ORDER <NAME>, C.J.

1. These references made by Income-tax Appellate <ORG>, New Delhi (in short, the <ORG>) involve identical points for adjudication in relation to Sir Shri Ram Foundation, hereinafter referred to as assessed for the assessment years 1971-72, 1972-73 and 1974-1974. Following question has been referred under Section 256(1) of the Income-tax Act, 1961 (in short, the Act) "Whether on the facts and in the circumstances of the case the <ORG> was correct in law to give a finding that the assessed was not covered by section 13(2)(h) of the Income-tax Act or any other provision of Section 13 and thereby allowing its claim for exemption from tax of its dividend income u/s 11 of the Income-tax Act ."

2. Factual position in a nutshell is as follows:

assessed is a public charitable trust which was originally registered as a society under the name "<ORG>" under the Societies Registration Act , 1860 on 7-5-1941. Name of the trust was changed to its present name "Sir <NAME> Foundation" as per certificate of registration dated 30-5-1963 granted by the Registrar of Societies. There were seven subscribers to the Memorandum of Association of whom three, namely, Sir <NAME>, <NAME> and <NAME> constituted <ORG>. On 10-2-1955, <NAME> donated to the <ORG> 200 shares of <ORG> (hereinafter referred to as '<ORG>') of the face value of Rs. 100/- each. On the said date <NAME> also donated 90 shares of <ORG>. In respect of these 290 shares received as donation by the <ORG>, <ORG> issued 870 bonus shares and thus the <ORG> came to hold 1160 shares of <ORG>. The total shareholding of <ORG> consisted of 19,997 shares, of which 11359 shares were held by relatives of <NAME> and <NAME> who were the founder members of the <ORG> and were treated by the revenue authorities as "excluded persons" in terms of clause (b) of Section 13(3) of the Act. Thus the percentage of shares held by excluded persons came to 56.79% while that of shares held by the <ORG> worked out to 5.8%.

3. On being moved for reference, question, as set out above, has been referred for opinion of this Court. We have heard the learned counsel for revenue and for the assessed.

4. Stand of the learned counsel for the <ORG> is that there is scope for misuse and evasion of tax if interpretation given by the <ORG> is accepted. The language of the provisions, according to him, shows that the amount must have remained invested for a specific period and merely because, for the sake of argument, it can be said that originally the amount was not invested by the assessed yet when it remained invested subsequently, the provision of Section 13(2)(h) are applicable. The stress, according to him, is on the concern and not on the funds invested, except that it should remain invested in the concern. Learned counsel for the assessed, on the other hand, submitted that the language used as "funds" which must have been invested. If it was originally not invested the question of funds remaining invested in the manner suggested by the learned counsel for <ORG> is not borne out from the statute.

5. In order to appreciate rival submissions, the relevant provisions need to be noted. Sections 11 , 12 and 13(2)(h) at the relevant time read as follows:

"Section 11(1) Subject to provisions of sections 60 and 63 , the following income shall not be included in the total income of the previous year of the person in receipt of the income-

(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India, and, where any such income is accumulated or set apart for application to such purposes in India, to the extend to which the income so accumulated or set apart is not in excess of twenty-five per cent of the income from such property:

12. any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes ( not being contributions made with a specific direction that they shall form part of the corpus If the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and Section 13 shall apply accordingly.

13.(1) Nothing contained in Section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof-

(a) *** *** ***

(b) *** *** ***

(c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof-

(i) *** *** ***

(ii) if any part of such income or any property of the trust or the institution ( whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section(3) *** *** *** *** *** *** (2) Without prejudice to the generality of the provisions of clause (c) and clause(d) of sub-section (1) the income or the property of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of a person referred to in sub-section(3),-

(h) if any funds of the trust or institution, are or continue to remain, invested for any period during the previous year (not being a period before the 1st day of January, 1971) in any concern in which nay person referred to in sub-section (3) has a substantial interest."

6. A similar issue had come up before various High Courts and there is unanimity in the view, as that taken by the <ORG>. In construing the provisions of Section 13(2)(h) , the expression "funds" has to be understood in the context of the provision and not only with reference to dictionaries or to commercial parlance or to the principles of accountancy. It is to be noted that the expression used is "funds" and not "fund". "Funds" means money in hand or cash according to some dictionaries. This, according to us, would be the proper meaning to be attributed to the expression "funds" as appearing in the provision. The fundamental requirement of Section 13(2)(h) is that there must be investment of funds of a trust. If any expanded meaning is given to include assets other than money in hand or cash or credit balance in a bank account, it is evident that they are not capable of being invested as such. Other assets of the trust apart from money in hand or cash or balance in bank will have to be converted into money or cash before the same can be invested, as was observed by <ORG> in <CITATION> ,  170 ITR 150. The expression "invest" connotes a positive act on the part of the trust whereby the funds of the trust are laid out or committed in any particular property or business or transaction with the object of earning a profit or financial advantage or return. What is contemplated is that the trust having assets in the form of money or cash or balance in a bank or any other form capable of being invested or by a positive act and pursuant to a decision of the trust was laid out or committed in a concern of a nature specified before it can be held that such an investment comes within the mischief of Section 13(2)(h) .

7. The meaning of expression "funds" given in the standard dictionaries are as follows:

"Black's Law dictionary, Fifth Edition: 'Fund'...An asset or group of assets set aside for a specific purpose......

A generic term and all-embracing as compared with term 'money' etc which is specific. A sum of money or other liquid assets set apart for a specific purpose or available for the payment of debts or claims. In the plural, this word has a variety of slightly different meanings, as follows: moneys and much more, such a notes, bills, cheques, drafts, stocks and bonds, and in broader meaning may include property of every kind... Money in hand, assets, cash, money available for the payment of a debt, legacy, etc. Corporate stocks or government securities; in this sense usually spoken of as the 'funds'. Assets, securities, bonds or revenue of a <ORG> or <ORG> appropriated for the discharge of its debts. Generally, working capital, sometimes used to refer to cash or to cash and marketable securities."

"(b) Dictionary for Accountants, 4th Edn., by <NAME>:

"1.An asset or group of assets within any organisation, separated physically or in the accounts or both from other assets and limited to specific uses. Examples: a petty cash or working fund; a replacement and renewal fund; an accident fund; a contingent fund; a pension fund.

Example: a trust fund created by a will; an endowment fund; a sinking fund.

4.Pl. Current assets less current liabilities (on an accrual basis); working capital; a term used in cash flow statement.

5. Pl: cash (pp.204-208)."

Chambers' Twentieth Century Dictionary, New Edn.

'Fund: n.a sum or money or which some enterprise is founded or expense supported: a supply or source of money':

The Concise Oxford dictionary, 5th Edn.,:

'Fund n.1 Permanent stock of something ready to be drawn upon-stock of money- pecuniary resources'.

Webster's Seventh New Collegiate Dictionary--based on Webster's Third New International Dictionary (p.538) :

'Fund. 1 an available quantity of material or intangible resources; supply; 2. a sum of money or other resources the principal or interest of which is set apart for a specific objective.

The expression 'invest' in the said Section 13(2)(h) is used as a verb and the meaning of the said expression in the standard dictionaries is as follows:

<ORG>'s Twentieth Century dictionary, New Edn.

"...to lay out for profit as by buying property, shares, etc"

The Concise Oxford dictionary, 5th ed., '... lay out money on, as (invest) in a car'.

Webster's Seventh New Collegiate Dictionary:

'vb. Vt 1: to commit ( money) in order to earn a financial return; 2 to make use of for future benefits or advantage,-- vt. To make an investment."

"In general.--The word has a variety of meanings, but the sense in which it is employed must be gathered from the context. It is not a legal term with a settled meaning but it is a term in common use, suggesting money, in common speech, although technically it may be employed to cover other articles of value, for the term 'fund' or 'funds' is generic and all embracing as compared with the term money, etc which is specific..." In the plural. "Capital : cash, money or moneys; money and negotiable paper immediately or readily convertible into cash, available pecuniary resources; money in hand or available for the payment of a debt, legacy, etc.; specie, or a stock of convertible wealth; and 'funds' may mean or include not only money, as the term is generally understood, but other circulating medium or instrument or tokens in general use in the commercial world as the representatives of value, such as bank notes, bills, cheques, drafts, notes, stocks and bonds, deposits or certificates of deposit, evidences of money lent to the Government, constituting a national debt, for which interest is paid at prescribed intervals..."

Corpus Jurisdiction Secundum Vol. xxxvII "In General.--The word has a variety of meanings, but the sense in which it is employed must be gathered from the context. It is not a legal term with a settled meaning, but it is a term in common use, suggesting money, in common speech, although technically it may be employed to cover other articles of value, for the term "fund" or "funds" is generic and all embracing as compared with the term 'money', etc. which is specific..." in the plural, "capital: cash, money, or moneys; money and negotiable paper immediately or readily convertible into cash, available pecuniary resources; money in hand or available for the payment of a debt, legacy, etc specie, or a stock of convertible wealth; and 'funds' may mean or include not only money, as the term is generally understood, but other circulating medium or instrument or tokens in general use in the commercial world as the representatives of value, such as bank notes, bills, cheques, drafts, notes, stocks and bonds, deposits or certificates of deposit, evidences of money lent to the Government, constituting a national debt, for which interest is paid at prescribed intervals.."

