2001(07)LCX0097

IN THE HIGH COURT AT CALCUTTA

Bhaskar Bhattacharya, J.

TERAI OVERSEAS LIMITED

Versus

COMMISSIONER OF CUSTOMS

Writ Petition No. 621 of 1999, decided on 31-7-2001

Cases Quoted

Collector v. Lotus Ink — 1996(09)LCX0068 Eq 1996 (087) ELT 0580 (S.C.) — Relied on...................................... [Para 29]

Commissioner of Sales Tax v. H.M. Ashiq — 1979 Tax LR 1680 — Distinguished......... [Para 13]

Commissioner of Wealth Tax v. Officer-in-Charge — 1976 (3) SCC 864 — Relied on....... [Para 10]

D.N. Banerjee v. P.R. Mukherjee — AIR 1953 SC 58 — Referred......................................... [Para 18]

Dunlop India Ltd. v. U.O.I. — AIR 1997 SC 597 — Relied on............................................ [Para 27]

Karnani Properties Limited v. Augustin — AIR 1957 SC 309 — Relied on........................ [Para 10]

Mahindra Engg. and Chemical Products Ltd. v. U.O.I. — 1992(01)LCX0028 Eq 1992 (058) ELT 0161 (S.C.) — Referred [Para 20]

Municipal Board v. Imperial Tobacco of India Limited — 1999 (1) SCC 566 — Relied on [Para 10]

Pareek Hosiery Product v. Deputy Commissioner of Sales Tax — Sales Tax Cases, Vol. XIII 722 — Distinguished    [Paras 13, 14]

Poulose and Mathen v. Collector — 1997(02)LCX0119 Eq 1997 (090) ELT 0264 (S.C.) — Relied on..................... [Para 29]

State of Punjab v. The Okara Grain Buyers Syndicate Ltd. — AIR 1964 SC 669 — Referred [Para 18]

Subhash Photographics v. U.O.I. — 1992(04)LCX0052 Eq 1992 (062) ELT 0270 (Bom.) — Distinguished....... [Para 28]

Sun Export Corporation v. Collector — 1997(07)LCX0044 Eq 1997 (093) ELT 0641 (S.C.) — Relied on............... [Para 29]

U.O.I. v. Security and Finance Pvt. Ltd. — 1975(10)LCX0015 Eq 1983 (013) ELT 1562 (S.C.) — Relied on....... [Para 27]

Advocated By :   Shri Debal Banerjee, Counsel, for the Petitioner.

Shri Udayan Chakraborty, Counsel, for the Respondent.

[Judgment]. - The question that falls for determination in this writ application under Article 226 of the Constitution of India is whether the authorities concerned were justified in classifying ‘necktie’ exported by the writ petitioner as “made-up articles” thereby placing it under Heading No. 6203(C) of drawback table.

2. The fact giving rise to the instant writ application may be summarized thus:

The petitioner exported two consignments of gents’ ‘necktie’ with full length made of polyester fabric with different prints and designs made of woven fabric. After exporting such goods, the petitioner filed a drawback claim aggregated Rs. 39,18,241/-. The petitioner however classified the goods under coverage of Heading No. 6204 on the ground that necktie is a species of readymade garments. On July 7, 1997 the petitioner received a notice asking it to explain why drawback rate should not be granted under Heading No. 6203 of drawback table which deals with made up articles. Ultimately, by order dated January 12, 1998 the Assistant Commissioner of Customs held that necktie comes within category 6203(C).

3. Being dissatisfied, the petitioner preferred an appeal before the Commissioner of Customs (Appeal) but such appeal was dismissed. The petitioner then preferred a revisional application before Central Government under Section 129 (DD) of the Customs Act. But by the order impugned herein the revisional authority has rejected such application thereby affirming the orders passed by the authorities below.

4. Being dissatisfied, the petitioner has come up with the instant writ application.

5. Mr. Banerjee, the learned Counsel appearing on behalf of the petitioner has made two-fold submissions before this Court.

6. According to Mr. Banerjee necktie is a readymade garment according to the plain dictionary meaning and as such it should come under the Heading 6204.

7. Mr. Banerjee next contends that if it is held that ‘necktie’ is not a readymade garment, in that case, it should come within Heading No. 6201; but at any rate, Mr. Banerjee continues, necktie cannot come within the category “made up articles” as specified in Heading No. 6203(C).

