PETITIONER:
UNION OF INDIA AND ORS.
Vs.
RESPONDENT:
GUJARAT WOOLLEN FELT MILLS
DATE OF JUDGMENT07/04/1977
BENCH:
GUPTA, A.C.
BEG, M. HAMEEDULLAH (CJ)
KAILASAM, P.S.
CITATION:
1977 AIR 1548 1977 SCR (3) 472
1977 SCC (2) 870
ACT
Central Excises and Salt Act, 1944---Schedule I Entry
21--Non-woven felts manufactured out of woollen fibres by
machine pressing, whether "wollen fabrics" for the purpose
of levy of excise duty--Rule of interpretation of items
in a statute.
HEADNOTE
An excise duty of Rs. 55055.87 was levied and collected
from the respondent-firm by the Excise authorities treating
the non-woven felts manufactured by them as "woollen fab-
rics" covered by entry 21 in Schedule I to the Central
Excises and Salt Act, 1944. The Gujarat High, Court allowed
the writ petition filed by the respondent and held that the
respondent’s products were not "woollen fabrics" and direct-
ed the refund of the entire sum collected as excise duty.
Dismissing the appeal by certificate to this Court,
HELD: (1) The well-known rule in interpreting items in
statutes is that resort should be had not to the scientif-
ic or the technical meaning of such terms but to their
popular meaning or the meaning attached to them by those
dealing in them, that is to say, their commercial sense.
[474 A-B]
Commissioner of Sales Tax, Madhya Pradesh, Indore v.
M/s. Jaswant Singh Charan Singh, AIR 1967 SC 1454, applied.
(2) Fabric means woven material. Entries 19 to 22 in
the Schedule deal with fabrics. Entry 21 describes woollen
fabrics as meaning all varieties of fabrics manufactured out
of wool, barring the exceptions mentioned, including blan-
kets, lohis, rugs, shawls and embroidery in the piece in
strips or in motifs. The word "fabric" in entry 21 has been
used to mean woven material in which sense it is popularly
understood. The term "woollen fabrics" in that sense was
not wide enough to cover non-woven material which is wool-
based. Blankets. rugs and shawls etc. have been specifical-
ly included in the entry out of abundant caution to indicate
that "woollen fabrics" in entry 21 means not only woollen
garments but also woollen material used as covering or for
similar other purposes. [473 H, 474 F-G]
(3) It is plain from entry 21 in Schedule 1 to the
Central Excises and Salt Act, 1944 that the respondent’s
products did not fall within it as they are nonwoven felts
from woollen fibres. [474 C]-
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1037
of 1971.
(From the Judgment and Order dated the 17th June, 1971 of
the Gujarat High Court in Special Civil Application No.
112/67).
V.P. Raman, Addl. Sot. Genl. and Girish Chandra, for
the appellants.
G.N. Dikshit and R.N. Dikshit, for the respondent.
The Judgment of the Court was delivered by
GUPTA, J.--The respondent is a partnership firm manufac-
turing non-woven felts from woollen fibres which are uti-
lised for the purpose of filtration in heavy industries.
Between August 25, 1965 and January 5. 1967 the Excise
authorities compelled the respondent to pay Rs. 55,055/87 p.
as excise duty on its products. The respondent
473
filed a writ petition in the High Court of Gujarat at Ahme-
dabad for quashing the order levying excise duty on the
felts manufactured by the respondent treating them as ’woo-
llen fabrics’ covered by entry 21 in Schedule I to the
Central Excises and Salt Act, 1944 (hereinafter referred to
as the Act). The High Court allowed the writ petition
holding that the respondents products were not ’woollen
fabrics’ and directed refund of the sum of Rs. 55,055/87 p.
collected as excise duty from the firm. The Union of India
has preferred this appeal on certificate of fitness granted
by the High Court questioning the correctness of the deci-
sion.
