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PETITIONER: COLLECTOR OF CENTRAL EXCISE, KANPUR

       Vs.

RESPONDENT: KRISHNA CARBON PAPER CO.

DATE OF JUDGMENT16/09/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 2223            1988 SCR  Supl. (3)  12  1989 SCC  (1) 150        JT 1988 (4)   762  1988 SCALE  (2)880  CITATOR INFO :  F          1990 SC 556  (5)  R          1990 SC1579  (44)  R          1991 SC 407  (6)

ACT:     Central  Excises  and  Salt  Act,  I944:  Section  II-A- Central  Excise  Tariff- Items 17(2), 17(3)  and  68  Carbon paper  whether included in the description ‘paper  subjected to coating’. %     Construction  of Statutes: Language in a taxing  statute to  be  construed  in popular sense as  understood  by  that particular trade and not in strict technical sense.

HEADNOTE:     The respondent-company was engaged in the manufacture of Carbon Paper. It was served with a notice demanding  central excise duty on carbon papers cleared from its factory during the period 25.3.1979 to 24.9.1979 under section 11-B of  the Central Excises and Salt Act, 1944. The respondent stated in reply  that the notice was without jurisdiction  because  it was  only after 28.2.1982 that the product was subjected  to duty  under  sub-item (3) of item 17 of the  Central  Excise Tariff. The Assistant Collector of Central Excise, confirmed the  demand. The appellate Collector, however, accepted  the respondent’s  contention.  The Collector (Appeals)  and  the Appellate  Tribunal  dismissed the  Revenue’s  appeals.  The Tribunal  upheld the contention of the respondent  that  for the  period before its amendment in 1982, carbon paper  fell under Tariff item 68 and not under Tariff Item 17(2), as was contended by the Revenue.     Before  this Court the Revenue contends that (I)  carbon paper  being  akin to coated paper was  covered  since  1976 under  sub-item (2) of item 17 of the Central Excise  Tariff which  included paper which had been subjected  to  coating; (2) the introduction of specific name ‘carbon paper’ as sub- item (3) of item 17 in 1982 was with a view to subject it to a  different rate of duty; and (3) the amendment so  far  as item  17(3)  was concerned was mere  clarificatory  and  was introduced  ex  abundanti cautela. The  respondent,  on  the other  hand,  contends  that if  carbon  paper  was  already

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included  then  there was no purpose  of  introducing  these subsequent amendments.     Disposing of the appeal, it was,                                                     PG NO 12                                                     PG NO 13     HELD: (1) Where no definition is provided in the statute itself  for  ascertaining the correct meaning  of  a  fiscal entry,  reference  to a dictionary is not always  safe.  The correct guide is the context and the trade meaning, which is prevalent in that particular trade where that goods is known or traded. [21D-E]     (2)  If a statute contains language which is capable  of being construed in a popular sense, such a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in  its popular  sense,  meaning, of course, by the  words  "popular sense" that which people conversant with the  subject-matter with which the statute is dealing would attribute to it. The ordinary  words  in  every day use  are,  therefore,  to  be construed according to their popular sense. [23F-G]     (3)  Paper  simpliciter  cannot  include’  carbon  paper because  that  would not be in consonance with  the  popular understanding of the expression "paper". [23G-H; 24A]     (4)  Where  paper  of  a special  type  defined  in  the particular  statute as one including paper which  have  been subjected   to   various   treatments   such   as   coating, impregnating,  how that paper be understood, there  must  be evidence of that understanding. [24A]     (5)   There  is  authority  of  the   Indian   Standards Institute’s  publication  "Glossary of Terms used  in  Paper Trade  and  Industry"  to the effect that  carbon  paper  is understood as a coated paper in trade. [23A-C]     (6)  The trade notices and the tariff advices issued  by the Board are not relevant, as such, in construing items  in Tariff Schedule. [24E-F]     (7)  Understood  in the accepted  notion  of  construing entries of fiscal Statute not from a technical or scientific point  of view but from the point of view of the  people  in the  trade  dealing with that particular type of  goods  and having  regard  to  the evidence  of  the  Indian  Standards Institute  and in the absence of any other evidence  to  the contrary, on the basis of the definition of paper or it  was in the year 1976, carbon paper would come within item  17(2) of  the Tariff Items, and would not fall into the  residuary entry. [23B-C]     Sai  Giridhara Supply Co. v. Collector v.  Collector  of Central  Excise,  Bombay,  [1987] 23  E.L.T.  438  Tribunal; Commissioner of Sales Tax, U.P. v. M.S.N. Brothers,  Kanpur,                                                     PG NO 14 AIR  1973  S.C.  78; King v.  Planters   Nut  and  Chocolate Company Ltd., [1951] C.L.R. Ex. 122; Union of India and Anr. v.  Delhi  Cloth and General Mills Co. Ltd., AIR  1963  S.C. 791;  Grenfell  v. I.R.C., [1876] 1 Ex. D  242;  Porritts  & Spencer (Asia) Ltd. v. State of Haryana, [1979] I S.C.C. 82; Kores  (India)  Ltd. Thane v. Collector of  Central  Excise, Thane.  29 E.L.T. 627; State of Uttar Pradesh v. M/s.  Kores (India) Ltd., [1977] 1 SCR 837; Attorney-General v.  Winstar lay.. [1901] 6 E.R. 740; Khoday Industries Ltd. v. Union  of India,  [1986]  23 E.L.T. 337; Orient Paper  Mills  Ltd.  v. Union  of  India, [1969] 1 SCR 245;  M/s  Colgate  Palmolive (India) P. Ltd., [1979] E.L.T. J. 567; Dunlop India Ltd.  v. Union of India, AIR 1977 S.C. 597; Md. Qasim Larry,  Factory Manager, Sasamusa Sugar Works v. Muhammad Samsuddin,  [1964] 7 S.C.R. 419, referred to.

