C.A. Vaidialingam, J.
1. In this writ petition, on behalf of the petitioner, Mr. J. Ranganatha Kamath, learned counsel, challenges the demand made by the third respondent herein under Ext. P-1, dated 23rd May 1961.
2. The circumstances under which this demand has been made may be briefly indicated. The petitioner company is a manufacturing concern, manufacturing, according to them, stoneware Glazed articles like Pickle Jars and other varieties of glazed stoneware jars, in their factory at Chalakuty, Kerala State. The demand Ext. P-1 itself is one calling upon the petitioner to pay a sum of Rs. 3669.94 towards excise duty in respect of stoneware jars stated to have been removed by the petitioner company without payment of excise duty from the factory from 1-3-1961 to 30-4-1961.
3. The Finance Bill, No. 10 of 1961, was introduced in the Parliament on 28-2-1961. The Bill was to give effect to the financial proposals of the Central Government for the financial year 1961-62. Under Clause 11 of the But the Indian Tariff Act, 1934 was to be amended in the manner specified in the II schedule. In Part II of the Schedule II of the Bill it was stated that in the 1st schedule to the Tariff Act after item No. 59 (6) the following item is to be inserted, namely, '59 (7) China and Porcelain ware, All sorts -
(1) Table ware. Revenue. The excise duty for
(2) Sanitary ware. the time being levi-
(3) Glazed tiles. able on like articles
(4) Not otherwise spe- if produced or manu- factured in India. and where such duty is leviable at different rates, the highest duty; and tba duty so leviable shall be in addition to the duty which would have been levied if this entry had not been inserted."
4. Similarly, by Clause (13) of the Bill certain amendments were made to the 1st schedule to the Central Excises and Salt Act, 1944. By Clause 13 (k) after item 23 new items 23A and 23B were directed to be inserted. We are concerned only with new item 23-B, namely, "'Chinaware and Porcelainware) All sorts,--
(1) Tableware. Fifteen per cent ad valoram.
(2) Banitarywara. Fifteen percent ad valorem.
(3) Glazed tiles. Ten per cent ad valorem.
(4) Not otherwise speci- Ten per cent ad fied. valorem."
Therefore, it will be seen that in the Bill for the first time excise duty was sought to be levied on Chmaware and Porcelainware all sorts.
5. in the bill, there was a declaration under the Provisional Collection of Taxes Act, 1931 to the following effect :
"It is hereby declared that it is expedient in the public interest that the provisions of Clauses 11, 12, 13 and 15 of this Bill shall have the imme-diate effect under the Provisional Collection of Taxes Act, 1931."
It will be seen that in particular, Clause 11 amending the Indian Tariff Act in accordance with the 2nd schedule and Clause 13 amending the 1st schedule to the Central Excises and Salt Act, 1944, have been included in the declaration. Therefore, these provisions take effect from the date of the introduction of the Bill, namely, 28-2-1961. I will have occasion to refer to this aspect when I deal later with some of the provisions of the Provisional Collection of Taxes Act 1931.
6. The Bill became an Act with certain modifications and amendments, as the Finance Act, 1961 Act No. 14 of 1961. The Act received the assent of the President on 29th April 1961, Sub-section (2) of Section 1 was to the effect.
"Save as otherwise provided in this Act, sections 3 to 10 inclusive shall be deemed to have come into force on the first day of April 1961." That is, these provisional also had retrospective effect even from 1st April ,1961.
7. Section 11 of the Act provided that the Indian Tariff Act, 1934, is to be amended in the manner specified in the II schedule. In Part II of the II (Second) schedule to the Act, it was provided that after item 59 (6) of the 1st schedule to the Tariff Act the following item is to be inserted, namely,
"59 (7) Chmaware and Porcelainware, All sorts,--(1) Tableware. Revenue. The excise duty for
(2) Sanitaryware. the time being levi-
(3) Glazed tiles. able on like article,
(4) Not otherwise if produced or specified. manufactured in India, and where such duty is leviable at different rates, the highest duty; and the duty so leviable shall be in addition to the duty which would have been levied if this entry had not been inserted".
Explanation : -- 'Chinaware' includes all glazed clayware but does not include terracotta."
