Full Judgment
2. We have heard Smt. Saxena for the department in the two appeals and Shri D.B. Engineer, advocate for the respondents.
3. The Collector (Appeals) having allowed the two appeals of the respondents and having set aside the six demands the respondents have no further relief to be granted (under the cross objection) than has been granted by the Collector (Appeals). Shri Engineer submitted that cross objection was only in the nature of the submission of the respondents to support the order of the Collector (Appeals) and would not, therefore, be cross objection in the proper sense. At the conclusion of the hearing he further submitted that the additional ground raised in the cross objection (that the product in issue was not goods at all) was not being pursued in these appeals and no submission was being made on that question. The cross objection is accordingly dismissed.
3 A. The process of manufacture of Band Aid Dressings is described in the show cause notice dated 14-7-1980 as follows :- "A special surgical pink cloth is coated with a pressure sensitive surgical adhesive containing mild astringent, zinc oxide. After evaporating the solvents from the adhesive, the dried plaster is slit into desired widths and fed into the automatic Adhesive Dressing Machines, which operate on a highly synchronised mechanism.
The plaster is chilled, unwound, perforated, over which non-occlusive medicated pad is laid and covered with protector films. The strips of desired sizes are punched out, fed into heat sealable pouches, which are formed on the automatic Adhesive Dressing Machine. The resulting Dressings are finally packed into cartons".
4. The duty demand in these appeals is on the coated surgical pink cloth mentioned above. The case of the department is that this cloth would be Adhesive Tape as described in Item 60 CET. The case of the respondents is that the product would not be Adhesive Tape covered by Item 60 CET, as the said item would not cover a surgical tape, as in the present instance. It is in this connection that reliance was placed by the respondents on the decision of this Tribunal in the case of J.L.
Morison, Son and Jones (India) Ltd. reported in 1984 (15) E.L.T. 251.
Shri Engineer submits that the ratio of the said decision squarely applies to the present appeals and, following the same, the decision of the Collector (Appeals) has to be upheld. Smt. Saxena contests this submission.
5. From the report of the said decision it appears that the products in issue in the said case were (i) Paragon Zinc Oxide Plasters BPC and (ii) Elastoplast Electric Adhesive Bandage BPC. It was held that the said plasters would not be Adhesive Tapes as fell under Item 60 CET, since medicated tapes/plasters/bandages would not fall within that item. The Tribunal, on an analysis of the respective contentions, held that Zinc Oxide is possessed of properties which are curative as well as protective and therefore tapes coated with Zinc Oxide would not be ordinary Adhesive tapes but medical dressings.
6. Smt. Saxena submits that such a finding would not be proper and that merely because the product in issue may be medicinally coated it would not fall outside Item 60-CET. It is in this connection that Shri Engineer relies on the statement of the Finance Minister in his Budget speech of 1971 (when Item 60 was introduced in the CET). An extract of the said speech is given in the reply dated 29-1-1982 (to the show cause notice dated 11-6-1981). The Finance Minister had stated "I also propose to introduce an excise levy on a number of producer goods such as Ball and Roller bearings, Bolts, Nuts and Screws, electric insulation and non medical Adhesive tapes, welding electrodes, grinding wheels and motor starters". The Tribunal has, in the above-noted decision, taken note of this speech of the Finance Minister in arriving at its conclusion.
7. As to the permissibility of looking into the Finance Minister's speech, Shri Engineer relies on the decisions of the Supreme Court in the cases of K.P. Varghese (1981 Vol. 131 ITR 597), the Sole Trustee, Loka Shikshan Trust (1976 Taxation Law Reporter Page I) and Commissioner of Income Tax v. Mahindra and Mahindra Ltd. (1983 Vol. IV Supreme Court Cases 392). In the abovesaid cases the Supreme Court had laid down that if an amendment was being brought forward by the Finance Minister (as in the present case by introduction of a new item in the CET) his speech justifying the amendment would be extremely relevant, as it would throw considerable light on the object and the purpose of the amendment and his speech would be a proper aid to a correct interpretation of the words in the amendment.
8. Item 60 CET no doubt reads "Adhesive tapes, all sorts, not elsewhere specified...". The argument of Smt. Saxena is that the word "all sorts" would establish that even medical tapes would fall within this item.
The speech of the Finance Minister would negative this contention. Smt.
Saxena's explanation of the Finance Minister's speech is that he meant to exclude from Item 60 only those goods that would fall under Item 14-E. Item 14-E could cover only such tapes as would fall under the description Patent and Proprietory medicines. Therefore, it would be improper to construe the Finance Minister's speech (extracted above) to conclude that he meant to exclude from Item 60 only medical tapes as could be called Patent and Proprietory medicines but not other medicated tapes.
9. We therefore hold, following the decision of the Tribunal cited supra, that the Collector (Appeals) was correct when he held that the product in issue was not covered by Item 60 CET.