JUDGMENT : RAVI NATH TILHARI, J. 1. Heard Sri T.C.D. Sekhar, learned Government Pleader for Commercial Tax appearing for the petitioner-State and M/s. Jyothi Ratna Anumolu, representing Sri B. Srinivas, learned counsel for the respondent in all the revisions. Facts of the Case - T.R.C. No. 210 of 2012: 2. The Tax Revision Case No. 210 of 2002 has been filed by the State of Andhra Pradesh challenging the order of the Andhra Pradesh State Tax Appellate Tribunal (for short “the Appellate Tribunal”) in T.A. No. 1456 of 1999, dated 25.07.2002. 3. M/s. Jai Shree Enterprises, Vijayawada are dealers in H.D.P.E. Woven Fabrics. For the Assessment year 1997-98 (CST), the Commercial Tax Officer (for short “the CTO”) exempted the disputed turnover of Rs.52,860/- of inter-State Sales of HDPE Fabrics from the sales tax under Central Sales Tax Act (CST). The CTO granted such exemption observing that the commodity was generally exempted under the Andhra Pradesh General Sales Tax Act, 1957 (for short “the APGST Act”). The CTO passed the order in Assessment No. 527/1997-98 (CST) dated 05.10.1998. 4. The Deputy Commissioner (CT) No. I Division, Vijayawada, In R.P. No. 2/1999-2000, vide order dated 11.08.1999 revised the assessment and subjected the disputed turnovers to tax at 10%, withdrawing the exemption granted by CTO taking the view that the HDPE Woven Fabrics should be treated as articles of plastics falling under Item No. 187 of the I Schedule, and do not fall under item No. 5 of the IV Schedule. They are classified under 3923.90 of Central Excise Tariff Act, 1985. The HDPE Woven Fabrics cannot be treated as generally exempted as they are wholly made up of plastics and cannot be treated as cloth, hence, levy or exemption of excise duty would not matter. 5. The Appellate Tribunal allowed T.A. No. 1456 of 1999 of the dealer vide order dated 23.07.2002. It held that the “H.D.P.E. Woven Fabrics” is covered by “man-made fabrics” in Item No. 5 of the IV Schedule and is not an article of plastic under Entry 187 of the 1st Schedule. It held that the “nil rate” is also a rate of additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (for short “the Act No. 58 of 1957”). It held that the “nil rate” is also a rate of additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (for short “the Act No. 58 of 1957”). It observed that the second part of the Explanation to Item No. 5, excludes only those goods which are not at all subject to levy of tax, but does not exclude those goods which are subjected to levy of additional duty of excise at nil rate. In other words, the Appellate Tribunal held that “H.D.P.E. Woven Fabrics” even if there was nil duty rate, will be covered under Item No. 5 of IV Schedule and exempted from tax. T.R.C. No. 211 of 2012: 6. The Tax Revision Case No. 211 of 2002 has been filed by the State of Andhra Pradesh challenging the order of the Andhra Pradesh State Tax Appellate Tribunal (for short “the Appellate Tribunal”) in T.A. No. 634 of 1999, dated 25.07.2002. 7. M/s. Jai Shree Enterprises, Vijayawada are dealers in H.D.P.E. Woven Fabrics. For the Assessment year 1997-98 (APGST), the Commercial Tax Officer (for short, “the CTO”) exempted the disputed turnover of Rs.11,02,230/- of inter-State Sales of HDPE Fabrics from the sales tax under Central Sales Tax Act (CST). The CTO granted such exemption observing that the commodity was generally exempted under the APGST Act. The CTO passed the order in Assessment No. 527/1997-98 dated 05.10.1998. The Deputy Commissioner (CT) No. I Division, Vijayawada, In R.P. No. 46/1998-99, dated 22.03.1999, revised the assessment and subjected the disputed turnovers to tax withdrawing the exemption granted by CTO. 8. The Appellate Tribunal allowed T.A. No. 634 of 1999 of the dealer vide order dated 25.07.2002. The Deputy Commissioner (CT) and the Appellate Tribunal have passed their respective orders, same as impugned in T.R.C. No. 210 of 2002. T.R.C. No. 212 OF 2002: 9. The Tax Revision Case No. 212 of 2002 has been filed by the State of Andhra Pradesh challenging the order of the Andhra Pradesh State Tax Appellate Tribunal (for short “the Appellate Tribunal”) in T.A. No. 1455 of 1999, dated 25.07.2002. 10. M/s. Jai Shree Enterprises, Vijayawada are dealers in H.D.P.E. Woven Fabrics. For the Assessment year 1997-98, the Commercial Tax Officer (for short “the CTO”) exempted the disputed turnover of Rs.75,960/- of inter-State Sales of HDPE Fabrics from the sales tax under Central Sales Tax Act (CST). 10. M/s. Jai Shree Enterprises, Vijayawada are dealers in H.D.P.E. Woven Fabrics. For the Assessment year 1997-98, the Commercial Tax Officer (for short “the CTO”) exempted the disputed turnover of Rs.75,960/- of inter-State Sales of HDPE Fabrics from the sales tax under Central Sales Tax Act (CST). The CTO granted such exemption observing that the commodity was generally exempted under the APGST Act. The CTO passed the order in Assessment No. 527/1996-1997 (CST) dated 06.01.1998. The Deputy Commissioner (CT) No. I Division, Vijayawada, In R.P.No. 1/1999-2000, vide order dated 11.08.1999 revised the assessment and subjected the disputed turnovers to tax at 10%, withdrawing the exemption granted by CTO. The Appellate Tribunal allowed T.A. No. 1455 of 1999 of the dealer vide order dated 25.07.2002. The Deputy Commissioner (CT) and the Appellate Tribunal passed their respective orders, same as in impugned in T.R.C. No. 210 of 2002. 