SUPREME COURT OF INDIA
Collector of Central Excise, Calcutta
Vs.
Messrs Alnoori Tobacco Products
C.A.Nos.4502-4503 of 1998
(S. N. Variava and Arijit Pasayat JJ.)
21.07.2004
JUDGMENT
Arijit Pasayat, J.
1. These appeals are directed against the common judgment of the Customs,
Excise and Gold (Control) Appellate Tribunal, Eastern Branch, Calcutta (in
short the 'CEGAT') which is being assailed by the Central Excise authorities.
By the impugned judgment, CEGAT held that tobacco powder obtained by crushing
of tobacco leaves, stems, stalks and butts are classifiable under tariff
sub-heading 2401.00 as un-manufactured tobacco and not classifiable as manufactured
tobacco under sub-heading 2404.90 of the Schedule to the Central Excise Tariff
Act, 1985 (in short the 'Tariff Act').
2. Background facts in a nutshell are as follows:
“The respondents are having licence under the Central Excise and Salt Act, 1944
(in short the 'Act'). They are engaged in manufacture of 'Gul'. While
scrutinizing the records, the Assistant Collector of Central Excise,
Barrackpore Division, Calcutta noticed that during the period from 1.2.90 to
31.7.90 manufactured tobacco powder/ dust fall under sub-heading 2404.90 of the
schedule to the 'Tariff Act'. He felt that without any justifiable reason, duty
involving Rs. 8, 871.65 (both basic and special) was not paid, statutory
records were not maintained, thereby contravening provisions of Rules 174,
9(1), 52, 52A, 54 and 226 of the Central Excise Rules, 1944 (in short
the 'Rules'). Show cause notice was issued on 30.1.1991 proposing to levy the
demand from 1.8.90 to 31.12.1990. Similarly show cause notices were also issued
for the demands for the period from 1.1.1991 to 31.5.1991 and from 1.6.1991 to
24.7.1991.”
3. The Superintendent of Central Excise of the concerned Range issued show
cause cum demand notice. After hearing the respondents the Assistant Collector
held that tobacco powder / dust emerging by crushing of un-manufactured tobacco
leaves is a distinct product having distinct name and character and fall under
sub-heading 2404.90. The demands were confirmed.
4. Appeals were preferred before the Collector of Central Excise (Appeals),
Calcutta along with an application for stay. The stay application was rejected
by the Collector (Appeals) holding that no case for stay of realization of duty
demanded was made out. Since the stay order was not complied with by depositing
the amount of duty demanded, the appeals were dismissed for non compliance of
Section 35(F) of the Act. Similar was the position in respect of demands raised
against both the respondents.
5. The respondents preferred appeals before the CEGAT. As noted above, the CEGAT
was of the view that the issue involved related to the tariff sub-heading
applicable to the product.
6. The respondents who were appellants before the CEGAT submitted that the
issue stood decided in view of the decisions rendered in two cases, i.e. Sree Biswa
Vijaya Industries vs. C.C.E., Bhubneshwar1 (Tribunal) and
Shamsuddin Akbar Khan & Co. vs. Commissioner of Central Excise, BBSR (Order
no. A-888/Cal/97 dt. 29.7.1997).
7. Learned counsel appearing for the Central Excise authorities submitted that
in Shree Chand Agarwal vs. Collector of Central Excise2 (Tribunal)
it was categorically held that tobacco powder in various forms and combinations
falls in the manufactured category and therefore tobacco powder is classifiable
under tariff sub-heading 2404.90. The Tribunal noted that issue in Shree
Chand's case (supra) related to classification of tobacco dust and not of
tobacco powder and what was stated in paragraph 16 in the said case was not a
binding precedent and was merely in the nature of obiter dictum. However, it
held that other two decisions relied upon by the present respondents were
directly in issue. Accordingly, the appeals were allowed.
8. Learned counsel appearing for the appellant submitted that the only question
that the CEGAT could have decided related to the propriety of dismissal of the
appeals by the Collector (Appeals) when there was non compliance of the order
in terms of Section 35(F) of the Act. It could not have gone into the merits.