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JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2110  of 1987.     From the Order dated 8.6.1987 of the Customs Excise  and Gold  (Control) Appellate Tribunal, New Delhi in Appeal  No. ED/SB/145/84-C in Order No. 440/87-C.     M.K. Banerjee, Solicitor General, P. Parmeshwaran,  Mrs. Radha Rangaswamy and Mrs. Sushma Suri for the Appellant.     J.S.  Kapil,  Krishan  Kumar  and  Vimal  Dave  for  the Respondent.     The Judgment of the Court was delivered by     SABYASACHI MUKHARJI, J. The Collector of Central Excise, Kanpur, is the appellant in this appeal under section 35L(b) of the  Central  Excises and Salt  Act,  1944  (hereinafter called ‘the Act’). The period involved in this appeal is the assessment  period from 25th March, 1979 to 24th  September, 1979,  a  period of about six months.  The  respondent  M/s. Krishna Carbon Paper Company was engaged in the  manufacture of carbon papers. During the period from 25th March, 1979 to 24th September, 1979 the respondent manufactured and cleared from its factory a quantity of 5601 boxes, 20,288 reams  and 45   packets  of  carbon  papers  for  a  total   value   of Rs.7,67,498.40  without payment of any duty under  the  Act. The Superintendent of Central Excise Lakhimpur Kheri, issued notice  to the respondent demanding central excise  duty  on carbon  paper  cleared  during the  aforesaid  period  under section II-A of the Act. The respondent submitted a  written reply  stating  that  the notice  was  without  jurisdiction because  the  respondent had taken out  the  central  excise                                                     PG NO 15 licence  immediately on the direction of the department  and it  was  only after February 28, 1982 that the  product  was subjected  to  duty  under sub-item (3) of item  17  by  the Central   Excise  Budget  of  1982.  In  support   of   this contention,  the  respondent relied  on  Notifications  Nos. 187/82  and  69/82, both dated 28th February, 1982.  It  was contended  that  the carbon paper was a new item  which  was specified under sub-item (3) of item 17 of C.E.T.  According to  the revenue, however, that the recasting of Tariff  Item 17 in 1976 was irrelevant and that the carbon being akin  to coated paper (one side or both side) was covered under  sub- item (2) of item 17 of the C.E.T. since 1976. The submission of  the respondent was that sub-item (3) of item 17  of  the C.E.T.  covering the carbon paper including copy  paper  was inserted by the Central Excise Budget 1982, but it does  not make  any  retrospective change. It was,  according  to  the appellant,  an introduction of specific name or  variety  of paper  for being subjected to a different rate of duty.  The carbon  paper remained a coated paper already covered  under sub-item (2) of item 17 of C.E.T. The Assistant Collector of Central  Excise, Sitapur, by his order dated 27/30th  April, 1983,  confirmed the demand for basic excise duty  amounting to Rs.1,15,124,76 and special excise duty of Rs.5,756.23  on carbon paper cleared during the period from 25th March, 1979 to  24th September, 1979. The Appellate Collector,  however, set  aside the order of the Assistant Collector and  was  of the view that the carbon paper could not be classified under Tariff  Item  17(2) of the Act, as it was before  1982.  The Collector  (Appeals)  accepted the  respondent’s  contention that  the  carbon  paper was brought under  the  purview  of Tariff  Item  17  for the first time in  1982  when  it  was introduced as sub-item (3) of Item 17 of the First  Schedule to the Act with effect from 1st March, 1982. Being aggrieved

