INDIAN METALS AND FERRO ALLOYS LTD. CUTTACKversusCOLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR

 INDIAN METALS AND FERRO ALLOYS LTD. CUTTACK
                                                                             A
                                    v.
  COLLECTOR OF CENTRAL EXCISE, BHUBANESHWAR

                        NOVEMBER 22. 1990

      [S. RANGANATHAN AND K. RAMASWAMY, JJ.]                                 B

      Central Excises and Salt Act, 1944-Section 3 and First Schedule
Item Nos. 26AA and 68-Assessee-Manufacturer of pipes, tubes and
poles of iron and steel-assessability to excise duty-Whether under
Item 26AA or 68.

       The appellant is a manufacturer of pipes, fu.iles and poles made of   c
iron and steel. Tariff Item No. 26AA was introduced w.e.f. 24.4 . .1962 in
the First Schedule to the Central Excises and Salt Act, according to
which, the appellant paid the excise duty. Thereafter the Government
issued a notification dated 1.3.1963, whereby 'telegraph, telephone and
electric li~ting and transmiSsion poles falling under Item 26AA"             D
were exempted from payment of duty subject to certain conditions. The
appellant having paid the duty earlier, applied for the refund on
10. 5 .1963 and sought permission to clear the goods without payment of
duty. The Assistant Collector rejected the said request on the ground
that conditions prescribed in-the notification had not been complied
with. The appellant thereupon preferred an appeal before the Collector       E
of Central Excise who held that the goods in question were eligible for
the exemption contained in the notification. As a consequence thereof,
the appellant paid no duty on the goods and cleared the goods from 1962
till 1975. On 1.3.1975, the Legislature introduced Tariff Item No. 68 in
the First Schedule to the Act covering goods not elsewhere prescribed.
Even thereafter the appellant filed classification lists showing the poles   F
as falling under Item 26AA and those lists were duly approved and the
appellant cleared its goods withont paying duty till August 1982. Earlier
on 8.I2.1977, the Snperintendent of Central Excise had taken a view
that the transmission and lighting poles were classifiable not under Item
26AA bot under Item 68. The appellant was accordingly asked to
furnish a statement of the goods manufactured and sold earlier and to        G
file a classified list. The appellant objected contending that the poles
 were covered by Tariff 26AA and it was entitled to exemption. The
 Revenue did not accept that contention whereupon the appellant ftled a
 writ petition before the High Court challenging the communication
 dated 26.12.1977. The appellant received a further letter on 6.11.1981
 whereby it was required to pay duty under Item No. 68 in regard to          H

                                   329
                                                                                  -
    330          SUPREME COURT REPORTS                 [1990] Supp. 3 S.C.R.

     ''swaged poles" also. The appellant challenged this letter also by means
A
     of a writ petition before the High Court. The High Court declined to
     interfere with the adjudication proceedings and dismissed the writ peti-
    tions by directing that the adudication be made within three months.
    On 31.3.83 the Assistant Collector passed an order holding the goods
    classifiable under Item 68. The Appellate Collector afllrmed the order
B   of the A'sistant Collector. Both parties preferred appeals before the
    Central Excise and Gold (Control) Appellate Tribunal. The Tribunal
    did not agree with the contention of the Appellant that the goods were
    dutiable under Tariff Item No. 26AA. It however gave certain direc-
    tions restricting the levy of excise duty periodwise. Hence these appeals
    by the appellant under Section 35L of the Act.
c         Allowing the appeals, this Court,

         . HELD: There is some difference in the description of the goods.
    While item 26AA covers only pipes and tubes, the goods manufactured
    by the assessee are called poles. It is also true that the poles have to be
D   manufactured by applying certain processes of heating and forging to
    pipes or tubes. But all this does not so change the commercial character
    of the goods as to take them away from the scope of item No. 26AA. [336C-D]

          The language of tariff item No. 26AA is very wide. It covers iron
    and steel products of the description set out therein. [3370]
E
          Unless the department can establish that the goods in question
    can, by no conceivable process of reasoning_, be brou~t under an:r of
    the specific items mentioned in the tariff, resort cannot be had to the
    residuary item. [339E]

F        The appellant's contention that the goods in question fall under
    Item 26AA is well founded and the Revenue was not justified in at-
    tempting to levy duty on the basis that the goods fall under Tariff Item
    No. 68. [334G-H]

          Indian Aluminium Cables Ltd. v. Union, [1985] 3 SCC 284;
G   Bharat Forge and Press Industries v. C.C.E., [1990] 1SCC532; Vargh-
    ese v. I. T.O., [1982] 1SCR629; State of Tamil Nadu v. Mahi Traders,
    [1989] 1 SCR 445; C.C.E. v. Andhra Sugar Ltd., [1989] (Supp.) 1,
    SCC 144 and Collector of Central Excise v. Parle Exports P. Ltd.,
    [1989] 1sec345, referred to.

