M/S. CASTROL INDIA LTD. versus COMMISSIONER OF CENTRAL EXCISE, CALCUTTA-I

Citation: [2005] 2 S.C.R. 414 · Decided: 25-02-2005 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
M/S. CASTROL INDIA LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, CALCUTTA-I 
FEBRUARY 25, 2005 
B 
[RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.J 
Central Excise Act, 1944-Sections 3 and 5A(4)-Assessee manufacturing 
blended lubricating oil having flash point below 94"C and classifying it under 
heading 2710.99-Exemption Notification No. 120184-CE of 11.5.1984 
C exempting blended or compounded lubricating oils from excise duty-Claim 
of-Majority view of the Tribunal that benefit of Notification applicable only 
to the lubricating oils falling under heading 2710. 60 and lubricating oil with 
flash point below 94"C ceases to be lubricating oil falling under heading 
2710.60 but under heading 2710.99 -
Sustainability of-Held: Under the 
D Notification lubricating oil was exempted without reference to any tariff 
heading/sub-heading and as such criteria satisfied-Hence, majority view 
unsustainable and the minority view that the Notification extends benefit to all 
types of lubricating oils, irrespective of their classification, upheld-Central 
Excise Tariff Act, 1985, Heading 2710.60 and 2710.99. 
E 
Words and Phrases: 
'That is to say', 'excluding'-Meaning of-In the cont.ext of Central 
Excise Tariff Act, 1985, Heading 2710.60. 
Blended or compounded lubricating oil with flash point above 94°C 
were classifiable under sub-heading 2710.60 and other lubricating oils were 
F classifiable under sub-heading 2710.99. Exemption Notification No. 120/ 
84-CE dated 11.5.1984 exempted blended or compounded lubricating oils 
from excise duty. 
Appellant - company is manufacforing blended lubricating oil 
ordinarily used for lubrication having flash point below 94°C. It classified 
G the product under heading 2710.99 and cleared the same at 'nil' rate of 
duty during different periods. Respondent-Department issued show cause 
notices and thereafter levied duty. Assessee preferred appeals before 
CEGAT contending that benefit of Notification is applicable only to the 
lubricating oils falling under sub-heading 2710.60; and that for the purpose 
H 
414 
CASTROL INDIA LTD. v. C.C.E. 
415 
of exemption Notification lubricating oil for flash point below 94°C ceases A 
to be lubricating oil falling under sub-heading 2710.60 as it acquires 
general description 'others' under sub-heading 2710.99 .. Appellant 
contended that the Notification extends the benefit to all types of 
lubricating oils, irrespective of their classification and that since the 
product is a lubricating oil, scope of notification cannot be restricted to 
lubricating oils falling under particular tariff entry. Majority view of the B 
Tribunal accepted the stand of the Department and dismissed the assessee's 
appeals. Hence the present appeal. 
Allowing the appeals, the Court 
HELD : 1.1. Under the Exemption Notification 120/84-CE dated C 
11.5.1984 lubricating oil was exempted without reference to any tariff 
heading/sub-heading. Consequently, the criteria specified in the 
Notification were satisfied. Therefore, majority view contained in the order 
of the Tribunal that for the purpose of Exemption Notification lubricating 
oil for flash point below 94°C ceases to be lubricating oil falling under sub- D 
heading 2710.60 as it acquires general description 'others' under sub-
heading 2710.99 is unsustainable and is set aside. The minority view that 
since the product is a lubricating oil, scope of notification cannot be 
restricted to lubricating oils falling under particular tariff entry, is upheld. 
[423-D; 419-D; 417-E) E 
Bharat Petroleum Corporation ltd. v. Commissioner of Central Excise, 
Kolkata-l (2003) 154 ELT 698(Tri - Kolkata), approved. 
Collector of Customs, Bangalore v. Maestro Motors ltd. (2004) 174 
EL T 289, referred to. 
1.2. Exemption Notification 120/84-CE dated 11.5.1984, in view of 
what is prescribed in Section 5A(4) of the Customs Tariff Act, 1985 
continued to be operative and effective as it was not amended, varied, 
rescinded or superseded under the provisions of Section 5A of the Act. 
F 
1422-DJ G 
Collector of Customs, Bangalore v. Maestro Motors ltd., (2004) 17 4 
EL T 289, referred to. 
1.3. The sub-heading 2710.60 significantly uses two expressions, 'that 
is to say' and 'excluding'. The first expression is used in description H 
416 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A enumerative and exhallstive sense and to a great extent circumscribes the 
scope of the entry~ The expression "that is to say" in su~-heading 27.I0.60 
has to be
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