Full Judgment Text
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CASE NO.:
Appeal (civil) 1951 of 1998
PETITIONER:
M/S. GRASIM INDUSTRIES LIMITED
Vs.
RESPONDENT:
COLLECTOR OF CUSTOMS, BOMBAY
DATE OF JUDGMENT: 04/04/2002
BENCH:
CJI, N. Santosh Hegde & Arijit Pasayat
JUDGMENT:
ARIJIT PASAYAT, J.
In this appeal under Section 130-E of the Customs Act, 1962
(in short the ’Act’), the only question that falls for adjudication is
whether Karbate Tubes made of artificial graphite impregnated with
Phenolic resin which are parts of Heat exchangers are classifiable
under Tariff Item: sub-heading 6815.10 in First Schedule of the
Customs Tariff Act, 1975 (in short ’Tariff Act’) as held by the
Revenue, or under sub-heading 8419.50 as claimed by the assessee-
importer.
Factual scenario needs to be noted in brief. Orders were
placed by the assessee on a foreign manufacturer for supply of
14700 Karbate Tubes which were supplied during April and July,
1992. An order was passed by the Assistant Collector of Customs
(Appraising Group III) classifying the goods under Chapter heading
68.15 and sub-headings 6815.10, whereby the demand raised by the
Appraiser was confirmed. Appeal filed before the Collector
(Appeals) did not bring any relief to the assessee. Matter was carried
in further appeal before the Customs, Excise and Gold Control
Appellate Tribunal, New Delhi (in short ’Tribunal’). As there was
difference in view between two members of the Tribunal, the matter
was referred to a larger Bench which by the impugned order dated
24.11.1997 held that the goods were rightly classified under Chapter
68 and not Chapter 84. The main ground which appears to have
been pressed before the Tribunal by the assessee was that the
Karbate Tubes which are made of artificial graphite cannot be
classified under tariff heading 68.15, as according to it, same
applies only to natural graphite. The Tribunal did not find any
substance in this plea. Reference was made to the Harmonized
System Nomenclature (in short ’HSN’) and it observed that Karbate
Tubes made of artificial graphite being non-electric articles made of
graphite fall under Chapter sub-heading 6815.10. It was further held
that though this is a part of machinery which may otherwise attract
sub-heading 8419.50, but the same is not applicable in view of the
exclusion in Note 1(a) of Chapter 84.
In support of the appeal, learned counsel for the assessee-
appellant submitted that the tubes in question are classifiable under
Chapter 84 as parts of Heat exchangers, are not excluded by Note
1(a) of Chapter 84, and are to be classified under Entry 84.19. With
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reference to the Note 1(a) of Chapter 84, it is submitted that by
application of the ejusdem generis principles, only such articles
which are similar to millstones or grindstones are excluded. In
reply, learned Attorney General submitted that the language of the
provision in question is clear, and if the interpretation sought to be
put by the assessee is accepted, it would mean a complete
transformation of the provision by addition/deletion of certain
words, which is not permissible.
In order to appreciate rival submissions, it would be proper to
take note of the entries on which the assessee and the Revenue have
placed reliance. In Chapter 68 Section XIII (Articles of stone,
plaster, cement, asbestos, mica, or similar materials: ceramic
products; glass and glassware), heading No. 68.15 reads as under:
Heading No.68.15- "Articles of stone or of other
mineral substances (including articles of peat), not
elsewhere specified or included"
Sub-heading No.6815.10- "Non-electrical articles
of graphite or other carbon" 65%
In Note 1 of Chapter 84 it is provided as follows:
"1. This Chapter does not cover:
(a) Millstones, grindstones or other articles of
Chapter 68;
(b) Appliances or machinery (for example,
pumps) or parts thereof, of ceramic material
(Chapter 69);
©Laboratory glassware (heading No. 70.17);
machinery appliances or other articles for technical
uses or parts thereof, of glass (heading No. 70.19)
or 70.20);
(d) Articles of heading No. 73.21 or 73.22 or
similar articles of other base metals (Chapter 74 to
76 or 78 to 81);
(e) Electro-mechanical tools for working in the
hand, of heading No.85.08 or electro-mechanical
domestic appliances of heading No. 85.09; or
(f) Hand-operated mechanical floor sweepers,
not motorized (heading No. 96.03)."
Chapter 84 appears in Section XVI and under the heading
"Nuclear reactors, boilers, machinery and mechanical appliances,
parts thereof" the aforesaid exclusions are provided in Notes 1(a) to (f).