<CITATION> , , it was observed that word "fund" may mean actual cash resources of a particular kind (e.g. money in a drawer or in a bank or it may be a mere accountancy expression used to describe a particular category which a person uses in making up his accounts. Similar view was expressed in <NAME> v. <NAME> (1942) 2 KB 228. The expression "fund" or "funds" has a variety of meanings but the sense in which it is employed must be gathered from the context. It would not be correct to adopt a strictly literal or technical meaning of this expression while construing section 13(2)(h) . In other words, we must not construe that provision mechanically. We must construe it having regard to the object which the <ORG> had in view in enacting it and in the context of the setting in which it occurs. That provision came to be inserted in the Act by the Finance Act , 1970. On a plain reading of that provision, it is clear that clause (h) of sub-section (2) of Section 13 covers investment of the trust funds in any concern in which any of the persons specified in sub-section (3) have substantial interest ("specified persons" in short) and if such investment of the trust funds is made after December, 31, 1970, it would result in forfeiture of exemption from tax. However, if the trust funds have already been invested in any concern as aforesaid before January 1, 1971 exemption would be forfeited if the funds continued to remain so invested even after December 31, 1970. The object of the above provision is to discourage investment of trust funds in the concerns in which specified persons have substantial interest and if an investment is already made in such concerns, to discourage continuance thereof after December 31, 1970. In order to attract the provisions of Section 13(2)(h) , what is essential is that the funds of the trust are invested in a concern covered by Section 13(2)(c) and if such investment is made prior to January 1, 1971, funds are continued to be not invested after December 31, 1970. It is only if the funds of the trust itself are under Section 11 . The funds have to be such as are capable of investment. Therefore, in order to attract Section 13(2)(b) , it has to be established that the funds of the trust which are capable of being invested have been utilised for making investment as provided therein. When the funds of the trust are so invested and such investment is continued after December 31, 1970, the trust whose funds are so invested will not be entitled to claim exemption under Section 11 . Above position has been elaborately dealt with by <ORG> in <CITATION> (1988) 173 ITR 248.

9. The word investment means to lay out money in business with a view to obtain income or profit. In order to constitute an investment the amount laid down should be capable of resulting in an income or return or profit to the investor and in every case of investment, the intention and positive act on the part of the investor should be to earn such income, return or profit to the investor. In order to constitute an investment, the money shall be laid out in such manner, as to acquire some species of property which bring in an income to the investor. An investment popularly means every application of money which is intended to fetch return by way of interest income or profit. This only employed as capital in a business is money invested in business. (<NAME>, in Tax Commissioner v. <ORG> (1902) 22 NZLR 445. In <NAME> v. <NAME> 21 WR Eng 155 it was observed that in its most comprehensive sense it is generally understood to signify the laying out of money in such a manner that it produces a revenue. An illuminating observation was made in IRC v. <ORG> (1946) 1 All ER 57(CA) about what "investment" means. It was observed that the word "investment" is not a word of art, but has to be interpreted in a popular sense. It is not capable of legal definition, but a word of current vernacular. The words "invest" and "investment" are to be taken in the business sense of laying out of money for interest or profit.

10. The plea similar to the one taken by the learned counsel for <ORG> was raised before <ORG> in <CITATION> trust, (1944) 207 ITR 108. There also it was pleaded that the expression 'continued to remain' qualifies the expression 'in any concern' whether it was an investment or not. The plea was rejected by <ORG>. It was observed that it would be doing violence to the plain language of the provision. Section 13(2)(h) requires that the funds of the trust are, or continue to remain invested in any concern of the nature mentioned therein.

(underlined for emphasis)

11. The interpretation suggested by learned counsel for <ORG> would do violence to the plain language used. The dictum of <NAME> as quoted with approval by <NAME> in <ORG> v. IR [1921] 1 KB 64, which has become locus classics can be aptly applied to the facts of the case. Following the illuminating words were used by the learned Judge: "In a taxing act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used" The position has been reiterated time and again by <ORG>. (See. <CITATION> , <CITATION> , <CITATION> , <CITATION> , ).

12. As indicated above, several High Courts have taken the view expressed by <ORG> in <ORG> case (supra). ( <CITATION> ; <CITATION> trust (2000) 240 ITR 513 (Cal); <CITATION> trust (1993) 203 ITR 349 (Guj); <CITATION> trust (1994) 209 ITR 865 (Guj). <CITATION> , (1994) 209 ITR 390 (Guj); <CITATION> trust, ; Trustees of Mangaldas N Verma Charitable trust v. CIT ; <CITATION> trust (1994) 207 ITR 1053 (Bom).

13. It appears that SLP'S filed against judgments of <ORG> and <ORG> in <ORG> (Supra) and <ORG> (supra) have been dismissed (See, (1995) 212 ITR (st) 369 (SC) and (1995) 212 ITR (St) 366 (SC) respectively).

14. The inevitable conclusion from the analysis made above is that the <ORG> was justified in its view. Accordingly, we answer the question referred in the affirmative in favor of the assessed and against revenue.


PETITIONER: ASRUMATI DEBI Vs. RESPONDENT: KUMAR RUPENDRA DEB RAIKOT AND OTHERS. DATE OF JUDGMENT: 27/02/1953 BENCH: <NAME>, B.K. BENCH: <NAME>, B.K. SASTRI, <NAME> (CJ) BOSE, VIVIAN BHAGWATI, NATWARLAL H. CITATION: 1953 AIR 198 1953 SCR 1159 CITATOR INFO : RF 1965 SC 507 (19) RF 1970 SC 891 (5) R 1971 SC2337 (4) R 1974 SC1719 (11,12,13,14) RF 1981 SC1786 (73,99,139,152) R 1988 SC1531 (63) ACT: Letters Patent (<ORG>), cls. 13, 15-Order for transfer of suit under cl. 13-Whether " judgment"- Appealability -meaning of "judgment". HEADNOTE: An order for transfer of a suit, made under clause 13 of the Letters Patent of the <ORG> is not a "judgment" within the meaning of clause 15 of the Letters Patent and no appeal lies therefrom under the Letters Patent, as it neither affects the merits of the controversy between the parties in the suit itself, nor terminates or disposes of the suit on any ground. [Meaning of the word "judgment" discussed]. <CITATION> . 47 Cal. 1104), Justices of the Peace for Calcutta v. <ORG> (8 Beng. L.R. 433), <NAME> v. <NAME> (I.L.R. 13 Rang. 457), <CITATION> . 35 Mad. 1), <NAME> v. <NAME> (I.L.R. 48 Cal. 857), <NAME> v. <NAME> (29 C.L.J. 225), <NAME> v. <NAME> (39 C.W.N. 156), <NAME> v. <NAME> (A.I.R. 1945 Nag. 156), <NAME> v. <NAME> (A.I.R. 1948 Nag. 85), <NAME> v. <NAME> (I.L.R. 57 All. 983), <NAME> v. <NAME> (I.L.R. 23 1160 Lab. 491), <NAME> v. <NAME> (9 Bom. H.C.R. 398) and <NAME> v. <NAME> (I.L.R. 29 Bom. 249) referred to. <CITATION> . 47 Mad. 136) disapproved. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 92 of 1952. Appeal by special leave from the Judgment and Order dated 16th May, 1951, of <ORG> Calcutta (<ORG> and <NAME>) in Appeal from Original Order No. 136 of 1949 arising out of Judgment and Order dated the 25th April,' 1949, of the said <ORG> (<NAME>) in Extra- ordinary Suit No. 2 of 1948.

<NAME> (<NAME>, with him) for the- appellant.

<NAME> (<NAME>, with him) for the respondent.

1953. February 27. The Judgment of the Court was delivered by <NAME> appeal, which has come before us on special leave, is directed against a judgment of <ORG> of <ORG>, dated the 16th May, 1951, by which the learned Judges dismissed an appeal taken against an order, made by a single Judge on the Original Side of that Court,, under clause 13 of the Letters Patent, on the preliminary ground that the appeal was not competent in law.

There is no dispute about the material facts of the case which lie with-in a short compass. On 7th August, 1947, a suit was filed by the respondent <NAME> in <ORG> at Jalpaiguri in West Bengal,being Title Suit No. 40 of 1947,for recovery of possession of a large estate known as Baikunthapur Raj situated in that district, on the allegation that he, being the eldest son of late <NAME>, the last holder of the estate, became entitled to the properties on the I death of his father under a custom of the family which excludes all females from inheritance and follows the rule of Iineal primogeniture in matters of succession. <NAME> died in December, 1946, and <NAME>, the appellant before us, is admittedly his widow. There was no son born to her and her only child is a daughter named <NAME>. According to the plaintiff respondent, his mother <NAME>, who is a Lepcha by birth was another lawfully wedded wife of <NAME> and was married to the latter in what is known as the " <NAME> form. <NAME> had three sons by this wife, the plaintiff being the eldest. <NAME>, it is alleged, took possession of the bulk of the properties comprised in the estate on the death of her husband, although she had no legal right to the same and it was to evict her from these properties that this suit was brought. Besides <NAME>, the plaintiff also impleaded three other agnatic relations of the deceased (who are defendants Nos. 2 to 4) and also his own two younger brothers as defendants to the suit. <NAME> filed her written statement on January 19, 1948, and the main defence put forward by her was that there was no legal marriage between her husband and the plaintiff's mother, the latter being only one of the several mistresses of her husband. She denied that there was any custom in the family under which females were excluded from inheritance. The defendants 2 to 4 also filed written statements, challenging the legitimacy of the plaintiff and his claim to succession, and put forward their own rights as heirs under the customary law obtaining in the family. On 30th April, 1948, the plaintiff presented an application in <ORG> <ORG> of Calcutta under clause 13 of the Letters Patent, praying for transfer of the suit filed in the Jalpaiguri court to <ORG> to be tried in its Extraordinary Original Civil Jurisdiction. This application was heard by <NAME> sitting singly and by his order dated the 25th of April, 1949, the learned Judge allowed the application, substantially on the ground that having regard to the atmosphere of prejudice that was created in the locality by supporters of the defendant, who wielded considerable influence in the district, the plaintiff might have a legitimate apprehension that he would not get fair trial in the district court.

