HICO PRODUCTS LTD. versus COLLECTOR OF CENTRAL EXCISE

Citation: [1994] 3 S.C.R. 625 · Decided: 22-04-1994 · Supreme Court of India · Bench: A.M. AHMADI, M.M. PUNCHHI

Judgment (excerpt)

_. 
HICO PRODUCTS LTD. 
A 
v. 
COLLECTOR OF CENTRAL EXCISE 
APRIL 22, 1994 
[A.M. AHMADI, CJ. AND M.M. PUNCHHI, J.] 
B 
• 
Central Excises and Salt Act, 1944: Section 3, ScHedule I-Medicinal 
Silicone products--Dimethicone and Simethicone-Classification-Tariff 
Item 15A or 68-Examption Notifications dated 28.2.82 and 22.6.82 from levy 
of duty to goods falling under res;duary Tariff Item 68--Benefit of exemption c 
from duty-Cannot be claimed as Silicone falls under specific Item 15A and 
not under item 68. 
The appellant is a manufacturer of medicinal Silicone prodncts 
named Dimethicone and Simethicone amongst others. It tiled classifica- D 
tion list in respect of these products under residuary Tariff Item 68 of the 
Central Excise Tariff bot exempt otherwise from levy under government 
~ 
notifications. It was however directed by Superintendent of Central Excise 
to put them under Item lSA. 
The Assistant Collector on appeal passed an order rejecting the E 
• 
contention of the appellant holding that the products were classifiable 
under Tariff Item lSA. The Collector of Central Excise on appeal by the 
appeal set aside the order of the Assistant Collector holding that the 
products were classifiable under Tariff Hem 68 and were exempt from 
Excise duty. Further appeal of the respondent before the Tribunal was 
allowed and the order of the Assistant Collector was restored. Aggrieved F 
, 
by the Tribunal's Judgment the appellant preferred the present appeal. 
On behalf of the appellant it was contended that only industrial 
Silicone was covered by Tariff Item ISA and the products in question being 
medicinal Silicone were not covered under Tariff Item l?A, and that these G 
products fell under the residuary Item 68 and being "bulk drugs" stood 
exempted from payment of excise duty under the notifications dated 28.2.82 
and 22.6.82 read \\ith the annexed Schedule and explanation thereto . 
• " 
On behalf of the respondent it was contended that Silicone, be it 
1 
termed medicinal or industrial, in all forms was covered under Item lSA H 
625 
626 
SUPREME COURT REPORTS 
[1994] 3 S.C.R. 
•
A and it having been specified there got stock up in that Item and thus In 
",_ 
no event could it slide down to the residuary Item 68; and that the question 
of exemption notification applying to the products did not arise. 
Dismissing the appeal, this Court 
•
B 
HELD : 1. The manufacture and production of all goods in India 
attract excise duty. Those may be goods specified or goods not specified 
elsewhere. Those goods may be falling under any of the Item 1 to 67, or 
' 
instead in the residuary Item 68 attracting ad-velorem duty as due thereon. 
Those goods are exempt from payment of excise duty because ·of the 
c language of the notification binding it to a particular Item and not univer-
sally. It is the clarity of the language which governs the issue, not involving 
any purposive approach. Interpreted in this manner, the benefit of the 
notifications was rightly denied to the appellant. (640-D-F] 
2. The explanation occurring in Item 68 is significant. It is the key 
D to understand the nature of the exclusion of goods from the description of 
goods in any particular item within Items 1 to 67. The Explanation clarifies 
that such exclusions could be demonstrated either by clear exclusion, or 
~ 
by explanation, or in any other manner. Once .such exclusion of goods is 
manifest from the description of goods, then the goods excluded shall be 
E deemed to be goods not specified in that item. By this deeming provision 
the excluded goods are taken for the purposes as if not specified in that 
item and have, for the purposes of Item 68 to be treated to be goods not 
specified elsewhere falling under Item 68. So such of those specified goods 
which get excluded from the description of goods in a particular tariff item 
in whatever manner, those goods shall be deemed to be goods not specified 
F 
in that item and thus becoming goods not specified eleswhere for the 
purposes of Item 68. (634-B-C-D] 
3. In the first notification of February 28, 1982, specific reference of 
Section 3 of the Act was not made, though ii was innately there, in the last 
G 
notification dated 1.11.82 there is su~h reference. Thus what was implicit 
has been made explicit. The levy of excise duty as a whole bas been foregone 
in so far as goods of the description as mentioned in the annexed Schedule 
to each notification are concerned if falling under It

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