Customs, Excise and Gold Tribunal - Delhi
Ashish And Co-And Ors. vs Collector Of Customs on 24 March, 1986
Equivalent citations: 1986(8)ECC42, 1991(7)ECR428(TRI.-DELHI), 1986(25)ELT114(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. This batch of appeals, having nearly identical facts, raises a common question whether PVC/PU Leather Cloth/PVC Flocking-sheets is "other embellishments for footwear" covered by Serial No. 12 of the Table attached to Notification No. 29/79-Cus., dated 10-2-1979 and, therefore, qualifies for concessional rate of duty as provided for in the said Notification.
2. The facts, giving rise to this common question, which are identical in nature with only difference in relevant period of import with which we are not concerned, lie in a narrow compass. The appellant firms: M/s. Ashish & Co., Bombay (Appellant in A. Nos. 265/83D & 466/84-D), M/s. Mehta Ravani & Co., Bombay (Appellant in A. No. 267/83-D), and M/s. Nehal International, Bombay (Appellant in A. Nos. 266 & 2431/83-D), are the importers of the PVC/PU Leather Cloth/PVC Flocking-sheets. All the appellants imported PVC/PU leather cloth/PVC flocking-sheets and paid import duty [3 100% plus 25%+CVD and, thereafter, applied for refund of duty on the ground that PVC/PU leather cloth/PVC flocking-sheets is an embellishment for footwear and, therefore, under Notification No. 29/79-Cus., dated 10th February, 1979, the same is assessable at concessional rate of duty (a) 40%. The Assistant Collector of Customs rejected the claims of the appellants; on the ground that PVC/PU leather cloth/PVC flocking-sheets was imported in running length and, as such, it cannot be considered as an embellishment. All the appellants pursued the matter in their separate appeals before the Collector of Customs (Appeals), but without success. The appellate authority, while confirming the orders of the Adjudicating Authority, held that the PVC/PU leather cloth/PVC flocking-sheets in running length is not an embellishment in itself. They are not in the nature of glass chatons or glass beads which serve no purpose whatever beyond embellishment and which are simply fitted on the article which is supposed to be an embellishment without involving any cutting, shaping etc. The appellate authority further held that what the appellants have imported are running length of material from which appropriate required sizes and shapes have to be cut off and fixed to the material to be embellished. It further held that it cannot be accepted that the imported goods by themselves deserve to be called embellishment.
3. Against the said orders passed by the Collector of Customs (Appeals), Bombay, all the appellants filed their captioned appeals before this Tribunal. These appeals first came up for hearing before the Special Bench consisting of three Hon'ble Members of this Tribunal but the said Bench had some reservations about the earlier decisions rendered by the Special Bench consisting of the same number of Members of this Tribunal in the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay 1983 ECR 894 D (CEGAT) and Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. 397/83-C dated 24-8-1983) and, therefore, these appeals were directed to be placed before the Hon'ble President for constituting a Special Bench of more than three Members. Accordingly, a Larger Bench was constituted by the Hon'ble President. These appeals have, therefore, been placed before the Larger Bench for decision.
4. Before we proceed to discuss the rival contentions of the parties, it would be useful to extract the relevant Notification No. 29/79-Cus., dated 10-2-1979. It reads as follows:
Notification No. 29/79-Cus., dated 10-2-1979 "In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Table below and used in the leather industry from:-
(a) so much of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), as is in excess of 40 per cent ad valorem; and
(b) the whole of the Additional duty, wherever leviable thereon under Section 3 of the said Customs Tariff Act.
TABLE
--------------------------------------------------------------------------------
Sl. Description No.
--------------------------------------------------------------------------------
1. Sulphonated cod oil or sulphated cod oil or oxidised cod oil or chlorinated cod oil or oil or sulphonated neats foot oil or sulphated neats foot oil or oxidised neats foot oil or chlorinated neats foot oil or sulphonated fish oil or sulphated fish oil or oxidised fish oil or chlorinated fish oil or mixtures thereof.
2. Syntans.
3. Pigment finishes for leather.
4. Synthetic fat liquors (with or without hydro carbons non-ionic fat liquors and mixture thereof.
5. Self basifying chrome tanning agents, aluminium tanning agents, oil tanning agents, resin tanning agents, ziroconium tanning agents.
6. Sole leather from ox hides and cut soles and units thereof.
7. Polyurethane soles cut to size.
8. Steel reinforced insoles.
9. Leather and plastic heels.
10. Thermoplastic toe caps and counters.
11. Belts made from leather or plastic.
12. Buckles and other embellishments for footwear.
13. Shoe eyelets.
14. Shoe finishing polishes in solution or in blocks.
15. The following solvent soluble dyes :
... ... ...
... ... ...