Against this decision the defendant No. 1 took an appeal to <ORG> of <ORG> and the learned Judges (<NAME> and <NAME>) dismissed the appeal on the ground that the order appealed again was not a 'judgment' within the meaning of clause 15 of the Letters Patent. It is the propriety of this decision that has been challenged before us in this appeal. <ORG> in holding the appeal before it to be incompetent based its decision entirely upon an earlier pronouncement of a Division Bench of the same court, where it was held by <NAME> sitting with <NAME> that an order for transfer of a suit made under clause 13 of the Letters Patent was not a 'judgment' within the meaning of clause 15 (1). Reliance was placed by the learned Judges for this view upon the pronouncement of Sir <NAME> in the well-known and often cited case of <NAME> for Calcutta v. <ORG> (2), where the learned Chief Justice said as follows:-

"We think that 'judgment' in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined."

The identical question, whether an order for transfer under clause 13 of the Letters Patent is a 'judgment' for purposes of appeal, was pointedly raised before the Madras and <ORG>, and while <ORG> (3) answered the question hi the affirmative, a definitely negative answer was given by (1) <CITATION> . 47 Cal. 1104 (2) 8 Ben. L.R. 433.

(3) Vide Krishns Reddi v. <NAME>, I.L.R 47 Mad. 136.

<ORG> (1). The Madras decision purports to be in accordance with the view enunciated <ORG> of that court in <CITATION> (2) where Sir <NAME> sitting with <NAME> swami <NAME> and <NAME> formulated a definition of 'judgment' in a comprehensive manner differing fro the wide interpretation put upon the term in the earlier case of <NAME> v. <NAME> (3). "The test seems me," thus observed the learned Chief Justice, "to be not what is the form of the adjudication, but what is its effect on the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a judgment within the meaning of the clause." This decision, it may be pointed out, has not only been adhered to in Madras since then without any comment, but <ORG> has in several instances manifested a marked leaning towards it (4).

On the other hand, a Full Bench(1) of <ORG> presided over by <NAME> took 'a view altogether different from that of the Calcutta and the Madras <ORG> as regards the meaning of the word I judgment' in clause 13 of the Rangoon Letters Patent, which corresponds to clause 15 of the Letters Patent of the Calcutta and Madras <ORG>. It was held by the Full Bench of <ORG> that the term 'judgment' in the Letters Patent means and is a decree in a suit by which the rights of the

-parties in the suit are determined. In other words, 'judgment' is not what is defined in section 2 (9) of the Civil Procedure Code as being the statement given by the judge of the grounds of a decree (1) <NAME> v. <NAME>, 13 Rang. 457 (F.B.). (2) 35 M 1 (F.B.).

(3) 3 M.H.C.R. 384.

(4) Vide Muathura Sundari v. Haran Chandra I.L.R. 43 Cal. 857; Chandi Charan v. <NAME> 29 C.L.J. 225 at 229 <CITATION> , 39 C.W. N. 155 or order, but is a judoment in its final and definitive sense embodying a decree. A final ' judgment is an adjudication which conclusively determines the rights of the parties with regard to all matters in issue in the suit, whereas a preliminary or interlocutory judgment is a decree by which the right to the relief claimed in the suit is decided but under which further proceedings are necessary before a suit in its entirety can be disposed of. Save and except final and preliminary judgments thus defined, all other decisions are ' orders' and they do not come within the description of I judgments ' under the relevant clause of the Letters Patent. No 'order' is appealable unless an appeal is expressly provided against it by the Civil Procedure code or some other Act of the <ORG>. In this view an ' order' for transferring a suit from a subordinate court to <ORG> could not possibly be regarded as a 'judgment', and consequently no appeal would lie against such an order. This definition of ' judgment 'has been accepted in several cases by <ORG> (1), and substantially this seems to be the view of <ORG> also (2). <ORG> of <ORG>(,'), however, has refused to accept this view and has preferred to follow the tests enumerated by the Calcutta and <ORG>. <ORG> accepted the Calcutta view from the very beginning (4). In view of this wide divergence of judicial opinion, it may be necessary for this court at some time or other to examine carefully the principles upon which the different views mentioned above purport to be based and attempt to determine with as much definiteness as possible the true meaning and scope of the word I judgment' as it occurs in clause 15 of the Letters Patent of <ORG> and in the corresponding clauses of the Letters Patent of the other <ORG>. We are, however, relieved from embarking (1) <NAME> v. <NAME>, A.I.R. 1945 Nag. 156; <NAME> v. <NAME>, A.I.R. 1948 Nag. 85. (2) <NAME> v. <NAME>, 57 All. 983 (F.B.) (3) <NAME> v. <NAME>, I.L.R. 23 Lah. 491, (4) <NAME> v. <NAME>, 9 Bom. H.C.R. 398, on such enquiry in the present case as we are satisfied that in none of the views referred to above could an order of the character which we have before us, be regarded as a judgment' within the meaning clause 15 of the Letters Patent.

<NAME>, as said already, defined 'judgment' be a decision which determines some right or liability affecting the merits of the controversy between the parties. It is true that according to the learned Chief Justice an adjudication, in order that it might rank as a 'judgment', need not decide the case on its merits, but it must be the final pronouncement of the court making it, the effect of which is to dispose of or terminate the suit or proceeding. This will be apparent from the following observations made by <NAME> in the course of his judgment in the case referred to above :

" It is, however, said that this court has already put a wider construction upon the word I judgment' in clause 15 by entertaining appeals in cases where the plaint has been rejected as insufficient, or as showing that the, claim is barred by limitation,, and also in cases where orders have been made in execution. These however are both within the above definition of a judgment, and it by no means follows that, because we hold the order in the present case not to be appealable, we should be bound to hold the same in the cases referred to. For example, there is an obvious difference between an order for the admission of a plaint and an order for its rejection. The former determines nothing, but is merely first step towards putting the case in a shape for determination. The latter determines finally so far as the court which makes the order is concerned that the suit, as brought. will not lie. The decision, therefore, is a judgment in the proper sense of the term ."

It cannot be said, therefore, that according to Sir <NAME> every judicial pronouncement on a right or liability between the parties is to be regarded  as a 'judgment', for in that case there would be any number of judgments in the course of a suit or proceeding, each one of which could be challenged by way of appeal. The judgment must be the final pronounce ment which puts an end to the proceeding so far as the court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits. This view, which is implied in the observations of Sir <NAME> C.J. quoted above, has been really made the basis of the definition of I judgment' by Sir <NAME> in the <ORG> decision of <ORG> to which reference has been made (1). According to <NAME> to find out whether an order is a I judgment ' or not, we have to look to its effect upon the particular suit or proceeding in which it is made. If its effect is to terminate the suit or proceeding, the decision would be a 'judgment' but not otherwise. As this definition covers not only decisions in suits or actions but 'orders' in other proceedings as well which start with applications, it may be said that any final order passed on an application in the course of a suit, e.g., granting or refusing a party's prayer for adjournment of a suit or for examination of a witness, would also come within the definition. This seems to be the reason why the learned Chief Justice qualifies the general proposition laid down above by stating that "an adjudication on an application, which is nothing more than a step towards obtaining a final adjudication in the suit, is not a judgment within the meaning of the Letters Patent. "

As stated already, it is not our purpose in the present case to frame an exhaustive definition of the word 'judgment' as used in clause 15 of the Letters Patent. We have indicated what the essential features of a I judgment' are according to both the Calcutta and the Madras <ORG> and all that we need say is that, in our opinion, an order under clause 13 of the Letters Patent does not satisfy the tests of a 'judgment' as formulated by either of these <ORG>. (1) <CITATION> , 35 Mad, 1, The question that requires determination in an application under clause 13 of the Letters Patent is, whether a particular suit should be removed from any court which is subject to the superintendence of <ORG> and tried and determined by the latter as a court of extraordinary original jurisdiction. It is true that unless the parties to the suit are agreed on this point, there must arise a controversy between them which has to be determined by the court. In the present case, a single Judge of <ORG> has decided this question in favour of the plaintiff in the suit; but a decision on any and every point in dispute between the parties to a suit is not necessarily a ' judgment'. The order in the present case neither affects the merits of the controversy between the parties in the suit itself, nor does it terminate or dispose of the suit on any ground. An order for transfer cannot be placed in the same category as an order rejecting a plaint or one dismissing a suit on a preliminary ground as has been referred to by <NAME> in his observations quoted above. An order directing a plaint to be rejected or taken off the file amounts to a final disposal of the suit so far as the court making the order is concerned. That suit is completely at an end and it is immaterial that another suit could be filed in the same or another court after removing the defects which led to the order of rejection. On the other hand, an order of transfer under clause 13 of the Letters Patent is, in the first place, not at all an order made by the court in which the suit is pending. In the second place, the order does not put an end to the suit which remains perfectly alive and that very suit is to be tried by another court, the proceedings in the latter to be taken only from the stage at which they were left in the court in which the suit was originally filed. Mr. <NAME> in the course of his arguments placed considerable reliance upon the pronouncement of <ORG> in <CITATION> (1), where it was held by Court C.J. and (1) 13 Beng, L.R. 91.

