Holding

"Any other process" in Sec. 2(f)(v) is limited to processes that, like the enumerated ones, impart a lasting change to the fabric; calendering does not, so the fabric remains "unprocessed" and exempt from duty.

Summary

Siddeshwari Cotton Mills manufactured cotton fabric on power looms and claimed exemption from excise duty as "unprocessed" fabric under Notifications 230/77 and 231/77. The mill subjected the fabric to a calendering process, after which the Central Excise authorities held that the fabric was no longer "unprocessed" and levied duty and a penalty. The Customs, Excise and Gold (Control) Appellate Tribunal upheld the levy, reasoning that calendering, being a process, fell within the residuary phrase "any other process" in Sec. 2(f)(v) of the Central Excise Act. On appeal, the Supreme Court examined the statutory construction of that clause, applying the ejusdem‑generis rule, and held that the enumerated processes (bleaching, mercerising, dyeing, etc.) all impart a lasting change to the fabric; therefore, "any other process" must share that characteristic. Calendering, being merely a temporary finishing operation that does not impart a lasting change, does not fall within the same genus. Consequently, the fabric remained "unprocessed" and exempt, the levy was set aside, and the matter was remitted to the Tribunal for fresh disposal.

Issues considered

Whether the calendering of cotton fabric removes the "unprocessed" status of the fabric under Sec. 2(f)(v) of the Central Excise and Salt Act, 1944.
Whether the phrase "any other process" in the same provision must be interpreted ejusdem‑generis, i.e., limited to processes of the same genus as the enumerated ones.
Whether the levy of excise duty and penalty on the calendered fabric was lawful.

Legislation cited

Central Excise and Salt Act, 1944s. 2(f)(v), s. 35L
Central Excise Rules, 1944s. 173, s. 8(1)

Subjects

central exciseunprocessed cotton fabriccalenderingstatutory constructionejusdem generisexemptionexcise dutymanufacturing process

Judgment

A SIDDESHWARI COTTON MILLS (P) LTD.
v.
UNION OF INDIA & ANR.

JANUARY 17, 1989.
B
[R.S. PATHAK, CJ AND
M.N. VENKATACHALIAH, J.]

Central Excises and Salt Act, 1944: Section 2(f)(v), First
Schedule Item No. 19(1) and Notification Nos. 230 and 231of1977-
C Cotton fabric if subjected to 'calendering'-Whether ceases to be
'unprocessed' cotton fabric-Levy of excise duty-Expression 'any
other process'-Interpretation of.

Statutory Construction: 'Ejus dem generis' rule-Applicability
0 of-Preceding words to control and limit the subsequent words must
represent a genus.

The appellant mannfactures cotton fabric on power looms. By
virtue of two notifications issued nnder Role 8(1) of the Central Excise ~
Rules 1944 unprocessed cotton fabric was exempt from excise duty as
E
also additional duties. Since the appellant was using the process of
'calendering', the Central Excise authorities held that the cotton
fabric manufactured by it ceases to be "unprocessed". The collector
of Central Excise, directed the appellant to pay levy on the manu-
facture of the calendered cotton fabric, and also levied a penalty of
F Rs.1,00,000 under Rule 173.

On appeal, the Central Board of Excise and Customs affirmed
the levy of duty, but .•et aside the imposition of penalty. The appellant
preferred an appeal before the Customs, Excise and Gold (Control)
Appellate Tribunal. The Tribunal held that calendering is a finishing
G process and it was not necessary for the process of calendering lo be a process
which belonged to the same genus as those enumerated in Sec. 2(f)(v)
to take the cotton fabric out of the exemption. It would be sufficient
that if calendering is a "process" df cotton fabric even if it does not
partake of the other processes specifically enumerated in the preced-
H ing expressions in Sec. 2(f)(v)2. In that view of the matter the Tribunal

214
SIDDESHWARI MILLS v. U.0.1. 215

-f .dismissed the appeal preferred by the appellant. A

This appeal nnder Sec. 35L of the Act is against the Tribunal's
Order.