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thereby  the  appellant  preferred  an  appeal  before   the Appellate  Tribunal.  The Appellate Tribunal  dismissed  the appeal. Hence, this appeal.     The  question  for decision in this  appeal  is  whether carbon  paper  before  the introduction  of  Central  Excise Budget  in 1982 and consequential amendment in tariff,  fell under  item 68 of the First Schedule to the Act, as held  by the  Tribunal or under item 17(2) of the Tariff Item,  which was  claimed by the Collector of Central  Excise.  Following its  previous decision in the case of Sai  Giridhara  Supply Co. v. Collector of Central Excise, Bombay, [1987] 23 E.L.T. 438  Tribunal,  the Tribunal upheld the  contention  of  the respondent and held that for the period before the amendment of  Central Excise Budget, in 1982, carbon paper fell  under Tariff  Item 68 and not under Tariff Item 17(2), as it  then was.  The  Tribunal  did not go into  the  question  of  the                                                     PG NO 16 limitation,  namely,  whether the claim was  barred  in  any event  by the lapse of time in view of section 11-A  of  the Act. The Tribunal came to the finding that the carbon  paper in question fell under Tariff Item 68 of the Central  Excise Tariff.  Shri  Kapil on behalf of the  respondent  submitted before us that the claim, in any event, was barred by  lapse of  time in view of section 11-A of the Act. In view of  the fact  that the Tribunal did not decide this question  if  we are  persuaded  to reject the revenue’s contention  in  this appeal,  the matter has to be remanded back to the  Tribunal to  decide  this question as to limitation, as there  is  no decision of the Tribunal on this aspect of the matter.     Before  the  contentions  are appreciated,  it  will  be appropriate  to refer to the position of Tariff Item  17  at three different phases, namely, in 1975, after the amendment in  1976 and after the further amendment to item No.  17  by the Finance Act of 1982. Item No. 17 was amended with effect from  27th  February,  1982 and two  specific  entries  were added. These were (3) and (4). It is necessary to set out in the position at different points of time. It was as follows:               "Tariff Item 17-Position in I975 ------------------------------------------------------------ Item No.       Description of goods             Rate of Duty ------------------------------------------------------------     17. Paper, all sorts (including paste board, mill-board, strawboard  and  cardboard),  in  or  in  relation  to   the manufacture  of which any process is ordinarily  carried  on with  the  aid of power     (1) Cigarette tissue                       Rs. 3 per Kg.     (2) Blotting, toilet, target  tissue       Rs. 1 and 20         other than cigarette      tissue       paise per kg.       teleprinter,         typewritting;       manifold,  bank, bond, art  paper,       chrome   paper,  tubsized   paper,       cheque    paper,   stamp    paper,       cartridge  paper,  (waxed   paper,       polythelene     coated     paper),       parchment    and   coated    board       (including art board, chrome board       and for playing cards)                                                     PG NO 17  (3)  Printing  and  writing  paper,         90 paise per kg.       packing   and   wrapping    paper,       strawboard    and   pulp    board,       including  grey board,  corrugated       board, duplex and triplex  boards,       other sorts  (4)  All  other kinds of  paper  and        Re. 1 and 20

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     paper  board, not  otherwise           paise per kg.       specified.                       Position in 1976 17.      Paper  and Paper Board,All sorts    Thirty percent        (including paste-board, mill-board     ad valorem.       straw-board,     cardboard     and       corrugated   board),  in   or   in       relation  to  the  manufacture  of       which  any process  is  ordinarily       carried  on with the aid of  power   (1) Uncoated  and  coated  print   and       writing  paper (other than  poster       paper)  Twenty-five  per  cent  ad       valorem   (2) Paper board and all kinds of paper       (including  paper or paper  hoards       which   have  been  subjected   to       various    treatments   such    as       coating, impregnating corrugation,       creping and design printing),  not       elsewhere specified.     There was further amendment to Item No 17 by the Finance Act of l982. Item 16 was amended with effect from 27.2 1982, and  two specific entries were added. They are (3)  and  (4) which are reproduced below: ------------------------------------------------------------     Item      No.     Description of goods              Rate of Duty ------------------------------------------------------------     17.        xx               xx               xx     (3) Carbon and other copying  papers        32  1/2%  ad (including   duplicator  stencils)   and        valorem papers,  whether or not cut to size  and whether  or not put to in boxes                                                     PG NO 18     (4)  Boxes, cartons, bags and  other        32 1/2% ad packing-containers (including  flattened        valorem or folded boxes and flattened or  folded cartons),  whether  or not  printed  and whether  in  assembled  or   unassembled conditions."     The  short  question  with which we  are  concerned  is, whether during the relevant period, namely, 25th March, 1979 to  24th September, 1979 when the position  mentioned  above was  prevailing, whether carbon papers could be included  in "all  kinds  of paper including the paper  which  have  been subjected  to  coating", would come within sub-item  (2)  of item 17 as mentioned hereinbefore or under residuary item 68 of the Central Excise Tariff.     The  Tribunal  followed  a  previous  decision  in   Sai Giridhara Supply Co. v. Collector of Central Excise, Bombay, (supra).  There,  the  Tribunal had  discussed  the  various aspects of the matter and felt itself bound by the  decision of the Karnataka High Court to which reference will be  made later.  The  Tribunal has referred to  the  observations  of Buckley  L.J.  where the Lord Justice observed that  once  a precedent  was held to be a binding one, then  no  deviation therefrom was permissible within the judicial polity  except in  the well accepted categories of cases enumerated in  the judgment. Those contingencies, the Tribunal found, were  not applicable to the facts of this case.     It  is  well-settled  that in  order  to  ascertain  the correct meaning of a fiscal entry reference to a  dictionary is apt to be a somewhat delusive guide, as it gives all  the different  shades  of  meaning. In  the  instant  case,  our

