INDIAN RAYON CORPORATION LIMITED Vs. UNION OF INDIA
LAWS(CAL)-1983-7-35
HIGH COURT OF CALCUTTA
Decided on July 22,1983

INDIAN RAYON CORPORATION LIMITED Appellant
VERSUS
UNION OF INDIA Respondents

JUDGEMENT

- (1.) The petitioner No. 1 at the material time had been manufacturing various kinds of insulators which, according to them, consisted of both porcelain and metal parts. The petitioner No. 1 under self-removal procedure prescribed under the Central Excise Rules, used to remove the said articles during the period April, 1970 upto the date of issue of this Rule, the respondents had assessed excise duty upon insulators manufactured by the petitioner No. 1 at the rate specified under Item No. 23B of the First Schedule of the Central Excises and Salt Act, 1944. The said Item No. 23B which was inserted by Finance Act, 1961, imposed duty upon Chinaware and Porcelainware of all sorts. Until the time mentioned hereinafter, the Central Excise Authorities were of the view that electrical insulators were porcelainware and, therefore, were liable to excise duty under Item No. 23B of the First Schedule of the Central Excises and Salt Act, 1944.
(2.) By two notifications respectively dated 26th July, 1971 and 1st March, 1975, the Central Government, in exercise of powers under Rule 8 of the Central Excise Rules, had exempted electrical insulators made of porcelain so much of duty as was in excess of the percentages mentioned in the said notifications. The parties have drawn my attention to two trade notices issued by the Central Board of Excise and Customs indicating the manner in which the excise duty was to be assessed upon insulators which consisted both of porcelain and metal parts. A Division Bench decision of the Madras High Court in English Electric Co. of India Ltd. v. Superintendent, Central Excise and Ors. , held that electric insulators were not .porcelainware and therefore, were not liable to be assessed under Item No. 23B of the First Schedule of the Central Excises and Salt Act, 1944. The Division Bench of the Madras High Court however, had no occasion to consider whether the porcelainware used in making electric insulators could be considered as an independent products and whether the same were liable to be assessed to excise duty under the said Item No. 23B.
(3.) Since the passing of the Finance Act, 1975, the residuary Item No. 68 has been inserted in the First Schedule of the Central Excises and Salt Act, 1944 for levy of excise duty on all other goods, not elsewhere specified, manufactured in a factory. The Central Excise Authorities no longer dispute that insulators consisting both of porcelain and metal parts were not assessable under Item No. 23B. But at the same time the Central Excise Authorities contend that the porcelain part of the insulators, were liable to levy of excise duty/under the said Item No. 23B of the First Schedule of the Act (Vide Trade Notice No. 215/China and Porcelainware-1/CE/77).;


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