On a bare perusal of the said Notification, it is clear that before the benefit of the Notification is claimed, what has to be established, inter alia, is that 'the goods imported must answer the description given at Serial No. 12 of the Table attached to the Notification and they must be used in the Leather Industry as such, that is to say, as an embellishment for footwear in the instant case.
5. It is the case of the appellants that the goods imported, that is to say, PVC/PU leather cloth/PVC flocking-sheets are "other embellishments for footwear" within the meaning of entry No. 12 of the said Notification. Whereas according to the respondent, looking to its nature, size and utility, it is nothing but raw material in the form of PVC/PU leather" cloth/PVC flocking-sheets for manufacturing the footwear itself and the same is not used in the Leather Industry as an embellishment.
6. For properly appreciating the controversy in hand, let us first ascertain as to what is PVC/PU leather cloth/PVC flocking-sheets. According to the respondent, leather is animal hide or skin that has been processed for use by man. It is made from raw hide. With the development of science, synthetic tans have also come in the market. "Vinyl Coated fabric" are commonly known as PVC leather cloth. It consists of depositing a coating of PVC Resin uniformly on a fabric substrate. The resin is dispersed in plasticisers and compounded with other ingredients such as stabilisers, pigments, etc., to get a compound which has a paste-like consistency. This paste (plastisols) is coated on the fabric usually by the knife or roll coating process. After coating, the fabric is passed, through a gelling oven to set the resin on the fabric. The supported film is then finished by being printed, embossed, etc., to improve its customer appeal. The coated fabric so obtained resembles leather and is used extensively in the manufacture of footwear, travel goods, hand-bags, brief cases, etc. The popularity of PVC leather cloth for the above use has been due to its cheapness and its properties like durability, resistance to abrasion, resistance to breakdown by flexing, etc. Further, in recent past and with the advent of chemical substances which when heated at high temperature decomposed to give inert gas has led to the manufacture of PVC leather cloth. The PVC/PU leather cloth/PVC flocking-sheet not only is comparable with natural leather due to its flexibility, workability, but also is similar to natural leather. This is not disputed by the appellants. Thus, it is clear that PVC/PU leather cloth/PVC flocking-sheets is in itself a raw material for the manufacture of shoes and it is also used as such. This is further not disputed by the learned counsel for the appellants that PVC/PU leather cloth/PVC flocking-sheet is used as a material for the purpose of manufacturing footwear as raw material.
But the main thrust of his arguments is that PVC/PU leather cloth/PVC flocking-sheet is considered as an "embellishment" in the trade and, for this purpose, he relies upon a Certificate dated 27-2-1980, said to have been issued by the Officiating Regional Officer, Export Promotion Council for Finished Leather and Leather Manufactures, Bombay. He further submits that in interpreting the items in the Statutes, like the one we are concerned with, the cardinal Rule of interpretation is that "resort should be had not to the scientific or the technical meaning of such term but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense". The appellants also rely upon the Import Policy for Registered Exporters (Vol. II) for the period April 1979 to March 1980. They also rely upon the following decisions of this Tribunal, which have led to this reference:-
1. Allibhoi Mohamed, Bombay v. ) Order No, D-11/82 dt. 4-1-1983) Collector of Customs, Bombay ) 1983 ECR 258D (CEGAT)
2. P. Hira, Bombay v. ) (order No. C- 30/83 Collector of Customs, Bombay ) dated 9-2-1983)
3. Aggarwal Commercial Corporation ) (order No. D/Z20/83 dt. 21-4-83) Bombay v. Collector of Customs, Bombay ) 1983 ECR 894D (CEGAT)
4. Raj Industries, Bombay v. ) (order No. 208-D/1983 Collector of Customs, Bombay ) dated 21-4-1983)
5. Chhaganlal & Sons, Bombay v. ) (Order No. 209-D/83 Collector of Customs. Bombay ) dated 21.4.1983
6. Raj Industries, Bombay v. ) (order No. c-397/83 Collector of Customs, Bombay. ) dated 24-8-1983)
7. Nehal International, Bombay v. ) (order No.c-436 to 440/83-c Collector of Customs, Bombay ) dt.2-9-83 1985 ECR404(CEGAT)
8. Leather Goods House, Bombay v. ) (order No. 977-B/S3 Collector of Customs, Bombay ) dated 28-10-1983
9. Aggarwal Commercial Corpn., Bombay ) (Order No. 846/34C v. Collector of Customs, Bombay ) dated 19-10-1984
10. Handicraft Exports, Bombay v. ) (Order No. C-282/85 Collector of Customs. ) dated 2-4-1985).
Besides the above decisions, the learned counsel for the appellants also relies upon Order Nos. 371B to 374B/81 dated 4-6-81 passed by the Government of India on review u/s. 131(2) of the Customs Act, reported in 1981 ECR 323D (GOI).