11. Challenging the aforesaid orders, the State has preferred the revision petitions, under Section 22(1) of APGST Act, 1957. 12. The revision petitions were admitted. QUESTIONS OF LAW: 13. The following questions of law are framed in the memo of revision on which learned Government Pleader advanced the submissions: “(i) Whether the disputed turnovers relating to the sale of HDPE woven sacks is entitled for exemption from sales tax as covered by item 5 of IV schedule to APGST Act? (ii) Whether the STAT justified in allowing the appeals by setting aside the Revisional orders of the DC (CT)?” 14. The present are the cases of “H.D.P.E. Woven Fabrics.” Sri T.C.D. Sekhar submitted that in the Question of Law No. (i), the “HDPE Woven Sacks” is typographical error, which should have been “HDPE Woven Fabrics” and requested to consider the same as such. The respondent counsel does not dispute. We shall read “Fabric” in place of “sacks” in Question of Law (i) which is reframed under: “(i) Whether the disputed turnovers relating to the sale of HDPE Woven Fabrics is entitled for exemption from sales tax as covered by item 5 of IV schedule to APGST Act.” SUBMISSIONS OF LEARNED GOVERNMENT PLEADER: 15. Sri T.C.D Sekhar, submitted that H.D.P.E. Woven Fabrics is made of plastic granules. It is an “article of plastic” falling under Entry 187 of the 1st Schedule and is liable to tax. “HDPE Woven Sacks” is excluded from Entry 187. But not HDPE Woven Fabrics. Sri T.C.D Sekhar, submitted that H.D.P.E. Woven Fabrics is made of plastic granules. It is an “article of plastic” falling under Entry 187 of the 1st Schedule and is liable to tax. “HDPE Woven Sacks” is excluded from Entry 187. But not HDPE Woven Fabrics. He submitted that the Appellate Tribunal had taken the view that “H.D.P.E. Woven Fabrics” is “man-made fabric” falling under Entry 5 of the IV Schedule. He submitted that even if it is so, still it is not exempted, as additional duty was not levied upon this item under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Act No. 58 of 1957). He submitted that the “nil rate” is no levy of additional duty and consequently, in view of the second part of the Explanation to Item No. 5 of IV Schedule, there could be no exemption from tax on this item under the APGST Act, 1957 nor under C.S.T Act. 16. Sri T.C.D. Shekar submitted that the Appellate Tribunal placed reliance in Collector of Central Excise, Patna vs. Usha Martin Industries, (1998) 111 STC 254 (SC) for holding that “nil rate” is also a rate of duty, but Usha Martin Industries (supra) has been overruled subsequently by the Constitution Bench of the Hon’ble Apex Court in Collector of Central Excise, Vadodara vs. Dhiren Chemical Industries, (2002) 800 ECR (SC). 17. Sri T.C.D Shekhar, learned Government Pleader further submitted that the Appellate Tribunal has erroneously decided the question of law and as such a case for interference is made out under Section 22 of the A.P.G.S.T. Act, 1957. SUBMISSION OF LEARNED COUNSEL FOR RESPONDENT: 18. Ms. Jyoti Ratna Anumolu, submitted that the “H.D.P.E. Woven Fabrics” is a man-made fabric. The appellate Tribunal while recording such a finding also had the advantage of seeing the sample of the fabric, before it. It found that the commodity was in the form of a cloth, woven from monofilament of plastic and came to the conclusion that the commodity was covered by “man-made fabric” in item No. 5 of IV Schedule. She submitted that, such is a finding of fact, not open to interference in the exercise of revision jurisdiction; particularly when there is no challenge to such finding nor any question of law on such aspect has been framed by the revisionists. 19. Ms. She submitted that, such is a finding of fact, not open to interference in the exercise of revision jurisdiction; particularly when there is no challenge to such finding nor any question of law on such aspect has been framed by the revisionists. 19. Ms. Jyothi Ratna Anumolu further submitted that the “man-made fabric” is included in the relevant head and sub heads of the I schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and “nil rate” is also a rate of additional duty. Thus, both the conditions under the Explanation to item No. 5 in IV Schedule are satisfied. The order of the Appellate Tribunal granting exemption is perfectly legal and justified. She placed reliance in Usha Martin Industries (supra), Collector of Central Excise, Hyderabad and Others vs. Vazir Sultan Tobacco Company Limited, Hyderabad and Others, (1996) 3 SCC 434 and M/s. Associated Cement Company Limited vs. Commissioner of Customs, (2001) 4 SCC 393. 