http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: MAHINDRA ENGINEERING AND CHEMICAL PRODUCTS LTD.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT21/01/1992

BENCH: SAHAI, R.M. (J) BENCH: SAHAI, R.M. (J) PANDIAN, S.R. (J)

CITATION:  1992 SCR  (1) 254        1992 SCC  (1) 727  JT 1992 (1)   276        1992 SCALE  (1)95

ACT:      Central  Excise-Tariff-Item NO.  22  F(4)-Construction- Legislative intention-"Following namely", "that is to  say", "other manufacture", "manufacture therefrom"-Meaning.      Central Excise-Tariff-Item No.22F (4), Item No.68-Glass fabric  manufactured out mineral fiber-Whether  exigible  to duty-Arc  Chamber  housing manufactured from  glass  fabric- Duty-Exigibility.

HEADNOTE:      The appellant was manufacturing the tubular shaped  are chamber housings from glass fabrics.      The  Assistant Collector levied duty under tariff  Item No.22F(4) of the Central Excise and Tariff Act. It was  held that the goods were covered under tariff item 22F(4) as  the percentage of the mineral fibre yarn was predominant in  the weight.      The   Collector   in  appeal  held   that   the   words "manufactured  therefrom"  in tariff Item No.  22F(4)  would include not only first manufacture of mineral fibre and yarn but  also subsequent manufacture where in mineral  fibre  or yarn was used.      The  Tribunal affirmed the order of the  Collector,  on construction of the expression "manufacture therefrom",  and held  that  the goods should be  manufactured  from  mineral fibre and yarn, that glass fabric was an intermediate  stage between  glass are housing and glass fibre or yarn, yet  the goods  were exigible to duty under item 22F(4), as  the  arc housing  chamber did not cease to be manufactured  of  glass fibre/yarn,  merely because the fibre/yarn was  first  woven into glass fabric, and that if glass fibers/yarn were to  be woven  into  fabrics  before  they  could  be  used  in  the manufacture  of the housing, the housing would not cease  to be a manufacture of glass fibres/yarn.      A five-judge Bench of the CEGAT did not agree with  the interpretation                                                        255 put by the Tribunal and held that the entry applied to  only those  products  the manufacture or  attendant  function  of which was to do something with mineral fibre and yarn and it did  not apply to a product in which only mineral  fibre  or yarn was used.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

    Against the order of CEGAT, the appellant  manufacturer preferred the appeal before this Court by special leave.      Allowing the appeal, this Court,      HELD: 1.01. The entry is in two parts, one, descriptive and the other explanatory.  Both are to be read together  to bring  out the scope and extent of its applicability  fully. The first declares the items which are exigible to duty  but restricts it to only those in relation to the manufacture of which  any process is ordinarily carried on with the aid  of power.  The words ‘following namely’ used in the second part explains the items that were intended to be covered in  this entry.   Use  of expressions ‘namely’ or ‘that  is  to  say’ followed  by  description  of goods  is  usually  exhaustive unless there are strong indications to the contrary. [257  G 258 A]      1.02. Language of serial no. 4 is plain and simple.  It intends to clarify the expression ‘manufacture therefrom’ by expanding it to include in its ambit even those manufactures in  which fibre or yarn predominated in weight.  But it  did not  go beyond it and purported to include manufactures  out of manufacture of a commodity in which mineral fibre or yarn predominated.   Any  other  construction  would  result   in altering  the principal clause.  That would be  contrary  to the scheme of the entry and principle of construction.   Its only effect was to include even those manufactures in  which mineral fibre or yarn or both predominate.  It could not  be extended  to  those  goods which were  manufactured  out  of certain  commodity in which mineral fibre or yarn  had  been predominately used. [258 A-B, D]      1.03.  The word ‘other manufacture’ has to be  read  in the  same sense as ‘manufacture therefrom’ used in the  main part.   The  only  difference is that  the  scope  has  been widened   to  include  not  only  those  goods  which   were manufactured from mineral or yarn but even to those in which they predominate. [258 D-E]      2.01.   Glass fabric manufactured out of mineral  fibre is exigible to duty under Item no. 4 but arc chamber housing manufactured                                                        256 from glass fabric cannot be placed at par with glass  fabric and  cannot  be considered as ‘other manufacture’  of  glass fibre or yarn.  [258 F]      2.02.   The  arc chamber housing  manufactured  out  of glass  fabric  are held to be exigible to  duty  during  the relevant period under item no.68.  [258 F]

JUDGMENT:      Geep  Flashlight Industries v. Union of India,  1986(6) ELR 430, referred to. &      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3251 of 1984      From  the  Judgment  and Order dated  8.3.1984  of  the Customs  Excise and Gold (Control) Appellate  Tribunal,  New Delhi  in Appeal No. ED(SB)(T) A.No 1132 of  1983-D.  [Order No.168/84-D).      S.Ganesh and Amitabh Marwah for the Appellants.      C.V. Subba Rao for the Respondents.      The Judgment of the Court was delivered by      R.M.SAHAI,  J.  The  question of law  that  arises  for consideration  in this appeal directed against Order of  the Customs,  Excise  &  Gold  (Control)  Tribunal  (hereinafter referred to as ‘CEGAT’), New Delhi, is if the tubular shaped