7. Since the main thrust of the arguments of the learned counsel for the appellants is that PVC/PU leather cloth/PVC flocking-sheets is understood as embellishment for footwear in the leather industry, let us examine as to :-
(i) what is an embellishment; and
(ii) whether PVC/PU leaver cloth/PVC flocking-sheet is "used" in the leather industry as other embellishment for footwear and is known as such in the trade.
8. (i) Embellishment: "The word "embellishment' has not been defined either under the Customs Act or in the Notification in question. Therefore, in a situation like this, when we turn to the Dictionaries - a course permissible by law as laid down by the Hon'ble High Court of Bombay in the case of Mechanical Packings Industries P. Ltd. v. C.L. Nangia and Ors., 1981 ELT 144 - we find that the word 'embellishment' is derived from the French word "Embellir", "Embellissantem: in, bel (beau) beautiful". The Chambers Twentieth Century Dictionary defines the word 'embellish' as follows: to make beautiful with ornaments: to decorate; to make graceful: to illustrate pictorially. The same Directory defines 'embellishment' as a Noun of embellish as follows: act of embellishing or adorning; decoration: ornament. The word 'embellish' as a Verb Transitive is defined in the Concise English Dictionary, to which we may resort for the purpose of finding out its meaning as a matter of plain language as meaning "to beautify, to adorn". From this definition, it is clear that when the word 'embellishment' is used as a Verb, it connotes a positive act of imparting beauty or adornment to the footwear.
(ii) Whether PVC/PU leather cloth/PVC flocking-sheet is "used" in the leather industry as other embellishment for footwear and is known as such in the trade - To understand the controversy in hand, it would be useful to refer to the meaning of the word "use". The word "use" as a Noun is defined in the Chambers Twentieth Century Dictionary as follows: Act of using: state of fact of being used: advantageous purpose to which a thing can be applied: the fact of serving a purpose.
The Concise Oxford Dictionary defines the word "use" as a Noun as follows: using, employment, application to a purpose. The same Dictionary defines the word "use" as a Verb as follows: cause to act. or serve for the purpose: put into operation. The same Dictionary further defines the word "used" as an Adjective as follows: In vol senses: (of clothes, vehicles, etc.) second-hand. The Concise English Dictionary defines the word "use" as a Verb Transitive as follows: to employ: to apply to a purpose: to put into operation: to treat in a specified way: to consume or exhaust as material: to wear out.
8. In Notification No. 29/79-Cus., dated 10-2-1979, it is expressly stated at the very start that in the public interest, the Central Government "exempts goods specified in the Table below" and "used in the Leather Industry". Thus, the expression "...used in the Leather Industry..." suggests something done positively, e.g., the utilisation of the goods mentioned in the Table attached to the Notification for beautifying or to adorn a footwear. Mere "non-use", in our opinion, is not included in the Expression "used" in the Leather Industry. This, interpretation, in our opinion, takes its colour from the context in which it is used. The Rule of strict construction also does not warrant the giving of a meaning to a word apart from the context in which it is used. There is no doubt, that the legislative intent of the Notification in question is that the "Buckles and other embellishment" for footwear, when imported, should be utilised in the Leather Industry to avail the benefit of the Notification. Nothing in the said Notification evinces a legislative intent that a mere import would earn the benefit of the concessional rate of duty of Customs.
9. Thus, in our opinion, use of the material for the purpose of embellishment for footwear is a condition precedent for claiming the benefit of the Notification and mere import of any goods is not included in the expression "used in the Leather Industry". In other words, the test to be applied for attracting the provisions of the Notification, in our opinion, would be whether an article or thing imported is used as embellishment for footwear in the Leather Industry. Capability of being used as embellishment for footwear without anything further would not be relevant for consideration because it is the article which is ordinarily used as an embellishment for footwear which is relevant. If the contention, as advanced on behalf of the appellants, that mere import of an article capable ot being used as an embellishment, which in fact is not ordinarily used as an embellishment, attracts the provisions of the Notification, is accepted, then the use of the words "used in the Leather Industry" in the Notification would be redundant and we would be reading the Notification leaving aside the expression 'used in the Leather Industry', which is not permissible. For, it is the cardinal Rule of construction that no word should be considered redundant or surplus in interpreting the provisions of a statute. It is the primary Rule of construction that the language used in a statute has to be understood in its grammatical and ordinary sense without addition or substraction or substitution, as held in Stock v. Frank Jones (Tipton) Ltd., [1978] 1 All E.R. 948 (HL) p.951. This is specially true of a taxing statute where equitable construction is inadmissible and one has to adhere simply to the words of the statute as propounded in Inspector of Taxes v. Higgs, (1921) 1 KB 64. The Rule of construction applicable to a taxing statute was well expressed in the classic words of Rowlatt, J. in Cape Brandy Syndicate v. I.R.C., (1921) 2 WLR 39 (PC) p.42 as follows:
"In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.