8. Mr. Chakraborty, the learned Counsel appearing on behalf of the Union of India has on the other hand opposed the aforesaid contention of Mr. Banerjee and has contended that the authorities below on consideration of the relevant rules rightly arrived at the conclusion that ‘necktie’ comes within Clause 6203(C) and as such this Court sitting in this writ jurisdiction should not interfere with the concurrent findings recorded by three authorities below.

To appreciate the aforesaid contentions of Mr. Banerjee, Chapter 62 of Drawback Rules are quoted hereunder :

9. After going through the orders of the authorities below it appears that all the authorities concurrently held that the ‘tie’ is a clothing accessory and as such is a part of garment but not a garment itself. Those authorities below further held that tie is a ‘made up’ article, but not having found place in Serial Nos. 6203(A) and 6203(B), must come under Clause 6203(C). Those authorities further held that although the word ‘made up’ is not defined in Drawback Schedule but for the purpose of interpreting the words ‘made up’ the relevant provisions contained in Central Excise Tariff Act, l985 and Customs Tariff Act, 1975 can be looked into. Those authorities were unanimous in their conclusion that ‘tie’ being placed under Heading 61.17 of the Customs Tariff and under 61.02 and 62.02 of the Central Excise Tariff as one of the ‘made up’ articles along with ‘shawls’ and ‘scarves’ which are also two of the items appearing in 6203(A), it must be held that ‘tie’ is also a ‘made up’ article of clothing accessory and thus residuary Heading 6203(C) applies to such item.

10. After hearing the learned Counsel for the parties and after going through the various decisions placed by them I am in full agreement with Mr. Banerjee that Courts are entitled to take recourse to ordinary dictionaries in the matter of classification if a particular word is not defined in the relevant statute. (See Karnani Properties Limited v. Augustin and Another, AIR 1957 S.C. 309; Municipal Board, Saharanpur v. Imperial Tobacco of India Limited and Another, 1999 (1) SCC page 566; Commissioner of Wealth Tax v. Officer-in-Charge, 1976 (3) SCC page 864).

11. I therefore propose to consider whether ‘tie’ is a readymade garment according to ordinary dictionary meaning. For the purpose of deciding the aforesaid question following definitions appearing in the Oxford Advanced Learners Dictionary of Current English by A. S. Hornby, 4th Edn, are relevant :-

(a) Garment - Article of clothing.

(b) Clothing - Cloths, article of clothing.

(c) Necktie or tie - Strip of a decorative material worn round neck under the collar and knotted in the front.

(d) Apparel - Clothing, dress.

(e) Accessory - Things that is useful or decorative extra but that is not essential.

(f) Shirt - Loose fitting garment (usually worn by men) for upper part of the body, made of cotton, linen, silk etc. with long or short slips.

                       (Emphasis supplied)

(g) Trouser - Outer garment covering both legs and reach from the waist to the ankles.

                       (Emphasis supplied)

(h) Suit - Set of outer garments of the same material, usually a jacket and trousers for a man and a jacket or skirt for a woman.

                       (Emphasis supplied)

(i) Skirt - (a) Woman’s garment that hangs from waist, (b) part of a dress or other garment, e.g. A long coat, that hangs below waist.

                       (Emphasis supplied)

12. The aforesaid definitions make it abundantly clear that ‘necktie’ being a decorative material worn round neck under collar should be described as one that is ‘decorative extra’ but not an essential item of clothing. Therefore, ‘tie’ is an accessory of clothing articles but not the clothing article itself. It will appear from the above definitions that shirt, trouser, skirt and suit are described as ‘garment’ while a ‘necktie’ is only a decorative material.

13. Therefore, I am not prepared to accept the contention of Mr. Banerjee that ‘necktie’ being an article of clothing will come within the definition of readymade garment; in my view, ‘tie’ is an accessory of clothing apparel even according to plain dictionary meaning.

In this connection, Mr. Banerjee has relied upon the following decisions in support of his contention that ‘necktie’ is also a garment :-

(1)     Pareek Hosiery Product v. Deputy Commissioner of Sales Tax, Sales Tax Cases, Vol. XIII page 722;

(2)     Commissioner of Sales Tax v. M/s. H.M. Ashiq, 1979 Tax LR page 1680.

