misplaced. As far as the advertisements referred to are concerned, they have been tendered in Court and have been taken on record as Exh. `C' (Colly). these advertisement and literature, on a fair reading, cleared show that emphasis has been given bythe petitioner to the hair darkening qualities of the Vasmol products, and not to the other qualities similar to those of an ordinery hair dressing which are claimed for the said products. The hair darkening qualities are printed in much bolder letter and the visual impact of the advertisement clearly, emphasizes these qualities and not the qualities claimed as ab ordinery hair dressing or pomade. It is usual for an advertiser of products to claim all possible vitues for his products, but is would be erroneous to reply on all these claims to determine the trade use of the products. I may rfer here to a carton of Vasmol which has been tendererd as Exh. "B" The aoriginal of the carton tendered by the Petitioner before respondents No. 2 must be with the Excoise authorites, but the respondents have failed to produced it although it was stated Court was that they would attempt to trace the same and produce it in court. The Petitioner was then called upon to produce a carton used for packing Vasmol in 1961. the Petitioner has produced such a carton used for packing Vasmol Emulsified Hair Oil and it is this carton whichis on record as Exh. "B' . It is true that on this carton it is claimed that Vamol is a " Hair Darkener" . `Hair Tonic' and Hair Dressing '. But a look at this carton shows that the emphasis is clearly on the hair darkening quality of the said product. in view of this, mearly on the basis of these advertisements no person could resonably come to the conclusion that the averments contained in the aforesald affidavits made by dealers and users of the said Vasmol products were incorret.
11. There is one other factor also which has ro be acted in this connection. From the impugned order it appears that the Drugs Controller, Bombay, stated in his letter dated 16th December 1958 addressed to the Petitioner that on perusal of the foremuals of the products Vasmol Exulsified Hair Oil and VasmolPomade, it was observed that bothe these prepartaions contained 1% of lead acetate. However, lead and its salts were considered to be cumulative posions. In thses circumstance, the Drugs Controller requested the petitioner to forward to has office scientific data to show that lead acetate would not be injurious to health if used continuously in the said Vasmol preperations. By a subsequent letter dated 26th October, 1961, the Director, Drugs contole Adminstration, Maharastra State , informed the petitioner that there should be a caution statement to the effect that the said Vasmol products were for external use only and use therof should be avoided on unintact asking or by mouth. this caution statement appears on the bottles of the aforesaid Vasmol products. In connection with this caution statement respondent No. 2. has observed that such a caution statement, cannot take the said products out of the category of hair crems or pomades included in Item 14F of the First Schedul to the said Act. This is, on a sence,of course, correct. But, it appears to me that respondent No.2. has not appreciated the real effect of its caution statement at all. What he really had to consider was wether any person, wanting to use a hair dressing ot a hair pomade as such andnot a hair darkener, would go oput and purpose a hair dressing ot a hair pomade which contained lead acetate might be injurious to helth or which could not be used on broken skin. Even from a common sense point of view,it do appear to me that a person mearly desiring a hair dressing or hair pomade as such would not go to the market and purchase a product which would alter the colour of his hair or which contained a caution statement such as aforsaid.