(underlining ours) The above passage from the judgment of Rawlett,' J. has been quoted times out of number and approved by the House of Lords, Privy Council and Supreme Court in a number of cases. We can content ourselves by mentioning only the recent cases which are: Commissioners of Customs v. Top Tea Promotions, (1969) 3 All E.R. 39 (HL) p.90; Owen Thomas Lenin v. I.R.C., (1971) 2 WLR 39 (PC) 42 and Smt. Tarulata Syam v. The Commissioner of Income Tax, West Bengal, AIR 1977 SC 1802. At page 1811, their Lordships of the Supreme Court in Tarulata's case, supra expressed themselves in the following classic words:
"34. To us, there appears no justification to depart from the normal Rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlett J. in Cape Brandy Syndicate v. I.R.C. (1921) 1 KB 64 at page 71 that "in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used". Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great, the hardship may appear to the judicial mind to be."
(Emphasis supplied) In our opinion, it would be doing a violence to the language employed in the Notification if we read the said Notification leaving aside the expression "used in the Leather Industry". Further, this argument of the learned counsel for the appellants cannot be accepted for another reason. Because for claiming the benefit of the Notification, the article imported must at least look like an embellishment as in the case of Stamping Foils, Buckles. Admittedly, in the instant case, the PVC/PU leather cloth/PVC fiocking-sheet was imported in rolls of 50 metres which do not look like embellishment and it is not the case of the appellant that the said rolls were cut in size and shape for the purpose of use as an embellishment for footwear. On the other hand, when asked about the use of the imported PVC/PU leather cloth/PVC flocking-sheets in question, the learned counsel for the appellant candidly stated that it is immaterial whether the goods imported by them were used as an embellishment for footwear or not because, according to him, it is the. goods imported which attract the provisions of the Notification. According to him, the importers are not required to show or prove that the goods imported were actually used as an embellishment. Even, according to him, it is not necessary to show or prove that the imported PVC/PU leather cloth/PVC flocking-sheet is ordinarily used in the leather industry as an embellishment for footwear. In other words, according to him, the concession is allowed to, the goods imported and not to the use of the goods imported. We are afraid, we cannot subscribe to such a broad view because, in that case, it can conveniently be said that any article, which is imported by the leather industry, is capable of being used as an embellishment, though not actually or ordinarily so used. This can even easily be said about any leather which is imported for manufacturing footwear. Thus, mere saying that it can be used as an embellishment does not fulfil the requirements of the Notification because it is the article used in the Leather Industry as an embellishment for footwear which earns the benefit of the Notification. It, may also be observed that PVC/PU leather cloth/PVC flocking-sheets is in itself a raw material for the manufacture of footwear - a fact admitted by the appellants themselves. Unlike an embellishment, which performs no other service1 but to decorate, PVC/PU leather cloth/PVC flocking-sheet has more varied functions and fulfils essential work. A PVC/PU leather cloth/PVC flocking-sheets is not an embellishment for anything. Even assuming and without admitting that a PVC/PU leather cloth/PVC flocking-sheet is capable of being used as an embellishment, then at least it must, be shown that the PVC/PU leather cloth/PVC flocking-sheet is ordinarily used as an embellishment for footwear. That is what the minimum is required, in our opinion, under the Notification. Thus, on a comprehensive consideration of the material before us, there is no escape from the conclusion that, by and large, the imported PVC/PU leather cloth/PVC flocking-sheets is a utility commodity and not an embellishment for footwear and it is ordinarily not used in the leather industry as an embellishment.