Similarly, section 13 of the Act effected certain amendments to the 1st schedule to the Central Excises and Salt Act. 1944. Section 13 (k) introduced two new items as items 23A and 23B after item No. 23. Item 23B with which we are concerned is as follows :
"23 B. Chinaware and Porcelain ware, all sorts,--
(1) Tableware. Fifteen per cent, ad valorem.
(2) Sanitary ware., Fifteen pec cent, ad valorem.
(3) Glazed tiles. Ten per cent. ad valorem.
(4) Not otherwise specified. Ten per cent. ad valorem.
Explanation. -- 'Chinaware' includes all glazed clayware but does not include ttrracotta."
8. it will be noted that both item 59 (7) of the 1st schedule to the Tariff Act as well as item 23B in the 1st schedule of the Central Excises and Salt Act referred to above contain an explanation that Chinaware includes all glazed clayware but does not include terracotta. It will be noted that the said explanation was not in the corresponding entries in the original Finance Bill. It may also be noted that the amendments carried out to the Indian Tariff Act by Section 11 and to the ls.t schedule of the Central Excises and Salt Act, by Section 13 of the Act are not retrospective because I have already stated that under subsection (2) to Section 1 only sections 3 to 10 inclusive have retrospective operation even from 1st April 1961.
9. After the introduction of the Finance Bill and before it became an Act, there was some correspondence between the petitioner and the Central Excise authorities.
10. On 7-3-1961 the petitioner sends a communication Ext. P-4 to the second respondent, the Collector of Customs and Central Excise, Cochin, wherein he states that the jars manufactured by them are technically and commercially known as stoneware glazed jars in contrast to China a,nd Porcelain wares. The petitioner company also states that the China and Porcelain ware are mainly made out of China clay and the jars manufactured by them are made mainly out of Ball clay which is black or bluish in colour, and highly plastic, to which is added a percentage of pegmatite. The petitioner company refers to several other matters but ultimately the petitioner says that the Central Excise 1961 Budget contemplates excise duty specifically on China and porcelain wares and that the stoneware glazed articles manufactured by the petitioner did not attract or come under the purview of the proposed Central Excise duty.
11. This letter is only relevant for the purpose of noting that even at the earliest stage the petitioner has taken up the position that the. articles manufactured by it, namely, stoneware glazed jars, do not come under the category of China and Porcelain wares so as to attract the levy of excise duty.
12. Under Ext. P-2, the second respondent sends a communication to the petitioner in reply to Ex. P-4. The 2nd respondent states that it is tentatively decided that stoneware glazed jars will not come under the excisable item "china-ware and porcelainware" but he desires the petitioner to keep correct accounts of production and clearance and also states that Central Excise formalities need not be observed in the matter of removal of goods. Though this letter by itselt may not operate as an estoppel as against the Department, nevertheless in my view, it clearly indicates that there was considerable genuine doubt at that stage as to whether the expression "Chinaware and Porcelainware" occurring in the Finance Bill under the relevant items will include "stonewara glazed jars".
13. There is an endorsement made by the third respondent in the books of account of the petitioner on 10-5-1961. A copy of the said endorsement is produced before me as Ext. P-3 and it is as follows :
"This Pottery has been brought under full excise control as on 1-3-1961 as per Tariff item 23B of Finance Bill 1961 vide Government of India Ministry of Finance (Department of Revenue) letter F. No. 15/23/61 Ext. I dated 21-4-1961 communicated in Collector's C. I. C. E. Gen. Circular No. 29/61 dated 25-4-61 and Collector's C. No. IV/16/39/61 CX Pol. dated 3-3-1961. Sd. Range Officer, Irinjalakuda. 10-5-61".
14. it is after all these correspondence that on 23-5-61 the third respondent issues notice of demand, Ext. P 1, for payment of duty to the petitioners under Rule 9 (2) of the Central Excises Rules, 1944. It wilt be noted that by this time the Finance Act 14 of 1961, had become law with effect from 29th April 1961. It is stated in Ext. P-l that the petitioner is liable to pay excise duty within the period mentioned therein in the sum ot Rs. 3669.94. It is also stated that excise duty at 10 per cent ad valorem under Tariff item 23 B (4) of Finance Bill 1961 on China and Porcelain ware of all sorts, stoneware jars, removed by the petitioner without payment of excise duty from the factory from 1-3-61 to 30-4-61 is to be paid in accordance with the details given therein. The details as to how exactly the sum of Rs. 3669.94 is made up are also given in Ext. P-l.