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attention  was drawn to the extract from the Oxford  English Dictionary,  Volume III, page 436 where the meaning  of  the word "paper" has been given. It reads as follows:     "Paper  (pei’per),  sb.  Also 4  papure,  4-6  papir.  5 papire,  papyre, (paupire, 5-6 pauper, 5-7 papyr,  6  papre. [a.  AF.  papir = OF, Papier (=Pr. Papier, Cat.  Paper,  Sp. papel  ‘paper’,  It.  papira papyrus), ad.  L.  papyrus  the papyrus  or  paper-reed of the Nile,  also  writing-material made  of  it,  a  Gr. nanvpos  the  papyrus-reed.  From  the writing-sheets  made of the thin strips of papyrus the  name was transferred to paper made of cotton, and thence to paper of  linen  and  other fibres. These  extensions  took  place before the word became English, so that here its application to papyrus is only a later retrospective use.]                                                     PG NO 19     I. The simple word. *Without a or pl. (exc. as  denoting a particular kind).     I.  A  substance composed of fibres  interlaced  into  a compact  web, made (usually in the form of a  thin  flexible sheet, most commonly white) from various fibrous  materials, as  linen  and cotton rags, straw,  wood,  certain  grasses, etc.,  which are macerated into a pulp, dried,  and  pressed (and  subjected  to various other processes,  as  bleaching, colouring, sizing, etc., according to the intended use);  it is  used  (in  various forms  and  qualities)  for  writing; printing,  or  drawing  on,  for  wrapping  things  in,  for covering the interior of walls, and for other purposes."     Our  attention  was  also drawn to the  meaning  of  the carbon  paper  in  ‘Pulp  and  Paper  Manufacture’,   second edition. volume II which has been described as follows:     "Carbon  paper is made by coating paper with  a  mixture consisting principally of a wax and a pigment. The color  is obtained from the pigment, usually a carbon black of low oil absorption,  plus  toners,  usually lake  pigments  or  oil- soluble dyes, which are added to increase the blackness. The wax,  which  acts as a binder for the pigment, must  have  a viscosity  low enough to permit slight penetration into  the paper, but not so low that the wax strikes through or sweats oil. Waxes with a melting point between 105 to 120 F. and  a viscosity of about 60 or 70 Saybolt at 210 F. are  generally used.  The  principal wax used is  carnauba,  although  some ceresin,  beeswax,  candelilla,  ozokerite.  ouricury,   and synthetic  waxes  are also used. Special  grades  of  micro- crystalline  waxes  may be added to soften the  coating  and improve  the  printing qualities. In addition to  the  above ingredients,  non-drying  oils (mineral oils)  are  used  to soften  the  coating  and  control  the  amount  of  coating transferred  to the copy. Oleic acid is sometimes used as  a solvent for oil-soluble dyes.     All  carbon  papers  must be free  of  offset,  flaking, wrinkles,  curl,  or  other defects, and must  give  a  good impression  on  the  copy paper. The coating  must  be  hard enough not to smear in hot weather, but the exact degree  of hardness depends upon the intended use, that is, whether                                                     PG NO 20 the  paper  is  designed as a pencil  carbon,  a  typewriter carbon,  or a one-time carbon. The amount of coating  varies from a very thin coating used in making one-time carbons  to a  very heavy coating used in making  high-grade  typewriter carbons for multiple use. The latter, in which the paper may be reused up to 40 to 50 times, must have a coating of  very high color value and the coating must be compounded so  that only  a  small amount is transferred to the  copy  sheet.  A simplified  formula  for  a typewriter carbon  would  be  as follows:

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   Carnauba was.............................34%     Ozokerite.................................6%     Deeswax...................................7%     Petrolatum................................6%     Mineral Oil..............................25%     Carbon black.............................13%     Toners....................................6%     Oleic acid................................3%     In  the coating of carbon paper, the molten was  mixture is  applied  to the paper at a temperature of about  200  F. Coating  is done on a carbon paper coater which consists  of an inking roll which is supplied with coating directly  from a  bath or from a heated fountain. The inking roll  revolves in  a  direction opposite to that of the paper  web.  Excess coating is scraped off the paper by an equalizer rod and the sheet then passed over a water-cooled cylinder to chill  and harden  the coating. Crystallization of the wax occurs  Upon chilling,  and  this  process continues  over  a  period  of several  days. For this reason, it is customary for  cart-on manufacturers  to  age their coated paper for two  to  seven days before shipping.     It is absolutely essential that the coating be  absorbed evenly by the paper. Therefore the paper must have a  smooth surface,  uniformly high density, good formation  and  above all,  be  free of pinholes. Further  requirements  are  high strength,  low basis weight, and freedom from flaws such  as slime  spots  and  dirt  specks.  Because  of  these   rigid requirements, the base stock for carbon tissue is  difficult to make. The best grades made from new cotton or linen rags, or  from  manila hemp, whereas the cheaper grades  are  made                                                     PG NO 21 from  sulfate and sulfite pulps. The  stock is beaten for  a considerable  period of time, often up to thirty  hours,  in order to develop maximum strength. The stock is only lightly sized. Calcium carbonate is often used as a filler, but  the ash should not be over 5%. The basis weight is usually 4,  5 1/2,  7, or 10 lb. per ream (20 x 30-500). The 4- 1b.  paper is used when a large number of copies is to be made; the 5-- and 7-lb. papers are suitable for ordinary work.     Carbon  paper  under the specifications  of  the  Indian Standard Institute, is described as follows:    "Carbon Paper-paper coated (generally on one side) with a pressure  transferable  pigmented  layer,  used  for  making copies  at  the  same  time as  an  original  manuscript  or typescript is made."     It  is well-settled, as mentioned before, that where  no definition  is  provided in the statute itself, as  in  this case, for ascertaining the correct meaning of a fiscal entry reference  to a dictionary is not always safe.  The  correct guide,  it  appears in such a case, is the content  and  the trade  meaning. In this connection reference may be made  to the observations of this Court in Commissioner of Sales Tax, U.P.v.  M/s.S.N Bothers, Kanpur, AIR 1973 S.C.68 at page  80 para 5.     The  trade  meaning is one which is  prevalent  in  that particular  trade  where that good is known  or  traded.  If special type of good is subject matte of a fiscal entry then that  entry  must  be  understood in  the  context  of  that particular  trade,  bearing in mind  that  particular  word. Where,  however,  there is no evidence either way  then  the definition  given and the meaning following from  particular statute at particular time would be the decisive test.     In the famous Canadian case in King V. Planters Nut  and Chocolate Company Limited, [1951] C.L.R. Ex. 122 Cameron  J. observed  that  it is not botanist’s conception as  to  what