<ORG> that an order refusing to rescind leave to sue granted under clause 12 of the Letters Patent was a 'judgment' under clause 15 and could be challenged by way of appeal. This decision was followed by <ORG> in <NAME> v. <NAME>); and it is argued by Mr. <NAME> that there is no difference in principle between an order of that description and an order transferring a suit under clause 13 of the Letters Patent. The contention of Mr. <NAME> undoubtedly receives support from the judgment of <ORG> in <NAME> v.

Thanikachala(2),where precisely the same line of reasoning was adopted. In our opinion, this reasoning is not sound and there is an essential difference between an order rescinding or refusing to rescind leave to sue granted under clause 12 of the Letters Patent and one removing a suit from a subordinate court to <ORG> under clause 13 of the Letters Patent, and this distinction would be apparent from the observations of Sir <NAME> in the Madras <ORG> case(3) mentioned above, to which sufficient attention does not appear to have been paid by the learned Judges of the same court who decided the later case. Referring to the decision of <ORG> in <NAME> v. <NAME>), <ORG> observed as follows:

"As regards the Bombay authorities I may refer to <NAME> v. Camaji(1), where it was held that an appeal lay from an order dismissing a Judge's summons to show cause why leave granted under clause 12 of the Letters Patent should not be rescinded and the plaint taken off the file. Here the adjudication asked for, if made, would have disposed of the suit. So also would an order made under an application to revoke a submission to arbitration. I think such an order is appealable."

Leave granted under clause 12 of the Letters Patent constitutes the very foundation of the suit which is instituted on its basis. If such leave is rescinded. the (1) I.L.R. 29 Bom. 249. (2) I.L.R. 47 Mad. 136. (3) <CITATION> 35 Mad. 1 (F.B.).

<NAME>

suit automatically comes to an end and there is no doubt that such an order would be a judgment. If, on the other hand, an order is made dismissing the Judge's summons to show cause why the leave should not be rescinded, the result is, as Sir <NAME> pointed out(1), that a decision on a vital point adverse to the defendant, which goes to the very root of the suit, becomes final and decisive, against him so far as the court making the order is concerned. This brings the order within the category of a 'judgment' as laid down in the Calcutta cases. We need not express any final opinion as to the propriety or otherwise of this view. It is enough for our purpose to state that there is a difference between ail order refusing to rescind leave granted under clause 12 of the Letters Patent and one under clause 13 directing the removal of a suit from one court to another, and there is no good reason to hold that the principle applicable to one applies to the other also. The result, therefore, is that, in our opinion, the view taken by <ORG> is right and this appeal should fail, and is dismissed with costs.

Appeal dismissed.

Agent for the appellant: <NAME>.

Agent for the respondent No. 1 : <NAME> for <NAME>.


* IN THE HIGH COURT OF DELHI AT NEW DELHI + WP(C) No.2254/2002 Reserved on: 7th August, 2009 Pronounced on: 13th August, 2009 # SAIL EX-EMPLOYEES ASSOCIATION .......Petitioner ! Through: None VERSUS $ STEEL AUTHORITY OF <ORG> AND <ORG>. ......Respondents ^ Through: Mr. <NAME>, Advocate, for the Respondent No.1. CORAM: HON'BLE MR. JUSTICE <NAME> 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? 2. To be referred to the Reporter or not?yes 3. Whether the Judgment should be reported in the Digest? yes <NAME>, J.

The Petitioner No.1 is an Association of retired employees of <ORG> (hereinafter referred to as „<ORG>) and is concerned with their welfare. Petitioner No.2 is the patron of petitioner No.1. The employees of <ORG> are divided into two categories, viz. (a)Executives (b) non-executives. The Executives are either promoted from non-executive cadres or appointed directly. Vide Notification dated 1.2.1996, <ORG> raised the ceiling on the amount of gratuity payable to the employees from Rs.1 lakh to Rs.2.5 lakhs for the Executives. This ceiling was further raised to Rs.3.5 lakhs with effect from 1.1.1996 and according to the petitioners, it was applicable to all Government employees of <ORG>. However, this enhanced ceiling on gratuity was adopted by Respondent-<ORG> only with effect from 22.9.1997.

2. Another grievance of the Petitioner is that the ceiling on gratuity is applicable only to those employees who are in Executive cadre and there is no ceiling in case of non-executive employees. The Petitioners have sought setting aside of the lower ceiling fixed by <ORG> and have further sought removal of distinction between Executives and non-executive employees in the matter of gratuity. They have also sought payment of difference in gratuity amount along with interest at the rate of 24 per cent per annum.

3. The Petition has been contested by <ORG>. It has been stated in the Counter Affidavit that Respondent No.1 is an independent Company having its own policy and rules for its employees and is not a department of <ORG> and, therefore, the decisions of <ORG> in respect of Government employees are not applicable to it. It has been further alleged that as per clause 3.2.1 of SAIL Gratuity Rules, the amount of gratuity in respect of employees governed by the Memorandum of Agreement, arrived at in <ORG>, is to be decided as per the terms of the agreement. Even the fixation of salary and other benefits in respect of the non-executives is based on the agreement arrived at <ORG>. The Memorandum of Agreements signed at the National level are implemented by entering upon by-partite settlement at the plant/unit level with the local management and local <ORG> representing the non-executives and the workmen. The Memorandum of Agreement of <ORG> which was signed in October, 1970, provided that there shall be no ceiling or limit on the amount of gratuity payable. In all subsequent NJCS Agreements, it has been provided that the benefits given under the previous Agreements will continue and, therefore, upper limit on payment of gratuity has become non- operative in case of non-executive employees.

4. It has also been alleged by the respondent that Executives being Officers/Managers at various levels are different and distinct class, compared to non-executives who constitute workmen. It has also been pleaded that since promotions from non-executives posts to executives post were accepted by the members of <ORG>, at the terms and conditions applicable to the Executives, they are stopped from raising a grievance on this count. It has also been stated that Executive enjoys several benefits and allowances which are not available to non-executives and there cannot be any comparison since the two are distinct class categories. It has further been stated in Counter Affidavit that vide Government of India Ordinance dated 24.9.1997, under payment of Gratuity Act , the amount of ceiling was increased from Rs.1 lakh to Rs.2.5 lakhs and further vide Payment of Gratuity (Amendment) Act , 1998 dated 23.6.1998, the ceiling was raised to Rs.3.5 lakhs. The Rules of the Company were amended accordingly so as to raise the ceiling from the date of amendments.

5. Let me first take up the grievance of the petitioners regarding distinction between Executives and non-Executives in the matter of payment of gratuity. Section 4(2) of the Payment of Gratuity Act, 1972 provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned. Sub-section 5 of Section 4 before its amendment with effect from 24.9.1997, provided that the amount of gratuity payable to an employee shall not exceed Rs. 1 lakh. It was increased first to Rs.2.5 lakhs and then to Rs. 3.5 lakhs. The ceiling of Rs. 3.5 lakhs was prescribed by Payment of Gratuity (Amendment) Act , 1998, with effect from 24 th September, 1997. Therefore, as far as Section 4 (4) of Payment of Gratuity Act , 1972 is concerned, the upper sealing was Rs.1 lakh prior to 24th September, 1997, which was fixed at Rs.3.5 lakhs with effect from 24.9.97.

6. Section 4(5) of the Payment of Gratuity Act, 1972 reads as under:-

"Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer."

Thus, despite the upper sealing prescribed by sub- section 4 , the employees are entitled to receive higher gratuity if it is so agreed under any award or an agreement or contract between the employer and the employees.

7. As disclosed in the counter affidavit, the salary and other benefits of non-executive employees of Steel Industry were fixed under an agreement arrived at the level of <ORG>, which was followed by by-partite agreement at plants/unit level between the local management and the local unions representing the workmen. The counter affidavit shows that a Memorandum of Agreement of Joint Wage Negotiating Committee for steel industry signed in October, 1970 provided that there was to be no ceiling or limit on the amount of gratuity payable. It further shows that in all subsequent <ORG> agreements, it was provided that the benefits provided under the previous agreement would continue. Thus, in view of the agreement between the respondent and its workmen, there is no ceiling on the amount of gratuity payable to the non-executive employees and such an agreement is specifically permitted by Section 4(5) of the Payment of Gratuity Act, 1972.