On behalf of the appellant, it was contended that "plain- B
-" calendering" process neither adds anything to the cotton fabdc nor
the effect brought about by it is lasting; it was purely a temporary
finish and that having regard to tbe nature of the process it is plainly

--, manifest that it does not impart to the fabric either of the two ingre-
dients necessary to bring the process into the family of processes
envisaged by the preceding expressions in Sec. 2(f)(v). c

On behalf of the Revenue it was submitted that since the
Tribunal had not specifically examined this aspect and recorded its
fipding thereon, it would be appropriate to remit the matter to the D
Tribunal.

Allowing the appeal, and remitting the matter to the Appellate
Tribunal for a fresh disposal, the Court,
E
HELD: 1. The expression ejus dem generis-'of the same kind

-·, J
or na~ure'-signifies a principle of construction whereby words in a
statute which are otherwise wide but are associated in the text with
more limited words are, by implication, given a restricted operation
and are limited to matters of the same class are genus as preceding
._',!, them. If a list or string or family of genus-describing terms are
F
followed by wider or residuary or sweeping-up words, then the verbal
context and the linguistic implications of the preceding words limit the
scope of such words. But the preceding words or expressions of
restricted meaning must be susceptible of the import that they repre-
sent a class. If no class can be found, ejus-dem-generis rule is not G
attracted and such broad construction as the subsequent words may
admit will be favoured. [220F; 221A-B]

S.S. Magnhild (owners) v. Mc Intyre Bros. & Co., [1920]
3 KB 321; Tribhuban Parkash Nayyar v. Union of India, [1970] H
216 SUPREME COURT REPORTS [1989] 1 S.C.R .•

A 2 SCR 732 and U.P.S.E. Board v. Hari Shankar, AIR 1979 SC 65 -t°
relied on.

Statutory Interpretation by Rupert Cross; Statutory Construction
by Francis Bennian, relied on.
B
2. The definition of "manufacture" obtaining in Sec. 2(1') of the ·f-
Central Excise Act was amended by Act 5 of 1986 giving it an extended
meaning. [220A]

Empire Industries v. Union of India, [1985] Suppl. 1 SCR 292 r
C relied on.

3. In the present case the expressions 'bleaching, mercerising, +
dyeing, printing, water·proofing, rubberising, shrink.proofing,
organdie processing' which precedes the expression 'or any other
D process' contemplate processes which impart a change of a lasting
character to the fabric by either the addition of some chemical into
the fabric or otherwise. 'Any other process' in the section must, share
one or the other of these incidents. The expression "any other
process" is used in the context of what constitutes manufacture in ~
E its extended meaning and the expression "unprocessed" in the
exempting notification draws its meaning from that context. [222G-H;
223A]

CIVIL APPELLATE JURISDICTION: Civil Appeal No.
2147of1984.
-\ I
-
F '........_ __ -
From the Judgment and Order dated 16.3.1984 of the Customs,
Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal
No. ED(SB) No. 425/82-C (Order No. 151of1984).

G Soli. J. Sorabjee, M.A. Rangaswamy and Ms. Radha Ran·
gaswamy for the Appellant.

A.K. Ganguli, K. Swami and C.V. Subba Rao for the Res· -*.
pondents.

H The Judgment of the Court was delivered by
SIDDESHWARI MILLS v. U.0.1. [VENKATACHALIAH. J.] 217

VENKATACHALIAH J. This appeal under Section 35-L of the A
Central Excise and Salt Act, 1944, (ACT) by Messrs Siddeshwari Cot-
ton Mills (P) Ltd., preferred against the appellate order dated
16.3.1984, of the Customs, Excise and Gold (Control) Appellate
Tribunal, New Delhi, raises a short question whether the appellant,
which manufactures cotton fabric on power looms which is otherwise B
exempt from duties of excise and the additional duties of excise respec-
tively under Notification No. 230/77 and 231/77 dated 15.7.1977,
looses the benefit of exemption by process of 'calendering' on a
calendering plant situated in the appellant's premises.

The Notification 230/77. CE dated 15.7.1977 issued by Central c
Government under Rule 8(1) of the Central Excise Rules, 1944,
exempts from the whole of the duty of Excise, 'unprocessed' cotton-
+~ fabric, falling under sub-item (1) of item No. 19 of the First Schedule
· to the Act, which is manufactured on power looms (without spinning
or processing plants) installed and worked with the permission of the
Textile Commissioner. Likewise, Notification No. 231/77. CE dated D
15. 7.1977 exempts such cotton fabric from payment of the additional
duties of excise.

