ORDER
Harish Chander, Member (J)
1. Agromore Limited, Mysore Road, Bangalore has filed an appeal being aggrieved from order in appeal No. 275/82B dated 10-11-1982 passed by the Collector of Central Excise (Appeals), Madras.
2. Briefly the facts of the case are that the appellant having a Central Excise Licence L4 No. 3/78 are manufacturers of (i) Ethrel plant growth regulators, (ii) Ethrel latex stimulant, (iii) Fruitone; and (iv) Trans-plantone; and had cleared the same without payment of Central Excise duty of Rs. 1,12,968.74 during the period from 1.3.1978 to 30.4.1980 and Rs. 34,201.42 during the period from 1.5.1980 to 31.7.1981 respectively. Two show cause notices dated 23.6.1981 and 25.9.1981 were issued to the appellants by the Superintendent of Central Excise, Bangalore asking them to show cause to Assistant Collector of Central Excise, Bangalore as to why the Central Excise duty of Rs. 1,12,968.74 and Rs. 34,201.42 should not be recovered from them under Section 11A of Central Excises and Salt Act, 1944. In response to the said show cause notice the appellant contended that the four products namely (i) Ethrel Plant Growth Regulator (ii) Ethrel Latex Stimulant (iii) Fruitone and (iv) Transplantons were classified as pesticides by the Government of India under the Insecticides Act, 1968, Section 3(e)(i)(ii) Schedule – Appendix I items 219 and 258. Notification No. 55/75 does not give an explanation as to what is an insecticide. In the absence of clarification by Government of India, Insecticides Act, 1968 had been taken as the basis for classifying the goods in question as insecticides and exempting the same under Notification No. 62/78 dated 1.3.1978. At the time of personal hearing it was argued that insecticides and pesticides are entitled to exemption under the Central Excise Rules. The appellant had claimed that all the four products were pesticides and merit exemption under Notification No. 55/75 dated 1.3.1975 as amended. The appellant also pleaded that as per 4 Schedules of the Government of India Insecticides Act,1968 the said four products were pesticides. The appellant had also placed reliance on a letter dated 8.4.1982 from the Under Secretary, Government of India, Department of Agriculture and Cooperation addressed to the appellant to the effect that Ethephane and Napthyl acetic acid will have to be treated as insecticides in view of the fact that they have been included in the Schedule to the Insecticides Act, 1968 vide Notification No. G.S.R. 9(E)dated 9.1.1974 and these items are mentioned at S. No. 69 and 128 of the Notification. It was also argued that pesticides include insecticides. The learned Assistant Collector did not accept the contention of the appellant on the ground that in items of S. No. 18 of the Schedule to the Notification No. 55/75 dated 1.3.1975 as amended exemption was available to insecticides and there was no further explanation as to the detailed insecticide which was qualified for exemption and in absence of any positive direction he did not accept the definition under the Insecticides Act, 1968. He further observed that the active element in the base formula for all the four products was (1) 2-Chloro-ethyl phosphonic acid (also known as ethrel) (2) Alpha Napthyl Acetic Acid and (3) Alpha Naphthyl Acemmide which the other constituents are diluents preservatives etc. He was of the view that as per Marek Index, Item (1) acts as a tissue generator and its application accelerates maturation of many fruits. In the case of item (2) “Agricultural Chemical speak of it being a stimulant to the growth of better fruits and aids in preventing premature drop of fruits. In the like manner ‘ Gunter Zeeg’ Book Vol. 1 describes item (3) as product superior in quality to them (2) with regard to stimulation of plant growth. He had come to the conclusion that all the four products are entitled to function as plant growth stimulants with special emphasis on plant metabolism connected with plant physiology and is in no way connected to destruction of pests, insects or fungus. He had also observed that on the printed labels of these products the appellant had mentioned the same as stimulant. He was of the view that all the four products were meant for the healthy plant growth and they do not destroy pest or immunise the plant fruits etc. from falling prey to diseases. He had held that the four products (1) Ethrel plant growth regulators, (2) Ethrel Latex Stimulant, (3) Transplantons; and (4) Fruitone as products not covered by E.No. 18 of the Schedule to Notification No. 55/75 dated 1.3.1975 as amended by Notification No. 62/78 dated 1.3.1978. He had confirmed the demand of Rs. 34,201.42 and Rs. 1,12,968.74. Being aggrieved from the aforesaid order the appellant had filed an appeal to the learned Collector of Central Excise (Appeals). The learned Collector (Appeals) had upheld the findings of the Assistant Collector but had given the benefit of law of limitation to the appellant in respect of show cause notice dated 23.6.1981 for the period 1.3.1978 to 1.4.1980 under Section 11A of the Central Excises and Salt Act, 1944. As a result, the demand of Rs. 1,12,968.74 was held to be time-barred. Regarding the show cause notice dated 25.9.1981 for the period 1.5.1980 to 31.7.1981 the appellants were directed to pay the duty for the period of 6 months prior to the date of receipt of the said show cause notice. Being aggrieved from the aforesaid order the appellant has come in appeal before the Tribunal.