8. It is true that differential treatment is being meted out by the respondent/SAIL to its employees forming part of the executive cadres and the employees who are non-executives/workmen. But, such a differential treatment is not without authority of law and is expressly permitted under Section 4(5) of The Payment of Gratuity Act, 1972. The Constitutional validity of Section 4(5) of Payment of Gratuity Act, 1972 has not been challenged by the petitioners. They have also not challenged the agreement between the respondent and its non-executive employees. So long as there is a subsisting agreement between the respondents and its non- executive employees to the effect that there will be no ceiling on the gratuity payable to the workmen and such an agreement is permissible in law, no fault can be found with the respondent treating its employees forming part of executive cadres differently from the employees who are workmen, in the matter of Payment of Gratuity.

9. Even otherwise, the employees who are workmen, constitute an altogether different class from the employees who are Managers and officers, being members of various executive cadres of the respondent/company. The pay structure, allowances and service conditions of employees forming part of managerial/officer cadres are altogether different from the pay structure, allowances and service conditions of employees constituting non-executive cadres. Those who belong to executive cadres get not only higher salary but also better allowances, more perks and more favourable service conditions. In fact, executive cadres and non-executive cadres are altogether different classes and cannot be compared with each other. Differential treatment based on intelligible differentia is permissible under the Constitution so long as it has a reasonable nexus with the objective sought to be achieved in this behalf. Only those who are similarly situated are entitled to equal treatment. Since the employees forming part of managerial cadres belong altogether to a different class, they cannot claim, as a matter of right, the same treatment which is given to the non-executive employees on account of a binding agreement between them and the respondent company. Therefore, this is no violation of Article 14 of the Constitution in payment of gratuity to the Executives as per their statutory entitlements while paying gratuity to the Non- Executives in terms of the agreement between them and the management.

10. Another important aspect in this regard is that while taking promotion from non-executive cadres to executive cadres, these employees knew that once they are promoted to the executive cadres, they will receive gratuity only as per their statutory entitlement and not in terms of the agreement between the management and the workmen. Having accepted the promotion, knowing fully well its implication on their gratuity, they cannot now claim the same gratuity which is payable to the non-executive employees.

11. The issue of differential treatment to executive and non- executive employees, in the matter of payment of gratuity came up for consideration before this court in CWP No.486/1995 decided on September 13, 1996. This court, after considering the provisions of Payment of Gratuity Act and the agreement of the respondent with its non-executive employees repelled the contentions that fixation of higher gratuity to the non-executive class under the agreement was inconsistent with the provisions of the Payment of Gratuity Act , 1972. This court also held that the two categories, namely, the executives and the non-executives belong to two different and distinct classes, and there was a rationale relationship with the object sought to be achieved in extending better terms of gratuity to the non-executive employees in pursuance of the agreement and in terms of sub-section 5 of Section 4 of the Payment of Gratuity Act , 1972.

12. The respondent amended its Gratuity Rules as and when there was amendment in the provisions of the Payment of Gratuity Act , 1972 and those rules applied to all employees irrespective of whether they are from executive cadres or from non-executive cadres. The non-executives are getting gratuity without any ceiling not on account of Rules but on account of their agreement with the management.

13. For the reasons given above, I find no merit in the contention that the executives are entitled to Payment of Gratuity without any ceiling, as is being paid to the non-executive employees.

14. Coming to the plea that <ORG> had increased the ceiling on the amount of gratuity from Rs.1 lakh to Rs.2.5 lakhs with effect from 1st April, 1995 and then to Rs. 3.5 lakhs with effect from 1st January, 1996 and the enhanced ceiling was applicable not only to <ORG> employees but also to the employees of public sector undertakings/enterprises, I find that the petitioner has not placed on record any order or notification of <ORG> revising the ceiling for payment of gratuity to the employees of all the public sector undertakings, to Rs. 2.5 lakhs with effect from 1st April, 1995 and then to Rs. 3.5 lakhs with effect from 1.4.96. <CITATION> . AIR 1998 Supreme Court 418, the Hon‟ble Supreme Court specifically held that <ORG> was not a department of the <ORG>. In taking this view, the Hon‟ble Supreme Court relied upon its earlier judgments, namely, <CITATION> . AIR 1970 SC 1150; and <CITATION> AIR 1982 SC 697.

Since neither the respondent is a department of <ORG> nor its employees are government employees, the ceiling fixed by <ORG> in respect of its employees does not ipso facto apply to the employees of public sector undertakings. The respondent is a company duly registered under Companies Act and it has framed its own Rules in the matter of Payment of Gratuity to its employees. The employees of the respondents are, therefore, entitled to Payment of Gratuity only in terms of Payment of Gratuity Act , 1972 and the Gratuity Rules framed by the respondent company. In the absence of any order, notification or direction from <ORG>, for applying the same ceiling, in payment of gratuity, to the employees of all the public sector undertakings, as is fixed by it in respect of its own employees, the employees of the respondent cannot claim that the ceiling prescribed for <ORG> employees should be applicable in their case as well.

15. Coming to the effective date from which the revised ceiling was applied by <ORG>, I find that the Gratuity Rules were amended by the respondent with effect from 24.9.97. Since the provisions of Payment of Gratuity Act , 1972 were amended with effect from the same date, it cannot be said that the aforesaid date was fixed arbitrarily and was without any basis. In State of H.P. & Anr. Vs. <NAME>8) SC 260, the State of Himachal Pradesh framed Demobilised Armed Forces personnel (Reservation of Vacancies in Himachal State Non Technical Services) Rules, 1972 to provide for reservation of vacancies to released army personnel, who were commissioned to the army on or after 1.11.62. The cut off date was challenged as arbitrary. <ORG> found that the cut off date had a direct bearing with the date on which country faced disturbance on account of war with China. In <ORG> Vs. <NAME> & Ors. JT 1993 (4) SC 501, <ORG> held as under:-

"the power of the <ORG> to specify a date with effect from which, the Regulations framed, or amended, as the case may be shall come into force is unquestioned. A date can be specified both prospectively as well as retrospectively. The only question is whether the prescription of the date is unreasonable or discriminatory."

In State of Bihar & Ors. Vs. <NAME> & Ors. AIR 1990 SC 1300, <ORG> held as under:-

"the choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the choice unless the circumstances show it to be capricious and whimsical. When it is necessary for the <ORG> or authorities to fix a line or a date and there is no mathematical or logical way of fixing it precisely, the decision of the <ORG> or authority must be accepted unless it is shown to be capricious or whimsical or wide off the reasonable mark."

The effective date fixed by the respondent being based upon the date of amendment of Payment of Gratuity Act , I find no merit in the contention that the date of 24th September, 1997 for the purpose of revising the ceiling of gratuity was fixed arbitrarily.

For the reasons given above, I do not find any merit in the petition and the same is hereby dismissed.

(<NAME>) JUDGE August 13, 2009.

sn/sk


JUDGMENT <NAME>, J.

1. In these appeals by special leave the only question that is raised is whether the substance known as Pyratax-Vinyl Pyridine Latex (for short, V.P. Latex) is not rubber raw classifiable under item No. 39 of the Indian Tariff Act, 1934 (hereinafter referred to as I.C.T.).

2. The appellants are manufacturers of automotive tyres. V.P. Latex is required in the process of manufacturing of tyres. V.P. Latex is required is the process of manufacturing of tyres V.P. Latex is not manufactured in India and has to be imported from outside the country. The tyre industry uses V.P. Latex as one of the essential ingredients in the course of manufacture of automotive tyres.

3. The appellant in Civil Appeal No. 1446 of 1972 imported sometime in April 1969, 3 consignments of V.P. Latex. In appeal from the proceedings before the Assistant Collector of <ORG> for appraisement of the said consignments for the purpose of imposition of customs duty and/or countervailing duty, the Appellate Collector of <ORG>, Calcutta upheld the appellant's contention and classified V.P. Latex under item 39 of the I.C.T. as raw rubber. The classification made by the Appellate Collector was revised by <ORG> in a proceeding initiated, suo motu, under Section 131(2) of the <ORG> Act, 1962. <ORG> held by the impugned order, that the said V.P. Latex was "an aqueous dispersion of synthetic resin", and hence classifiable under item 87 of the I.C.T. prior to 1st March, 1970, and thereafter under the new item No. 82(3) I.C.T. <ORG> by the same order further held that the said goods were liable to countervailing duty under item No. 15A, C.E.T. both before and after 1st March, 1970. It is apparent that if V.P. Latex were to be classified under Item No. 87, higher duty will be leviable and that is the reason for the controversy in these appeals.

4. In Civil Appeal No. 2746 of 1972, the appeal is directed against the order of August 17, 1972, of the Appellate Collector of Customs, Madras, dismissing a batch of 18 appeals of the <ORG>. The Appellate Collector confirmed the order of the Assistant Collector of Customs Appraising, Madras, rejecting the appellant's claim for refund of duty on the basis that V.P. Latex should be classified under item 39 I.C.T. and not under item 82(3) of the I.C.T. The appellant did not go in revision before <ORG> as already similar claims had been rejected by <ORG>.