H        CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
    2743-48 and 2920 qf 1986.
          METALS AND FERRO ALLOYS v. C.C.E. [RANGANATHAN, J.]                   331

            From the Ord_er dated 16.4.1985 and 12.5.1986 of the Customs
                                                                                      A
      Excise and Gold,LCgntrol Appellate Tribunal), New Delhi in Appeal
      Nos. ED/SB/2870/83 to 2874/83-B and 166 of 1984(B) (Order No.
      297-302/85-B and 40/86-B-I. .

          C.S. Vaidyanathan, S.R. Setia, Rajen Mahapatra and Ms. Indu
      Malini Ananthachari for the Appellant. -      -         -                       B
            N .S. Hegde, Additional Solicitor Gene rat (N .P. ), Dalip Tandon,
      P. Parmeshwaran and Ms. Sushma Suri (N.P.) for the Respondent.

...         The Judgment of the Court was delivered by

            RANGANATHA.,'11, J.' These three appeals can be disposed of by c
      a common order. The appellant is a manufacturer of pipes, tubes and
      poles made of iron and steel. These products are generally used by the
      telephone and telegraph departments of the Government of India but
      can also be used for purposes of transmission and lighting. The ques-
      tion is whether these goods are liable to excise duty under item 26AA D
      or under item 68, in the First Schedule to the Central _Excises & S.It
      Act, 1944 (hereinafter referred to as 'the Act').

            Tariff Item No. 26AA was introduced w.e.f. 24.4.1962 in the
      First Schedule to the Act. Item 26AA reads thus:
                                                                                      E
      Description of goods                            Rate of duty

      26AA. Iron or Steel Products, The Following Namely:

       (i) Semi-finished st_eel inluding_ blooms, Three hundred and fifty             F
      billets, slabs, sheet bars, tin-bars and hoe bars. rupees per metric tonne.

      (i-a) Bars, rods, coils, wires, joists,     Three hundred and fifty
      girders, angles other than slotted angles, rupees per metric tonne.
      channels other than slotted channels, tees,
      fiats, beams, zeds, trough, piling and all                                      G
      other rolled, forged or extruded shapes
      and sections not otherwise specified.

       (ii) Plates and sheets (including uncoa-       One thousand three hund-
       ted plates and sheets intended for tinn-       red and fifty rupees per
       ing, and forms such as ridges, ch~nnels,       metric tonne.                   H
    332         SUPREME COURT REPORTS                [ 1990] Supp. 3 S.C.R.
    rain water pipes and their fittings made
A   from plates or sheets but not including plates
    and sheets after tinning, and hoops all sorts
    other than skelp and strips.
    (iii) Flats skelp and stips.                 One thousand three hund-
                                                 red and fifty rupees per
B                                                metric tonne.

    (iv) Pipes and tubes (including blanks       One thousand rupees per
    thereof) all sorts, whether rolled, for-     metric tonne plus the
    ged, spun, cast, drawn, annealed, welded     excise duty for the time b_e-
    or extruded.                                 ing leviable on pig iron or
                                                 steel ingots, as the case
c                                                maybe.

    ( v) All other steel castings, not other-    Seven hundred and fifty
    wise specified.                              rupees per metric tonne.

0   Explanation-"Skelp" means hot rolled
    narrow strip of width not exceeding six
    hundred milimetres with rolled (square,
    slightly round or bevelled) edge."

    However, soon afterwards, the Government of India issued a notifica-
E tion dated 1.3.1963 under Rule 8 of the Central Excise Rules (herein-
    after referred to as 'the Rules') by which "telegraph, telephone and
    electric lighting and transmission poles falling under Item 26AA of the
    First Schedule of the Act" were declared completely exempt from duty
    subject to certain conditions and limitations prescribed in the notifica-
    tion with which we are not concerned. (It may be here mentioned that
F   this some similar notification was in force at various points of time but
    it is unnecessary to set out the full particulars thereof).