2. The question in the appeal is whether such cotton-fabric
ceases to be "unprocessed" cotton-fabric if it is subjected to calender- E
'"" ing. The Tribunal has held in the affirmative and has upheld the levy of
duty imposed on the appellant.

We have heard Sri Soli J. Sorabjee, learned Senior Counsel for
\ /_the appellant and Sri A.K. Ganguly, learned Senior Counsel for the
.._.....{ Revenue. F

3. The facts which are not in dispute may briefly be stated. The
Central Excise authorities held appellant to have contravened the pro-
visions of the relevant mies by manufacturing and removing, between
14.5.1981 and 19.9.1981. 6,09,848.47 Sq. Metres of calendered cotton- G
fabric falling under item 19-l(b) of the First Schedule to ihe Act with-
out payment of Rs.2,62,767.04 leviable thereon as excise duty. The
·::<;: Collector of Central Excise, Calcut.ta, directed the appellant to pay the
said duty and also imposed on the appellant a penalty of Rs. l,00,000
under rule 173-Q. The Central Board of Excise and Customs, by its
order dated 24.8.1982, partly allowed the appellant's appeal and while H
218 SUPREME COURT REPORTS [1989] 1 S.C.R.
A
affirming the levy of the duty, however, set aside the imposition of the -1:-• I .
penalty. The further appeal before the Appellate-Tribunal preferred
by the appellant against the confirmation of the levy and the duty came
to be dismissed by the Tribunal's order dated 16.3.1984 now under
appeal. ·
B
4. Before the Appellate Tribunal it was contended for the appel- /-
!ant that the process of plain-calendering to which the cotton fabric
was subjected, though might, in itself, be a process in the larger and
general sense of that term, would not, however, fall under "any other
process' within the meaning of Sec. Z(f)(v) the Act. It was contended y·.:
c that even after the calendering, the cotton-fabric remained an "unpro-
cessed" cotton fabric and the expression "any other process" in Sec.
2(f)(v) must be considered ejus-dem-generis, so as to partake of the
nature and character of the processes-and belong to the same -+
genus-as those envisaged in the preceding expressions in that clause.
Sec. 2(f)(v) reads:
D

"in relation to goods comprised in Item No. 19-1 of the
Schedule to the Central Excise Tariff Act, 1985, includes
bleaching, mercerising, dyeing, printing, water-proofing,
rubberising, shrink-proofing, organdie processing or any :x
E other process or any one or more of these processes;"

The Appellate Tribual did not accept this contention. It held:

" .... There is prima facie nothing in the language em-
F ployed in Section 2(f) and item 19-1 of the CET to suggest --+ I
that the words "any other process" will take within sweep ~-.
only such processes as are of the same class or genus as the
specifically enumerated processes. It may be that for the
enumerated processes some extreneous substance may be
required. That, however, would"not make the processes a
G class. They enumerated processes from a group of dispa-
raie and dissimilar processes for example, bleaching and
rubberising or dyeing and organdie processing. Singifican- .
tly, what follows the enumerated process is not an expres- ~~·
sion like "any other like process or any such process", in
which case it could be argued that the non-enumerated
H process should of the same genus or class as the enumera-
SIDDESHWARI MILLS v. U.0.1. [VENKATACHALIAH, J.J 219
A
~ed ones ..... "

" ..... Admittedly, calendering is a finishing process. The
machine employed may be a simple or complex one. The
effect ought to be brought about may be simple or not.
That, however, would not mean that calendering is not a B
process. In fact, from the sample produced by the appel-
lants before us it was seen that the appellants had stamped
cotton sarees as calendered. It was stated before us that the
sarees were sold as calendered. Saree calendering will thus
fall within the ambit of the expression "any other process"
occurring in Secti.on 2(f) and Item 19-I CET particularly
when sub-item (b) of Item 19-1 is read in juxtaposition with
c
sub-item (a) which covers cotton fabrics not subjected to
any process."