20. Ms. Jyothi Ratna Anumolu further submitted that the revision deserves to be dismissed. The Appellate Tribunal has not failed to decide any question of law. She placed reliance in Baby vs. Travancore Devaswom Board and Others, (1998) 8 SCC 310 and Kerala Ayurveda Vydyasala Limited vs. Pandara Valappil Kallianai and Others, (1999) 3 SCC 238 . 21. We have considered the submissions of the learned counsels for the parties and perused the material on record. ANALYSIS: Question of Law No. (i) 22. Section 5 of the APGST Act is as follows: “5. Levy of tax on sales or purchases of goods: (1) Save as otherwise provided in this Act every dealer shall pay tax under this Act for each year on every rupee of his turnover of sales or purchases of goods in each year irrespective of the quantum of his turnover at the rates of tax and at the points of levy specified in the Schedules. (3) For the purpose of this section and the other provisions of this Act, the turnover which a dealer shall be liable to pay tax shall be determined after making such deductions from his total turnover, and in such manner as may be prescribed. (4) The taxes under this section shall be assessed, levied and collected in such manner, as may be prescribed. (4) The taxes under this section shall be assessed, levied and collected in such manner, as may be prescribed. Provided that: (i) in respect of the same transaction, the buyer or the seller but not both, as determined by such rules as may be prescribed, shall be taxed. (ii) where a dealer has been taxed in respect of the purchase of any goods, in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him.” 23. Section 5 of the APGST Act, 1957 provides for Levy of tax on sales or purchases of goods. According to this Section, save as otherwise provided in the APGST Act, 1957, every dealer shall pay tax for each year on every rupee of his turnover of sales or purchases of goods in each year irrespective of the quantum of his turnover at the rates of tax and at the points of levy specified in the Schedules. 24. Item No. 187 of the 1st Schedule of APGST Act, 1957 provides as under: “Articles of plastic (excluding HDPE Woven Sacks and laminated sheets) and including: 1. Monofilament rods, sticks and profile shapes of plastics 2. Tubes, pipes and hoses, fittings therefor (for e.g. joints, elbows, Flanges) of plastics. 3. Floor coverings of plastics, whether or not self-adhesive in rolls or in the form of titles; wall or ceiling covering of plastics. 4. Plates, blocks, (sheets excluding laminated sheets), film foil, tape, strip and other flat shapes.” 25. Section 8 of APGST Act, 1957 reads as under: “8. Exemption from tax in respect of certain goods Subject to such restrictions and conditions as may be prescribed including conditions as to licences and licence fees, a dealer who deals in the goods specified in the 1 (Fourth Schedule) shall be (exempt from tax under this Act in respect of such goods.” 26. Item No. 5 of the IV Schedule of APGST Act, 1957 with explanation provides as under: “5. Cotton fabrics, man-made fabrics and woolen fabrics” 6 to 12................. Item No. 5 of the IV Schedule of APGST Act, 1957 with explanation provides as under: “5. Cotton fabrics, man-made fabrics and woolen fabrics” 6 to 12................. Explanation: “The goods mentioned in entries 5, 6 and 7 of this Schedule shall be goods included in the relevant heads and sub-heads of the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, but does not include goods where no Additional Duties of Excise are levied under that Schedule.” 27. The Additional Duties of Excise (Goods of Special Importance) Act, 1957 was enacted to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of a part of the net proceeds thereof among the States in pursuance of the principles of distribution formulated and the recommendations made by the Finance Commission in its second report dated 18th December, 1990. 28. Section 2(a) of the Act No. 58 of 1957 defines the “additional duties” which means the duties of excise levied and collected under Sub Section (1) of Section 3 of the Act No. 58 of 1957: “2. Definitions - In this Act: “(a) “additional duties” means the duties of excise levied and collected under sub-section (1) of section 3.” 29. Section 3 of the Act No. 58 of 1957 provides as under: Section 3. Levy and collection of additional duties: (1) There shall be levied and collected in respect of the a [goods described in column (3) of the First Schedule] produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto, duties of excise at the rate or rates specified in [column (4) of the said Schedule]. (2) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises and “Section 3. Levy and collection of additional duties Salt Act, 1944 (1 of 1944), or any other law for the time being in force. (2) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises and “Section 3. Levy and collection of additional duties Salt Act, 1944 (1 of 1944), or any other law for the time being in force. (3) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1). (a) Substituted for the words “in respect of the following goods, namely, sugar, tobacco, cotton fabrics, silk fabrics, man-made fabrics and woollen fabrics” by the Additional Duties of Excise (Goods of Special Importance) Second Amendment Act, 1986(7 of 1986), Section 3 (w.e.f. 28-2-1986). (b) Substituted for the words “specified in the First Schedule to this Act by Act 7 of 1986, Section 3 (w.e.f. 28-2-1986). (c) Substituted by The Finance Act (32 of 1994), Section 63(a).” 