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constitutes  a fruit or vegetable....but rather  what  would ordinarily  in  matters of commerce in  Canada  be  included there should be the guide. Similarly, this Court has held in Union of India and Anr.V. Delhi Cloth and General Mills  Co. Ltd., A.I.R. 1963 S.C. 791 at page 79 para 12 that the  view of the Indian Standard Institute as regards what is  refined oil as known to the market in India must be preferred in the absence   of  any  other  reliable  evidence.  It  must   be                                                    PG NO 22 emphasised  in  view of he regards what is  refined  oil  as known  arguments  advanced  in this case  that  the  meaning should  be  as understood in the particular trade.  In  this case,  we are construing not paper as such but a  particular brand  of  paper with a meaning attributed to it.  Sub  item (2)of item 17 as was the position in 1976 paper referred  to all  kinds  of paper including paper or paper  boards  which have  been subjected to various treatments such as  coating, impregnating. So, therefore, if all kinds of paper including coated  paper is the goods, we have to find out the  meaning attributed  to  those goods in the trade of those  kinds  of paper where transactions of those goods take place.     It  is  a  well-settled principle  of  construction,  as mentioned   before, that where the word has a scientific  or technical meaning and also an ordinary meaning according  to common parlance, it is in the latter sense that in a  taxing statute  the  word must be held to have  been  used,  unless contrary intention is clearly expressed by the  legislature. This  principle is well-settled by a long line of  decisions of Canadian, American, Australian and Indian cases.  Pollock J. pointed out in Grenfell v. I.R.C., [1876] I Ex. D 242  at 248 that if a statute contains language which is capable  of being construed in a popular sense, such a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in  its popular  sense,  meaning, of course, by the  words  "popular sense’’  that   which people conversant  with  the  subject- matter with which the statute is dealing would attribute  to it.  The ordinary words in every day use are, therefore,  to be construed according to their popular sense. The same view was reiterated by Story, J. in 200 Chests of Tea, [ 1824]  9 Wheaton US 435 at 438 where he observed that the legislature does  not  suppose  our  merchants  to  be  naturalists,  or geologists, or botanists. See the observations of  Bhagwati, J.  as  the learned Chief Justice then was,  in  Porritts  & Spencer (Asia) Ltd. v. State of Haryana,[l9791] I S.C.C. 82. But there is a word of caution that has to be borne in  mind in this connection, the words must be understood in  popular sense,  that is to say, these must be confined to the  words used in a particular Statute and then if in respect of  that particular  items, an artificial definition is given in  the sense that a special meaning is attached to particular words in the Statute then the ordinary sense or dictionary meaning would  not  be applicable but the meaning of  that  type  of goods  dealt  with  by that type of goods in  that  type  of market,  should  be searched. In the instant case,  we  have "all kinds of papers including papers subjected to  coating, impregnating  etc."  If there is a market meaning  or  trade meaning  of that kind of a paper that should be adhered  to. In this case, there is no direct evidence how these peculiar goods  are dealt with in the particular market dealing  with                                                    PG NO 23 those  goods.  But  there is evidence how these  are  to  be understood in the light of the specifications of the  Indian Standard  Institute  which we have mentioned before.  It  is instructive  to  refer in this connection a passage  of  the

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Tribunal’s decision in Kores (India) Ltd. Thane v. Collector of Central Excise, Thane, (29 E.L.T. 627, where the Tribunal observed   that  on  the  point  whether  carbon  paper   is understood as a coated paper in trade, there is authority of the  Indian Standards Institute’s publication  "Glossary  of Terms   used  in  Paper  Trade  and   Industry"--IS:   4661. Therefore,  understood in the accepted notion of  construing entries of fiscal Statute not from a technical or scientific point  of view but from the point of view of the  people  in the  trade  dealing with that particular type of  goods  and having  regard  to  the  evidence  of  the  Indian  Standard Institute  and in the absence of any other evidence  to  the contrary, the Tribunal was justified in holding that on  the basis of the definition of paper as it was in the year  1976 carbon  paper  would  come within item  17(2)of  the  Tariff Items.     Learned  counsel for the respondent placed  reliance  on the observations of this Court in State of Uttar Pradesh  v. M/s.  Kores (India) Ltd., [977] 1 SCR 837 where  this  Court was  concerned with a notification under section 3-A of  the U.P. Sales Tax Act, 1948 The question fell for  consideration before this Court in that case was whether carbon paper  was taxable as paper and further whether ribbon was accessory or part of typewriter. This Court reiterated that a word  which is  not defined in an enactment has to be understood in  its popular  and commercial sense with reference to the  context in which it occurs. The word has to be understood  according to  the well established canon of construction in the  sense in  which  persons  dealing  with  and  using  the   article understand  it. For this principle this Court relied on  the observations  of  Lord  Tenterden  in  Attorney-General   v. Winstanley,  [1901]  6  E.R. 740  and  the  observations  of Pollock, J. in Grenfell v. Commissioners of Inland  Revenue, [  1876] 1 Ex. D 242 at 248. Pollock, J. was construing  the Stamp  Act,  where he correctly emphasised  that  the  words should  be  construed in popular sense meaning  thereby  the sense  in  which people conversant with  the  subject-matter with  which the Statute is dealing, would attribute  to  it. That  is  the correct test. This Court observed  further  at page  839 of the report that in popular parlance,  the  word ’paper’  is understood as meaning a substance which is  used for  bearing, writing, or printing, or for packing,  or  for drawing on, or for decorating, or covering the walls. Carbon paper  is not commonly understood as paper. This Court  thus held  that  paper simpliciter cannot  include  carbon  paper because  that  would not be in consonance with  the  popular                                                    PG NO 24 understanding of the expression "paper". But where paper  of a  special  type defined in the particular  statute  as  one including  paper  which  have  been  subjected  to   various treatments such as coating, impregnating, how that paper  be understood, there must be evidence of that understanding. In the absence of that evidence, the natural meaning  following from  the expression used in the statute should  be  adhered to.  In  that light, it appears to us that in  view  of  the facts  of  this  c..se  and in  the  principles  of  law  as prevailing in 1976 papers of all kinds including paper  with coating  and  impregnating  and  the  views  of  the  Indian Standard Institute, would include carbon papers .      Learned  counsel drew our attention to the decision  of the Karnataka High Court in Khoday Industries Ltd. v.  Union of  India and Ors., [1986] 23 E.L.T. 337 where the  learned single  Judge  held  that  carbon paper  is  an  article  of statutory  classifiable under item 68 of the Central  Excise Tariff  al1d not under item 17(2) as coated paper  prior  to