Assessee’s stand was that if at all the Note 1(a) has
application, that will be restricted to 68.04, which specifically refers
to millstones, grindstones, grinding wheels and the like without
frameworks and cannot take within its ambit all the articles which
are covered by Chapter 68. As noted above, it was submitted that the
expression ’other articles of Chapter 68’ has to take colour from
"millstones, grindstones". With reference to a decision of this Court
in Collector of Customs, Bombay vs. Grasim Industries Ltd. (2000
(5) SCC 177), it was submitted that the issue is settled beyond
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doubt. Strong reliance was placed on para 12 of the judgment which
reads as follows:
"In view of the categorical finding, there can be no
hesitation in holding that the goods in question fall
within Heading 84.17(1) of CTA unless it is shown
they being millstones, grindstones and other
articles falling within Chapter 68 have to be
excluded from Heading 84.17(1) of CTA in view
of Note 1(a) of Chapter 84. Obviously the articles
in question are not millstones, grindstones or the
like. We have carefully gone through various sub-
headings of Chapter 68 of CTA and we are of the
view that the contention that the goods in question
fall within Chapter 68 has no substance."
(Underlined for emphasis)
The plea of the appellant is clearly untenable. The issue which
was under consideration in the said case was entirely different and
the sentence underlined cannot be read out of context to draw an
inference that Note 1(a) related to articles which are millstones,
grindstones or the like. It is to be noted that the only plea which was
raised before the Tribunal related to artificial and natural graphite.
The points now canvassed were not urged before the Tribunal; but
since they involve question of law we have permitted the parties to
address us on the various aspects related to the core question.
It is significant to note that in different sub-headings the
words ’similar’ and ’other’ have been used. It appears that wherever
the expression ’similar’ was intended to be used, it has been so done.
Reference may be made in this context to headings and sub-headings
like 6802.10, 6806.10 and 68.09 where the expression used is
’similar articles’. In some other headings and sub-headings, the
expression ’and the like’ have also been used, for example 6804.10
and 68.11. It cannot be said that different expressions like ’similar’
and ’other’ or ’and the like’ have been used without any basis. Even
in the Note 1 itself in clauses ’a’ and ’d’, the expressions used are
’other articles’ and ’similar articles’ respectively. Such user as noted
above cannot be said to be without basis or purpose.
No words or expressions used in any statute can be said to
be redundant or superfluous. In matters of interpretation one
should not concentrate too much on one word and pay too little
attention to other words. No provision in the statute and no word
in any section can be construed in isolation. Every provision and
every word must be looked at generally and in the context in which
it is used. It is said that every statute is an edict of the legislature.
The elementary principle of interpreting any word while
considering a statute is to gather the mens or sententia legis of the
legislature. Where the words are clear and there is no obscurity,
and there is no ambiguity and the intention of the legislature is
clearly conveyed, there is no scope for the Court to take upon itself
the task of amending or alternating the statutory provisions.
Wherever the language is clear the intention of the legislature is to
be gathered from the language used. While doing so what has
been said in the statute as also what has not been said has to be
noted. The construction which requires for its support addition or
substitution of words or which results in rejection of words has to
be avoided. As stated by the Privy Council in Crawford v.
Spooner [(1846) 6 Moore PC 1] "we cannot aid the Legislature’s
defective phrasing of an Act, we cannot add or mend and, by
construction make up deficiencies which are left there". In case of
an ordinary word there should be no attempt to substitute or
paraphrase of general application. Attention should be confined to
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what is necessary for deciding the particular case. This principle is
too well settled and reference to few decisions of this Court would
suffice. [See: Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v.
Custodian of Vested Forests, Palghat and Anr. (AIR 1990 SC
1747), Union of India and Anr. v. Deoki Nandan Aggarwal (AIR
1992 SC 96), Institute of Chartered Accountants of India v. Price
Waterhouse and Anr. (1997 (6) SCC 312) and Harbhajan Singh v.
Press Council of India and Ors. (JT 2002 (3) SC 21)]
It was urged by learned counsel for the assessee that the
legislature could have, if it had really so intended, couched the Note
1 (a) in a different manner i.e. all ’articles of Chapter 68’ instead of
the present expression used. Merely because the provision could
have been differently worded, does not in any way affect the
meaning of the expression used as it is clear and unambiguous. In
Union of India and Anr. v. Delhi High Court Bar Association and
Ors. ( JT 2002 (3) SC 131), following observations in Navin
Chandra Mafatlal v. The Commissioner of Income Tax Bombay
City [(1955) 1 SCR 829] were noted:
".As pointed out by Gwyer C.J. in The United
Provinces v. Atiqa Begum [(1940) FCR 110] at
page 134 none of the items in the Lists is to be
read in a narrow or restricted sense and that each
general word should be held to extend to all
ancillary or subsidiary matters which can fairly
and reasonably be said to be comprehended in it."