         The appellant, having paid the duty in respect of the above goods
   under item 26AA, applied to the Assistant Collector, Central Excise
   on 10.5.1963 for the refund of the duty already paid in view of the
G notification above-mentioned. Permission was also sought for clear-
   ance of poles without payment of duty from the factory with imme-
   diate effect. The Assistant Collector, by an order dated 25.5.1963,
   rejected these requests on the ground that the conditions prescribed in
   the notification for exemption were not satisfied and not on the ground
   that the goods manufactured did not fall under item 26AA. The appel-
ff lant thereupon preferred an appeal before the Collector of Central
   METALS AND FERRO ALLOYS v. C.C.E. [RANGANATHAN, J.]               333

Excise who held that the goods manufactured were eligible for the
                                                                             A
exemption contained in the notification. This order of the Collector
was passed on 29. 1.1964. The result was that the appellant paid no
duty on the goods in question and the goods were cleared without
either payment of duty or collection of duty from the purchasers right
from 1962 till 1975.
                                                                             B
      On 1.3.1975, the legislature introduced Tariff Item No. 68 in the
First Schedule to the Act covering "goods not elsewhere prescribed".
Even thereafter, the appellant filed classification lists showing the
poles as falling under Item 26AA and eligible for exemption under the
relevant notification (which had taken the place of the notification of
1.3.63). These classification lists were approved and the appellant con-
tinued to clear its goods without paying d~ty till August, 1982.             c

       Ealier, on 8.12.1977, the Superintendent of Central Excise had
taken a view that the transmission and lighting poles manufactured by
the appellant were classifiable not under item 26AA but under item 68
of the Central Excise Tariff and that, therefore, the appellant was          D
liable to pay duty on all goods manufactured by it from 1.3.1975 till the
date of the notice. The appellant was asked to furnish a statement of
the goods manufactured and sold earlier and also to file a classified list
for the above goods in respect of the future. The appellant objected to
this, referred to the earlier exemptions granted and contended that the
poles were covered by Tariff Item No. 26AA and that it continued to          E
be entitled to the exemption under notification No. 69 of 1973 dated
 1.3.1973 as amended by a notification No. 16 of 1976. Apparently, this
contention was not acceptable to the Revenue. So, the appellant filed
Writ Petition No. OJC 1072 of 1977 in the Orissa High Court challeng-
ing the letter dated 8.12.1977 and obtained, on 26.12.77, an order
restraining the Revenue from enforcing the letter of 8.12.77. It             F
received a further letter from the Superintendent on 6.11.1981 to the
effect that the assessee-appellant will have to pay duty under Tariff
Item No. 68 in regard to "swaged poles" and calling upon it file a
classification list well in advance on the above footing. The appellant
challenged this letter by filing a Writ Petition No. 329 of 1982 ar.d
obtained a stay order. These two writ petitions were eventually dis-         G
posed Of by the Orissa High Court by its order dated 6.10.1982. The
High Court declined to interfere with the adjudication proceedings
under the Act in the writ petition and dismissed the writ petitions with
the direction that an adjudication be made within three months from
the date of the communication of the order after giving full oppor-
tunity to the appellant to establish its stand and by a reasoned deci-       H
    334         SUPREME COURT REPORTS               [1990] Supp. 3 S.C.R.

    sion. Subsequently, on 31.3.83, the Assistant Collector passed an
A
    order holding the goods of the value of Rs.16,04, 753 classifiable under
    Tariff Item 68 and confirmed the demand for the period 1.3 .1975 to
    21.1.1983 (excluding the period from 26.12.1977 to 6.10.1982, the
    period of the stay granted in the writ petiton). The Appellate Col-
    lector, by his order dated 30.9.83, dismissed the appeals preferred and
B   confirmed the order of the Assistant Collector in respect of the goods
    to the tune of Rs.13,53,653 being the goods cleared during the period
    from 22.3.79 to 21.1.83.