30. Section 3 of the Act No. 58 of 1957 provides for Levy and collection of additional duties. As per Section 3(1), there shall be levied and collected in respect of the goods described in column (3) of the First Schedule produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto, duties of excise at the rate or rates specified in column (4) of the said Schedule. Sub Section (2) provides that the duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the Central Excises and Salt Act, 1944 (1 of 1944), or any other law for the time being in force, and as per sub section (3), the provisions of the Central Excises and Salt Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds, exemptions from duty, offences and penalties, shall, so far as may be, apply in relation to levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1). 31. The submission of the learned Government Pleader is that nil rate of duty is no duty levied. The submission of the learned counsel for respondent is that the “nil rate” of duty is also a duty under the Act No. 58 of 1957. 32. In Usha Martin Industries (supra), the question was whether the benefit of excise duty exemption granted by the Central Government under the notifications could be claimed in respect of the commodities made out of materials on which no excise duty was payable. The Hon’ble Apex Court interpreted the expression “on which the appropriate amount of duty of excise has already been paid” and held that the benefit of exemption from duty could legitimately be claimed in respect of the goods referred to in the notification, the raw-materials of which were not exigible to any excise duty at all. 33. In view of the conflict being noticed in Dhiren Chemical Industries (supra), between Usha Martin Industries (supra) and Motiram Tolaram vs. Union of India, (1989) 6 SCC 375 the matter was referred to the Larger Bench. In Dhiren Chemical Industries (supra), the Constitution Bench of the Hon’ble Apex Court held that where the same material is not liable to excise duty or such duty is nil, no excise duty is as a matter paid upon it. To goods made out of such material, the notification will not apply. It was held that the emphasis must be given to the words “has already been paid” at “appropriate” or correct rate. To goods made out of such material, the notification will not apply. It was held that the emphasis must be given to the words “has already been paid” at “appropriate” or correct rate. Unless the correct amount of excise duty was paid he was not entitled for the benefit of the exemption notified. 34. Paras 7 to 10 of Dhiren Chemical Industries (supra) are as under: “7. In our view, the correct interpretation of the said phrase has not been placed in the judgment in the case of Usha Martin. The stress on the word “appropriate” has been mislaid. All that the word “appropriate” in the context means is the correct or the specified rate of excise duty. 8. An exemption notification that uses the said phrase applies to goods which have been made from duty paid material. In the said phrase, due emphasis must be given to the words “has already been paid.” For the purposes of getting the benefit of the exemption under the notification, the goods must be made from raw material on which excise duty has, as a matter of fact, been paid, and has been paid at the “appropriate” or correct rate. Unless the manufacturer has paid, the correct amount of excise duty, he is not entitled to the benefit of the exemption notification. 9. Where the raw material is not liable to excise duty or such duty is nil, no excise duty is, as a matter of fact, paid upon it. To goods made out of such material the notification will not apply. 10. The notification is intended to give relief against the cascading of excise duty - on the raw material and again on the goods made therefrom. There is no cascading effect when no excise duty is payable upon the raw material and the hardship that the notification seeks to alleviate does not arise.” 