5. There are several interveners in the appeals and the entire tyre industry is interested in the matter.

6. Prior to the 1st March, 1970, the First Schedule to the Indian Tariff Act, 1934, contained, inter alia, the following dutiable items :

Item No. 39-Ruber, raw, Item No. 87-All other articles, not otherwise specified.

In addition to the above, the following item was introduced in the Tariff Act by the Finance Act , 1970 :

Item No. 82(3)(a).-Artificial or synthetic resins and plastic materials in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders.

7. Under Section 2A of the Tariff Act any article which is imported into India shall be liable to customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. Such customs duty in addition to the duty under the Tariff Act is known as countervailing duty.

8. Item 15A of the First Schedule to the Central Excises and Salt Act , 1944 (briefly C.E.T.) reads as follows :

15A. Artificial or synthetic resins and plastic materials and articles thereof (1) Artificial or synthetic resins and plastic materials in any form, whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, the following, namely

9. An additional item being item No. 16AA was introduced in the C.E.T. for the first time by the Finance Act , 1970, which reads as follows :

Item No. 16AA.-Synthetic rubber, including butadiene acrylonitrile rubber, styrene butadiene rubber and butyl rubber, synthetic rubber latex, including prevulcanised synthetic rubber latex.

The quantity of V.P. Latex consumed by the tyre industry in India as a whole is said to be about 1000 tonnes per year and the value thereof is Rs. 40,33,000/- approximately. The appellant, <ORG>, consumes about 300 tonnes per year. The controversy between the parties centers round the real meaning of V.P. Latex, while the appellants submit that V.P. Latex is synthetic rubber in the latex form, according to the respondents it is not so, but on the other hand, it is what may be described as 'resin'.

10. In order that the <ORG> is able to appreciate the rival contentions, both sides addressed us referring to several standard authorities and treatises.

11. Before we proceed further it may be appropriate to see how rubber is described in the Encyclopaedia Britannica, Volume 19, 1965 Edition :

Rubber is the substance caoutchouc (q.v.), a milk like fluid that is obtained from certain tropical shrubs or tyres and then subjected to various processes of manufacture; or it may be a product of chemical synthesis.

* * * * The uniqueness of rubber lies in its physical properties of extensibility and toughness. In its natural state, it is greatly affected by temperature, becoming harder when cooled (at 0°-10°C it is opaque) and softer when heated (above 50°C, it becomes tackier and less elastic, decomposing into liquid form at 190°-200°C). When vulcanized (i.e. heated with sulphur at 120°-160°C.) it loses its thermoplasticity and becomes stronger and more elastic ....

Chemically, rubber is a polymer of isoprene....

* * * * The term synthetic rubber is used to describe an ever growing number of elastic materials, some of which closely resemble natural rubber while others have completely different physical properties, Since World War II, precise terminology has not kept pace with the rapid developments in the synthetic and plastics industries.

The copolymerization of the butadiene and the styrene takes place in an emulsion in the presence of an active initiator, such as cumene hydroperoxide and p-menthane hydroperoxide, which allows the conversion to occur at a low temperature (5°C). SBR is usually prepared with 75% butadiene and 25% styrene; the proportion will, however, vary according to the desired degree of elasticity....

12. Let us consider the appellants' case to treat the V.P. Latex as rubber raw. In this attempt the appellants rely upon several authorities from the rubber world pronouncing upon the chemical properties as well as various uses and potentialities. Their contention is that V.P. Latex is a synthetic rubber Latex and can never be taken for synthetic resin. The principal point to distinguish V.P. Latex from synthetic resin is, while synthetic resin cannot be vulcanised, V.P. Latex, being rubber can be vulcanised. According to <ORG>, (A.S.T.M.) raw rubber is defined as crude or uncompounded rubber, either natural or synthetic. <ORG> (I.S.I.) defines rubber as follows :

Rubber in its modified state free of all diluents, retracts within one minute to less than 1.5 times its original length after being stretched at normal room temperature to twice its length and held for one minute before release.

13. It also defines raw rubber as 'vulcanised rubber'. According to <NAME> in his book "Rubber-Natural and Synthetic", V.P. Latex is composed of butadiene styrene and vinyl pyridine in the ratio of 70 : 15 : 15 respectively. A synthetic latex is produced as the first stage in the manufacture of most synthetic rubbers. V.P. Latex is one such synthetic rubber latex. An affidavit sworn by Mr. <NAME>, Manager, <ORG>, <ORG>, <ORG>, states that V.P. Latex is a terpolyer rubber as defined in A.S.T.M. Specification DI-566-60T and that there is no measurable resin content in this product. It is claimed by the appellants that pyratex which is the commercial name for V.P. Latex, imported by them, is exactly similar to the V.P. Latex referred to in Mr. <NAME>'s affidavit, since it also contains butadiene styrene and vinyl pyridine in the same proportion of 70 : 15 : 15 with no measurable resin content. It is claimed that V.P. Latex is an emulsion of synthetic rubber and it is borne out by its chemical composition and by the physical properties. In the case of V.P. Latex when coagulated, the coagulum answers fully the A.S.T.M. standards and tests prescribed for rubber. Its use in liquid state is commercially more expedient than its use in dry state. V.P. Latex has been designed as a special synthetic rubber latex to be suitable for its use at the fabric cross-linking stage with rubber compound. It is claimed that in its application it is in no way different from any other natural rubber or synthetic rubber latices. The advantage gained in the case of V.P. Latex is that it is more stable and is not whimsical with reference to manufacturing conditions. According to <ORG>, the additions of vinyl pyridine in such terpolymers of butadiene, styrene and vinyl pyridine have been found to improve the characteristics and properties with the increase of vinyl pyridine content and it is known to reach optimum at about 15 parts i.e. at a charge of 75 : 10 : 15. It is further said that vinyl pyridine copolymers suffer from the drawback of extremely high rate of cure, scorching and incompatibility with other rubbers and hence do not find use in the dry state in spite of their certain superior properties. According to the appellants, V.P. Latex, when coagulated just like any other rubber latex satisfies the elongation tests prescribed for rubber. It is also claimed that in the international field of rubber manufacture, all over the world, V.P. Latex is fully recognised as a synthetic rubber latex and not as a synthetic resin.

14. The Condensed Chemical Dictionary, 8th edition, 1971, defines latex as a white free-flowing liquid obtained from some species of shrubs or trees in which microscopically small particles or globules of natural rubber are suspended in a watery serum. Natural rubber latex, obtained from the tree Heve a Braziliensis, contains about 60% water, 35% rubber hydrocarbon, and 5% proteins and other substances. Coagulation is prevented by protective colloids, but can be induced by addition of acetic or formic acid. Synthetic latices include polystyrene, SBR rubber, neoprene, polyvinyl chloride etc. Both natural and synthetic latices are available in vulcanised form. It describes their uses for thin rubber products (surgeons' gloves, drug, sundries); girdles, pillows, etc.; emulsion paints; adhesives; tire cord coating; rubber, natural.

15. In the same Dictionary, rubber synthetic is described as follows :

Any of a group of manmade elastomers which approximate one or more of the properties of natural rubber. Some of these are : sodium polysulfide ('Thiokol'); polychloroprene (neoprene); butadiene-styrene copolymers (SBR) ; acrylonitrile-butadiene copolymers (nitrile rubber); ethylene-propylene-diene (EPDM) rubbers; synthetic polyisoprene ('Coral', 'Natsyn'); butyl rubber (copolymer of isobutylene and isoprene); poly acryloni-trile ('Hycar'); silicone (polysiloxane); epichlorohydrin; polyurethane ('Vulkollan').

Styrene-butadiene rubber (SBR, s. type elastomer)-is the most common type of synthetic rubber. Manufacture involves copolymerization of about 3 parts butadiene with 1 part styrene. Its uses are for tires, footwear, mechanical goods coatings; adhesives; etc.

16. The appellants have also produced the Import Trade Control Policy, Volume I, for the year 1975-76 described during the arguments as the 'Red Book' of <ORG> of <ORG>. It may be useful to quote the entire entry 150 at page 58 :

Section II : Policy for individual items and the detailed policy for Actual Users : ____________________________________________________________________________________________________________ Part & SI. No. Description Established IMPORT POLICY of I.T.C. Importers Actual User Schedule _____________________________________________________________________________________________________________ (1) (2) (3) (4) _____________________________________________________________________________________________________________ 150 Rubber, raw and Nil (1) A.U. for import of Gutta gutta percha, raw. percha, raw. (2) Requirements of actual users for the following items will be met by imports through public-sector agency : (i) Synthetic rubber namely, Butyl rubber Acrylonitrile Butadiene Copolymer, Poly Chloroprene, Thikol, Polyisoprene, Poly butadiene, Hypalon, Viton Polyarcylic EPDM, Chlonobutyl and Bromobutyl Silicone rubber and Silicone rubber master batches and Silicone rubber master batches and Synthetic latex including Vinyl pyridine latex and copolyme of 'styrene butadiene latex, Nitrilre latex and poly chloroprene latex. (ii) Hot type special grades of SBR for manufacture of high impact polystyrene only. Please see Section III to this Red Book. (3) Import of SBR and/or Alkyl substituted Styrene Butadiene Elastometric Copolymers will not be allowed. (4) Import of natural rubber and reclaimed rubber will not be allowed.