12. There is one other aspect emphasized by Mr.Bhabha which also can be dealt which at this stage. It was pointed out by Mr. Bhabha that the impugned order shows that before the Sales Tax authorities the petitioner had contended that Vasmol Emulsified Hair Oil was not a hair dye but mearly a hair oil. this contention of the petitoners was rejected bythe Sales Tax Officer. Mr. Bhabha however, says that this conduct of the petitioner wouldshow that he then regarded Vasmol Emulsified Hair Oil as a hair dressing and not as a hair dye, and hence no credence should be paid to his present claim that the said products are not hair dressing or pomades. in this regard, Mr. Bhabha relied on the decision of Deshmukh J. in Miscellaneous Petition No. 630 of 1969 (with Misc.Petitions Nos. 631to 635 and 668 of 1969) referred to esrlier. In thoses cases, the question was whether was certain dumpers should be classified for the purpose of import duty under the Customs Act under item 75 of the Indian Customs Tariff, as had been done by the Customs authorities or under item 72(18) or 72(b) of the Indian Customs Tariff. In brief, the contention of the petitioner there was that the said dumpers should be regarded as mining machinery falling under item 72(18) of the said Tariff and not as conveyances under items 75. Deshmukh J. has pointed out that in the Bill of Entry these dumpers were classified by the petitioners them- selves as conveyances under item 75 and certain exemptions were claimed. The claim to exemption was rejected byt the Customs Department. Against this decision, the petitioners appesled to the Appellate Collector. in their written reply to the Assistent Collector it was not stated by the petitioners that thses dumperas were mining machinery. But the petitioners contended before the Appellate Collector, for the first time, that the correct classification of the said dumpers would be as mining machinery falling under item 72(18) of the Indian Customs Tariff. It was in thses circumstance that Deshmukh J. rejected certain affidative whcih were filed by the petitioners alleging that classification of the said dumpers as conveyances under item 75 was erroneous. It is significant that some of these affidavits were never presented before the Appellate Collector. Deshmukh J.has also referred to the fact that althought, if it said dumpres were classified as mining machinery falling under item 72(18), they would have invited a much lower customs duty than if they were classified as conveyances falling under item 75, yet the petitioners there had classified them as conveyances. it was in these circumstasnce that the conduct of the petitioners was regarded as negativing the correctness of the advantages as contained in the affidavits filed on behalf of the petiitoners. In the present case, such a consideration does not aply at all, because it is apparent that the contention taken by the `petitioner before the Sales Tax authorities was mearly with a view to save some sales tax, and as far as the Indian authorities are concerned, the contention of the petitioner has throughout been that the aforsaid Vasmol products asr not hair dressings or hair pomades covered by Item 14F of the First Schedule to the said Act.
13. In my view, the impugned order of the respondent No.2. shows that he has not really applied his mind to the aforsaid affidavits at all. Although he was noticed them, he has not considered properly the effect of these affidavits. These affidavits were relevent pieces of evidence showing as to how the aforsaid products were regarded in trade or commercisl parlance. Instead of giving due weight to these affidavits and considering their efect respondent No. 2. has chosen to place under reliance on the chemical composition of the said products and to some extent on the advertisments. which,I have already pointed out, have moreover been misconstrued by him. He has further failed to take into account the effect of the cautionary statments which I have alreay referred to earlier. In my opinion, respondent No. 2. has in effect, ingnored the relevent material before him, nemaly the said affidavits and has adopted a wholly erroneous approach in making impugned order. This is clearly not a case where on the material before him two views were possible or resonably open to respondent No. 2. and he was chosen to adopt on e of them. The evidence on record before respondent No. 2. clearly showeed that the aforsaid products could not be fairly regarded as "hair dressing" or "hair pomade" at all. If one were to pose the question were in a somewhat similar form to the question posed by the Exchequer Court of Canada in The King v. Planters Nut and Chocolate Co. Ltd. (1951 Canada Law Reports 122)the question could be framed thus : Supposing a household who did not to darken his hair were to ask his son to go to the provision store and get a bottleof hair pomade or hair dressing, would he excpect his son to come back with Vasmol Emulsfied Hair Oil or Vasmol Pomade". The answer to that question in my opinion, would be clearly in the negative on the evidence on record in this petition. In my view, therfore the decision of respondent No.2. is liable to be quashed.