In the background of what has been urged by the assessee it
has to be further seen whether the principles of ejusdem generis have
application. The rule is applicable when particular words pertaining
to a class, category or genus are followed by general words. In such
a case the general words are construed as limited to things of the
same kind as those specified. The rule reflects an attempt to
reconcile incompatibility between the specific and general words in
view of the other rules of interpretation that all words in a statute
are given effect if possible, that a statute is to be construed as a
whole and that no words in a statute are presumed to be
superfluous. The rule applies only when (1) the statute enumerates
the specific words, (2) the subjects of enumeration constitute a class
or category, (3) that class or category is not exhausted by the
enumeration, (4) the general terms follow the enumeration and (5)
there is no indication of a different legislative intent. If the subjects
of enumeration belong to a broad based genus, as also to a narrower
genus there is no principle that the general words should be confined
to the narrower genus. In interpreting Section 30 of the United
Towns Electrical Company Act, 1902 which reads: "the company
shall be liable for water rates on all lands and buildings, owned by it
in the aforesaid town, but otherwise shall be exempted from
taxation", the Privy Council rejected the contention that the word
"taxation" should be considered ejusdem generis with "water rate".
It was held that there is no room for application of the principle in
the absence of any mention of a genus, since the mention of a single
species for example of water rates does not constitute a genus.
[See: United Towns Electric Co. Ltd. vs. A.G. for Newfoundland
1939 (1) ALL ER 423 PC]. The rule cannot be applied unless there
is genus constituted or a category disclosed. If the preceding words
do not constitute mere specifications of a genus but constitute
description of a complete genus, the rule has no application. The
rule has to be applied with care and caution. This is not an
inviolable rule of law, but it is only permissible inference, in the
absence of any indication to the contrary. Where the context and the
object and mischief of the enactment do not require restricted
meaning to be attached to words of general import it becomes the
duty of the Courts to give those words their plain and ordinary
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meaning. Following enunciation in Craies on Statute Law (Seventh
Edition) at page 181 succinctly states the principle.
"The modern tendency of the law, it was
said, [by Asquith J in Allen v. Emmerson (1944)
KB 362)] is " to attenuate the application of the
rule of ejusdem generis." To invoke the
application of the ejusdem generis rule there must
be a distinct genus category. The specific words
must apply not to different objects of a widely
differing character but to something which can be
called a class or kind of objects. Where this is
lacking, the rule cannot apply, (Hood-Barrs v. IRC
(1946) 2 All ER 768) but the mention of a single
species does not constitute a genus. (Per Lord
Thankerton in United Towns Electric Co. Ltd. v.
Att. General for Newfoundland (1939) 1 All ER
423). "Unless you can find a category," said
Farwell L.J., (in Tillmans and Co. v. S.S.
Knutsford (1908) 2 KB 385) "there is no room for
the application of the ejusdem generis doctrine,"
and where the words are clearly wide in their
meaning they ought not to be qualified on the
ground of their association with other words. For
instance, where a local Act required that "theatres
and other places of public entertainment" should
be licensed, the question arose whether a "fun-fair"
for which no fee was charged for admission was
within the Act. It was held to be so, and that the
ejusdem generis rule did not apply to confine the
words "other places" to places of the same kind as
theatres. So the insertion of such words as " or
things of whatever description" would exclude the
rule. (Attorney General v. Leicester Corporation
(1910) 2 Ch. 359). In N.A.L.G.O. v. Bolton
Corpn. (1943) AC 166) Lord Simon L.C. referred
to a definition of "workman" as any person who
has entered into a works under a contract with an
employer whether the contract be by way of
manual labour, clerical work "or otherwise" and
said: "The use of the words ’or otherwise’ does not
bring into play the ejusdem generis principle: for
’manual labour’ and ’clerical work’ do not belong
to a single limited genus" and Lord Wright in the
same case said: "The ejusdem generis rule is often
useful or convenient, but it is merely a rule of
construction, not a rule of law. In the present case
it is entirely inapt. It presupposes a ’genus’ but
here the only ’genus’ is a contract with an
employer".
The Note 1(a) of Chapter 84, as noted above, is clear and
unambiguous. It does not speak of a class, category or genus
followed by general words. The rule of ejusdem generis has,
therefore, no application.
Above being the position this appeal has no merit and is
dismissed.
CJI
...J.
(N. SANTOSH HEGDE)
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...J.
(ARIJIT PASAYAT)
April 4, 2002