10. As regards the contention of the learned counsel for the appellants that, in determining the meaning of the connotation of words and expression, describing an article or commodity in taxing statute, 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, there cannot be any dispute. For a long train of authorities supports that view but such principle should not be understood as laying down the Rule that the words or the expression must be construed in the sense in which they are understood in the trade_ by the dealer only.' On the other hand, the meaning of that principle is that the words or the expression must be construed in the sense in which they are understood in the trade not only by the dealer but by the consumer also. Recently, their Lordships of the Supreme Court in the case of Delhi Cloth & General Mills Co. v. State of Rajasthan, AIR 1980 SC 1552, after reiterating their earlier view, expressed in the case of Porritts & Spencers (Asia) Ltd. v. State of Haryana, AIR 1979 SC 300, observed in paragraph 7 that in determining the meaning of connotation of words and expressions describing an article or commodity to be taxed, if there is one principle fairly well-settled, it is that the words or expressions must be construed in the sense in which they are understood in the trade, by the dealer and the consumer. It is they who are concerned with it, and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the statutes were enacted, as the liability of the tax falls on the seller, who in his turn passes it on to, the consumer. As we have seen earlier that PVC/PU leather cloth/PVC flocking-sheet has come to acquire in common circles a popular meaning and that a person who desires to purchase a PVC/PU lealther cloth/PVC flocking-sheets does not go to the market and ask for an embellishment but would straighaway ask for PVC/PU leather cloth/PVC flocking-sheets, or an article made of PVC/PU leather cloth and, therefore, PVC/PU lether cloth/PVC flocking-sheets, in its popular sense, would not fall under the expression "other embellishment for footwear" mentioned under SI. No. 12 of the Table attached to the Notification in question and would, in our opinion, therefore, not fall within the scope of that entry. If the term "other embellishment for footwear" in this entry under SI. No. 12 had been used in its technical or scientific sense and, if in that sense, it was wide enough to cover even PVC/PU leather cloth/PVC flocking-sheets, which is admittedly a raw material for manufacturing the footwear, then it is difficult to explain why the entry should specifically mention Buckles, etc., as being included within it. No one could possibly be in any doubt in respect of these few items if the term was so pervasive, and there was no reason for singling out those specific objects. Moreover, it is accepted by the appellants that PVC/PU leather cloth/PVC flocking-sheets by itself is used as a material for the manufacture of footwear. That being so, there can be no doubt that PVC/PU leather cloth/PVC flocking-sheets would not fall, in any event, under the category of "other embellishment for footwear". In other words, in its popular understanding also, it is understood by all who are conversant with such article as raw material for manufacturing the footwears.
11. So far as the Certificate dated 27-2-1980, said to have been issued by the Officiating Regional Officer of the Export Promotion Council for Finished Leather and Leather Manufactures, Bombay, and relied upon by the appellants, is concerned, it would be sufficient to say that it has its own tale to tell. It is said to have been issued by the Officiating Regional Officer. We do not know under what circumstances, the Officiating Regional Officer issued the said Certificate. Even the learned counsel for the appellants could not point out the circumstance/circumstances under which it was issued, even though we asked for the circumstances. Even assuming that the said Certificate was issued by the competent authority, it does not say that the PVC/PU leather cloth/PVC flocking-sheet is used in the Leather Industry as an embellishment for footwear. It is pertinent to note that in the Certificate, Synthetic backers for shoes are stated at item No. 9 as one of the items used in the manufacture of leather footwear and considered as embellishment, but, to our great surprise, against the said item, that is to say, after the words "synthetic backers for shoes", the words "viz PVC/PU leather cloth/PVC flocking-sheets" appear to have been added. This does not stand to common sense because synthetic backers for shoes and PVC/PU leather cloth/PVC flocking-sheets are quite independent and distinct commodity. Not only this, the said Certificate contains as many as 14 items which are said to be used in manufacture of leather footwear and are considered" as embellishment. At SI. No. 2, this Certificate speaks of hooks, studs and bars which cannot, by any stretch of imagination, be said to be an embellishment for footwear because that is in itself a component of footwear and are always known in the trade as boot and shoe grindery. Similarly, at SI. No. 13, the certificate speaks of Bifurcated (wrongly spelt as bigurcated) Rivets (wrongly spelt as Rivels), when it is common knowledge that Bifurcated Rivets are similarly known as Boot and Shoe grindery in the trade. Moreover, the said Certificate is ambiguous, and while listing 14 different items, it does not say which of the items are considered as embellishment, particularly when it is not the case of the appellants that all the items mentioned therein are considered as an embellishment. The said Certificate also suffers from one more ambiguity. It does not say clearly that PVC/PU leather cloth/PVC flocking-sheet is used in the leather industry as an embellishment for footwear. From the tenor of the Certificate in question, it cannot be said that it said so. It is significant to note here that the words "other embellishment for footwear" under SI. No. 12 of the said Notification are preceded by the words "Buckles and". As such, the words "other embellishment for footwear" refer to goods similar to Buckles. In this connection, a reference may be made to the case of A-G v. Brown, (1920) 1 K.B. 773. In that case, the words' "any other goods" occurring in Section 43 of the Customs (Consolidation) Act, 1876, which empowered His Majesty by Order-in-Council to prohibit the importation of "arms, ammunitions or gun powder or any other goods" were construed as referring to goods similar to "arms, ammunitions, or gun powder". Admittedly PVC/PU leather cloth/PVC flocking-sheet is not similar to 'Buckles'. In the teeth of these circumstances, we conclude that the said Certificate does not help the appellants and cannot be relied upon for the purpose of interpreting the words "other embellishment for footwear" occurring in the Notification in guestion.