14. In the case of Pareek Hosiery Product (supra), the question was whether the word ‘garment’ means an outer covering as distinct from an under wear. A Division Bench of Rajasthan High Court in such a case held that garment means any article of clothing irrespective of the fact whether it is visible to another or not. It is the use of covering human body which gives content to the word. I have already indicated that ‘tie’ is not meant for covering human body but it is a decorative article. Therefore, the said decision cannot in any way help Mr. Banerjee’s client.

15. In the case of Commissioner of Sales Tax, U.P. (supra), the question was whether Rampuri cap sold by the petitioner was a readymade garment. The Division Bench answered the question in affirmative on the ground that this was an article of clothing used for covering outer part of the body viz. head. The said decision, in my opinion, cannot assist the petitioner to bring ‘tie’ within the definition of garment.

16. I thus reject the first contention of Mr. Banerjee that tie is a readymade garment and as such it should come within the Heading 6204 as a readymade garment.

17. The next question is whether ‘tie’ is a ‘made up’ article within the meaning of Heading 6203 (C).

18. There is no dispute that in the Drawback schedule the expression ‘made up’ has not been defined. All the authorities below in holding that ‘tie’ is a ‘made up’ article relied on the provisions contained in Customs Tariff Act, 1975 and Central Excise Tariff Act, 1985. According to those authorities since ‘tie’ is one of the items appearing with ‘shawls’ and ‘scarves’ as one of the ‘made up’ article under those statutes, for the similar reason ‘tie’ should also be held to be a ‘made up’ articles under Drawback schedule since ‘shawls’ and ‘scarves’ find place in 6203(A). The authorities however did not classify ‘tie’ under Clause 6203(A), but placed it under Clause 6203 (C) by treating the said sub-clause as a residuary one. Mr. Banerjee in this connection has placed strong reliance upon the following decisions in support of his contention that it is not permissible under law to look at the schedule framed under other statutes, or other guidelines for the purpose of interpretation of the Drawback rates framed under Customs Act which according to Mr. Banerjee is complete in itself.

(1) State of Punjab v. The Okara Grain Buyers Syndicate Limited, Okara and Another, AIR 1964 SC 669,

(2) D. N. Banerjee v. P. R. Mukherjee, AIR 1953 SC page 58.

19. It is now settled law that same words are named in one place in one context and another in a different context. For that reason decisions on the meaning of particular words or collection of words found in other statutes are scarcely of much value when Court is to deal with a specific statute; they may be sometime helpful but cannot be taken as guides or precedents. Moreover, Note (7) of Section XI of the Customs Tariff Act specifically says that the expression “made up” is defined for the purpose of that Section. Therefore, there is no scope of importing the said definition to the Drawback Schedule which constitutes an independent and complete Rules.

20. It appears from Chapter 62 of Drawback Rules which is the subject-matter of the instant proceedings that the description of the goods under the Heading 6203 is ‘made up’ article made chiefly from textile materials and not elsewhere specified. Under such description there are three sub-clauses (A), (B) and (C). According to sub-clause (A), the articles mentioned therein are made of man-made staple fibres, and/or filament yarn, namely, Dupattas, Shawls, Stoles, Scarves, Umeries, Patkas, Arab Rumals, Subhayyas and Khangas. The aforesaid provision clearly indicates that only those articles mentioned under Clause (A) should be held to be ‘made up’ articles for the purpose of 6203. If however those articles are made of man-made staple fibres or filament yarn, those come under the Heading 6203(A); if those are produced out of fabric made wholly or mainly of silk, those will come under Heading 6203 (B) and if such articles are made of any other fibres than those mentioned in Clauses (A) and (B), those will come under the Clause (C). Therefore, the words “all others” appearing under Clause (C) refer to the nature of the fibre not specified in Clauses (A) and (B); but do not refer to species of articles other than those mentioned in Clause (A). ‘Tie’ or ‘necktie’ not having found place in Clause (A), authorities below could not bring it under Clause (C) simply because in two different other statutes ‘tie’ appeared along with ‘shawls’ and ‘scarves’ which are two of the items of Clause (A). In this connection I find substance in the contention of Mr. Banerjee that the use of the express ‘namely’ followed by description of goods indicates exhaustiveness of the list unless there are strong indication to the contrary as held by the Apex Court in the case of Mahindra Engineering and Chemical Products Limited v. Union of India reported in 1992(01)LCX0028 Eq 1992 (058) ELT 0161 (S.C.) = JT 1992 (1) SC page 276.