15. But it should be noted that the demand is really in respect of the stoneware jars stated to have been removed by the petitioner from his factory from 1-3-1961 to 30-4-1961 which will be the period exclusively covered by the Finance Bill, namely Finance Bill 10 of 1961.
16. Before 1 consider the stand taken by the parties in these proceedings it is desirable to advert to some of the provisions ot the Provisional Collection of Taxes Act, 16 of 1931. The preamble to this statute is to the ettect that is it found expedient to amend the law providing for the immediate effect for a limited period of provisions in Bills relating to the imposition or increase of duties of customs or excise. Section 2 states that a "declared provision" means a provision in a Bill in respect of which a declaration has been made. Section 3 gives power to the Central Government to make a declaration in a Bill introduced in Parliament relating to imposition or increase of duty or customs or excise, Section 4 deals with the effect of declarations under the Act as well as duration thereof and is as follows :
"4 (1). A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced.
(2) A declared provision shall cease to have the force of law under the provisions of this Act,
(a) When it comes into operation as an enactment, with or without amendment, or
"(b) When the Central Government, in pursuance of a motion passed by Parliament, directs, by notification in the Official Gazette, that it shall cease to have the force of law, or
(c) if it has not already ceased to have the force of law under Clause (a) or Clause (b), then on the expiry of the sixtieth day after the day on which the Bill containing it was introduced".
It will be noted that under section 4 (1) a declared provision gets the force of law on the expiry of the day the Bill is introduced and under Sub-section (2)(a) of Section 4 a declared provision ceases to have the force of law when it comes into operation as an enactment with or without amendment. In this case it will be seen that by virtue of these provisions the declaration in the Bill 10 of 1961 has the force of law with effect from 28-2-1961 and the declared are provisions in the bill, in particular Clauses 11 and 13, ceased to have the force of law on 20 (30?)-4-1961 when it came into operation as an enactment and in this case, in my view, with an amendment.
17. Section 5 relates to refunds to be made when declarations cease to have effect.
18. Section 2 (d) of the Central Excises and Salt Act, 1944, defines excisable goods as goods specified in the 1st schedule as being subject to a duty of excise and as including salt. Section 3 (1) of the Act which is the charging section directs the levy and collection of duty of excise on all excisable goods in accordance with the sub-section. Having regard to the provisions of the Finance Bill, 10 of 1961, read with the provisions of the Provisional Collection of Taxes Act, 1931, the provisions of the Finance Act, 14 of 1961, and the relevant provisions of the Central Excises and Salt Act, 1944, if under the relevant items the articles of the petitioners are liable for excise duty, then the petitioner can have no answer to the demand made under Ext. P 1. Even on the basis that the articles manufactured by the petitioner can be characterised as Chinaware coming under the relevant items introduced by the Finance Act, 1961 in the Tariff Act and the Central Excises and Salt Act, by virtue of the explanation contained therein, the question arises as to whether under the relevant items as they stood in the Finance Bill, 10 of 1961, the petitioner's articles can be characterised as chinaware or porcelain ware. This assumes some importance in this case because the demand is not for a period after the Finance Act 14 of 1961 came into force but for a period anterior to it and during the period when the declaration in the Finance Bill, 10 of 1961, was in force
19. if the relevant items had also the Explanation in the Bill itself then the position may be different if the respondents are not able to satisfy this Court that the expression "China-ware" as stood by itself in the Finance Bill without the explanation that occurs in the Finance Act, will take in also stoneware jars manufactured by the petitioner, then it follows that the demand under Ex. P-l cannot be sustained.
20. According to the petitioner, chinaware and porcelainware products in Ceramic Science are products distinct and different from those of stoneware inasmuch as according to the petitioner the body-compositions of these are distinct and different. The petitioner states that, no doubt, chinaware and stoneware are all made of clay material and the petitioner even takes up the position that even by virtue of the Explanation of Chinaware occurring in the Finance Act which will include clayware will not in law take in stoneware products. The petitioner also lakes up the position that he manufactures only glaze stoneware jars and he does not manufacture china-ware or porcelainware and, according to him, chinaware articles are different in Ceramic Science from stoneware articles, both from their composition and manufacture as well as in their popular sense. By and large, the contention of the petitioner is that the expression 'chinaware' will take in only articles, manufactured out of china clay. In this connection, Mr. Ranganatha Kamath, learned counsel for the petitioners, has placed before me certain passages from books dealing with Ceramic Science.