12. So far as the Import Trade Control Policy (for Registered Exporters), Vol. II for the period April 1976 to March 1977 and April 1979 to March 1980, which are relied upon by the appellants, are concerned, we are of the definite view that these policies do not help the appellants at all. On the contrary, they negative the claim of the appellants. To illustrate, in the Import Policy for April 1976 to March 1977 and April 1979 to March 1980, PVC/PU leather cloth/PVC flocking-sheet is not listed as an article which is used as an embellishment for footwear. On the contrary, in the Import Policy for April 1979 to March 1980 at SI. No. D.2.1(G of Appendix 17 at page 132), articles which are trimmings and embellishments for leather goods are mentioned and Buckles are mentioned as trimmings and embellishment for leather goods. At SI. No. (vi) Nylon backed reinforcement tapes and backers, snythetic backers for shoe are also mentioned as trimmings and embellishment for leather goods. In other words, the said policy does not speak of PVC/PU leather cloth/PVC flocking-sheets as an embellishment tor footwear. Even otherwise, the Import Policy uses the joint expression "trimmings and embellishment" without making any distinction between the two. But, in the Notification in hand, only the expression "embellishment" has been used. Hence, it is clear that the ambit and scope of the Import Policy is much wider than the Notification in hand.
13. At the outset, it would be relevant to mention here that the law is well-settled that it is for the assessee who claims exemption to establish his claim, and the onus is not on the Taxing Authority to prove its admissibility or otherwise. In support of this view, the following observations of the Supreme Court, made in the case of I. Commissioner v. Ramkrishna Dev, AIR 1959 SC 239, are pertinent:-
"At the very outset, we should dissent from the view expressed by the learned Judges that the burden is on the department to prove that the income sought to be taxed is not agricultural income. The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Income-tax Act."
14. It is true that these observations were made by the Supreme Court while discussing the admissibility of an exemption claimed under the Income-Tax Act, but the principle is equally valid in its application to exemption granted under the Customs Act or the Central Excise act. It was, therefore, up to the importer in the instant case to establish that the PVC/PU leather cloth/PVC flocking-sheets imported by them would attract the benefit of exemption under the Notification in question but, in the instant case, the importers have failed to discharge the said onus. It is significant to note that the case was argued by both the sides with the help of the material used for manufacturing the footwear. The learned SDR produced before us a model of a shoe which was completely made of flocking sheet, but in spite of the fact that we repeatedly asked the learned counsel for the appellants to satisfy us as to how PVC/PU leather cloth/PVC flocking-sheet is used as an embellishment for footwear, that is to say, how the PVC/PU leather cloth/PVC flocking-sheet, which is used for manufacturing the footwear itself is used in the leather industry to adorn or to beautify or to decorate the footwear, he failed to show or demonstrate the alleged use of PVC/PU leather cloth/PVC flocking-sheets as an embellishment for footwear, even though he was having the PVC/PU leather cloth and also upper part of the shoe made of PVC/PU leather cloth with him at the time of arguments and representatives of the appellants were present to instruct him. It was put to Shri Nankani by the Bench that, on an earlier occasion, he had referred to the use of PVC/PU leather cloth/PVC flocking-sheet as embellishment for shoes because of their use as "backers", i.e. the narrow vertical strip at the back of a shoe covering the joint of two pieces constituting the sides of the shoe. He had then stated that such "backers" 'of PVC, etc., were used, as mentioned above, for lending ornamentation. We find some difficulty in accepting this argument, as it appears that these backers are used functionally to lend strength at the seam where the two parts are joined. In that view, they would not be embellishments. In any event, what was presented before us, on the present occasion, as a sample to show that PVC/PU leather cloth/PVC flocking-sheets could be used as embellishments, was something quite different. We were shown pieces of PVC/PU leather cloth, shaped somewhat as shown below:-
It was seen that it was about an inch wide at the top and about 4 to 5 inches wide at the bottom. It was not the narrow strip one usually finds used in shoes as a backer. This piece, it was said, with the narrow side being on top and the broad side at the bottom, would form the back of the shoe upper. It appears to us that such a piece, which would really form a functional part of the shoe upper, having the necessary strength to be such, could not be considered an ornamentation or embellishment.
