Calcutta High Court
Seth Chemical Works Pvt. Ltd. vs Union Of India (Uoi) on 31 March, 1993
Equivalent citations: 1994(46)ECC95, 1993(67)ELT48(CAL)
JUDGMENT Ajit K. Sengupta, J.
1. The short question which calls for determination in this appeal is whether Ultramarine blue manufactured and marketed by the appellant is liable to Duty under Tariff Item No. 141(5) of the First Schedule to the Central Excises and Salt Act, 1944. The description of the goods in Tariff Item No. 141(5) of the Act is "Paints and Enamels not otherwise specified".
2. In the Writ application filed by the appellant a learned Single Judge of this Court held that the said product manufactured and marketed by the appellant is liable to Excise Duty. In coming to the aforesaid conclusion the learned Single Judge relied on a decision rendered by Chittatosh Mookerjee, J. (as he then was) in Nilsin Company v. Collector of Central Excise, Calcutta and Orissa and Others . In that case it was held that 'Ultramarine blue' is understood by the people conversant with the product as pigment i.e. as a colorant.
3. In the case of Nilsin Company (supra) a judgment of the Division Bench of Gujarat High Court in Union of India and Ors. v. C.M.C. India, Ahmedabad reported in 1979 (4) E.L.T. (J 298) was relied on by the Writ Petitioner. In that case the question was whether ultramarine blue is chargeable with Duty under Tariff Item No. 14. 1(5) of the First Schedule to the said Act. The Division Bench came to the conclusion that Ultramarine blue is not excisable with Duty under the said tariff item. It may be mentioned that Gujarat High Court by the same judgment allowed the Writ petition filed by M/s. Nilsin Company and directed Union of India to refund the Excise Duty levied for a period of three years prior to the filing of the Writ petition upon the said product. Gujarat High Court however granted certificate of fitness to appeal to the Supreme Court under Article 133 of the Constitution. Chittatosh Mukher-jee, J. referred to the said judgment but did not express any opinion on the aforesaid decision. The learned Judge observed as follows :
"2. On 20th August, 1971, a learned Judge of the City Civil Court, Ahmedabad, had decreed a civil suit brought by M/s. C.M.C. India, inter alia, for declaring that the product ultramarine blue manufactured by the said plaintiff was not a pigment to common people, businessmen and consumers, and, therefore, the plaintiff's said product was not excisable under Item No. 14.1(5) of the First Schedule to the Central Excises and Salt Act, 1944. The learned Civil Judge also granted consequential relief by way of permanent injunction against the Union of India and others defendants of the suit. We understand that the High Court at Gujarat had subsequently dismissed the appeal preferred by the Union of India and others against the said decision of the learned Civil Judge, City Civil Court, Ahmedabad. The said High Court also reversed the decision of the trial court in another suit for similar reliefs brought by Jaynal Tarachand and others and decreed the suit. The learned Judges of the Gujarat High Court by the same judgment allowed a writ petition filed by M/s. Nilsin Industries and another and directed the Union of India to refund the excise duty levied for a period of three years prior to the filing of the writ petition upon the petitioner's product ultramarine blue. It is stated that the above matters are now pending before the Supreme Court."
4. The Supreme Court disposed of the Appeals preferred by the Union of India against the said judgment of Gujarat High Court by order dated March 15,1990 in the following manner :
" On the facts found, we do not want to interfere with the conclusion reached by the High Court stating that the product (Ultramarine Blue Tinopal) is not chargeable with a duty under Item No. 14.1(5) of the First Schedule of the Central Excise Act. The appeals are dismissed. No costs."
5. In view of the decision of the Supreme Court upholding the decision of the Gujarat High Court we are of the view that the Ultramarine blue is not chargeable to Excise Duty under Item No. 14.1(5) of the First Schedule to the said Act.
6. We may also point out that after the said order was passed by the Supreme Court on 15th March, 1990 a circular was issued by the Department of Revenue on 30th July, 1990 stating that the said judgment or order of the Supreme Court had been accepted by the Government.
7. It is now well settled that the word which is not defined in the statute ought not to be construed in any technical sense. While interpreting items in fiscal statutes resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or to the meaning attached to them by those dealing in them that is to say their commercial sense. A word of every day use must be construed in its popular senses meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. It should be construed and understood in common language. (See Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola ; Commissioner of Sales Tax, Madhya Pradesh v. Jaswant Singh Charan Singh ; Deputy Commissioner of Sales Tax v. G.S. Pai & Co. .
8. We may add that a Division Bench of Rajasthan High Court in Assistant Commercial Taxes Officer, Jodhpur v. Rajasthan Chemical Corporation reported in (1987) 65 STC 356 held that in common parlance "neel" (ultramarine blue) is understood as a substance which is used to whiten clothes. It is not understood as a colour and it cannot be said that "neel" is a pigment.
9. Allahabad High Court in Commissioner, Sales Tax v. Ram Babu and Company reported in (1971) 28 S.T.C. 81 has held that Tinopal" is a material used for - washing purposes.
10. Similar view has been taken by Madhya Pradesh High Court in N. Ganu Bhai v. Commissioner of Sales Tax, Madhya Pradesh reported in (1975) 36 STC 421 that Ultramarine blue i.e. 'Neel' is not a paint or varnish or lacquer or Enamel or glue or polish.
11. It is no doubt true that in the aforesaid judgments the identical word used in different fiscal statute was considered but the Gujarat High Court was concerned with the Tariff Item No. 14.1(5) of the First Schedule of the said Act which was approved by the Supreme Court and as such no other contention could be raised, and rightly, has not been raised by Mr. Sanyal appearing for the respondents that Ultramarine blue is excisable under the aforesaid item.
12. Our attention has been drawn to the fact that the said Item No. 14.1(5) of the said Act has undergone changes and now corresponds to Item No.32.06.
13. For the reasons aforesaid the appeal succeeds and the same is allowed. The Rule is made absolute in terms of prayers (i), (ii), (iv) and (v). Let appropriate Writs be issued.
14. It is made quite clear that we have not gone into the question as to whether the appellant is entitled to any refund of the duty collected so far by the Excise authorities. It will be open to the appellant to pursue its remedy in the appropriate forum for the refund, if any, due to the appellant in view of the declaration made herein.