5. In this view of the matter, the Appellate Tribunal did not-
D
accept the contention that though "calendering" might be a "process",
it is not any 'process' that satisfies the requirement of "any other
process" occurring in see. 2(f)(v), but only those processes that partake
of the same common characteristic of and belong to same genus as the
processes such as bleaching, mercerising, dyeing, printing, water-
proofing, rubberising, shrink-proofing, or organdie-processing occurr-
E
ing in Section 2(f)(v).

.. The Appellate Tribunal held that it was not necessary for the
"process",-process10f calendering in the present case-to .be a pro-
cess which belongs to the same· genus as those enumerated in sec.
2(f)(v) to take the cotton-fabric out of the exemption and thai it would F
be sufficient that if calendering is a "process" of cotton fabric even if it
does not partake of the other processing specifically enumerated in the
preceding expressions in Section 2(f)(v). Accordingly, the App"ellate
.Tribunal did not specifically examine the alternative position whether
the process of calendering of the type and kind adopted by the appel-
lant really shared the common element or characteristic possessed by G
the other processes specifically enumerated. Therefore, if it is to be
held that the expression "any other process" in Sec. 2(f)(v) must be
understood and construed ejus-dem-generis, then the question whether
the "process" of calendering employed in the present case belongs to
the same genus as the processes envisaged in the preceding expressions
in the section would have to be examined afresh. H
220 SUPREME COURT REPORTS [1989) 1 S.C.R.

6. The definition of "manufacture" obtaining in Sec. 2(f) of the
A
Act was amended by Act 5 of 1986 giving it an extended meaning. In
repelling the contention that the extended meaning was introduced as
an artificial concept of "manufacture" not belonging to, but outside,
Entry 84 of List 1 of the Seventh Schedule lo the Constitution, this
Court in Empire Industries v. Union of India, [1985) Suppl. 1SCR292
B held:
"As has been noted, processes of the type which have been
incorporated by the impugned Act were not so alien or
foreign to the concept of "manufacture" that these could
not come within that concept."
(p.323)
c
If, accordingly, the processes such as bleaching, mercerising,
dyeing, printing, water-proofing, rubberising, shrink-proofing, --+
organdie-processing, are not unrelated to the concept of manufacture
and bring about such a change in the cotton-fabric as to render it a
commercially different product, then by parity of reasoning, "any
D other process" in Sec. 2(f)(v) which is a part of the scheme of the
extended meaning of "manufacture" must also share the same charac-
teristic of those other expression. That apart, even if the amendment is
beyond Entry 84 of List ·1 and is supportable under or referrable to the
residuary Entry 97 of List 1, on the principles of construction appro-
priate to the provision in Sec. 2(f)(v), is "any other process" in Sec.
E 2(f)(v), though otherwise of wide import, must share the characterist-
ics of and be limited by the preceding expressions.
7. The expression ejus-dem-generis, 'of the same kind or
nature'-signifies a principle of construction whereby words in a sta-
tute which are otherwise wide but are associated in the test with more
F limited words are, by implication, given a restricted operation and are
limited to matters of the same class or genus as preceding. If a list or
string or family of genus-describing terms are followed by wider or
residuary or sweeping-up words, then the verbal context and the ling-
uistic implications of the preceding words limit the scope of such
words.
G
In 'Statutory Interpretation' Rupert Cross says:

" ...... The draftsman must be taken to have inserted the
general words in case something which ought to have been
included among the specifically enumerated items had
H been omitted ..... " (Page 116)
SIDDESHWARI MILLS v. U.0.1. [VENKATACHALIAH, J.J 221

The principle underlying this approach to statutory construction A
is that the suosequent. general words were only intended to guard
against some accidental omission in the objects of the kind mentioned
earlier and were not intended to extent to objects of a wholly different
kind. This is a presumption and operates unless there is some contrary
·indication. But the preceding words or expressions of restricted mean- B
ing must be susceptible of the import that they represent a class. If no
class can be found, ejus-dem-generis rule is not attracted and such
broad construction as the subsequent words may admit will be
favoured. As a learned author puts it:

" . . . . . if a class can be found, but the specific words
exhaust the class, then rejection of the rule may be c
favoured because its adoption would make the general
words unnecessary; if, however, the specific words do not
exhaust the class, then adoption of the rule may be
favoured because its rejection would make the specific
words unnecessary." D
[See: Construction of Statutes by E.A. Driedger p.95
quoted by Francis Bennion in his Statutory Construction
page 829 and 830].