15. So far as the cases, relied on by the appellants, are concerned, it would be useful to mention at the outset that Entry No. 12 - Buckles and other embellishments for footwear - occurring in the Notification in question came up for consideration for the first time before this Tribunal in the case' of Allibhoy Mohamed v. Collector of Customs, Bombay (Order No.D-11/ 82_dated 4-1-1983) reported in 1983 ELT 385 (Tribunal) with reference to "Stamping Foils". In that case, it was held that as per the trade understanding and usage, Stamping Foils are embellishments and, therefore, entitled to concessional rate of duty provided for in the Notification in question. On the basis of this very judgement, it was held in the case of P. Hira, Bombay v. Collector of Customs, Bombay (Order No. C-30/1983 dated 9-2-1983) that Polyester Plastic (Polyester Supported) are also covered by the said entry as an embellishment for footwear. Subsequently, on the basis of these two decisions, that is to say, Allibhoy's case (supra) and M/s. P. Hira's case (supra), it was held in the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay (Appeal No. 86/83-D - Order No. 220/83 dated 21-4-83), 1983 E.C.R. 894-D'.CEGAT) that imported PU leather cloth is covered by the term "other embellishments for footwear" mentioned at SI. No. 12 of the Notification in question. To the same effect are the judgments rendered by this Tribunal in the case of Raj Industries v. Collector of Customs, Bombay (Order No. 208-D/1983 dated 21-4-83) and Chhaganlal & Sons, Bombay v. Collector of Customs, Bombay (Order No. 209-D/83). Again, basing its judgment on the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, supra, this Tribunal held in the case of Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. C-397/83 dated 24-8-1983) that since it was held in the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, supra, that PU leather cloth is an embellishment for footwear, PVC leather cloth is also an embellishment for footwear for the purpose of entry No. 12 occurring in the Notification in question. However, when this question, as to whether PVC/PU leather cloth is an embellishment for footwear within the meaning of entry No. 12 of the Notification in question, again came up for consideration in the case of Nehal International, Bombay v. Collector of Customs, Bombay, 1985 ECR 404 (CEGAT) before a Special Bench consisting of three Hon'ble Members, our learned brother, Shri H.R. Syiem, Member (T), took a different view and held that PVC/PU leather cloth is not an embellishment for footwear within the meaning of entry No, 12 of the Notification in question. But the majority basing its decision on the earlier cases of M/s. Allibhoy Mohamed, M/s. Raj Industries, Bombay and Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, supra, held that PVC/PU leather cloth is an embellishment for footwear. It further deserves to be mentioned here that the question, as to whether Jacquard supported with laminated pattern, Polyurethene sheeting, PVC leather cloth and sponge leather in running length are embellishments for footwear within the meaning of entry No. 12 of the Notification in question, came up for consideration before a Bench of three Hon'ble Members of this Tribunal, in the case of Handicraft Exports, Bombay v. Collector of Customs, Bombay (Order No. C-282/85 dated 2-4-1985). In that case, our learned brother, Shri H.R. Syiem, held that it is not embellishment for footwear, but the majority held that it was so. The other case, that is to say, the case of Leather Goods House, Bombay v. Collector of Customs, Bombay (Order No. 977-B/83 dated 28-10-1983) relates to Buckles and is again based on the aforesaid judgments of this Hon'ble Tribunal. Similarly, the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay (Order No. 846/84-C dated 19-10-1984) relates to Stamping Foils and is again based on the case of Allibhoy Mohamed v. Collector of Customs, supra'. The last case relied upon by the counsel for the appellants is the case of Zip Fasteners and Snap Fasteners which was decided by the Government of India on a Review Petition on 4-6-1981, reported in 1981 ECR 323-D(GOI), wherein it was held that Zip fasteners and Snap Fasteners are embellishments for footwear within the meaning of entry No. 12 of the Notification in question, because Zip fasteners and Snap fasteners are similar to Buckles which are specifically mentioned in Entry 12 of the Notification.
16. Thus, it is clear that the leading case on which other subsequent decisions of this Tribunal are based, is the case of Allibhoy Mohamed, Bombay v. Collector of Customs, Bombay, 1983 ELT 385 (Tribunal), supra. In our opinion, this decision does not resolve the controversy in hand because, in that case, it was not disputed by the Revenue that Stamping Foils were used for imparting beauty, adornment and ornamentation to footwear. What was disputed in that case by the Revenue was that Stamping Foils, in the form imported, were not embellishment in themselves but were only an aid or a base to transfer embellishment on to the article stamped. In other words, the objection of the Revenue only was to the running length form in which the Stamping Foils were imported and it was held that the Stamping Foils, even though imported in a running length, are embellishments for footwear because importing of Stamping Foils in any other form would either be impractical or would be so prohibitively expensive as to make it impractical. For holding so, support was also sought from the Import Trade Control Policy Book for the year 1977-78, where in list 17 (page 35), articles alleged to be imported against the description "trimmings and embellishments", Stamping Foils were also listed as one of the items at SI. No. xv of that list. Thus, the said case is not applicable to the present case and is distinguishable on its own facts. The case of P. Hira, Bombay v. Collector of Customs, Bombay, supra, is also distinguishable because that case relates to Polyester Plastic (Polyester Supported) and, in that case also, there was no dispute that the appellants of that case imported the goods to impart embellishment to the footwear manufactured by them. So far as case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay (Order No. 220/83 dated 21-4-1983) reported in 1983 ECR 894-D(CEGAT) is concerned no doubt it relates to PU leather cloth but it is pertinent to note that that case was decided only on the basis of the trade practice and the opinion of the persons conversant with the use of the goods in question and the nature of the PVC/PU leather cloth and its use was never considered and decided and the plea raised by the Revenue regarding the use of the PVC/PU leather cloth was regatived by reproducing the case of P. Hira, supra, in extenso and by holding that the plea of the Revenue regarding use was considered in paragraph 4 of the judgment rendered in M/s. P. Hira's case. But when we turn to the case of P. Hira, Bombay, we find that capability of imported Polyester Plastic (Polyester Supported and not of PVC/PU leather cloth) of being put to uses other than as embellishment material for footwear was advance, but since it was conceded by the appellants of that case [see sub-para (ii) of Para 4 of the Judgment] also, it was never considered. Thus, we find ourselves unable to share the view that this plea was considered in M/s. P. Hira's case, as held by the learned Members deciding the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, sugra.
