LexM/S NOVOPAN INDIA LTD., HYDERABAD versus COLLECTOR OF CENTRAL EXCISE AND CUSTOMS, HYDERABAD
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MIS NOVOPAN INDIA LTD., HYDERAltAD v. COLLECTOR OF CENTRAL EXCISE AND CUSTOMS, HYDERABAD SEPTEMBER 14, 1994 [B.P. JEEVAN REDDY, SUHAS C. SEN AND K.S. P ARIPOORNAN, JJ .] Central Excises and Salt.Ac4 1944/Central Excise Rules, 1944: . . . First Schedule-Tariff Item 16-&-ltem 6 in the Table and Tariff Item No. 68-8(1) Exemption Notification N_o. 55 of 1979 issued by the Central Govemment-'Unveneered pmticle boards' and 'melamine faced paTticle boardsl-Whether one and .the same-Held : No and hence exemption not available for 'melamine faced paTticle boards. A B c D The appellant, a manufacturer of particle boards sought to take advantage of Notification No. 55of1979 issued by the Central Government under rule 8(1) of the Central Excise Rules, 1944 •. The said notification exempted plywood and boards specified in column (2) of the table falling under Item No. 16-B of the First Schedule to the Central Excise and Salt E Act, ·1944. Appellant relied on Item 6 of the Table which exempted from duty unveneered particle boards. A few months later, appellant started manufacturing melamine faced particle boards. Accordingly the appellant filed the classification list a~d the Department approved it. Later, the Collector of Central Excise issued F a show cause notice to the appellant stating that the melamine faced particle boards were classifiable under Tariff Item 16-B but were not entitled to the benefit of exemption provided by Notification No. 55 of 1979 and the said boards would attract a duty higher than the one prescribed · under Tariff Item No. 68. The appellant showed cause and the Collector G dropped the proceedings. He held that the melamine faced particle boards fell under Tariff Item 68 and not under Tariff Item 16-B. The Tribunal agreed with the Collector and rejeeted the claim of the appellant. In this appeal, the question that arose was whether melamine faced particle boards could be called unveneered particle boards within the H 549 550 SUPREME COURT REPORTS (1994] SUPP. 3 S.C.R. A. meaning of Item-6 of the Table appended to Notification No. 55 of 1979. Dismissing the appeals, HELD : 1. Actually, veneered particle boards mean particle boards on both sides of which plywood is pasted. Unveneered particle board is raw B particle board. The melamine facing gives it a smooth polished surface. It looks as if the particle board has been laminated on both sides. It is thus difficult to say that the melamine faced particle boards can be described as 'Unveneered particle boards'. Nobody in the trade circles or in the market would consider both the products as one and the same. From C whichever way one looks at them, they appear to be different products. Even the process of manufacturing is different. It is not a case of mere processing of particle boards for giving it strength. It is a case of manufac- turing an altogether different product. (555-E to G] Plasmac Machine Manufacturing Co. Pvt. Ltd. v. Collector of Central D Excise, Bombay, (1991) Suppl. 1 S.C.C. 57 relied on. 2. Both of the Experts deposed before the Tribunal that they did not witness the process of manufacture nor were they able to comment upon the process of manufacture contained in the brochure referred to E hereinabove. From a reading of their affidavits, the Tribunal concluded that they are not in~ependent experts and that their affidavits were prepared with a view to bolster the appellant's case in these proceedings. The said experts, the Tribunal observed, did not also try to support their opinions with reference to any technical literature or authority on the subject. For all the above reasons, the Tribunal declined to accept their F bare assertion that melamine faced particle boards can be described as 'unveneered particle boards'. It cannot be said that the reasons given by the Tribunal for rejecting the said affidavits are either irrelevant or unsustainable. The said affidavits, therefore, do not advance the appellant's case in any manner. (556-G, H, 557-A] G 3. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee-assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability H must establish clearly that he is covered by the sa
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