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

arc  chamber  housings manufactured by the  appellants  from glass  fabrics which they purchased from  manufacturers  was exigible  to  duty  under tariff Item No. 2  F(4)  or  under residuary Item No. 68 of the Central Excise and Tariff Act.      Manner of manufacture of arc chamber housing was not in dispute  nor there was any dispute that it was  manufactured from glass fabric purchased from open market in which  glass fibre  predominated.  The issue was whether the arc  chamber manufactured  from  glass fibre, a product  of  intermediate stage  and  not  directly from mineral  fibre  or  yarn  was exigible to duty under Item 22F(4) which read as under:          "22.F.   Mineral fibres and yarn and  manufacturers          therefrom, in or in relation to the manufacturer of          which any process is ordinarily carried on with the          aid of power, the following, namely;                                                        257          (1)  Glass fibres and yarn including glass  tissues          and glass wool;          (2) asbestos fibre and yarn;          (3)  any  other  mineral  fibre  or  yarn,  whether          continuous  or  otherwise, such as, slag  wool  and          rock wool;          (4) Other manufacturers in which mineral fibres  or          yarn or both predominate or predominates in weight.           Explanation:-  This item does not include asbestos           cement products." The  Assistant  Collector held that the goods  were  covered under  tariff Item 22 F(4) as the percentage of the  mineral fibre yarn was predominant in the weight.  In appeal it  was held that the words "manufactured therefrom" in tariff  Item No.  22  F(4) would include not only  first  manufacture  of mineral  fibre  and  yarn but  also  subsequent  manufacture wherein  mineral  fibre  or yarn was used.   The  order  was affirmed  by the Tribunal on construction of the  expression "manufacture  therefrom" which were capable of a simple  and straight away meaning that the goods should be  manufactured from  mineral  fibre and yarn.  The CEGAT  held  that  glass fabric was no doubt an intermediate stage between glass  arc housing and glass fibre or yarn yet the goods were  exigible to  duty under 22 F(4), as the arc housing chamber  did  not cease  to be manufacture of glass fibre/yarn merely  because the  fibre/yarn  was  first woven  into  glass  fabric.   It rejected   the  claim  of  appellant  as  the   construction suggested would result in reading the word directly in  item No. 22 F(4).  It was found that if glass fibres/yarn were to be  woven  into  fabrics before they could be  used  in  the manufacture  of the housing, the housing would not cease  to be a manufacture of glass fibres/yarn.  Subsequently a five- Judge   Bench   of  the  CEGAT  did  not  agree   with   the interpretation  put by the Tribunal in this case,  and  held that   the  entry  applied  to  only  those   products   the manufacture  or  attendant  function  of  which  was  to  do something with mineral fibre and yarn.  It did not apply  to a product in which only mineral fibre or yarn was used.      The  entry  is in two parts, one  descriptive  and  the other  explanatory.  Both are to be read together  to  bring out  the scope and extent of its applicability  fully.   The first  declares the items which are exigible to  duty.   But restricts it to only those in relation to the manufacture of which  any process is ordinarily carried on with the aid  of power.  Having thus specified the items and the condition on which  it  would  be covered in the  entry  it  proceeds  to amplify it in the second part by using the words ‘following                                                        258 namely’  thus explaining the items that were intended to  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

covered  in  this entry.  Use of  expressions  ‘namely’,  or ‘that is to say’ followed by description of goods is usually exhaustive  unless  there  are  strong  indications  to  the contrary.  Language of serial no. 4 is plain and simple.  It intends to clarify the expression ‘manufacture therefrom’ by expanding it to include in its ambit even those  manufacture in  which fibre or yarn predominated in weight.  But it  did not  go beyond it and purported to include manufactures  out of manufacture of a commodity in which mineral fibre or yarn predominated.   The entry was added in 1980.  That  gave  an occasion for the learned counsel for Union of India to  urge that  it was intended to evade payment of duty  by  widening and  expanding the ambit of entry.  In our opinion the  item cannot be construed in the manner suggested.  The entry  was widened  but  to  the extent  indicated  above.   Any  other construction would result in altering the principal  clause. That  would  be  contrary to the scheme  of  the  entry  and principle  of construction.  Its only effect was to  include even  those manufactures in which mineral fibre or  yarn  or both  predominate.  It could not be extended to those  goods which  were manufactured out of certain commodity  in  which mineral fibre or yarn had been predominantly used.  The word ‘other  manufacture’  has to be read in the  same  sense  as ‘manufacture  therefrom’  used in the main part.   The  only difference is that the scope has been widened to include not only  those  goods which were manufactured from  mineral  or yarn  but  even  to those in which  they  predominate.   The construction  as suggested by the learned counsel for  Union of  India shall not only change the nature of entry  but  it shall result in extending to manufactures at any stage.   In Geep Flaslight Industries v. Union of India,[1986]6 ELR 430, the entry or ‘articles of plastic’ was construed to mean  as article  made wholly of commodity commonly known as  plastic to avoid any artificial reading.  The word ‘wholly’ was read in  the  entry  to render it workable.   Thus  glass  fabric manufactured out of mineral fibre is exigible to duty  under item  no. 4 but arc chamber housing manufactured from  glass fabric cannot be placed at par with glass fabric and  cannot be considered as ‘other manufacture’ of glass fibre or yarn.      For  reasons stated above this appeal succeeds  and  is allowed.   The orders of Tribunal, Collector  and  Assistant Collector   are   set  aside.   The  arc   chamber   housing manufactured out of glass fabric are held to be exigible  to duty  during  the  relevant period under item  no  68.   The appellant shall be entitled to its costs. V.P.R.                                       Appeal allowed.                                                        259