         Further appeals were preferred before the Central Excise &
   Gold (Control) Appellate Tribunal (CEGAT) by both parties. There
  were five appeals by the assessee before the Tribunal in respect of
C five demand notices and proceedings in respect thereof. The depart-
  ment had preferred the appeal in respect of the demand for the period
  1.3.75 to 21.3.79 which had been set aside by the Appellate Collector.
  The Tribunal disposed of the appeals on 16.4.85. It did not agree with
  the appellant's contention that the goods were dutiable under Tariff
D item No. 68. It was, however, of the opinion that the back duty
  demand should be restricted to a period of six months prior to the issue
  of the show cause notice dated 8.12.77 (excluding the period from
  26.12.1977 to 16.3.1978). It upheld a demand of Rs.15,45,217. The
  appellant filed a rectification application pointing out that the stay had
  been vacated by the High Court only on 6.10.82 and this was disposed
E of by the Tribunal on 12.5.1986. The Tribunal directed the exclusion,
  from the levy of back duty, of the larger period from 26.12.77 to
  6.10.1982. There was, we are told, another rectification application and
  an order thereon which is the subject matter of another Special Leave
  Petition which is not before us today. We shall leave that out of account.

t        These appeals, under Section 35L of the Act, have been prefer-
    red against the orders dated 16.4.1985 and 12.5.1986 passed by the
    Tribunal.

        We have heard the learned counsel for both parties. We are of
  the opinion that the appeals have to be allowed on the principle con-
G tention on classification raised on behalf of the appellant and that, in
  this view, it is unnecessary to consider the other point regarding limita-
  tion raised on behalf of the appellant. We are of the opinioo that the
  appellant's contention that the goods in question fall under Item 26AA
  is well founded and that the Revenue was not justified in attempting to
  levy duty on the basis that the goods fall under Tariff Item No. 68.
H Before we state our reasons for coming to this conclusion, it would be
   METALS AND FERRO ALLOYS v. C.C.E. [RANGANATHAN, J.]             335

only appropriate to indicate the approach ot the Revenue authorities
                                                                          A
and the Tribunal.

      The Assistant Collector of Central Excise pointed out that the
poles sold by the assessee were manufactured by it, no doubt from
pipes and tubes, out after an elaborate process. He described this
 process at great length in his order dated 31.3.1983. Such poles are of B
two types: (1) Stepped poles (2) Swaged poles. Stepped poles are
made "from one length of the tube, seamless or welded, the diameter
being reduced in parallel steps by passing the tubes through series of
dies." Swaged poles are made "of seamless or welded tubes of suitable
lengths swaged together when hot and the upper edge of each joint is
chamfered off at an angle of about 45 degrees". The process of
manufacture is briefly this: for stepped poles, a pre-determined length c
of tube, called a pole blank, is heated at the end to about ll00°C and
subsequently forged giving a hook shape to the end to facilitate hold-
ing of the tube. The hooked end is held firmly and by a series of draw
dies the out side diameter is reduced to give steps to the poles at
desired step lengths. The forged end is subsequently sawn off and the D
finished poles, after cooling, are conveyed to a bituminizing plant.
Different varieties of step drawn poles, as per ISI specifications, are
drawn depending on the needs of the consumers. For the manufacture
of swaged poles, the bottom pipe passes through roughing and the top
portion of this pipe is slightly squeezed so that the middle pipe can be
put into the bottom pipe and can fit in. Under heavy hydraulic pres- E
sure both the pipes are pressed mechanically and swaged. Finally the
top tube is put inside the middle tube and the process is repeated so as
to produce a complete piece of swaged pole. The Assistant Collector
was of the view that the process of manufacture, as indicated above,
alters the identity of the mother tubes and that the stepped poles or
swaged poles, as the case may be, constitute a distinct commercial F
commodity. In view of this process of manufacture which the tubes
undergo, the end product, i.e. poles, no longer falls under the purview
of the description of Tariff Item 26AA and hence falls under item 68
introduced in 1975.

     The Appellate Collector and Tribunal have endorsed this line of      G
reasoning. The Tribunal observed that the process of manufacture of
poles produced by the appellant showed that the goods in question
were obtained by heating the steel pipes to a substantic' temperature
and giving shapes and forms by a series of processes to produce, what
were known as, stepped poles and swaged poles. It was, therefore,
manifest that the poles have a distinct name, character and use, diffe-   H
    336         SUPREME COURT REPORTS                (1990] Supp. 3 S.C.R.

    rent from pipes and tubes. In trade parlance also, the Tribunal pointed
A
    out, the expressions 'pipes' and 'tubes' were generally understood as
    something intended for conveying fluids. It could not be said that the
    products manufactured by the appellant are pipes or tubes. The pro-
    ducts conform to ISI specification of "poles". The Tribunal agreed
    with the Appellate Collector that the poles made of steel tubes and
B   steel pipes are distinct from 'pipes and tubes', the expression used in
    sub-item (iv) of item 26AA. The duty was, therefore, rightly levied
    under Tariff item 68.

