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Indirect Tax Laws

Notes 11. Textile and Textile Products (Section XI - Chapters 50 to 63)
12. Footwear, Headgear, Umbrellas, Articles of human hair (Section XII - Chapters 64 to 67).
13. Articles of stone, plaster, ceramic, glass (Section XIII - Chapters 68 to 70)

14. Pearls, precious metals (Section XIV - Chapter 71)
15. Base metals and articles of base metal (Iron, Steel, Copper, Nickel, Zinc, Tin etc.). (Section
XV - Chapters 72 to 83)
16. Machinery and mechanical appliances, electrical equipments, television etc. (Section XVI
- Chapters 84 and 85)

17. Vehicles, Aircrafts, vessels (Section XVII - Chapters 86 to 89)
18. Optical, photographic, medical, surgical instruments, clocks, musical instruments (Section
XVIII - Chapters 90 to 92)
19. Arms and Ammunition (Section XIX - Chapter 93)

20. Misc. Manufactured articles like Furniture, toys etc. (Section XX - Chapters 94 to 96)
21. Works of Art, collectors’ pieces and antiques (Section XXI - Chapters 97 to 99) – This section
is only in Customs Tariff and not in Central Excise Tariff.

Task Discuss Broad Grouping of Goods in CETA.

3.1.3 Trade Parlance Theory

Trade Parlance Theory emerged out of case of Grenfell vs. IRC (1876), where justice Pollok
concluded that nay word in statue should be interpreted (understood in its popular sense, in
which people understand it.

Some examples:
 A mirror is not a glass wear, as glass loses its character after it is converted into mirror.

 Windscreen of motor vehicle (front glass of car) is not a glass it is understood as automobile
part.

 Plastic pen has a separate identity. It cannot be classified as article of plastic like pipes,
plastic sheets etc.

 Carbon paper is not a paper because paper is used for writing,
 Printing, drawing etc.
A product is also classified on the basis of its end use, if classification is related to the function of
the goods.
In order to determine the rate of excise duty on goods, classification is prerequisite. Excise duty
payable is based on the classification of goods given in the Central Excise Tariff Act, 1985
(CETA). The Act gives a list of items chargeable to Central Excise duty. It is divided into 96
Chapters grouped in twenty Sections. Each of these twenty sections relates to broader class of
goods such as Section I relates to Animal and Dairy Products, Section VI relates to Products of
Chemical and Allied Industries, while Chapter XI relates to Textiles and Textile Articles.

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