COLLECTOR OF CENTRAL EXCISE, HYDERABAD versus FENOPLAST (P) LTD. {II)

Citation: [1994] SUPP. 1 S.C.R. 267 · Decided: 27-06-1994 · Supreme Court of India · Bench: M.M. PUNCHHI
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

COLLECTOR OF CENTRAL EXCISE, HYDERABAD 
A 
v. 
FENOPLAST {P) LTD. {II) 
JUNE 27, 1994 
[M.M. PUNCHHI, S.C. AGRAWAL AND B.P. JEEVAN REDDY, JJ.] 
Central Excises and Salt Ac~ 19~Tariff Item 19-'Cotton Fabric'-
Held, wauld include coated fabrics like.rexine cloth produced by coating 100% 
cotton cloth with P. V. C. resin and other plasticizers. 
lntelpretation of Statutes-Taxing statutes-Commercial parlance or 
common parlance meaning, held applicable only when word not defined in 
statute-lntelpretation by Government, an authority under the A.ct, held not 
binding on Cowt. 
The respondent-Company manufacturers rexine cloth by coating 
100% 'cotton cloth' with P.V.C. resin and other plasticizers. The composi-
B 
c 
D 
tion by weight ofrexine cloth so manufactured includes cotton fabrics, PVC 
Resin, Plasticizers and other fillers to the extent of 8%, 24.5%, 13.0% and 
54.5% respectively. The respondent contended that rexine cloth could not E 
be treated as "Cotton fabric" under Tariff Item 19 as it obtained at the 
relevant time since cotton cloth represented a mere 8% of the final product 
by weight whereas the remaining 92% Is represented by coating material. 
The original Authority rejected the contention of the Company and held 
that it fell within Tariff Item 19 (DI) but the Collector (Appeals) held to 
the contrary. The order of the Collector (Appeals) was upheld by a F 
majority of the Customs, Excise and Gold (Control) Appellate Tribunal. 
The Revenue appealed to the Supreme Court. Initially the appeal was 
heard by a Bench of two hon'ble Judges (B.P Jeevan Reddy and B.L. 
Hansaria JJ,) but was subsequently referred to the preseut larger Bench 
of three Hon'ble Judges since the Bench originally heai'ing the matter G 
entertained a doubt regarding the correctness of the decision of the Court 
in Collector of Central Excise, Calcutta v. Multiple Fabrics Pvt. Ltd., [1987] 
2 sec 636 on which the Respondents relied. 
Allowing the appeal, this Court 
U,7 
H 
268 
SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R. 
A 
HELD : 1. Tariff item 19 deals with 'cotton fabrics', whether made 
B 
wholly or partially from cotton. It includes several other goods within the 
ambit of the expression 'cotton fabrics'. The proviso as well as Explanation 
1 to the Tariff Item it clear beyond doubt that the predominance and 
percentages referred to in clause (i) and (ii) shall be in relation to the base 
fabric which are impregnated, coated or laminated as the case may be. The 
proviso excludes any room for argument that the predominance or per· 
centages referred to in the aforesaid clause (i) and (ii) should be applied 
to the impregnated, coated or laminated fabrics. It must follow therefrom 
that the question of predominance of percentages is irrelevant in the case 
or the respondent's product inasmuch as the base fabric iL the 
C respondent's prodnct is 100% cotton. [274·H; 275·A; F-G; 278-C-D] 
D 
2. When the Parliament has chosen to include the coated/laminated 
fabrics within the ambit and purview of 'cotton fabrics' and when 
Parliament's power to do so is not questioned, it cannot be argued that the. 
cotton fabric after coating no longer retains its Identity as cotton fabric and 
that a new distinct commodity emerges. The fact remains that to start with, 
It is a cotton cloth upon which certain coating material is applied. [278'A·B] 
3. The proposition that the meaning assigned to the words in a taxing 
statute by the trade and the popular meaning should be accepted is 
E correct, but it applies only when the words in question are not defined. 
This Is not so in the present case. [277·B·C) 
4. The view of the Government of India acting as the revising 
authority under the Act that if the end product has lost its identity as a 
cotton fabric it cannot be said to fall within the expression 'cotton fabrics' 
F under Tariff Item 19 cannot bind the court. The Supreme Court is the final 
authority to interpret the Tariff Item and cannot be bound by the inter· 
pretation placed by an authority under the Act. [277-F-G] 
G 
Collector of Central Excise, Calcutta v. Multiple Fabrics Pvt. Ltd. 
[1987] 2 sec 636, distinguished. 
Indo International Industries v. CST, UP, [1981] 2 SCC 528, relied on. 
Dunlop India Ltd. Re. [1982) 10 ELT 634, distinguished. 
Encyclopaedia Americana Vol. 22 (1988) Edn.) P. 375, 217, referred 
H to, McGraw-Hill Encyclopaedia of Science and Technology, Vol. 14, p. 170 
CENTRAL EXCISE v. FENOPLAST (P) LTD. [JEEV AN R
Excerpt shown. Read the full judgment & AI analysis in Lexace.