The Financial Express [FRONT PAGE][ECONOMY]

Thursday, May 1 1997

Law Courts -- A cryptic order on bubbles

Krishan Mahajan

MUMBAI, April 30: Bubbles that's the difference between a bubble gum and a chewing gum.

The Supreme Court in the 1987 appeal collector of Central Excise, Madras, vs Gum Products (P) Ltd, has held that because of this difference bubble gum could be subjected to excise duty only at the lower rate prescribed in the residuary entry of the Central Excise Tariff rather than at the higher rate prescribed under Entry IA(1) for chewing gum.

The apex court confirmed the order of the Central Excise Tribunal that a bubble gum is not a chewing gum.

But the decision is typical of the latest style of deciding revenue cases in the Supreme Court. The entire matter has been disposed of in a single-para order of 15 lines. The order nowhere states as to why this appeal of the excise authorities came up for hearing ten years after it had been admitted by the Supreme Court. It does not mention whether there was a stay order operating in favour of the company which had lost before the assistant collector and then the Collector (Appeals). There is no enquiry as to whether the Central Board of Excise was ever bothered about as ten year pendency of an appeal, whether it directed the officers concerned in Madras to seek expeditious hearing of the appeal and whether the officers directed the Central Agency under the Union Law Ministry to file an application for early hearing.

No question is sought to be asked from the Union Finance Secretary (Revenue) as to how such a situation was allowed to exist by him concerning Central revenues. Surely if the department felt a compelling necessity to file an appeal at once in the Supreme Court against the Tribunal's judgement dated August 14, 1986, it owned to the public revenues a duty to pursue urgent hearing and disposal of the appeal. After ten years, a cryptic order is handed to the public with airy bubbles concerning management of public revenue.

The Tribunal had rejected the contention of the Excise Department that the bubble gum is classifiable as the chewing gum because the ingredients of both the gums under the 1981 ISI specification are same. The Tribuinal pointed out that though the ingredients were same, their proportions were different. The maximum percentage by mass of moisture, sulphated ash, acid insoluble ash, reducing sugars and sucrose required in a chewing gum and a bubble gum was 3.5 and 3.5, 9.5 and 11.5, 2 and 3.5, 4.5 and 5.5, and 70 and 60, respectively.

It also rejected the contention that both bubble gum and chewing gum are meant for chewing, the only difference being that in the case of the former, after chewing, bubbles can be produced by blowing, which cannot be done in the case of chewing gum. Though Entry IA(I) did not state bubble gum specifically, it was headed `chewing gums' and so included all kinds of chewing gums including bubble gum. The Tribunal pointed out that overlooking the difference of bubbles between bubble gum and chewing gum was to ignore a vital and essential difference between the two gums. This is the characteristic difference between the two, apart from the proportion of ingredients.

Finally, the Tribunal had rejected the contention of the department that bubble gum was chewing gum, since for the purpose of other laws the producers had declared both the gums to be confectionery. Besides, both the ISI and the Prevention of Food Adulteration Act showed both the chewing gum and the bubble gum in a single category. The Tribunal held that if the two gums were one and the same thing, there would have been no need to mention them separately.

The Supreme Court upheld the Tribunal's judgment in a wholly different language. It held that the Tribunal was right since it held that bubble gum was a commercially distinct item from chewing gum. Unfortunately, the Tribunal, which noted that there was no earlier decision on this commodity by any competent authority, did not state this. It nowhere applied the test of the commercial or market sense in which the two gums are understood. The apex court nowhere reproduced the relevant extracts of the judgment of the Tribunal. Apparently, a new methodology of writing judgments is evolving in the apex court.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.



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