Case: M/S.Grasim Inds.Ltd Vs. Collector Of Customs,Bombay

Orders were placed by the assessee on a foreign manufacturer for supply of 14700 Karbate Tubes which were supplied during April and July, 1992. An order was passed by the Assistant Collector of Customs (Appraising Group III) classifying the goods under Chapter heading 68.15 and sub-heading 6815.10, whereby the demand raised by the Appraiser was confirmed. Appeal filed before the Collector (Appeals) did not bring any relief to the assessee. Matter was carried in further appeal before the Customs, Excise and Gold Control Appellate Tribunal, New Delhi (in short Tribunal). As there was difference in view between the members of Tribunal, the matter was referred to a large Bench which by the impugned order dated 24.11.1997 held that the goods were rightly classified under Chapter 68 and not Chapter 84. The main ground which appears to have been pressed before the Tribunal by the assessee was that the Karbate Tubes which ware made of artificial graphite cannot be classified under tariff heading 68.15, as according to it, same applies only to natural graphite. The Tribunal did not find any substance in is plea. Reference was made to the Harmonized System Nomenclature (in short HSN) and it observed that Karbate Tubes made of artificial graphite being non-electric articles made of graphite fall under Chapter sub-heading 6815.10. It was further held that though this is a part of machinery which may otherwise attract sub-heading 8419.50, but the same is not applicable in view of the exclusion in Note 1(a) of Chapter 84.

Reasoning:
12. In the background of what has been urged by the assessee it has to be further seen whether the principles of ejusdem generis have application. The rule is applicable when particular words pertaining to a class, category or genus are followed by general words. In such a case the general words are construed as limited to things of the same kind as those specified. The rule reflects an attempt to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous. The rule applies only when (1) the statute enumerates the specific words, (2) the subjects of enumeration constitute a class or category, (3) that class or category is not exhausted by the enumeration, (4) the general terms follow the enumeration and (5) there is no indication of a different legislative intent. If the subjects of enumeration belong to a broad based genus, as also to a narrower genus there is no principle that the general words should be confined to the narrower genus. In interpreting Section 30 of the United Towns Electrical Company Act, 1902 which reads: the company shall be liable for water rates on all lands and buildings, owned by it in the aforesaid town, but otherwise shall be exempted from taxation, the Privy Council rejected the contention that the word taxation should be considered ejusdem generis with water rate. It was held that there is no room for application of the principle in the absence of any mention of a genus, since the mention of a single species for example of water rates does not constitute a genus. [See:United Towns Electric Co. Ltd.vs. A.G. for Newfoundland 1939 (1) ALL ER 423 PC] The rule cannot be applied unless there is genus constituted or a category disclosed. If the preceding words do not constitute mere specifications of a genus but constitute description of a complete genus, the rule has no application. The rule has to be applied with care and caution. This is not an inviolable rule of law, but it is only permissible interference, in the absence of any indication to the contrary. Where the context and the object and mischief of the enactment do not require restricted meaning to be attached to words of general import it becomes the duty of the Courts to give those words their plain and ordinary meaning. Following enunciation in Craies on Statute Law (Seventh Edition) at page 181 succinctly stated the principle. The modern tendency of the law, it was said, [by Asquith J in Allen vs. Emmerson (1994) KB 362] is to attenuate the application of the rule of ejusdem generis. To invoke the application of the ejusdem generis rule there must be a distinct genus category. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects. Where this is lacking, the rule cannot apply,s vs. IRC (1946) 2 ALL ER 768) but the mention of a single species does not constitute a genus. (Per Lord Thankerton inUnited Towns Electric Co. Ltd.vs. Att. General for Newfoundland (1939) 1 ALL ER 423). Unless you can find a category, said Farwell L.J., (in Tillmans and Co. vs. S.S. Knutsford (1908) 2 KB 385) there is no room for the application of the ejusdem generis doctrine, and where the words are clearly wide in their meaning they ought not to be qualified on the ground of their association with other words. For instance, where a local Act required that theatres and other places of public entertainment should be licensed, the question arose whether ar for which no fee was charged for admission was within the Act. It was held to be so, and that the ejusdem generis rule did not apply to confine the words other places to places of the same kind as theatres. So the insertion of such words as or things of whatever description would exclude the rule (Attorney GeneralLeicester Corporation (1910) 2 Ch.. In N.A.L.G.O. vs. Bolton Corporation (1943) AC 166) Lord Simon L.C. referred to a definition of workman as any person who has entered into a works under a contract with an employer whether the contract be by way of manual labour, clerical work or otherwise and said: The use of the words or otherwise does not bring into play the ejusdem generis principle: for manual labour and clerical work do not belong to a single limited genus and Lord Wright in the same case said: The ejusde generis rule is often useful or convenient, but it is merely a rule of construction, not a rule of law. In the present case it is entirely inapt. In presupposes a genus but here the only genus is a contract with an employer.