3. Shri Shiva Subramaniam, the learned Advocate, has appeared on behalf of the appellants. He has reiterated the facts. He has referred to S.No. 18 of the Schedule to Notification No. 55/75. He has pleaded that in terms of Notification No. 55/75 dated 1.3.1975 as amended by Notification No. 62/78 dated 1.3.1978 insecticides, pesticides, weedicides and fungicides are exempt from excise duty. He has pleaded that in terms of the provisions of Insecticides Act, 1968 any person who manufactures these items has to secure a licence from the Government. He has pleaded that the word “pesticides” has to be understood in a wider sense and pesticides has got a large family. He has referred to a letter dated 28.8.1978 written by Minister of Agriculture which grants permission to the appellants to manufacture Ethephon. The same appears on page 76 of the paper book. He has referred to the Government of India Gazette dated 9.1.1974 and in terms of that Gazette Notification Ethrel appears at Sl.No. 89 of the Insecticides Act, 1968. He has referred to classification list filed by the appellant effective from 12.3.1979 which appears on page 83 of the paper book and in the classification list the appellant had duly mentioned “at S.No. 2” agricultural chemicals (pesticides tariff item 68 basic excise duty exempt in terms of Notification No. 62/78 dated 1.3.1978. He has referred to the demand notices at page 9 of the paper book. The learned Advocate had pleaded that the Revenue’s argument that the products manufactured by the appellant do not kill germs does not carry any weight. These products have to be accepted as insecticides. The Revenue has mainly rejected the appellant’s contention on the ground that the products so manufactured by the appellant are plant growth regulators. He has also referred to the letter dated 10.9.1982 written by Pesticides Association of India which appears at page 51 of the paper book. He has also referred to Working Group Projection Report which appears at page 56 of the paper book and plant growth regulators fall in pesticides group. He laid special emphasis on S.No. 15 where Ethephon has been described as pesticides. The same relates to the imports (Report of Working Group of Pesticide Industry). He has referred to Herbicide Handbook of the Weed Science Society of America, 3rd Edition. Extract from the same appears at page 58 of the paper book where the nomenclature, chemical and physical properties of the pure chemical has been described; and the technical name is 2-Chloro Ethyl Phosphonic Acid and the common name is Ethephon and the trade names are Ethrel, Florel and Bromoflor and growth regulator use has been explained in general Ethylene responses in plants (fruit ripening, abscission, flower induction, breaking apical dominance and many others) and for application it is mentioned that it helps in the promotion of colour, of apples, flower initiation on young trees and fruit abscission. Similar advantages it has in the growth of cherry walnut, cantaloupe fruit ripening, grapes cranberries, pineapple flower induction, pineapple fruit ripening, tomato fruit ripening etc.. The learned Advocate states that there is no definition of pesticide under the notification or under the Act, and as such we have to resort to definition, under the Insecticides Act,1968. The learned Advocate has referred to a judgment of the Hon’ble Bombay High Court in the case of Chemicals and Fibres India Ltd. v. Union of India and Ors. reported in 1982 ELT 917 (Bom) where the Hon’ble Bombay High Court had held that the rule that the words should be construed in a popular sense will not be applicable in all cases and cannot be said to be all pervasive. This rule is a qualified rule and could apply only if the statute contains language which is capable of being construed in a popular sense. The Hon’ble High Court had further held that it was clear that the nature of the products specified in item 15A(1) are highly technical and scientific in character and therefore the words used therein will have to be given only their technical or scientific meaning. Adopting of any other method of construction will amount to wholly defeating the very purpose of making Item 15A a comprehensive one. He has referred to another judgment of the Delhi High Court in the case of Anil Starch Products Ltd. v. Union of India and Ors. reported in 1983 ELT 1681 (Delhi) where the Hon’ble High Court had held that the contention that unless wet dextrose is subjected to further process before the product glucose or dextrose monothydrate comes into existence must have been considered by the Central Government after referring to technical material or literature that exists which could enable it to arrive at a definite conclusion as to the nature and type of the product and whether it was classifiable under Item 1-E of the Central Excise Tariff. He has referred to a judgment of the Hon’ble Supreme Court in the case of State of West Bengal and Ors. v. Washi Ahmed and Ors. reported in 39 STC 378 where the Hon’ble Supreme Court has held that the word “vegetables” in item 6 of Schedule I to the Act must be construed as understood in common