(emphasis added) ________________________________________________________________________________________________________________________

17. In the earlier Volume of the Import Trade Control Policy, for the year 1969-70, this item 150-Rubber, raw-shows under the fourth column "Actual Users for Synthetic rubber", the following :

(i) Import of natural rubber will normally be arranged through STC for meeting the requirements of actual users.

(ii) A.U. for Synthetic Rubber, namely, Butyl rubber, Acrylonitrile Butadiene Copolymer, Poly chloroprene, Thikol, Poly isoprene and Polybutadiene and Synthetic latex.

* * * * In the Import Trade Control Policy in Volume No. I for the year 1970-71 against Serial No. 150, rubber, raw, under column 4 Actual Users for Synthetic rubber", actual users are shown as (ii) "A.U. (Actual User) for Synthetic Rubber, namely, Butyl Rubber, Acrylon-trile Butadiene Copolymer, Poly Chloroprene, Thikol, Poly Isoprene and Poly-butadiene Hypalon, Silicone rubber and Synthetic latex including Vinyl Pyridine latexand copolymer of styrene butadiene latex" (emphasis added). Again the Condensed Chemical Dictionary at page 741 describes "Pyratex" the trade name under which V.P. Latex has been imported as follows :

Pyratex, 248 Trademark for a vinylpyridine Latex.

Properties : Total solids 40-42% PH 10, 5-11, 5 : sp. gr. 0.96.

Uses : To promote adhesion between rayon or nylon fibres and rubber, as in tire cord, belting, hose, etc.

18. The British Standard specification is as follows :

<ORG> gives the specification of PSBR 41 latex as "(Vinyl) pyridine-styrene-butadiene rubber latex with a nominal total solids content within the range 40.0% to 49.9% and a nominal bound styrene content of less than 20.0% of the total polymer". In <ORG>, under Table XI, <ORG> enumerates "GENTAC" and "PYRATEX" as Emulsion Styrene-Butadiene and Butadiene Rubber Latices of Section 41 P Class. The classification "Section 41 P" properly decoded means as belonging to the Chemical Family of Styrene-Butadiene Rubber (SBR) having total solid contents of 40 to 49% and Styrene Co-monomer content of less than 20% wherein Vinyl Pyridine is present in the Polymer.

19. Although the controversy between the parties was placed before us in an exhaustively enlarged form going into the Chemistry of V.P. Latex, it is not necessary to go into all the complexities of chemical formulate and properties. The impugned order itself takes note of all the contentions raised before the <ORG> and also pressed before us.

20. This approach is also convenient and unobjectionable, since it is urged on behalf of the respondents that we should not entertain fresh materials which were not available before the authority. We may, therefore, briefly note the claim of the appellants to V.P. Latex being classified as raw rubber under item 39, I.C.T. on the grounds advanced before the <ORG> which the authority took note of:

(1) V.P. Latex is a synthetic rubber latex which satisfies wholly each and every test prescribed by the authority in India as well as abroad for classification of rubber.

(2) According to the A.S.T.M. definition, rubber means "an elastomer that can be or already is vulcanised. Collectively the rubber constitutes the definite raw material of the rubber industry. They may be of vegetable origin or synthetic". Synthetic resin cannot be vulcanised whereas V.P. Latex, being rubber, can be vulcanised.

(3) A.S.T.M. further defines raw rubber as crude or uncompounded rubber, either natural or synthetic.

(4) According to I.S.I. definition, rubber is defined as follows :

<ORG>, also defines raw rubber as unvulcanised rubber.

(5) V.P. Latex is composed of butadiene styrene and vinyl pyridine in the ratio of 70 : 15 : 15 respectively. According to <NAME> (author of 'Rubber-Natural and Synthetic'), a synthetic latex is produced at the first stage in the manufacture of most synthetic rubbers V.P. Latex is one such synthetic rubber latex.

(6) V.P. Latex is very much similar to other synthetic rubber latices. V.P. Latex cannot be regarded as an aqueous dispersion of synthetic resin since it has no measurable resin at all. On the contrary the proper description of V.P. Latex would be to call it an emulsion of synthetic rubber and this is borne out by its chemical composition and by its physical properties.

(7) The question of classifying a substance rests primarily on its chemical properties as borne out by technical tests. In the case of V.P. Latex, when coagulated, the coagulum answers fully the A.S.T.M. standards and tests prescribed for rubber. Its use in liquid state is commercially more expedient than its use in dry state but this should not be factor in classifying a product according to its technical and chemical composition.

(8) V.P. Latex has been designed as a special synthetic rubber latex to be suitable for its use at the fabric cross-linking stage with rubber compound. In its application it is in no way different from any other natural rubber or synthetic rubber latices. V.P. Latex should, therefore, properly be regarded as a synthetic rubber latex.

(9) It is not correct to say that all rubber latices when coagulated should have an absolute commercial dry rubber usage in order to be classified under raw rubber. Quoting from <NAME> "the addition of vinyl pyridine in such terpolymers of butadiene, styrene and vinyl pyridine has been found to improve the characteristics and properties with the increase of vinyl pyridine content and it is known to reach optimum at about 15 parts, i.e. at a charge of 75 : 10 : 15 (Synthetic rubber by <NAME>). It was admitted that vinyl pyridine copolymers do not find use in the dry state as they suffer from the drawback of extremely high rate of cure, scorching and incompatibility with other rubbers.

(10) V.P. Latex has to be assessed in the form in which it is imported. In this view, V.P. Latex is nothing but a synthetic rubber latex.

(11) In the International field of rubber manufacture all over the world V.P. Latex is fully recognised as a synthetic rubber latex and not as a synthetic resin. While V.P. Latex can be coagulated and vulcanised, a synthetic rubber cannot be vulcanised.

21. The appellants submitted before the revisional authority letter dated 26th November, 1970, written by <ORG> on V.P. Latex; extracts from Elastomers Manual published by <ORG>; Articles written by <NAME> of <ORG> (PBR) published Rubber Chemistry and Technology; A.S.T.M. Glossary of Terms relating to Rubber and Rubber like materials; and the books by <NAME> and <NAME>. It was pointed out before the authority by the appellants that rubber was always obtained first in a latex form and latex was nothing but an aqueous state of rubber, that V.P. Latex is a liquid rubber designed for use in tyre manufacture as a bonding agent by cross linking with fabrics. It was also pointed out with reference to the classification of synthetic rubber latices that <ORG> itself had ruled in several cases that these were to be regarded as coming under I.C.T. 39.

22. The conclusion of the revisional authority, after considering the above submissions, may be quoted in its own words :

V.P. Latex is a synthetic latex designed to be used in the manufacture of tyres as a bonding agent by cross linking with fabric. It has bee admitted by the importers that the product is not used in the dry state V.P. Latex is a liquid latex used as such and the question boils down to consider whether synthetic rubber latex could be classified as 'raw rubber' assessable under item 39 I.C.T. irrespective of its usage known commercially or in the industry.

23. Then after nothing the definition of latex in the Chemical Dictionary and in the "Materials Hand Book" by <NAME>, the authority observed as follows :

These definitions imply that latex is a material from which rubber is obtained and not rubber itself.

Latex, according to the authority, is milk juice of the rubber tree which is source of rubber and is in common parlance referred to as rubber. The authority then refers to Chapter 40 of the Brussels Tariff Nomenclature (B.T.N.) dealing with natural rubber latex (40.01) and synthetic rubber latex (40.02).

40.1. : "Natural rubber latex, whether or not with added synthetic rubber latex; pre-vulcanised natural rubber latex; natural rubber; balata, gutta-percha and similar natural gums.

40.2. "Synthetic rubber latex; pre-vulcanised synthetic rubber latex; synthetic rubber; factice derived from oils.

The authority then observed as follows :

Chapter 40 of the B.T.N. covers raw rubber, Heading No. 40.01 refers to 'natural Rubber Latex whether or not with added synthetic rubber latex, pre-vulcanised natural rubber latex, natural rubber but natural rubber latex has been defined under 40.01 as containing in suspension 30% to 40% of rubber. Rubber Latex therefore appears to fall under 40.01 by specific inclusion only. So also synthetic rubber latex is specifically mentioned in heading 40.02. Had they not been so specified, latex may have been excluded from the scope of the heading 'rubber'.

24. To say the least, it is difficult to appreciate the strained meaning given by the authority in the above extract. At any rate the authority concludes "hence it appears that rubber latex is not rubber as such but merely a source of rubber.... In this view, latex and rubber will have to be distinguished from each other.

25. It appears from the order itself that <ORG> was not treating rubber latex as raw rubber assessable under item 39 I.C.T. till 1935, and a decision was taken in that year to accord the same tariff treatment to rubber latex as to rubber raw, because it was found that latex had to be imported for various specific uses which required a liquid form. According to the authority, the use of rubber latex was as rubber and therefore on the same principle, synthetic rubber latex was also treated as synthetic rubber for assessment purposes. Then comes the crucial conclusion of the authority.