17. So far as the cases of Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. 2D8-D/83 dated 21-4-83) and Chhaganial & Sons, Bombay v. Collector of Customs, Bombay, supra are concerned, they are one-line orders based on the decision rendered in the cases of Allibhoy Mohamed and Aggarwal Commercial Corporation, Bombay, v. Collector of Customs, Bombay, and do not decide the controversy in hand. So far as the case of Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. 397/83 dated 24-8-1983), holding that PVC leather cloth is an embellishment for footwear, is concerned, it also does not resolve the controversy in hand because that case has been decided on the basis of the judgment of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, 1983 ECR 894-D.
18. So far as the case of Nehal International, Bombay v. Collector of Customs, Bombay, supra, is concerned, it also does not help in resolving the controversy in hand, because that case was disposed of by the majority judgment holding that the issue involved in that case already stands resolved by the earlier judgments rendered in the cases of M/s. Allibhoy Mohamed, supra, and M/s. Raj Industries, Bombay, supra. In that case also, the question of the nature of PVC/PU leather cloth and its use were never raised and decided by the majority. However, our learned brother, Shri H.R. Syiem, after examining the nature and the use of PVC/PU leather cloth, held that the same is not an embellishment for footwear. So far as the last case of Handicrafts Exports, Bombay v. Collector of Customs, Bombay, supra, is concerned, it would suffice to say that it was decided by the majority judgment holding that on the basis of the said earlier decisions, Jacquard supported with laminated pattern, Polyurethene Sheeting, PVC leather cloth and Sponge leather are embellishments for footwear. However, our learned brother, Shri H.R. Syiem, dissented- from the majority view and reiterated his earlier view.
19. Thus, in our opinion, the majority, deciding the case of Aggarwal Commercial Corporation, Bombay v. Collector of Customs, Bombay, Order No. 220/83 reported in 1983 ECR 894-D and the cases of Raj Industries, Bombay v. Collector of Customs, Bombay (Order No. 397/83 dated 24-8-1983) and Nehal International, Bombay v. Collector of Customs, Bombay, 1985 ECR 404, stretched the provisions of the Notification, if we may say with respect, too far to hold that PVC/PU leather cloth is an embellishment for footwear. We have read the judgment rendered in the case of Allibhoy Mohamed, supra, with considerable care and attention which it deserves. In that case, the question as to whether the goods imported, that is to say, Stamping Foils were embellishments for footwear in themselves was not disputed and it was an admitted position that the Stamping Foils were used for imparting beauty, adornment and ornamentation to footwear. Moreover, this case was decided with the aid of Import Trade Control Policy Book, where Stamping. Foils were also listed as an embellishment as one of the articles. We have also read the case of P. Hira, Bombay, supra, and found that it does not lay down that PVC/PU leather cloth are embellishments for footwear, but it relates to imported Polyester Plastic (Polyester Supported) and, in that case also, there was no dispute that the goods were imported to embellish footwear to be manufactured by the appellants of that case.
20. We find ourselves unable to ignore the dissenting judgment of our learned brother, Shri H.R. Syiem, rendered in the case of Nehal International, Bombay v. Collector of Customs, Bombay, supra, and Handicraft Exports, Bombay v. Collector of Customs, Bombay, supra, and we are in complete agreement with the conclusion which he arrived at.
21. On a comprehensive consideration of the materials before us, the conclusion is in-escapable that the PVC/PU leather cloth/PVC flocking-sheets, imported by the appellants, is not an embellishment for footwear and are not used as an embellishment in the leather industry and, therefore, the appellants are not entitled to the concessional rate of duty, as provided for in Notification No. 29/79-Cus. dated 10-2-1979.
22. Consequently, all the appeals fail and are dismissed.