parlance and it must be given its popular sense meaning “that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it” and, so construed, it denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table. He has referred to another judgment of the Hon’ble Supreme Court in the case of Indo International Industries v. Commissioner of Sales Tax, U.P. reported in 1947 STC 359 where the Hon’ble Supreme Court had held that if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. He has also referred to Bombay High Court decision in the case of Leukoplast (India) Pvt. Ltd. and Ors. v. Union of India and Ors. reported in 1985 (20) ELT 70 where it has been held that advertisements are published by the manufacturers of a product in order to attract consumers and has nothing to do with the classification of a product of levy of duty. He has pleaded that in the instant case the learned Assistant Collector has referred to the pamphlets of the products manufactured where there is mention of the word “stimulants for the plants”. The same should not be adopted in terms of this Bombay High Court Judgment. He has also referred to the judgment, of the Hon’ble Supreme Court in the case of Indian Aluminium Cables Ltd. v. Union of India and Ors. reported in 1985 (21) ELT 3(SC) where it has been held that the words and expressions should be construed in the sense in which they are understood in the trade, commerce and the consumer. He has also argued that the functional aspect should not be considered in classifying the product. In support of his argument he has referred to the judgment of the Hon’ble Supreme Court in the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India and Ors. reported in 1983 ELT 1566 (SC) where it has been held that when there is any reference to the use of adoption of the article the basis of end use for classification under the tariff entry is absolutely irrelevant. Further, it has been held that the meaning given to article in a fiscal statute must be as people in the trade and commerce conversant with the subject generally treat and understand them in the usual course. But once an article is classified and put up in a distinct entry, the basis of classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, there is no difficulty for statutory classification under a particular entry. He has also referred to a judgment of the Tribunal in the case of Hico Products Ltd., Bombay v. Collector of Central Excise, Bombay reported in 1983 ELT 2483 where it has been held that end use of certain goods cannot determine their classification in general but predominant use relevant and significant where classification is related to function of the goods as in Tariff Item 65. He has also referred to a judgement of the Bombay High Court in the case of Techni-Glass Ltd. v. Union of India and Ors. reported in 1981 ELT 147 (Bom) where it has been held that it is well settled that if adjudicating authority in customs or excise matters have preferred one of the possible meanings or placed a product in one category which could perhaps be better placed in another, the court should not ordinarily interefere. But, if the adjudicating authorities have given a strained meaning to an expression used in ordinary parlance or acted in a manner not warranted by settled rules of interpretation then the court has not merely the right to interfere but also a duty. He has referred to the judgement of the Tribunal in the case of Shah Scientific (India), Bombay v. Collector of Customs, Bombay reported in 1983 ELT 1811 where the Tribunal had held that a vital definition should be taken. He has referred to a judgement of the Hon’ble Supreme Court in the case of Commissioner of Income Tax, Bangalore v. Gotla reported in 1985 Indian Law Reports Karnataka where it has been held that where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the legislature, the Court might modify the language used by the legislature so as to achieve the intention of the legislature and produce a rational construction. The task of interpretation of a statutory provision is an attempt to discover the intention of the legislature from the language used. It is necessary to remember that language is at best an imperfect instrument for the expression of human intention. It is well to remember the warning administered by Judge Learned Hand that one should not make a fortress out of dictionary but remember that statutes always have some purpose or object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning. If the purpose of a particular provision is easily discernible from the whole scheme of the Act, the intention should be found out from the language used by the legislature and if strict literal construction leads to an absurd result i.e. result not intended to be subserved by the object of the legislation found and if another construction is possible apart from strict literal construction then that construction should be preferred to the strict literal construction.
In support of his arguments the learned Advocate has referred to the following judgments :-
Purushotham Gokuldas Plywood Co. v. Union of India and Ors. 1983 ELT 1677 (Kerala).