          On behalf of the appellant, it had been submitted before the
    Tribunal that, on all earlier occasions, the classification lists filed by
    the appellant were repeatedly approved on the basis that the goods fall
c   under Tariff item No. 26AA and that it was not open to the depart-
    ment to reopen these approved classification lists. The Tribunal
    observed:

               "We do not wholly accept this contention. It is well settled
0              that if facts are different, further and fresh facts are
               brought on record, process of manufacture is changed,
               relevant entries in the Tariff have undergone a modifica-
               tion or if there had been pronouncement of a High Court or
                Supreme Court, the classification approved may be recon-
                sidered and reopened. (Mis. Nucham Plastics Ltd. Farida-
E               bad v. The Collector of Central Excise, Delhi, [1983] ECR
                1888-D following Mis. J.K. Synthetics Ltd. and Another v.
                Union of India and Others, [1981] ELT 328 (Delhi). In the
                instant case, after the approval by earlier classification
                lists, Tariff item 68 had come on the Tariff. Due to this
                change in law, Excise authorities could enquire what would
                be the more appropriate classification of the goods in ques-
                tion. It was thus open to the authorities to modify the clas-
                sification subject, however, to the demand being restricted
                to the time limit, as may be applicable, and stipulated in
                section llA of the Central Excises and Salt Act, 1944. We,
                therefore, hold that the classification sought under Tariff
G               item 68 is valid."

  We may point out that the reasoning in this part of the order of the
  Tribunal, extracted above, is patently erroneous. It seems to say that,
  even if the goods manufactured by the appellant had been rightly
  classified under item 26AA before 1.3.1975, the introduction of item
H 68 makes a difference to the interpretation of item 26AA. This is not
    METALS AND FERRO ALLOYS v. C.C.E. [RANGANATHAN, J.]' 337

correct. Item 68 was only intended as a residuary item. It covers goods
                                                                            A
not expressly mentioned in any of the earlier items. If, as assumed by
the Tribunal, the poles manufactured were rightly classified under
item 26AA, the question of revising the classification cannot arise
merely because item 68 is introduced to bring into the tax net items not
covered by the various items set out in the schedule. It does not and
cannot affect the interpretation of the items enumerated in the             B
schedule. This logic of the Tribunal. is, therefore, clearly wrong.

      The real question, therefore, is whether the goods manufactured
by the appellant can be rightly classified under item 26AA. We think
that the answer to this question should be in the affirmative. It is true
that there is some difference in the description of the goods."While
item 26AA covers only pipes and tubes, the goods manufactured by            c
the assessee are called poles. It is also true that the poles have to be
manufactured by applying certain processes of heating and forging to
pipes or tubes. But does all this so change the commercial character of
the goods marketed by the assessee as to take them away from the
scope of item 26AA?                           •                             D

       We think not. The language of tariff item no. 26AA is very wide.
It covers iron and steel products of the descriptions set out therein.
The sum and substance of the description given by the Assistant Col-
lector in the assessment order is only (a) that the poles produced by
the appellant are not ordinary pipes and tubes which convey a fluid         E
from one place to another and (b) that they are manufactured by a
very elaborate and sophisticated process. So far as the first point is
concerned, it will be appreciated that, just as pipes and tubes are
generally intended to carry a fluid from one place to another, the poles
with which we are concerned enable wires to be passed through them
for the transmission of electric energy, a function not very very diffe-    F
rent in nature from that of other ordinary pipes and tubes. That apart,
even tubes and pipes are not always necessarily used for such purpose.
They can be used as flag-masts or for purposes of scaffolding or other
purposes where they do not serve as a medium for the transmission of
a fluid. This is not, therefore, a sound objection. In regard to the
second point, it is perhaps sufficient to point out that sub-item (iv) of   G
item 26AA refers to pipes and tubes (includings blanks thereof) all
sorts, whether rolled, forged, spun, cast, drawn, annealed, welded or
extruded. It is comprehensive enough to taken in all sorts of pipes and
tubes and even those obtained by the processes of forging, drawing
and so on. The ultimate product in the present case is merely a set of
pipes or tubes of different diameters attached to one another by diffe-     H
    338         SUPREME COURT REPORTS                [1990] Supp. 3 S.C.R.