If V.P. Latex was designed for or intended to be used as rubber, there would have been no difficulty in classifying it under item 39 I.C.T. In fact synthetic rubber itself has been classified as raw rubber only because synthetic rubber serves exactly the same purpose as crude rubber in all its industrial uses and has no practical difference from the latter. Pyratex V.P. Latex is designed for use as an adhesive in the manufacture of tyres. It is seldom put to any of the other uses to which rubber, natural or synthetic is ordinarily put. In composition, it is similar to rubber latex and it may also well answer the tests for rubber such as elongation etc. When reduced to dry state but its use is not the same as that of rubber. It could theoretically be converted into a substance which is akin to rubber but it has been admitted that due to high rate of cure, scorching and incompatibility with other rubbers. It does not find use in a dry state. In fact it does not replace rubber in use though it has similar properties.

[Emphasis added]

26. The last point considered by the authority was with regard to the resin content in V.P. Latex. The appellants claimed that V.P. Latex had no resin content. The authority repelled the contention in the following words :

It appears that there is no accepted definition of the term 'resin' in trade usage or technical literature and resins are identified by their use as resins and in this view V.P. Latex may well be considered as a resin latex.

27. Mr. <NAME> for the respondents has made a strenuous plea that V.P. Latex is not rubber raw and is synthetic resin. If it is correct that V.P. Latex is synthetic resin, it would come under item 87 I.C.T. the residuary entry covering "all other articles not otherwise specified".

28. To revert to the order of the authority, it is clear that the authority would be have found no difficulty in coming to the conclusion that V.P. Latex in view of chemical composition and physical properties is rubber raw, if the same were commercially used as rubber. The authority, therefore, was principally influenced to come to its decision on the sole basis of the ultimate use of the imported article in the trade.

29. Section 12 of the Customs Act, 1962, is the charging section. That section reads (1) "Except as otherwise provided in this Act or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Indian Tariff Act, 1934, or any other law for the time being in force, on goods imported into, or exported from, India.

30. The relevant taxing event is the importing into or exporting from India. Condition of the article at the time of importing is a material factor for the purpose of classification as to under what head, duty will be leviable. The reason given by the authority that V.P. Latex when coagulated as solid rubber cannot be commercially used as an economic proposition, as even admitted by the appellants, is an extraneous consideration in dealing with the matter. We are, therefore, not required to consider the history and chemistry of synthetic rubber and V.P. Latex as a component of SBR with regard to which extensive arguments were addressed by both sides by quoting from different texts and authorities.

31. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the <ORG> and its popular meaning should commend itself to the authority.

32. Dealing with the meaning of the term "vegetables" in the Excise Tax Act in King v. <ORG>, 1951 CLR 122, <ORG> observed as follows :

Now the statute affects nearly everyone, the producer or manufacturer, the importer, wholesaler and retailer, and finally the consumer who, in the last analysis, pays the tax. <ORG> would not suppose in an Act of this character that manufacturers, producers, importers, consumers, and others who would be effected by the Act, would be botanists. The object of Excise Tax Act is to raise revenue, and for this purpose to class substances according to the general usage and known denominations of trade. In my view, therefore, it is not the botanist's conception as to what constitutes a 'fruit' or 'vegetable' which must govern the interpretation to be placed on the words, but, rather what would ordinarily in matters of commerce in Canada be included therein. Botanically, oranges, and lemons are berries, but otherwise no one would consider them as such.

<ORG> also referred to a pithy sentence from "200 chests of Tea", per story, J (1824) 9 Wheaton (US) 435 that "the <ORG> does not suppose our merchants to be naturalists, or geologists, or botanists".

33. The above Planters Nut case (supra) was referred to with approval by this Court in <CITATION> , (. In <NAME>'s case, this Court was concerned with the meaning of the word 'vegetables' occurring in C.P. and Berar Sales Tax Act, 1947. This Court held as follows :

But this word must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning 'that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it'. It is to be construed as understood in common language.

34. Again in the <CITATION> , , this <ORG> had to deal with the word 'charcoal' used in Madhya Pradesh General Sales Tax Act. It was contended in that case that 'charcoal' would be covered under Entry I of Part III of Schedule II to that Act. This <ORG> while holding that charcoal would be included in coal, observed as follows :

Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well settled that while interpreting items in statutes like the Sales Tax Act s, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.

This Court again referred with approval to the decision in <ORG> case (supra) and followed the principle laid down in <NAME>'s case (supra). In <ORG>, etc. v. <ORG>, the question that was raised related to item 14-H in the Schedule I to the Central Excises and Salt Act , 1944, which contained compressed, liquefied or solidified gases, inter alia. Carbon acid (carbon dioxide). This Court observed as follows :

It is also not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purpose and sets up a kiln for it that he produces carbon dioxide and not kiln gas. In fact what he produces is a mixture known both to trade and science as kiln gas, one of the constituents of which is, no doubt, carbon dioxide.

This Court finally observed :

The Kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14-H in the First Schedule.

Similarly in <CITATION> , this Court dealing with the meaning of the word 'Wolfram ore' again approvingly referred "not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in their commercial sense".

35. Mr. <NAME> draws our attention to several authorities to impress upon us that butadiene styrene latices are compatible with many resins and modifiers. He also submits that the term vinyl pyridine has been used to include a variety of resins, plastics, elastomers, etc. and that V.P. Latex exhibits outstanding adhesive properties. His main object is to show that V.P. Latex is resin which is "an omnibus term for a variety of hard brittle, solid or semisolid organic substances". It is however, seen from an extract from the Dictionary of Rubber Technology, 1969 edition, by <NAME>, produced by Mr. <NAME> that "vinyl pyridine is one component of terpolymer of butadiene, styrene and vinyl pyridine used in latex form to promote good adhesion between rubber and textiles, particularly rayon and nylon". We find the same description reiterate in a book "Latex Natural and Synthetic" by <NAME> (a Reinhold Pilot Book) where at page 145 it is stated that 'there is one type of speciality rubber latex that deserves special notice. This is terpolymer of butadiene, styrene, and 2-vinyl pyridine. Under the trade names of "Gentac" and "Pyratex" it is extensively used in nylon tire cord saturation because it gives better adhesion between the cord and the rubber in which the cord is imbedded than do other latices'. Mr. <NAME>, however, emphasises that V.P. Latex is merely an adhesive and so is akin to resin and not to rubber.

36. We are however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the 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, we then see no difficulty for statutory classification under a particular entry.

37. It is good fiscal policy not to put people in doubt and quandary about their liability to duty, when a particular product like V.P. Latex known to trade and commerce in this country and abroad is imported, it would have been better if the article is eonomine, put under a proper classification to avoid controversy over the residuary clause. As a matter of fact in the Red Book (Import Trade Control Policy of the Ministry of Commerce) under Item 150, in Section II, which relates to "rubber, raw and gutta percha, raw", synthetic latex including vinyl pyridine latex and copolymer of styrene butadiene latex are specifically included under the sub-head "Synthetic Rubber". We do not see any reason why the same policy could not have been followed in the <ORG> book being complementary to each other. When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classifications will, however, stand on a different footing.

38. It is not for the <ORG> to determine for itself under article 136 of the Constitution under which item a particular artical falls. It is best left to the authorities entrusted with the subject. But where the very basis of the reason for including the article under a residuary head in order to charge higher duty is foreign to a proper determination of this kind, this <ORG> will be loath to say that it will not interefere.

39. In this case there is rather voluminous evidence from the standard authorities in favour of V. P. Latex being a component of SBR which is admittedly classified under rubber raw. But assuming, and only assuming, that evidence is balanced, the best course in a fiscal measure is to decide and fix the entry under which the article comes, otherwise it will give rise to adoption of varying standards where uniformity should be the rule.

40. At one stage Mr. <NAME> pointed out that in certain Bills of Entry of Dunlop India Limited, their Agents, Messrs, <ORG>, Private Ltd., gave the I.C.T. Item No. 87 with regard to the imported V.P. Laitex. This, according to Mr. <NAME>, clearly shows how the appellants them selves have understood the matter. There is, however, no estoppel in law against a party in a taxation matter. In order to clear the goods for the customs, the appellants Agents may have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which they actually applied for. we do not attach any significance to this aspect of the matter pointed out by counsel. The question is of general importance and must be decided on its merits.

41. Mr. <NAME> drew our attention to two decisions of this <ORG> in <CITATION> , and the <CITATION> , and submitted that this <ORG> should not interfere with the decision of the authority under Article 136 of the Constitution. These decisions are clearly distinguish able, as, in the view we have taken, the order is ex facie based on an irrelevant factor. Even in the <CITATION> , , this <ORG> refused to interfere only because it could not be persuaded to hold that the view taken by the High <ORG> was so grossly erroneous as to call for interference under Article 136 of the Constitution. The present is not such a case.

42. We are clearly of opinion that in the state of the evidence before the revisional authority no reasonable person could come to the conclusion that V.P. Latex would not come under rubber raw. The basis of the reason with regard to the end-use of the article is absolutely irrelevant in the context of the entry where there is no reference to the use or adaptation of the article. The orders of the authority are, therefore, set aside. In the result the appeals are allowed with costs.

43. We should observe that we express no opinion with regard to the question relating to countervailing duty under Section 16AA of the First Schedule to the Central Excises and Salt Act , 1944, in these appeals.