The only question in the appeal is whether the felts
manufactured by the respondent are "woolien fabrics" within
the meaning of entry 21 in the first schedule to the Act.The
writ petition describes the process of manufacture and
states that the thickness of the felts produced varies from
1 mm. to 50 mms. according to. the specification of the
customers and that these are really machine pressed raw
woolwaste. It is stated further that the felts
manufactured .by the process described are neither sheets
nor fabrics, they are not material from which garments could
be prepared nor they could be used ’as covering or for
similar other purposes. Entry 21 in the first schedule to
the Act reads:
"21. WOOLLEN FABRICS--
"Woollen fabrics" .means all varieties of
fabrics manufactured wholly of wool or which
contain 40 per cent, or more by weight of wool
and includes blankets, lohis, rugs, shawls and
embroidery in the piece, in strips or in
motifs:
Provided that in the case of embroidery
in the piece, in strips or in motifs, the
percentage referred to above shall be in
relation to the base fabrics which are embroi-
dered--_
(1) Woollen fabrics, other than Ten percent.
embroidery in the piece, in ad valorem.
strips or in motifs. ---------
(2) Embroidery in the piece in The duty for
strips or in motifs, in or in the time being
relation to the manufacture leviable on the
of which any process is ordbase fabrics,
inarily carried on with the if not already
aid of power. paid, plus
twenty percent.
ad va’orern
Explanation-----" Base fabrics" means fab-
rics falling’ under sub-item (1) of this Item
which are subjected to the process of embroi-
dery."
0
Are the products of the respondent’s factory woollen
fabrics ? Fabric means woven material. The articles manu-
factured by the respondent, as already stated, are non-
woven felts from woollen fibres. It is contended on behalf
of the appellant, Union of India,
474
that in a technical sense the felts manufactured by the
respondent would still be woollen fabrics. The well-known
rule in interpreting items in statutes like the one we are
concerned with is that "resort should be had not to the
scientific or the technical meaning of such terms but to
their popular meaning or the meaning attached to them by
those dealing in them, that is to say, to their commercial
sense". (Commissioner of Sales Tax, Madhya Pradesh, Indore
v. M/s. Jaswant Singh Charan Singh)(1). The High Court has
held that a trader dealing in woollen fabrics would not
regard the respondent’s products as woollen fabrics, but it
does not appear that there is any evidence on the record of
the case to support the finding. However, an inquiry re-
garding the meaning of the term woollen fabrics as commer-
cially understood would be relevant only when there is doubt
as to the sense in which the term has been used in entry 21;
it seems to us plain from the entry read as a whole
that the respondent’s products did not fail within it.
Entries 19 to 22 in the schedule all deal with fabrics.
Entry 19 deals with cotton fabrics which is stated to cover,
barring the exceptions specified, all varieties of fabrics
manufactured either wholly or partly from cotton and in-
cludes, dhoties, sarees, chadders, bed-sheets, bed-spreads
etc. Entry 20 relates to slik fabrics which is said to mean
all varieties of fabrics manufactured. either wholly or
partly from silk with certain exceptions and includes em-
broidery in the piece, in strips or in motifs. Entry 22
relates to rayon or artificial silk fabrics which also is
said to mean all varieties of fabrics manufactured either
wholly or partly from rayon or artificial silk with some
exceptions and includes embroidery in the piece, in strips
or in motifs etc. In this group, entry 21 describes woollen
fabrics as meaning all varieties of fabrics manufactured
out of wool, barring the exceptions mentioned, including
blankets, lohis, rugs, shawls and embroidery in the piece,
in strips or in motifs. If the term ’woollen fabrics’ in
this entry had been used in its technical or scientific
sense and, if in that sense, it was wide enough to cover
non woven material which is wool-based, then it is diffi-
cult to explain why the entry should specifically mention
blankets, rugs and shawIs as being included within it. No
one could possibly be in any doubt in respect of these few
items if the term was so pervasive, and there was no reason
for singling out these specific objects. On the contrary,
the mention of these items suggests that the word ’fab-
rics’ in entry 21 has been used to mean woven material in
which sense it is popularly understood, and blankets, rugs
and shawls etc. have been specifically included in the entry
out of abundant caution to indicate that ’woollen fabrics’
in entry 21 means not only woollen garments but also woollen
material used as ’covering or for similar other purposes.
We therefore find no reason to take a view different from
that taken by the High Court.
The appeal is dismissed with costs.
S.R. Appeal dismissed.
(1) A.I.R. 1967 S.C. 1454.
475