14. The next question which arises is as to whether in view of the decision of respondent No.2. being quashed, the matter should be remanded for consideration by respondent No.1.or whether I should proceed to decide it myself, IN this connection, it must be noted that this matter has a somewhat chequered history. The Petitioner has gone through the full gamut of hearing before the Excise authorities. In the aforsaid Miscellanous Petition No. 355 of 1965 my brother Desai J. had quashed the decision of the Central Government, and directed the case to be remanded to the Central Government with a direction that it should be disposed os in accordence with law. It is on such remand that respondent No. 2. has passed the impugned order. In view of this, it appears to me that it would be unduly harsh to the petitioner to remand the case and direct him to go back to the revisional authoriteis viz. respondents No. 1. Notwithstanding this I would have remanded the matter,if I had come to the conslusion that althought the order of respondent No.2. was bad in law on the relevent material before him, it was open to him to have come to one of the two conclusions, that is, if the relevent evidence on record was such that the officer deciding the revision could take one view or the other In the present case, however,as I have already pointed out. I am of the view that the evidence on record makes, it clear that the aforsaid products were not regarded in trade or commercial parlance as hair dressing or hair pomades at all with the result that the same would clearly not fall within the ambit of Item 14F of the First Schdule of the said Act. In view of this, it appears to me that there is no need for me te remand the matter but that I should decide the same on the relevent material on record. I find that a similar course has been followed in a number of cases. In Union of India v. Delhi Cloth and General mills , three petitions were filed by three different companies manufacturing vegetable products known as `Vanaspati" and they challenged the legality of the imposition of excise duty on what was called by the taxing authorities as the "manufacture" of "refund oil" from raw oil. Affidative were filed on both sides. The petitioners succeeded before the Hgh Court and the Union of India appealed to the Supreme Court. The observations in paragraph 13 of the said report shows that the Supreme Court took into account all the materisl on record and came to the conclusion that the case of the said compnies that the oil purchased by them for the purpose of manufacture of Vanaspati did not become at any stage "refund oil" as known to the consumers andthe commercial community was correct and proceeded to dispose of the appeals on that footing. A similar course was followed by the Supreme Court in S. B. Sugar Mills v. Union of India .
15. The submission of Mr.Bhabha, however, was that even if I find that the order of respondent No.2. is bad in law, it is not open to me to dispose of the matter myself, but the matter should be remanded to respondent No. 1 for being disposed of in accordance with law. in support of this contention, Mr Bhabha relied on the decision of the Supreme Couret in M. Naina Mahamed v. K. A. Natarajan . It was held in this case that when in a writ petition against decision of the State Transport Appellate Tribunal in respect of the grant of a permit to ply a bus on a paticular route, a single Judge of the High Court undertook an evalution of the maerits on his own, that was beyond his jurisdiction. It was held that even if there were errors of law vitiating the Tribunal's finding, the question about the grant of the permit could not be finally decided by the High Court itself and the case must go back to the Tribunal for fresh consideration as a matter of law and in the intereests of justice. this decision relates to a grant of permits where there is a certain amount of discretion involved and considerations are althought different from those which might prevail in the question of consstruction of an item in an excise Tariff. Moreover, this decision does not in any manner weaken the authority of the aforsaid two decisions referred to by me. In fact, in a more recent case viz. Healthways Dairy Products Co. v.Union of India the Supreme Court took into account the evidence on recod and come to the conclusion on that condensed skimmed milk prepared from skimmed kilk could not be considered to be condensed milk within the meaning of the said term 13 in the Schedule annexed tothe Notification No. G.S.R. 339, dated 1st March, 1970In my view on the evidence on record in the present case it must be held that the aforsaid product viz Vasmol Emulsified Hair Oil and Vasmol Pomade are not covered by Item 14F of the First Schedule to the said Act and are not exigible to excise duty under that item.
16. In the result, the rule is made absolute and the impugned order dated 22nd October, 1971 is set aside. There will be a further order restraining the respondents from acting in pursuance or futherance of the said impugned order and directing them to refund to the Petitioner the amount which might have been recovered from the Petitioners pursuant to be said impugned order. As the Petitioner has succeeded in the Petition, the Bank Guarantees given by him from time to time must be discharged.
17. In order to enable the respondents to apply from this judgment, if so advised, the operstion of this Order so far as the refund of the amount recovered from the Petitioner and the discharged of the Bank Guarantees are concerned is stayed for a period of six weks from the date of signing of judgment. The respondents to pay to the Petitioner the costs of this Petition fixed at Rs. 300/-.