21. The second respondent has filed a counter-affidavit wherein it is stated that the articles manufactured by the petitioner company belong to the category of goods which are commercially known in the market as Chinaware. It is also stated that the materials used for manufacture of the petitioner's articles are local clay, kadappa clay, china clay, feldspar, Quarts, Whiting, Zinc Oxide, Barium Carbonate White lead, iron Oxide, Manganese dioxide and common salt. The respondent also states that by the explanation added to Entry 23-B by the Finance Act, 1961, the scope of the item Chinaware as mentioned in the bill itself was not by any means enlarged but it was only intended to clarify existing position, namely, that all glazed articles commonly known or sold as chinawaue or porcelainware, even if claimed to be clayware, comes under tariff item. The second respondent also takes up the position that whatever may be the technical word used in ceramic science to describe the articles manufactured by the petitioner, they are commonly known-in the market as chinaware and it is in thai sense that the expression "chinaware" is used in Entry 23-B both in the Bill and the Act.
22. Therefore, it will be noted that, while according to the petitioner, the expressions 'china-ware" and "porcelainware" must bear the meaning which they have in Ceramic Science, namely a very limited meaning, according to the respondents, these expressions do not have such a narrow or technical meaning. On the other hand, the expression "chinaware" will take in all articles of clayware and as admittedly the petitioners articles are made of local clay, Kadappa Clay etc., they should be considered to be chinaware under item 23-B of the First Schedule to the Central Excises and Salt Act, 1944 as it now stands after the amendment effected by the Finance Act of 1961.
23. in my view, the meaning to be given to the word "chinaware" occurring in item 25-B after the Finance Act of 1961 has become com-paratively easy because of the Explanation occurring therein, to the effect that Chinaware includes all glazed clayware but does not include terracotta. As to what exactly the expressions "chinaware" 'porcelainware' and "terracotta" mean in Ceramic Science will be dealt with by me presently. As no controversy is raised in this proceeding as to whether the particular article comes within the expression "Terracotta" or not, we are only concerned with articles which are glazed clayware and which have been brought in the expression "Chinaware" by virtue of the Explanation.
24. No doubt, Mr. Ranganatha Kamatha, learned counsel for the petitioner, urged that even after the passing of the Finance Act, 14 of 1961, which incorporated the Explanation in question, the position is not in many way different because the object of the legislature was, according to him, to exclude from the. expression "Chinaware" two articles, namely, (a) non-glazed Chinaware and (b) Terracotta. That is, according to the learned counsel, the effect of the explanation is to make liable for duty only unglazed chinaware and exempt terracotta from liability for duty. I have no hesitation in rejecting this contention of the learned counsel for the petitioner. The explanation does consider the meaning of chinaware.
25. As pointed out by the learned Govern-ment Pleader, whatever may be the technical meaning of the expression "chinaware" in Ceramic Science, that has absolutely no bearing when the expression has to be construed in the statute before us wherein the legislature has provided, so to say, a dictionary for the expression. That is according to the learned Government Pleader, the expression "chinaware" read with the explanation, in item 23-B as it now stands will take in all glazed clayware. There is no controversy in this case that the petitioner's articles are glazed and they are also clayware. As to out of what clay it is manufactured is immaterial for the purpose of the explanation.
26. in my view, if the demand, Ext. P-1, has to be considered after the passing of the Finance Act wherein the explanation to item 23-B has been incorporated it must be held that the petitioner's articles being glazed clay-ware are taken in by the expression "chinaware" under item 23-B of the First schedule to the Central Excises and Salt Act, 1944 and as such they will be liable to duty.
27. Therefore, all glazed clayware after 29th April 1961, when the Finance Act 14 of 1961, was passed, will have to be considered to be china-ware in item 23-B read with the expression and they will be liable for excise duty in accordance with the tariff.
