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PETITIONER: UNION OF INDIA AND ORS.

       Vs.

RESPONDENT: GUJARAT WOOLLEN FELT MILLS

DATE OF JUDGMENT07/04/1977

BENCH: GUPTA, A.C. BENCH: GUPTA, A.C. BEG, M. HAMEEDULLAH (CJ) KAILASAM, P.S.

CITATION:  1977 AIR 1548            1977 SCR  (3) 472  1977 SCC  (2) 870  CITATOR INFO :  RF         1986 SC 626  (7,16)

ACT:             Central  Excises and Salt Act, 1944---Schedule  I  Entry         21--Non-woven  felts manufactured out of woollen  fibres  by         machine  pressing, whether "wollen fabrics" for the  purpose         of   levy  of excise  duty--Rule of interpretation of  items         in  a statute.

HEADNOTE:             An excise duty of Rs. 55055.87 was levied and  collected         from the respondent-firm by the Excise authorities  treating         the   non-woven felts manufactured by them as "woollen  fab-         rics"  covered  by  entry 21 in Schedule I  to  the  Central         Excises and Salt Act, 1944.  The Gujarat High, Court allowed         the  writ petition filed by the respondent and held that the         respondent’s products were not "woollen fabrics" and direct-         ed the refund of the entire sum collected as excise duty.         Dismissing the appeal by certificate to this Court,             HELD:  (1) The well-known rule in interpreting items  in         statutes  is  that resort should be had not to the scientif-         ic  or  the  technical meaning of such terms  but  to  their         popular  meaning  or the meaning attached to them  by  those         dealing  in  them, that is to say, their  commercial  sense.         [474 A-B]             Commissioner  of  Sales Tax, Madhya Pradesh,  Indore  v.         M/s. Jaswant Singh Charan Singh, AIR 1967 SC 1454, applied.             (2)  Fabric means woven material.  Entries 19 to  22  in         the Schedule  deal with fabrics.  Entry 21 describes woollen         fabrics as meaning all varieties of fabrics manufactured out         of  wool, barring the exceptions mentioned, including  blan-         kets,  lohis,  rugs, shawls and embroidery in the  piece  in         strips or in motifs. The word "fabric" in entry 21 has  been         used  to mean woven material in which sense it is  popularly         understood.   The term "woollen fabrics" in that  sense  was         not  wide enough to cover non-woven material which is  wool-         based.  Blankets. rugs and shawls etc. have been specifical-         ly included in the entry out of abundant caution to indicate         that  "woollen fabrics" in entry 21 means not  only  woollen         garments  but also woollen material used as covering or  for         similar other purposes. [473 H, 474 F-G]

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           (3)  It  is  plain from entry 21 in Schedule  1  to  the         Central  Excises  and Salt Act, 1944 that  the  respondent’s         products  did not fall within it as they are nonwoven  felts         from woollen fibres. [474 C]-

JUDGMENT:             CIVIL  APPELLATE JURISDICTION: Civil  Appeal  No.   1037         of 1971.          (From  the Judgment and Order dated the 17th June, 1971  of         the  Gujarat  High Court in Special  Civil  Application  No.         112/67).             V.P. Raman,  Addl. Sot.  Genl.  and Girish  Chandra, for         the appellants.           G.N. Dikshit and R.N. Dikshit, for the respondent.             The Judgment of the Court was delivered by            GUPTA, J.--The respondent is a partnership firm  manufac-         turing  non-woven felts from woollen fibres which  are  uti-         lised  for  the purpose of filtration in  heavy  industries.         Between  August  25,  1965 and January 5.  1967  the  Excise         authorities compelled the respondent to pay Rs. 55,055/87 p.         as excise duty on its products.  The respondent         473         filed a writ petition in the High Court of Gujarat at  Ahme-         dabad  for  quashing the order levying excise  duty  on  the         felts manufactured by the respondent treating them as  ’woo-         llen  fabrics’  covered  by entry 21 in Schedule  I  to  the         Central Excises and Salt Act, 1944 (hereinafter referred  to         as  the  Act).   The High Court allowed  the  writ  petition         holding  that  the respondents products  were  not  ’woollen         fabrics’ and directed refund of the sum of Rs. 55,055/87  p.         collected as excise duty from the firm.  The Union of  India         has preferred this appeal on certificate of fitness  granted         by  the High Court questioning the correctness of the  deci-         sion.               The  only question in the appeal is whether the  felts         manufactured by the respondent are "woolien fabrics"  within         the meaning of entry 21 in the first schedule to the Act.The         writ  petition  describes  the process  of  manufacture  and         states that the thickness of the felts produced varies  from         1  mm.  to 50 mms. according to. the  specification  of  the         customers  and  that these are really  machine  pressed  raw         woolwaste.    It   is   stated  further   that   the   felts         manufactured  .by the process described are  neither  sheets         nor fabrics, they are not material from which garments could         be  prepared  nor  they could be used ’as  covering  or  for         similar  other purposes.  Entry 21 in the first schedule  to         the Act reads:                              "21. WOOLLEN FABRICS--                         "Woollen  fabrics" .means all  varieties  of                       fabrics  manufactured wholly of wool or  which                       contain 40 per cent, or more by weight of wool                       and includes blankets, lohis, rugs, shawls and                       embroidery  in  the  piece, in  strips  or  in                       motifs:                             Provided that in the case of  embroidery                       in  the  piece, in strips or  in  motifs,  the                       percentage  referred  to  above  shall  be  in                       relation to the base fabrics which are embroi-                       dered--_                (1) Woollen fabrics, other than    Ten percent.                 embroidery in the piece, in       ad valorem.                 strips or in motifs.              ---------                 (2) Embroidery in the piece in     The duty for