21. In this connection, it will not be out of place to mention the following observations of H.W. Fowller in his Dictionary of Modern English Usage while commenting on the use of ‘viz’ :-

“Viz, as is suggested by its usual spoken representative namely, introduces especially the items that compose what has been expressed as a whole (For three goods reasons, viz 1………., 2………, 3……….) or a more particular statement of what has been vaguely described (my only means of earning, viz my fiddle).”

22. In the Macmillan Dictionary of Current English Usage edited by F.T. Wood, R.H. Flavell and L.M. Flavell, 1995 Edition, ‘viz’ has been reported as under :-

“The abbreviated form of Latin, Videlicet, meaning namely, that is to say. Do not use viz. unless a full explanation follows as: The person responsible for the selection of the books, viz. the librarian.

If only examples are given, then eg. not viz. is required.”

23. In the Wordsworth Dictionary of English Usage, 1986 edition reprinted in 1995, “namely” has appeared in the following way:-

“Adv. That is: only one student passed the exam, namely John.”

Oxford Advanced Learner’s Dictionary of Current English defines ‘namely’ as ‘that is to say’ or ‘specifically’ thereby giving the following example :-

“Only one boy was absent, namely Harry.”

24. In Drawback schedule, no separate definition of expression ‘made up’ was given although such definition has been given in Customs Tariff Act and Central Excise Tariff Act. This fact manifests the intention of the legislature that the list in 6203 (A) was exhaustive and for that reason the adverb “namely” was used to specify and limit the list of ‘made up’ articles.

25. In my view, Serial No. 6201 is the clause meant for all other articles of apparel or clothing accessories not knitted or crocheted which are not mentioned in either 6202, 6203 or 6204. Therefore, the appropriate serial number applicable in case of ‘necktie’ should be Serial No. 6201.

26. The authorities below thus acted illegally in placing ‘necktie’ under Clause 6203 (C) such classification is, irrational, if not, perverse.

27. In this connection Mr. Chakraborty vigorously asserted that all the three authorities having concurrently found that ‘necktie’ comes within 6203 (C), this Court sitting in writ jurisdiction should not interfere with such concurrent findings of fact. I am however not at all convinced by the aforesaid contention of Mr. Chakraborty. Though the aforesaid contention is a general rule but if it appears that an appropriate authority has misdirected itself by not applying the correct legal tests and when the conclusion arrived at as a result thereof is perverse or irrational, a writ court can interfere with such irrational findings recorded by the authorities below. [See Dunlop India Limited v. Union of India and Ors, AIR 1997 SC page 597; The Union of India and Ors. v. Security and Finance Private Limited, 1975(10)LCX0015 Eq 1983 (013) ELT 1562].

28. The Division Bench decision of the Bombay High Court in the case of Subhash Photographics v. Union of India reported in 1992 (062) ELT 270, relied upon by Mr. Chakraborty, in my view, is of no avail to his client for the purpose of resolving the dispute involved in the present case.

29. Moreover, it is now settled law that where two opinions are possible in the matter of classification of goods, assessee should be given benefit of doubt and the opinion favourable to the assessee should be given effect to. (See Sun Export Corporation v. Collector of Customs, Bombay - 1997(07)LCX0044 Eq 1997 (093) ELT 0641 (S.C.); Collector of Customs, Madras v. Lotus Ink - 1996(09)LCX0068 Eq 1996 (087) ELT 0580 (S.C.); Poulose and Mathen v. Collector of Central Excise - 1997(02)LCX0119 Eq 1997 (090) ELT 0264 (S.C.).

30. Although this Court is of the view that there was no reason for the authorities to classify ‘necktie’ under the Heading 6203 (C), even if it is held that there was any doubt, the authorities below ought to have classified the disputed goods under Clause 6201 by applying the aforesaid principle. It appears from the record that authorities below did not consider even the existence or the scope of Serial No. 6201 in the Schedule.

31. On consideration of the entire materials on record I am thus of the view that the authorities below did not apply the correct tests and misapplied Serial No. 6203 (C) to ‘necktie’ causing grave injury to the petitioner. I thus set aside the orders impugned and direct the Assistant Commissioner of Customs to proceed afresh as if the disputed consignments of ‘necktie’ come within Heading 6201 of the Drawback Rules. Since the matter is pending for about 5 years, the said authority is directed to pass necessary order on the basis of such classification positively within three months from the date of communication of this order. Writ application thus succeeds. The orders impugned are set aside.

No orders as to costs.

________

Equivalent 2001 (134) ELT 337 (Cal.)