28. But, as I mentioned earlier, in this case the demand is in respect of a period before the Act came into force. That is, the period for which the demand is made is from 1-3-1961 to 30-4-1961. The Revenue can succeed only if it is able to show that the expression 'chinaware' occurring in the relevant items in the Finance Bill, 10 of 1961, includes also all glazed clayware. It must be noted that there was no Explanation to the original item 23-B in the Finance Bill. The Provisional Collection of Taxes Act will certainly assist the Revenue for sustaining the demand under Ext. P 1 if the expression "China-ware" includes also all glazed clayware. That the petitioner's articles, though called stoneware are glazed clayware is not really disputed. But the petitioner's contention is that the expression 'chinaware' without anything more takes in only articles manufactured of china clay because that is the technical meaning given to the said expression in Ceramic Science.
29. Excepting making an averment in the counter-affidavit that the expression "chinaware" has been used in a very wide and popular sense there is no other material placed before me to show that the said expression is understood in that sense. Therefore, in my view, it will be reasonable to hold that when the legislature itself did not give any special meaning to that expression in the Finance Bill as it has done in the Finance Act. It has proceeded on the basis that the expression "chinaware" occurring in the relevant item 25-B in the Bill takes in only such articles as will come within that expression in Ceramic Science; No doubt, if the legislature has given a separate and special meaning to that expression this Court must certainly adopt that meaning and ignore the technical meaning of that expression.
30. it is in this connection that Mr. Ranganatha Kamath has referred to certain passages in some of the books dealing with ceramic science. In Modern Pottery Manufacture by M. M. Bose the author deals with porcelain at page 198. The author says that porcelain is the highest attainment of man in the field of ceramic arts. The learned author says that porcelain is a beautiful non-porous white and bluish white body of very fine texture, translucent in this section. According to the author the impermeability of porcelain distinguishes it from common pottery and the trans-iucency makes it differ from stoneware.
31. At page 292, the learned author in dealing with terracotta says that the term 'terracotta' is applied to all pottery wares made by common clays without any glaze and that the chief articles included within this group are common bricks, roofing tiles and unglazed red clay pottery.
32. Again, at page 130, the learned author dealing with glazes says that glazes are carefully prepared mixtures of minerals and chemicals, which when applied on claywares and heated to suitable temperatures, melt into liquid and uniformly cover the surface of the wares and on cooling, that liquid sets into a glass with a glossy surface, which is technically known as the glaze of the ware.
33. in his book "A treatise on ceramic Industries" by E. Bourry, at page 1 it is stated that bricks, tiles, pipes, terracotta, earthenware, stoneware, china and porcelain are included under the general name of pottery or ceramic ware. It has only to be noted that according to the author stoneware and earthenware are something different from China and porcelain. At page 7, the author states that the expression 'terracotta' comprises all permeable ceramic wares which are not covered with glaze and whose body cannot be heated to a temperature higher than that used in firing hard porcelain (1375oC) without losing its form or becoming vitrified. On the same page, the author says that stoneware is pottery with a coloured, opaque, impermeable body, although sometimes the colour is only slight and the surface may be matt or covered with a glaze. Again, porcelain (including chinaware), according to the author, is pottery with a translucent white, impermeable body, the surface of which may be matt or covered with glaze. The author again states that the distinction between stoneware and porcelain lies in the translucency of the body, and is a fairly clear one. It will be noted that, according to the author porcelain will include china-ware also, but both of them have got one characteristic, namely, that they have a translucent body whereas stoneware has got an opaque body. I am only referring to this aspect to show that Chinaware is one which has got a translucent body whereas the articles of the petitioner, namely, stoneware jars, have got only opaque body and therefore, they cannot be described chinaware. The author also later on in the book states that chinaware are largely made from and out of china clay or Kaolin. Again the same author deals with glazes at page 169 and states that glazes are virous coatings -- used to cover bodies, either to decorate them or to make them impermeable to water and they should partly combine with the body itself, in order that the two may adhere closely. In the Book Clays and Clay products by Alfred B. Searle at page 98, it is stated that terracotta is a term, which, in the strictest sense, merely means baked or burned earth or goods of such material. Then the author says that the term terracotta has been advantageously applied to blocks and architectural ornaments made of clay which cannot be described as pottery and in the modern use of the term, terracotta has been regarded as blocks, carved and moulded work and various ornamental pieces used in architecture, with a possible extension to vases and other vessels made of unglazed clay. The same author, at page 106, states that the expression "stoneware" is used to include all ware with an impervious, vitrified- body, with the exception of porcelain. That only shows that stoneware articles cannot be included in porcelain which expression, according to the authors, takes in also chinaware. Again. at page 134, the author deals with porcelain and nays that porcelain differs from other kinds of pottery in consisting of a body translucent nature which is made by extensive vitrification of material. He also later on says that chinaware or Bone Porcelain is the principal porcelain manufacture in Great Britain and its essential ingredients are china clay, Cornish stone and bone ash. In particular the author says that chinaware varies greatly in composition, but a typical one consists of
Bone Ash. 35 Ibs.