Francis Bennion in his Statutory Construction observed:
E

- "For the ejus dem generis principle to apply there must be a
sufficient indication of a category that can properly be
described as a class or genus, even though not specified as
such in the enactment. Furthermore the genus must be
narrower than the words it is said to regulate. The nature of F
the genus is gathered by implication from the express
words which suggest it .... "
[p. 830]

It is necessary to be able to formulate the genus; for
if it cannot be formulated it does not exist. 'Unless you can
G
find a category', said Farwell LJ, 'there is no room for the
application of the ejus dem gen eris doctrine'."
Ip. 8311
In SS. Magnild (Owners) v. Macintyre Bros. & Co.,· [1920] 3 KB
321 Mc Cardie J said: H
222 SUPREME COURT REPORTS 11989] 1 S.C.R.

A "So far as I can see the only test seems to be whether the
specified things which precede the general words can be
placed under some common category. By this I understand
that the specified things must possess some common and
dominant feature."

B In Tribhuban Parkash Nayyar v. Union of India, 11970] 2 SCR
732 the Court said:

" ..... This rule reflects an attempt to reconcile incompati-
bility between the specific and general words, in view of the
other rules of interpretation, that all words in a statute are
given effect if possible, that a statute is to be construed as a
c whole and that no words in a statute are presumed to be
superfluous .... " ~-
Ip. 740] '

In U.P.S.E. Board v. Hari Shanker, AIR 1979 SC 65 it was
D observed:

" ..... The true scope of the rule of "ejus dem generis" is
that words of a general nature (following specific and
particular words should be construed as limited to things
which are of the same nature as those specified. But the
E rule is one which has to be "applied with caution and not
pushed too far" ..... "
Ip. 73]

8. ·The preceding words in the statutory provision which, under
-
this particular rule of construction, control and limit the meaning of the
F subsequent words must represent a genus or a family which admits of a
number of species or members. If there is only one species it cannot
supply the idea of a genus.

In the present case the expressions 'bleaching, mercerising, dye-
ing, printing, water-proofing, rubberising, shrink-proofing, organdie
G processing' which precede the expression 'or any other process' con-
template processes which impart a change of a lasting character to the
fabric by either the addition of some chemical into the fabric or
otherwise. 'Any other process' in the section must, share one or the
other of these incidents. The expression "any other process" is used in
the context of what coqstitutes manufacture in its extended meaning
H and the expression "unprocessed" in the exempting notification draws
SIDDESHWARI MILLS v. U.0.1. [VENKATACHAl..IAH, J.[ 223

+· its meaning from that context. The principle of construction con-
sidered appropriate by the Tribunal in this case appears to us to be
A

unsupportable in the context in which· the expression "or any other
process" has to be understood.

9. It was then contended by Sri Sorabjee that "plain-calender-
B
-~ ing" process neither adds anything to the cotton-fabric nor the effect
brought about by it is lasting. It is, according to learned counsel,
nothing more than pressing the cotton-fabric by running it between
plain Rollers to improve its appearance. Learned counsel submitted
that it was purely a temporary finish and that having regard to the
nature of the process it is plainly manifest that it does not impart to the
fabric either of the two ingredients necessary to bring the process into c
the family of processes envisaged by the preceding expressions in the
section. Sri A.K. Ganguly, learned counsel for Revenue, however,
submitted that this aspect requires investigation of the factual aspects
and that since the Appellate-Tribunal had not specifically examined this
aspect and recorded its finding thereon, it would be appropriate to
D
remit the matter to the Appellate Tribunal for a fresh disposal of the
appeal in the light of the pronouncement of this Court on the proper
rule of construction to be applied in the understanding of the expres-
sion "any other process" in Sec. 2(f)(v) and to consider whether the
particular process of calendering adopted by the appellant would
satisfy that requirement. We think we should accept this submission of
E
Sri Ganguly.

- 10. In the result, this appeal is allowed, the order under appeal
is set-aside, and the appeal No. 151 of 1984 before the Appellate
Tribunal is remitted to it for a fresh disposal in accordance with law.
There will be no order as to costs in this appeal.
F
G.N. Appealallowed.