1996(03)LCX0049

IN THE CEGAT, PRINCIPAL BENCH `D’, NEW DELHI

S/Shri G.P. Agarwal, Member (J) and Gowri Shankar, Member (T)

D.C.M. SHRIRAM INDUSTRIES

Versus

COLLECTOR OF CENTRAL EXCISE, MEERUT

Order No. 188 & 189/96-D, dated 8-3-1996 in Appeal No. E/822 & 909/95-D

CASE CITED

State of Gujarat v. Sakarwala — 1967 (19) STC 24                                                                [Para 7]

Advocated By : Shri Lakshmi Kumaran, Advocate, for the Appellant.

 Shri J.M. Sharma, JDR, for the Respondents.

[Order per : Gowri Shankar, Member (T)]. - The appellant is a manufacturer of sugar. Among the products manufactured by it a sugar cubes, sugar sachets and pharmaceutical grade sugar. By the impugned orders, the Collector has classified these three products under sub-heading 1701.90 of the Central Excise Tariff. The appellant claims classification of these goods under 1701.39. Hence this appeal.

2. We have heard elaborate submissions made by Shri V. Lakshmi Kumaran, The Departmental Representative adopts the reasoning of the Collector.

3. In the course of manufacture of sugar from sugar cane juice, the products known as `damaged sugar’, `rori’ and dust arise. These were explained to be forms of sugar with some mixture of molasses, or with large and uneven crystals. They are therefore not acceptable to the market because of its colour. Such sugar therefore is reprocessed being subjected to further refining. It is this sugar which is made into the products in question.

4.  The tariff heading for sugar is reproduced below :

   17.01  Cane or beet sugar and chemically pure sucrose,

      in solid form

Note 2 to Chapter 17 of the Tariff also provides “For the purpose of sub-heading Nos. 1701.10, 1701.20, 1701.31 and 1701.39, `Sugar’ means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105 o would be more than 90.”

5.  The Collector has applied the principle of ejusdem generis to come to his conclusion. He says that sub-headings 31 and 39 have to be read together because each of this is a sub-heading as proceeded by a “__”. The rate of duty for each of these is also ad valorem. The sugar covered by these entries remains “a common man’s item”. Classification as claimed by the appellant would, according to him render the sub-heading to redundant. The goods in question are manufactured by a different process and have a higher market value. They differ from sugar in matters such as solubility unit of sale etc.

6.  The rule of ejusdem generis can be explained as follows : “when particular words pertaining to a class and category or generis are followed by a general words, the general words are construed as limited to things of the same kind as those specified” [Principles of Statutory Interpretation by (G.P. Singh) 5th Edition 1982 p. 281]. It will be evident that the Collector has erred in applying this rule to different tariff heading.

7.  Applying the General Explanatory Notes in the Central Excise Tariff Act, it is clear that sub-headings 31 and 39 are to be considered to be a sub- classification of the immediately preceding description which contains “_” i.e. sugar other than khandsari sugar. Therefore, these two sub-headings are to be considered sub- classifications of sugar other than khandsari sugar. “Sugar” has been defined in Note 2 to the Chapter with reference to its sucrose contents. Therefore, as long as the material is known as sugar, has its requisite sucrose content of more items 90% and does not fall under sub-heading 10 or 20, each of which is preceded by a “__”, it would be classifiable under either of these two sub-headings 31 or 39. The test report which was placed before the Collector (Appeals) indicated the sucrose content to be more than 90 per cent i.e. the sugar confirmed to the percentage specified in Note 2. The fact that the sugar in the present case has a different form, is packed differently or is priced higher, do not by themselves result in excluding the product from the general description of sugar. The judgment of the Supreme Court cited by the advocate State of Gujarat v. Sakarwala [1967 (19) STC 24] to say that “patasa” and other products which are manufactured out of sugar do not cease to be sugar within the meaning of Item 8 of the erstwhile Central Excise tariff would only be the facts of this appeal. That tariff and Chapter 17 of the present tariff define sugar as “another form of sucrose” with the requisite sucrose content. There is no allegation, or finding that the sugar in the present case was used for any purpose other than what in the Collector’s words “........ sugar” is used for addition of sweetness to edible and potable substances.

8.  we are persuaded by the advocate’s argument that sub-heading 90 would cover items which do not figure in any of the prevailing sub-headings. It may cover chemically pure sucrose, if this is not considered sugar it would cover sugar than that defined in Note 2 to the Chapter i.e. with sucrose content of 90% or less. The sugar under consideration therefore would fall either under sub-heading 31 or 39. The former is for sugar sold at prices fixed by the government, it is not claimed that this sugar was so sold. It should therefore fall under Heading 39.

9. We therefore, allow these appeals. Consequential relief, if any to follow.

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Equivalent 1996 (84) ELT 221 (Tribunal)