China clay. 28 Ibs,
Cornish stone. 37 Ibs.
34. in this treatise Stoneware and Porcelain by Daniel Rhodes, there is an elaborate discussion about chinaware and porcelainware. In Shorter Oxford English Dictionary, Vol. I at page 302, the expressions "China Porcelain", "Chinaware" and "China" are dealt with as follows :
'A fine, semi-transparent earthernware, brought from China into Europe in the 16th Century by the Portuguse, who named it Porcelain (China-ware meant orig. "ware from China".) This shortened to China, became the name also of the material, so that 'china-ware is now ware made of china or porcelain".
35. This clearly shows that chinaware is a fine semi-transparent earthernware and unless it satisfies this requirement an article cannot be called a chinaware. I have already referred to the passages from the books to the effect that stone-ware articles are not translucent but opaque.
36. These various matters referred to above and dealt with by the learned authors on Ceramic Science clearly show that there is a marked difference in Ceramic Science between Chinaware and porcelainware on the one hand and stone-ware articles on the other. So far as I could see, stoneware articles have not been dealt with as coming under Chinaware or porcelainware. I should proceed on the basis that Parliament was perfectly conscious of the technical meaning in Ceramic Science of the expressions chinaware and porcelain-ware.
37. The learned Government Pleader, no doubt, referred me to Collins National Dictionary wherein the expression "Chinaware" is stated to mean a speciesi of fine earthenware. Therefore according to the learned Government Pleader any fine article made of clay can be considered to be chinaware. I am not inclined to accept this contention of the learned Government Pleader because in the same Dictionary it is stated that china clay means the fine kinds of pottery and porcelain clay, called kaolin and chinaware as a species of fine earthenware -- porcelain. Therefore this clearly shows that the author does not intend to include stoneware articles within the expression "china" or "chinaware".
38. Though I am not inclined to accept the contention of Mr. Ranganatha Kamath that the expression "Chinaware" occurring in item 23-B read along with the Explanation incorporated by the Finance Act, 1961, will not take in all glazed clayware which will include articles like those of the petitioners, I have to accept his contention that the expression "ehinaware" occurring in item 23-8 as found in the Finance Bill, 1961, must be considered to be used only in the technical sense in which it is understood in Ceramic Science. If that is so, it follows that the articles manufactured by the petitioner in respect of which duty is demanded under Ext. PI for the period referred to therein are not liable for excise duty as articles coming under "chinaware".
39. Under Section 4(2) of the Provisional Collection of Taxes Act, 1931, I have already shown that a declared provision ceases to have the force of law under the provisions of the said Act when it comes into operation as an enactment with or without amendment. Therefore, the declaration in respect of Clauses 11 and 13 of the Finance Bill has ceased to have any force of law on 29-4-1961 when the Finance Act, 14 of 1961 was passed, and in my view the provisions regarding declaration regarding this matter have been passed with an amendment in the Finance Act. That is, the Explanation found in item 23-B in the Finance Act as passed does not find a place as against item 23-B in the Finance Bill, 10 of 1961. As we are concerned with a period to this case taken in by the Finance Bill 10 of 1961, and as I have already held that the expression "chinaware" does not include stoneware articles manufactured by the petitioner concern, it follows that the demand under Ext. P-l will have to be quashed and this writ petition allowed. Parties will bear their own costs.
40. The C. M. P. is dismissed.