Nat Steel Equipment Pvt. Ltd. v. CCE Bombay 1983 ELT 1238 Suhrid Giegy Ltd.. Ahmedabad v. Union of India and Ors. 1980 ELT 538 (Gujarat). Bharat Carpets Ltd. v. Union of India 1978 ELT (3-111). The learned Advocate has pleaded that if the Revenue authorities had intention to change classification, the principles of natural justice have to be followed. He has pleaded for the acceptance of the appeal.
4. Mrs. Chander, the learned JDR, has appeared on behalf of the respondent. She has referred to the order in original and order in appeal. She has referred to the 4 items manufactured by the appellant and reiterates that all the 4 items have no function of killing the insects. She has referred to the definition of insecticides as given in Encyclopaedia of Chemical Technology by Kirk Othmer – page 418. She pleads that insecticides are chemicals that are used to control damage or annoyance from insects. Generally, control is achieved by poisoning the insects by oral ingestions, stomach poisons, by contact poisons that penetrate through the cuticle, or by fumigants that penetrate through the respiratory system. Ancillary chemicals also are employed in insect control and include attractants and repellents, which influence insects behaviour, and chemosterilants which influence reproduction. She has referred to a judgment of the Hon’ble Supreme Court in the case of MSCO Pvt. Ltd. v. Union of India and Ors. reported in 1985 (19) ELT 15 (SC) where it has been held that by construing a word in a statute or a statutory instruction in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of statute or the statutory instrument understand it. It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. She has pleaded that in view of the Supreme Court Judgment cited by her, the mere fact that the products manufactured by the appellant fall in Insecticides Act, 1968, the Revenue should treat the same as pesticide and the appellant is not entitled to the benefit of Notification No. 62/78. She has referred to page 63 of the paper book and has pleaded that the classification by the Ministry of Agriculture of the products manufactured by the appellant as pesticides does not help the appellant in view of the Supreme Court judgment. She has referred to the definition of plant growth regulator as given in Condensed Chemical Dictionary by G.G. Hawley (10th Edition) page 280 and reproduced below :
“plant growth regulator. An organic compound, either natural or synthetic, that modifies or controls one or more specific physiological processes within the plant. If the compound is produced by the plant it is called hormone, e.g., auxin, which regulates the growth of longitudinal cells involved in bending of the stem one way or another. Substances applied externally also bring about modifications such as improved rooting of cuttings, increased rate of ripening (ethylene) and easier scission (separation of fruit from stem). A large number of chemicals tend to increase the yield of certain plants such as sugar cane, corn, etc. All these, as well as plant produced hormones are included in the term plant growth regulator.”
She has also referred to the dictionary meaning of the two main ingredients used in the manufacture of the products by the appellant viz. Ethrel and Napthyl Acetic Acid. The description in Condensed Chemical Dictionary by G.G. Hawley – pages 236 and 713 are reproduced on pre-page.
“2-Chloroethylphosphonic acid (ethephon, “Ethrel”) CICH2CH2PO3H2. A plant growth regulator that increases rate of ripening of plants by promoting release of ethylene; stimulates rubber latex formation; ripening of sugarcane; flowering agent for pineapple; color enhancer.
alpha-napthaieneacetic acid (1- naphthylacetic acid) C1OH7CH2 COOH. A plant growth regulator. Properties: White crystals, odorless; m.p.l32-135°C. Soluble in acetone, ether, and chloroform, slightly soluble in water and alchohol. Grades: Usually supplied in dilute form, either as a powder or liquid solution ready for use.
Containers: Powder; fiber cans or multiwall paper sacs; solution: glass bottles and carboys.
Hazard: Moderately toxic; skin irritant.
Uses : Inducing rotting of plant cuttings; spraying apple trees to prevent early drop; fruit thinner.”
She has referred to judgment of the Tribunal in the case of Collector of Central Excise, Bombay v. _Bombay Chemicals Pvt. Ltd., Bombay and Standard Chemical & Pharmaceutical Company. Bombay reported in 1986 (24) ELT 373 where the Tribunal had held that insecticides, pesticides, weedicides and fungicides are not synonymous but particular formulations with well defined uses and disinfectants intended for general disinfection purposes are not includible therein and not entitled to exemption under Item 18 of Notification No. 55/75-C.E. dated 1.3.1975, as. amended by Notification No. 62/78-C.E. dated 1.3.1978. She has also stated that the classification list filed by the appellant did not contain the details of the products manufactured by the appellant and as such there was suppression of facts on the part of the appellant and the appellant is not entitled to the benefit of the notification. She has pleaded for the dismmisal of the appeal.
