CEMENTO CORPORATION LTD. versus COLLECTOR CENTRAL EXCISE

Citation: [2002] SUPP. 3 S.C.R. 210 · Decided: 23-10-2002 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
CEMENTO CORPORATION LTD. 
v. 
COLLECTOR CENTRAL EXCISE 
OCTOBER 23, 2002 
[RUMA PAL AND S.N. VARIAVA, JJ.] 
Central Excises and Salt Act, 1944-First Schedule, Tariff Item 23(1), 
23(2) and 68-Lympo, a lime-pozzolana mixture-Classification of for purpose 
C of Excise Duty-Excise Department claiming it a variety of cement exigible to 
duty- Assessee claiming it to be a cement substitute and thus classifiable 
under Tariff Item 68 -
Collecto~ holding it to be classifiable under Tariff 
Item 23(2)-Tribunal upholding the order-On appeal held: Once it is admitted 
that Lympo is a cement substitute, Tribunal erred in holding that Lympo was 
cement or a variety of cement-Further if Lympo is not cement or a variety 
D of it under the 1985 Tariff Act it could not have been cement under the 
Schedule of the 1944 Act either-Hence lympo not classifiable under Tariff 
Item 23(1) or (2) but under Item 68 of the Schedule of 1944 Act-Central 
Excise Tariff Act, 1985-Schedule Chapter 25. 
The question which arose in this appeai, was regarding classification 
E of Lympo, a Iime-pozzolana mixture for the purposes of excise duty for 
the period 1982-1985. 
Prior to the amendment of Central Excises and Salt Act, 1944 in 
1985, Cement was specified in Tariff item 23 in the First Schedule of the 
Act and was exigible to duty. In 1985, First Schedule to 1944 Act was 
F repealed and re-enacted as Schedule to Central Excise Tariff Act 1985 in 
terms of which cement was classified under Tariff Item 25.02 while Lym po 
came under Tariff Item 25.05. Appellants manufactured Lympo-lime-
pozzolana mixture since 1982. Respondent-Excise Department claimed 
that Lym po is a variety of cement and hence exigible to duty. Appellants 
G contended that Lympo was a cement substitute and was classifiable under 
Tariff Item 68 and not under 23. Collector held that lympo was correctly 
classifiable under Tariff Item 23(2) and was subject to duty, upto the 
amendment of 1944 Act. Tribunal upheld the order. Hence the present 
appeal. 
H 
210 
r 
CEMENTO CORPORATION LTD. v. C.C.E. 
211 
Allowing the appeal, the Court 
HELD: t.t. Lym po was not classifiable under Tariff Item (T.I.) 23(1) 
or 23(2) but under T.I. 68 of the Schedule to Central Excises and Salt Act, 
1944. 1218-G) 
A 
1.2. The Tribunal and the Collector incorrectly interpreted the B 
provisions of Tariff Item 23 of the First Schedult to the Central Excises 
and Salt Act, 1944. The Tariff heading of the entry is 'Cement'. Therefore, 
when T.I. 25(2) speaks of "all others" it means "all other kinds or varieties 
of cement". It is axiomatic that if the product is not cement but can be 
used for some purposes like cement, such product is not cement. The test C 
as enunciated by the Tribunal for determination of the question of 
classification is no doubt how the product is known to the trade. Appellant 
has produced evidence to show that lympo had never been known or 
indeed advertised as 'cement' whether of a superior or inferior quality, 
but was known as a cement substitute. Respondents have produced nothing 
to show to the contrary. A substitute necessarily implies a difference in D 
identity. When once it is admitted that lympo is a co~ment substitute, 
Tribunal could not have come to the conclusion that lympo was cement 
or a variety of cement. There is no ambiguity in the defi11ition of T.I. 23(1) 
or 23(2). Even if there were, on the principle that when two constructions 
can be equally drawn, the one favourable to the taxpayer should be E 
adopted, Tribunal should have held in favour of appellant. 
1217-E, H; 218-Af 
Dunlop India Limited v. Union of India and Ors., [19761 2 SCC 241, 
relied on. 
1.3. The position has been clarified by the 1985 Act beyond doubt. 
Cement and all its varieties including 'Sago!' and 'Ashmoh' have been 
separately provided for under Tl 2502 and Lympo has been classified 
under a different Tariff item altogether. The Schedules to the 1944 and 
F 
the 1985 Act deal with the same commodity. If lympo is not cement or a 
variety of it under the 1985 Act it could not have been cement under the G 
Schedule of the 1944 Act either. Since even according to the respondents 
there was no other entry of the Schedule to the 1944 Act, under which 
lympo could have been classified, necessarily it would have to be classified 
under the residuary Tariff item 68. [218-E, Fi 
Income Tax Officer v. Mani Ram, AIR (1969) SC 543, relied on. 
H 
212 
SUPREME COURT REPORTS [2002] SUPP. 3

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