Collector of C. Ex. Vs. Sudarshan Plywood Industries - Court Judgment

Excerpt:
1. short question involved in this appeal i whether the shuttering plywood manufactured by the respondents herein is structuare plywood.if it is so, then the respondents would not be entitled to the benefit of the notification 55/79, dated 1.3.79 (as amended). 1.2 the respondent company submitted a classification list of commercial shuttering plywood falling under tariff item 16-b for approval effective from 183.82 claiming the benefit of the aforesaid notification applicable to commercial plywood. a show cause notice was, however, issued to the respondent company as to why the central excise duty @ 30% ad valorem (basic) instead of the concessional rate of duty of 20% ad valorem (basic) as claimed by them should not be charged, since the plywood manufactured by them was structural plywood and therefore, a higher rate of duty applicable to non-commercial plywoods was liable to be imposed. on adjudication, however, the assistant collector concerned dropped the proceedings and extended the benefit of commercial plywood to the shuttering plywood under notification 55/79. 1.3 on an application under section 35-e by the assistant collector, as directed by the collector of central excise, shillong, the collector (appeals), calcutta also decided in favour of the respondent company and the application under section 25-e, as mentioned above, was dismissed. the appellant-collector has now filed an appeal against the said-decision of the collector (appeals).2. learned jdr appearing for the appellant-collector has urged that the respondent company itself in its advertisement in a.b. patrika dated october 20,1982 has held out its product shuttering plywood as structural plywood inasmuch as this plywood is used in the manufacture of structures for concrete roofing etc. in order to understand this plea of the appellant-collector an english translation of the advertisement as given in the paper book of the respondent company is given below :-___________________________________________________________________________picture picture swastik*more than 70% savings in shuttering work. *smoother & uniform sur- face finish.*can be reused at least twenty times. *available in large panel size.*pliable and available in different shapes. *as per is-4990/1969___________________________________________________________________________ sudershan plywood industries___________________________________________________________________________available at:- pressmanm/s. sree ram santhosh kumar m/s. sree ram plywoods, 51, chittaranjan avenue, he further submits that the concrete shuttering plywood under consideration is a preservative treated one so that it is of repeated utility value and is durable under al-ternate wetting and drying conditions. he has also pointed out that the indian plywood has held that any variety of plywood used for making structures will cover the term "structural plywood".3. apart from the aforesaid arguments in the appeal memo, the learned d.r. has also pointed out that in the absence of any commercial und erstanding of the term "structural plywood" dictionary meaning has to be used. he submits that in the lexicon webster dictionary 1981 at page. 971 'structural plywood' has been defined as one which goes into the structure or used in relation to the structure. similarly in shorter oxford english dictionary vol. ii page 2156 'structural plywood' has been defined as a term 'of generic nature which covers all varieties of plywood used in the art and practice of building.[emphasis supplied by the learned dr]. from the aforesaid dictionary definitions he submits that shuttering plywood will get included in the term "structural plywood" and therefore, would be excluded from the definition of commercial plywood as defined in notification 55/79-ce, dated 1.3.79.4. countering the aforesaid argument ms. savita sharma for the respondent company has urged that shuttering plywood and structural plywood are two definite terms well understood in trade and industry.she points out that there are regular indian standard specifications separately for shuttering plywood and structural plywood. these are is 10701-1983 for structural plywood and is 4990-1981 for shuttering plywood. she also submits that reliance on dictionary meaning is not a safe guide as has been recently held by the supreme court in the case of collector of central excise kanpur v. krishna carbon paper ltd. [1988 (37) elt 480]. according to the supreme court reference to a dictionary is not safe. where no trade evidence is available is specification should be relied upon. the learned advocate also relies upon a judgment of calcutta high court in the case of union carbide ltd. v. acce [1978 elt j 180]. according to this judgment she points out that when any item of the goods is specified by the isi that is certainly an evidence of the fact that the said item is known as such in the trade or commerce. in this context, observations in the judgment of calcutta high court delivered by justice sabyasachi mukharji, as he was then, are very material. the learned advocate relies on the following observations :- "13. therefore, when an item of goods is specified by the indian standards institution, in my opinion, that is certainly evidence of the fact that the said item is known as such in the trade or commerce. the indian standards institution is not dealing with the goods in future. is must be presumed that these specifications were laying down standards of the goods that are known in the trade or commerce at the present moment. therefore, when an item is specified in the specifications issued by the standards institute, it is certainly a piece of evidence which must be considered by the relevant authority...if, however, in the context of dispute that the item does not conform to the specification laid down in the standards institution, then whether the article produced which was not according to the standard would be sub-standard or was known in the market as that kind of goods or not would have to be judged on evidence independent of this specification." 5. we have carefully considered the pleas advanced on both sides. we observe that there is no merit in the appeal. on the basis of the advertisement itself relied upon by the appellant-collector, it cannot be said that the respondent company has held out its product as structural plywood. the advertisement merely mentions that it is concrete shuttering plywood which can be reused twenty times and it helps to build modern indian temples. nowhere the advertisement says that it is structural plywood. learned advocate for the respondent company is on a very strong ground when she submits that different isi specifications exist for structural plywood and shuttering plywood.thus marking them out as two different products known to the trade and industry. her reliance on the judgments of supreme court and calcutta high court mentioned supra, is well founded. reliance on dictionary meaning is not a safe guide for determining the trade and commercial parlance of the product as has been clearly held by the hon'ble supreme court in the case of krishna carbon papers ltd. (supra).6. accordingly, we agree with both the lower authorities that shuttering plywood is different from structural plywood and they are not the same thing in commercial and trade parlance. hence the appeal is dismissed and the cross-objections are upheld.