5. In reply Shri Subramaniam, the learned Advocate, has again reiterated the facts and has pleaded for the acceptance of the appeal.
6. We have heard both the sides and have gone through the facts and circumstances of the case. We have also perused the pricelist filed by the appellant. A simple perusal of the pricelist shows that the appellant did not file the details of the four products manufactured by them in the pricelist and as such the appellant’s plea that there was complete disclosure of the fact before the Revenue authorities cannot be accepted. Since there is no cross objection filed by the respondent and as such we do not propose to interfere with the order passed by the Collector of Central Excise (Appeals) on the point of limitation. We have gone through the dictionary meanings of the 4 items which have already been reproduced above. A simple perusal of the same nowhere shows that the products manufactured by the appellant acts as insecticide or pesticide in any way. Rather the products help in the growth of the plants. Our views are further fortified by the earlier judgment of the Tribunal in the case of Collector of Central Excise. Bombay v. Bombay Chemicals Pvt. Ltd., Bombay and Standard Chemical and Pharmaceutical Co., Bombay reported in 1986 (24) ELT 373. Para Nos. 37 and 48 of the said judgment are reproduced below:-
“37. Another rule which leads to the same conclusion is that when in relation to the same subject matter, different words are used in the same statute, there is a presumption that they are not used in the same sense (ibid page 250). The respondents are seeking that a wide rather than a restricted meaning should be given to the terms in the notification. It is true that sometimes the context may require a wide meaning to be given, and sometimes a narrow one. In the present case, when four words are juxtaposed it should be assumed that they are not meant to be considered as synonyms or as substantially overlapping with one another. To illustrate this, one may take the word “men” In certain contexts this would have to be taken as referring to the species of mankind and as including women and children. When the poet makes the Brook say “Men may come and men may go, but I go on for ever,” we are safe in assuming that the reference to “men” is not intended to exclude the female of the species. However, if one is in search of a rest room and finds the words “Men” and “Women” close together but on two different doors, the context and juxta-position clearly require that the word “Men” should be interpreted in a narrow sense. In the present case the juxtaposition of four terms which indicate distinct uses or applications should be taken as referring to substances which are recognised as respectively suited to those applications. It would be wrong to go strictly by a selected meaning, or to apply a process of extension of meaning from one word to another, as the respondents have sought to do.
* * * * * 48. For the above reasons, I am of the view that the terms "insecticides" etc., in the exemption notification were meant to cover particular formulations with well-defined uses and specifically for killing insects, etc. They cannot be equated or interpreted to include disinfectants, which are preparations for general disinfection purposes and which are used in bathrooms, gutters, floor cleaning, etc. Therefore, in the two cases before us, the view taken by the respective Assistant Collector in holding that the disinfectants in question were not entitled to the benefit of the exemption notification was correct and the orders of the two Collectors (Appeals) against which the present appeals have been filed were in error. Entry No. 18 of Schedule to Notification No. 62/78-C.E. is also reproduced below :- "18. Insecticides, Pesticides, Weedicides and Fungicides;" We do not find that the four products namely (1) ethrel plant growth regulators (2) ethrel latex stimulant (3) fruitone; and (4) transplantone, manufactured by the appellant can qualify to be called as pesticides or insecticides. The Hon'ble Supreme Court in the case of MSCO Pvt. Ltd. v. Union of India and Ors. reported in 1985 (19) ELT 15 (SC), had held that the meaning of a word given in another statute should not be adopted. Para 4 from the said judgment is reproduced below :-
“4. The expression ‘industry’ has many meanings. It means ‘skill’, ‘ingenuity’, ‘dexterity’, ‘diligence’, ‘systematic work or labour’, ‘habitual employment in the productive arts’, ‘manufacturing establishment’ etc. But while construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. Craies on Statute Law (6th Edition) says thus at page 164:
“In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. “It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone”.
The judgments cited by the learned Advocate do not help him. We very respectfully follow the observations of the Hon’ble Supreme Court in the case of MSCO Pvt. Ltd. v. Union of India and Ors. reported in 1985 (19) ELT 15 (SC). We are also in full agreement with the earlier judgment of the Tribunal in the case of Collector of Central Excise, Bombay v. Bombay Chemicals Pvt. Ltd., Bombay and Standard Chemical and Pharmaceutical Company, Bombay reported in 1986 (24) ELT 373. In view of the above discussion, we do not find any merit in the appeal. The appeal is dismissed.