Case: Union Of India And Ors Vs. Gujarat Woollen Felt Mills

The respondent is a partnership firm manufacturing non-woven felts from woollen fibres which are utilised 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 filed a writ petition in the High Court of Gujarat at Ahmedabad for quashing the order levying excise duty on the felts manufactured by the respondent treating them as woollen fabrics covered by entry 21 in Schedule I to the Central Excises and Salt A ct, 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 decision.

Reasoning: The High Court has held that a trader dealing in woollen fabrics would not regard the respondents 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 regarding the meaning of the term woollen fabrics as commercially 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 respondents 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 includes, 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 embroidery 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 difficult to explain why the entry should specifically mention blankets, rugs and shawls 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 fabrics in entry 21 has been used to mean woven material in which sense it is popularly understood, and blankets, rugs 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.