Judgment:
1. Short question involved in this appeal i whether the shuttering plywood manufactured by the respondents herein is structuare plywood.

If it is so, then the respondents would not be entitled to the benefit of the Notification 55/79, dated 1.3.79 (as amended).

1.2 The respondent company submitted a classification list of commercial shuttering plywood falling under Tariff Item 16-B for approval effective from 183.82 claiming the benefit of the aforesaid notification applicable to commercial plywood. A show cause notice was, however, issued to the respondent company as to why the Central Excise duty @ 30% ad valorem (basic) instead of the concessional rate of duty of 20% ad valorem (basic) as claimed by them should not be charged, since the plywood manufactured by them was structural plywood and therefore, a higher rate of duty applicable to non-commercial plywoods was liable to be imposed. On adjudication, however, the Assistant Collector concerned dropped the proceedings and extended the benefit of commercial plywood to the shuttering plywood under Notification 55/79.

1.3 On an application under Section 35-E by the Assistant Collector, as directed by the Collector of Central Excise, Shillong, the Collector (Appeals), Calcutta also decided in favour of the respondent company and the application under Section 25-E, as mentioned above, was dismissed. The appellant-Collector has now filed an appeal against the said-decision of the Collector (Appeals).

2. Learned JDR appearing for the appellant-Collector has urged that the respondent company itself in its advertisement in A.B. Patrika dated October 20,1982 has held out its product shuttering plywood as structural plywood inasmuch as this plywood is used in the manufacture of structures for concrete roofing etc. In order to understand this plea of the appellant-Collector an English translation of the advertisement as given in the Paper Book of the respondent company is given below :-___________________________________________________________________________PICTURE PICTURE SWASTIK*More than 70% savings in shuttering work.

*Smoother & uniform sur- face finish.*Can be reused at least twenty times.

*Available in large panel size.*Pliable and available in different shapes.