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                 strips or in motifs, in or in    the time being                   relation to the manufacture      leviable on the                   of which any process is ord-     base fabrics,                   inarily carried on with the      if not already                   aid of power.                    paid, plus                                                    twenty percent.                                                    ad va’orern                        Explanation-----"  Base fabrics" means   fab-                       rics falling’  under sub-item (1) of this Item                       which are subjected to the process of  embroi-                       dery."          0             Are  the  products of the respondent’s  factory  woollen         fabrics  ? Fabric means woven material.  The articles  manu-         factured  by  the respondent, as already stated,  are   non-         woven felts from  woollen fibres.  It is contended on behalf         of the appellant, Union of India,         474         that  in  a technical sense the felts  manufactured  by  the         respondent  would still be woollen fabrics.  The  well-known         rule  in interpreting items in statutes like the one we  are         concerned  with  is that "resort should be had  not  to  the         scientific  or  the technical meaning of such terms  but  to         their  popular  meaning or the meaning attached to  them  by         those  dealing in them, that is to say, to their  commercial         sense". (Commissioner of Sales Tax,  Madhya  Pradesh, Indore         v.  M/s. Jaswant Singh Charan Singh)(1).  The High Court has         held  that   a trader dealing in woollen fabrics  would  not         regard the respondent’s products as woollen fabrics, but  it         does not appear that there is any evidence on the record  of         the  case to support the finding.  However, an  inquiry  re-         garding  the meaning of the term woollen fabrics as  commer-         cially understood would be relevant only when there is doubt         as to the sense in which the term has been used in entry 21;         it  seems to  us  plain  from  the  entry  read as  a  whole         that  the   respondent’s products did not  fail  within  it.         Entries  19  to 22 in the schedule all  deal  with  fabrics.         Entry 19 deals with cotton fabrics which is stated to cover,         barring  the exceptions specified, all varieties of  fabrics         manufactured  either  wholly or partly from cotton  and  in-         cludes, dhoties, sarees, chadders, bed-sheets,   bed-spreads         etc.  Entry 20 relates to slik fabrics which is said to mean         all  varieties  of  fabrics manufactured. either  wholly  or         partly  from silk with certain exceptions and  includes  em-         broidery  in  the piece, in strips or in  motifs.  Entry  22         relates  to rayon or artificial silk fabrics which  also  is         said  to mean all varieties of fabrics  manufactured  either         wholly  or  partly from rayon or artificial silk  with  some         exceptions  and includes embroidery in the piece, in  strips         or in motifs etc.  In this group, entry 21 describes woollen         fabrics  as meaning all  varieties of fabrics   manufactured         out  of  wool, barring the exceptions  mentioned,  including         blankets,  lohis, rugs, shawls and embroidery in the  piece,         in  strips or in motifs.  If the term ’woollen  fabrics’  in         this  entry  had been used in its  technical  or  scientific         sense  and, if in that  sense, it was wide enough  to  cover         non  woven material which is wool-based, then it  is  diffi-         cult  to explain why the entry should  specifically  mention         blankets,  rugs and shawIs as being included within  it.  No         one  could possibly be in any doubt in respect of these  few         items if the term was so pervasive, and there was no  reason         for  singling out these specific objects.  On the  contrary,         the   mention of these items  suggests that the  word  ’fab-         rics’  in entry 21 has been used to mean woven  material  in         which  sense it is popularly understood, and blankets,  rugs

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       and shawls etc. have been specifically included in the entry         out  of abundant caution to indicate that ’woollen  fabrics’         in entry 21 means not only woollen garments but also woollen         material  used as ’covering or for similar  other  purposes.         We  therefore find no reason to take a view  different  from         that taken by the High Court.         The appeal is dismissed with costs.         S.R.                                      Appeal dismissed.         (1) A.I.R. 1967 S.C. 1454.         475