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its amendment with effect from 27th February, 1982. He  took into  account the Trade Notice No. 56/76 and  Tariff  Advice No.  5/76.  The  Trade Notice No. 5/76. The  issued  by  the Collector was based on the instructions issued by the Boarsl as per Tariff Advice No .5/76. Carbon paper was commercially recognised  only as an article of stationery  falling  under item  68  of the Central Excise Tariff and  not  under  Item 17(2). This was in respect of the position as it stood prior to  1976  when  paper  did  not  include  coated  paper   or impregnated paper. It appears from the said judgment of  the High  Court  that the Trade Notice 56/76 was issued  by  the Collector on 2nd March, 1976 and Item 17 was amended on 27th May, 11976 and sub-clause (2) as amended among other  things included  coated  paper. the trade notices  and  the  tariff advices  are not relevant, as such, in construing  items  in Tariff  Schedule. In this connection, reference may be  made to  the  observations of this Court in  Orient  Paper  Mills Ltd. V. Union of India, [1969] 1 S.C.R. 245 where this Court observed  that  a  quasi-judicial  body  exercising   quasi- judicial power is not bound by the directions of the  Board. There  is  no provision in the Act empowering the  Board  to issue  directions  to  the  assessing  authorities  or   the appellate  authorities  in the matter of  deciding  disputes between the persons who are called upon to pay duty and  the department.  Therefore, trade notices as such issued by  the Board are not relevant considerations.     The point which Shri Kapil, further, urged is that  Item No.  17  was  amended by the Finance Act  of  1982  and  two specific  entries were added, namely, Items nos.  17(3)  and 17(4)  we have noted before. His contention was that if  the                                                    PG NO 25 carbon paper was already there then there was no purpose  of introducing  these subsequent amendments. Shri Kapil  relied on  a Full Bench decision of the Government of India in  the case  of  M/s. Colgate Palmolive (India)  (P)  Ltd.,  [1979] E.L.T. J 567 where the Government of India observed that  it was  well settled law that the proper rule  of  construction applicable to items and entries occurring in Excise Schedule should  be to construe not in scientific or technical  sense but  in the sense as understood by the parties dealing  with or  commercially  conversant with them.  The  Government  of India  relied  on the observations of this Court  in  Dunlop India  Ltd. v. Union of India, A.I.R. 1977 S.C. 597. So  far as that principle is concerned, this is applicable. It  must be  understood by the persons dealing with  this  particular type  of  goods.  We  are  concerned  here  not  with  paper simpliciter  or how it is understood in common parlance  but paper  with  a particular definition at the  relevant  time, namely, all kinds of paper (including paper or paper  boards which  have  been subjected to various  treatments  such  as coating,  impregnating)  stated  in that  context.  In  that context,  it  cannot  be said that carbon  paper  cannot  be coated  paper as such. Shri Kapil submitted that  if  carbon paper  was there then there was no purpose  for  introducing two  sub-items  by  the Finance Act  of  1982.  The  Finance Minister,  however, observed in his speech (extract of  para 123 at page 38-39 of Part ’B’ dated 27th February, l982)  as follows:    "123.  I also propose to rationalise and restructure  the tariff  relating  to  paper and paper  boards,  the  primary objective being to exempt small scale paper converters  from payment  of  excise  duty and to release  them  from  excise control. In order to recoup the consequent loss in  revenue, I  propose  to  raise the basic excise  duty  on  industrial varieties  of paper and paper boards by a small margin of  2