  rent methods. The so-called manufacture is nothing but the putting
A
  together of a number of pipes or tubes by one or other of the processes
  mentioned in the taciff item. The goods produced, therefore, do not
  cease to be iron and steel products or pipes and tubes of the descrip-
  tion mentioned in item 26AA(iv). It may not be also correct to
  characterise them as a different commercial commodity. Some of them
B are called poles, an expression which means "a long slender piece of
  metal or wood commonly tapering and more or less rounded". Electric
  poles, being hollow ones, are not much different from pipes or tubes.
  The statement that they are commercially distinct commodities is
  merely based on their being called 'poles'. They are also available in
  the same market in which normally pipes and tubes are otherwise
  available. Neither the circumstance that certain processes are applied
C to the "mother" pipes or tubes nor the fact that, in order to identify
  the particular type of tube or pipe one needs, one may use different
  names is sufficient to treat the article as a commercially different com-
  modity: See Indian Aluminium Cables Ltd. v. Union, [1985] 3 S.C.C.
  284 followed and applied in Bharat Forge & Press Industries v. C. C.E.,
D [1990] 1 S.C.C. 532.

        However, even assuming that there could have been some doubt
  as to the intention of the legislation in this regard, the matter is placed
  beyond all doubt by the Revenue's own consistent interpretation of
  the item over the years. It has been pointed out that prior to 1.3.1975,
E residuary item no. 68 was not in the schedule. If the Revenue's conten-
  tion that these poles are not pipes and tubes is correct then they could
  not have been brought to duty at all before 1.3.1975. But the facts is
  that transmission poles have been brought to duty between 1962 to
  1975, and that could only have been under item 26AA (for there was
  no residuary item then). This is indeed proved by the fact that this very
F assessee was thus assessed initially and also by the issue of notifications
  of exemption from time to time which proceed on the footing that
  these poles were assessable to duty under item 26AA but were entitled
  to an exemption if certain conditions were fulfilled. Indeed, the asses-
  see also applied for an obtained relief under one of those exemption
  notifications since 1964.
G
        It is contended on behalf of the department that this earlier view
  of the department may be wrong and that it is open to the department
  to contend now that the poles really do not fall under item 26AA. In
  any event, it was submitted since the poles were exempted from duty
  under one notification or other, it was not very material prior to
H 1.3.1975 to specifically clarify whether the poles would fall under item
   METALS AND FERRO ALLOYS v. C.C.E. [RANGANATI!AN, J.J               339

 26AA or not. This argument proceeds on a misapprehension. The               A
 Revenue is not being precluded from putting forward the present con-
tention on grounds of estoppel. The practice of the department in
assessing the poles to duty (except in cases where they were exempt as
the conditions in the exemption notifications were fulfilled) and the
issue of notifications from time to time (the first of which was almost
contemporaneous with the insertion of item 26AA) are being relied            B
upon on the doctrine of contemporaneo expositio to remove any possi-
ble ambiguity in the understanding of the language of the relevant
statutory instrument: see Varghese v. /. T.0., [1982] I S.C.R. 629;
State of Tamil Nadu v. Mahi Traders, [1989] 1 S.C.R. 445; C.C.E. v.
Andhra Sugar Ltd., [1989] (Supp.) 1 S.C.C. 144 and Collector of Cent-
ral Excise v. Parle Expom P. Ltd., [1989] 1 S.C.C. 345. Applying the         c
principle of these decisions, that a contemporaneous exposition by the
administrative authorities is a very useful and relevant guide to the
interpretation of the expressions used in a statutory instrument, we
think the assessee's contention that its products fall within the purview
of item 26AA should be upheld.
                                                                             D
       One more aspect of the issue should be adverted to before we
conclude. The assessee is relying upon a specific entry in the tariff
schedule while the department seeks to bring the goods to charge
under the residuary item no. 68. It is a settled principle that unless the
department can establish that the goods in question can, by no con-
ceivable process of reasoning, be brought under Any of the specific          E
i terns mentioned in the tariff, resort cannot be had to the residuary
item: see the Bharat Forge case (supra). This certainly is not the posi-
tion in this case, particularly in the light of the department's own
understanding and interpretation of item 26AA.

      For the reasons above mentioned, we are of the opinion that the        F
appellant's contention that the goods in question are assessable to duty
under item 26AA is correct and has to be upheld. The assessments in
question will be modifred accordingly and the appellant will be entitled
to complete exemption or reduced duty in accordance with the provi-
sions of item 26AA read with the relevant notifications, if any, extant
at the various points of time with which we are concerned. The appeals       G
are allowed accordingly. In the above view, it is not necessary to go
into the other question regarding limitation which had been urged
before the Tribunal by the assessee-appellant.

Y.LAL                                                  Appeals allowed.