*As per IS-4990/1969___________________________________________________________________________ SUDERSHAN PLYWOOD INDUSTRIES___________________________________________________________________________Available at:- PRESSMANM/s. Sree Ram Santhosh Kumar M/s. Sree Ram Plywoods, 51, Chittaranjan Avenue, He further submits that the concrete shuttering plywood under consideration is a preservative treated one so that it is of repeated utility value and is durable under al-ternate wetting and drying conditions. He has also pointed out that the Indian Plywood has held that any variety of plywood used for making structures will cover the term "Structural plywood".

3. Apart from the aforesaid arguments in the appeal memo, the learned D.R. has also pointed out that in the absence of any commercial und erstanding of the term "structural plywood" dictionary meaning has to be used. He submits that in the Lexicon Webster Dictionary 1981 at page. 971 'structural plywood' has been defined as one which goes into the structure or used in relation to the structure. Similarly in Shorter Oxford English Dictionary Vol. II page 2156 'structural plywood' has been defined as a term 'of generic nature which covers all varieties of plywood used in the art and practice of building.

[Emphasis supplied by the learned DR]. From the aforesaid dictionary definitions he submits that shuttering plywood will get included in the term "structural plywood" and therefore, would be excluded from the definition of commercial plywood as defined in Notification 55/79-CE, dated 1.3.79.

4. Countering the aforesaid argument Ms. Savita Sharma for the respondent company has urged that shuttering plywood and structural plywood are two definite terms well understood in trade and industry.

She points out that there are regular Indian Standard Specifications separately for shuttering plywood and structural plywood. These are IS 10701-1983 for structural plywood and IS 4990-1981 for shuttering plywood. She also submits that reliance on dictionary meaning is not a safe guide as has been recently held by the Supreme Court in the case of Collector of Central Excise Kanpur v. Krishna Carbon Paper Ltd. [1988 (37) ELT 480]. According to the Supreme Court reference to a dictionary is not safe. Where no trade evidence is available IS specification should be relied upon. The learned advocate also relies upon a judgment of Calcutta High Court in the case of Union Carbide Ltd. v. ACCE [1978 ELT J 180]. According to this judgment she points out that when any item of the goods is specified by the ISI that is certainly an evidence of the fact that the said item is known as such in the trade or commerce. In this context, observations in the judgment of Calcutta High Court delivered by Justice Sabyasachi Mukharji, as he was then, are very material. The learned advocate relies on the following observations :- "13. Therefore, when an item of goods is specified by the Indian Standards Institution, in my opinion, that is certainly evidence of the fact that the said item is known as such in the trade or commerce. The Indian Standards Institution is not dealing with the goods in future. Is must be presumed that these specifications were laying down standards of the goods that are known in the trade or commerce at the present moment. Therefore, when an item is specified in the specifications issued by the Standards Institute, it is certainly a piece of evidence which must be considered by the relevant authority...If, however, in the context of dispute that the item does not conform to the specification laid down in the Standards Institution, then whether the Article produced which was not according to the standard would be sub-standard or was known in the market as that kind of goods or not would have to be judged on evidence independent of this specification." 5. We have carefully considered the pleas advanced on both sides. We observe that there is no merit in the appeal. On the basis of the advertisement itself relied upon by the appellant-Collector, it cannot be said that the respondent company has held out its product as structural plywood. The advertisement merely mentions that it is concrete shuttering plywood which can be reused twenty times and it helps to build modern Indian temples. Nowhere the advertisement says that it is structural plywood. Learned advocate for the respondent company is on a very strong ground when she submits that different ISI specifications exist for structural plywood and shuttering plywood.

Thus marking them out as two different products known to the trade and industry. Her reliance on the judgments of Supreme Court and Calcutta High Court mentioned supra, is well founded. Reliance on dictionary meaning is not a safe guide for determining the trade and commercial parlance of the product as has been clearly held by the Hon'ble Supreme Court in the case of Krishna Carbon Papers Ltd. (supra).

6. Accordingly, we agree with both the lower authorities that shuttering plywood is different from structural plywood and they are not the same thing in commercial and trade parlance. Hence the appeal is dismissed and the cross-objections are upheld.