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1/2  per cent ad valorem. However, certain converted  papers of high value-added categories are proposed to be subject to basic excise duty at 32 1/2 per cent ad valorem.  Similarly, specified  articles  made  of  paper  and  paper  board  are proposed to be brought within the purview of the tariff item but effectively restricting the levy to printed cartons  and printed boxes.     It  appears  that the Finance Minister  was  adding  two items, one was 17(3)-carbon and other copying papers and the second  was  17(4)-boxes, cartons, bags  and  other  packing containers.  He  mentioned in his speech that  in  order  to recoup the consequent loss in revenue, he proposed to  raise                                                    PG NO 26 the  basic excise duty on industrial varieties of paper  and paper boards by a small margin of 2 1i2 per cent ad valorem. Tariff Advice No. 5/76 contained the following statement:     "TARIFF ADVICE No. 5/76-     (BOARD’S LETTER F. No. 61/2/73-CX. 2 dated 12.2.76.)     Sub:  Paper-Carbon  paper  and  Stencil   Paper-Whether     excisable under Item No. 17 of.     A  doubt has been raised whether  carbon/stencil  paper, produced  by conversion of duty paid base paper,  should  be treated as paper falling under tariff item 17(4) of  Central Excise Tariff or as on item of stationery, outside the scope of item No. 17 of C.E. Tariff.     2.  The  matter  was considered in  the  Central  Excise Tariff  Conference  held  at  Cochin on  the  13th  to  15th November,  1975. It was reported that  carbon  paper/stencil paper  is  sold in the market mostly cut to size  by  retail stationers. The Indian Customs Tariff Guide has also treated Carbon paper as an item of stationery and not as paper.  The Conference   was   therefore,  of  the  view   that   carbon paper/stencil  paper, were commercially recognised  only  as articles of stationery.     3.  The Board is accordingly advised that  carbon  paper and   stencil  paper  should  he  treated  as  articles   of stationery.  and therefore outside the purview of  item  No. 17-C.Ex . Tariff.     4 Receipl of this letter may kindly be acknowledged.     These  are  relevant  or proper materials  to  apply  to construe the meaning of the Tariff Item. Moreover. in proper light  these  do not militate against the view  that  carbon paper in 1976, was included in the special type of paper. as defined at that time.     In  the  aforesaid  view of the matter, we  are  of  the opinion that as at the relevant time the definition of paper                                                    PG NO 27 being paper board and all kinds of paper (including paper or paper boards which have been subjected to various treatments such  as  coating and impregnating and in the light  of  the I.S. specifications as noted hereinbefore and there being no other reliable evidence as to how coated paper is understood in  the  market, except the opinion of the  Indian  Standard Institute  in  its  specifications,  in  our  opinion,   the Tribunal was not right in the view it took .      The Tribunal in Kores (India) Ltd., Thane, v. Collector of  Central Excise, thane, (supra) expressed the  view  that carbon  would  fall  under item 17(2) of  the  Tariff  Items relying  on ISI specifications. There was authority  of  the Indian Standards Institute’s publication "Glossary of  Terms used  in paper Trade and Industry"-Is 4661. In view  of  the facts as appeared in paragraph 14 of the Tribunal’s judgment in  Kores  (India)  Lid.,Thane,  v.  Collector  of   Central Excise,Thane,    (supra),   where   the   basis    of    the classifications  of ISI in its specifications is  explained,

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we are of the opinion that the carbon paper fell under  item 17(2)  as it stood at the relevant period germane  for  this appeal,  before  1982, and not in residuary  item  No.68  of C.E.T.     Learned Solicitor General submitted that this  amendment so  tar as item 17(3) was concerned was  mere  clarificatory and  was introduced ex abundanti cautela. Our attention  was drawn  to  the decision of this Court in  Md.  Qasim  Larry, Factory  Manager,Sasamusa Sugar Works v. Muhammad  Samsuddin and Anr., [1964] 7  S.C.R.419 where the Court was  concerned with  the  question whether the term "wages" as  defined  by section  2(vi) of the Payment of Wages Act,  1936  including wages  fixed in an industrial dispute between  the  employer and  the  employee. The question had to be answered  in  the light  of the definition prescribed by section 2(vi)  before it  was  amendement   in  1958.  The  subsequent   amendment expressly provided by section 2(vi)(a) that any remuneration payable under any award or settlement between the parties or order  of a Court. would be included in the main  definition under  section  2(vi).  In the view we  have  taken  on  the construction  of the expression as it stood in the  relevant time,  it  is  not necessary to rest  our  decision  on  the question whether the amendment was clarificatory or not.     In the light of the evidence referred to by the Tribunal in  Kores (India) Ltd. Thane v. Collector of Central  Excise Thane,  (supra) and in the light of the definition of  paper in C.E.T. Item 17( l ) as it stood at the relevant time,  it is  sufficient to hold that it was covered by item 17(2)  of                                                    PG NO 28 C.E.T.  and would not fall into the residuary entry.In  that view  of the matter, the decision of the Tribunal cannot  be sustained  on  this point and the appeal  must  be  allowed. However, as the point of limitation has not been decided  by the  Tribunal,  we remand the case back to the  Tribunal  to decide  that  question having regard to the facts  found  in this  case.  The appeal is, therefore, disposed  of  in  the light  of  what is stated aforesaid. In the  facts  of  this case, the parties will pay and bear their own costs. R. S . S.                                Appeal disposed of.