Even otherwise when there is a categorical finding recorded by the adjudicating
authority that the tobacco powder was a different commercial commodity and an
article having distinct name and character, this factual finding could not have
been disturbed by the CEGAT without any material to the contrary. The decisions
in the two cases relied upon by the CEGAT were based on different factual
premises.
9. In response, learned counsel for the respondents submitted that the factual
position was identical and, therefore, the CEGAT was justified in placing
reliance in the two decisions referred to above and to hold that tobacco powder
was not a different product from tobacco leaves.
10. It is undisputed that the First appeals filed by the present respondents
were dismissed on the ground of non compliance with the requirements of Section
35(F) of the Act. The CEGAT should have primarily considered that aspect. No
finding has been recorded by the CEGAT. Additionally, we find that unlike the
two cases relied upon by the CEGAT there was a categorical finding recorded on
facts by the adjudicating authority that the tobacco powder obtained by
crushing of un-manufactured tobacco leaves is a different commercial product
having a distinct name and character. In the cases relied upon by the CEGAT it
was categorically noticed that there was no material placed by the Central
Excise authorities to show that a different commercial product had come into
existence.
11. Courts should not place reliance on decisions without discussing as to how
the factual situation fits in with the fact situation of the decision on which
reliance is placed. Observations of Courts are neither to be read as Euclid's
theorems nor as provisions of the statute and that too taken out of their
context. These observations must be read in the context in which they appear to
have been stated Judgments of Courts are not to be construed as statutes. To
interpret words, phrases and provisions of a statute, it may become necessary
for judges to embark into lengthy discussions but the discussion is meant to
explain and not to define. Judges interpret statutes, they do not interpret
judgments. They interpret words of statutes; their words are not to be
interpreted as statutes. In London Graving Dock Co. Ltd. vs. Horton3
Lord Mac Dermot observed:
"The matter cannot, of course, be settled merely by treating the ipsissima
vertra of Willes, J as though they were part of an Act of Parliament and
applying the rules of interpretation appropriate thereto. This is not to
detract from the great weight to be given to the language actually used by that
most distinguished judge."
12. In Home Office vs. Dorset Yacht Co.4, Lord Reid
said, 'Lord Atkin's speech... it not to be treated as if it was a statute
definition It will require qualification in new circumstances." Megarry
J in5 observed: "one must not, of course, construe even a
reserved judgment of Russell L.J. as if it were an Act of Parliament."
And, in Herrington vs. British Railways Board6 Lord Morris
said:
"There is always peril in treating the words of a speech or judgment as
though they are words in a legislative enactment, and it is to be remembered
that judicial utterances made in the setting of the facts of a particular
case."
13. Circumstantial flexibility, one additional or different fact may make a
world of difference between conclusions in two cases. Disposal of cases by
blindly placing reliance on a decision is not proper.
14. The following words of Lord Denning in the matter of applying precedents
have become locus classicus:
"Each case depends on its own facts and a close similarity between one
case and another is not enough because even a single significant detail may alter
the entire aspect, in deciding such cases, one should avoid the temptation to
decide cases (as said by Cordozo) by matching the colour of one case against
the colour of another. To decide therefore, on which side of the line a case
falls, the broad resemblance to another case is not at all decisive."
"Precedent should be followed only so far as it marks the path of justice,
but you must cut the dead wood and trim off the side branches else you will
find yourself lost in thickets and branches. My plea is to keep the path to
justice clear of obstructions which could impede it."
15. In view of the undisputed position that the CEGAT did not consider the
relevant aspects and proceeded to decide the appeals on merits without
examining the propriety of dismissal of appeals by the Collector (Appeals) for
non compliance with the requirements of Section 35(F) of the Act, the impugned
judgments are unsustainable and are set aside. We remit the matter back
to the CEGAT for adjudication afresh in accordance with law. The appeals are
accordingly disposed of with no order as to costs.
11997 Indlaw CEGAT 926
21989 Indlaw CEGAT 99
31951 Indlaw HL (11) 761
41970 Indlaw HL 2
51971 Indlaw CHD 83
61972 Indlaw HL 20