35. In Vazir Sultan Tabaco (supra), Section 37(1) of the Finance Act, 1978, levied a special duty of excise equal to 5% of the amount of excise duty chargeable on goods. The levy came into effect on and from 01.03.1978 and was to remain in force till 31.03.1979. This levy was in addition to the duties of excise chargeable of such goods under the law in force. The levy came into effect on and from 01.03.1978 and was to remain in force till 31.03.1979. This levy was in addition to the duties of excise chargeable of such goods under the law in force. The question involved was, whether the goods manufactured prior to 01.03.1978, but removed on or after 01.03.1978, were liable to pay the special duties of excise? The Hon’ble Apex Court held that the special excise duty was relatable to Entry 84 list-I in VII Schedule to the Constitution of India. The levy must be on the manufacture or production of goods. Once the levy was not there at the time, the goods were manufactured or produced in India, it could not be levied at the stage of removal of those goods. The idea of collection at the stage of removal was devised for the sake of convenience. The levy could not be attached nor could it be realized because such goods were being removed on or after March 1, 1978. The removal of goods was not the taxable event. Taxable event was the manufacture or production of goods and at that time there was no levy of special excise duty. 36. Learned counsel for the respondent laid much emphasis in Para 13 in Vazir Sultan Tobacco Company Limited (supra), to contend that in this case also the Hon’ble Apex Court held that nil rate of duty is also a rate of duty. Para 13 of Vazir Sultan Tobacco Company Limited (supra) reads as under: “13. In our opinion, the decision in Wallace Flour Mills (1989) 4 SCC 592 : 1990 SCC (Tax) 10 : (1989) 44 ELT 598 does not lay down a contrary proposition - neither does it support the contention of Shri Vellapally. That was a case where the goods were excisable goods prior to 1-3-1987, though by virtue of an exemption notification, the rate of duty was nil. This does not mean that they were not excisable goods. They were excisable goods. Nil rate of duty is also a rate of duty. With effect from 1-3-1987, the said goods became excisable to duty at the rate of fifteen per cent ad valorem. This does not mean that they were not excisable goods. They were excisable goods. Nil rate of duty is also a rate of duty. With effect from 1-3-1987, the said goods became excisable to duty at the rate of fifteen per cent ad valorem. It is in the above circumstances that the Court held, on the basis of Section 3 and Rule 9-A, that though the goods were produced or manufactured prior to 1-3-1987, still they attracted duty at the rate prevailing on the date of their removal, i.e., fifteen per cent. Para 4 clearly brings out the ratio of the said decision. The relevant portion reads: (SCC pp. 594-95, Para 4) “Excise is a duty on manufacture or production. But the realization of the duty may be postponed for administrative convenience to the date of removal of goods from the factory. Rule 9-A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under Rule 9-A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory Industrial Estate v. Superintendent of Central Excise, (1986) 23 ELT 313 (Kant) where it was decided that the words “as being subject to a duty of excise” appearing in Section 2(d) of the Act are only descriptive of the goods and not to the actual levy. “Excisable goods” it was held, do not become non- excisable goods merely by the reason of the exemption given under a notification. This view was also taken by the Madras High Court in Tamil Nadu (Madras State) Handloom Weavers Cooperative Society Ltd. v. Assistant Collector of Central Excise, (1978) 2 ELT (J) 57 (Mad). On the basis of Rule 9-A of the said rules, the Central Excise authorities were within the competence to apply the rate prevailing on the date of removal. We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative convenience.” 37. We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative convenience.” 37. In Vazir Sultan Tobacco Company Limited (supra), the goods were not subject to the levy of duty at the time of manufacture or production. Levy came into effect on and from 01.03.1978. In Wallace Flour Mills Company (supra), the goods were “excisable” prior to 01.03.1987. At that time the levy was “nil rate” but at the time of removal the duty was 15%. It was, in view of the definition of “excisable goods” in Section 2(d) of the Central Excise Act, that it was held that, the goods being specified in the Schedule being subject to a duty of excise, were excisable goods and the nil rate of duty did not mean that such goods were not excisable goods. Consequently, prevailing rate of duty at the time of removal shall have to be paid. 38. The aforesaid judgments were considered by the Hon’ble Apex Court in Associated Cement Company Limited (supra) and it was held as under in Paras 78 to 82: “78. While dealing with the provisions of the Excise Act, this Court in CCE v. Vazir Sultan Tobacco Co. Ltd. (1996) 3 SCC 434 : (1996) 83 ELT 3 referring to an earlier decision in the case of Wallace Flour Mills Co. Ltd. v. CCE, (1989) 4 SCC 592 : 1990 SCC (Tax) 10 : (1989) 44 ELT 598 had observed that if by virtue of an exemption notification the rate of duty was reduced to nil, the goods specified in the Tariff Act would still be regarded as excisable goods on which nil rate of duty was payable. 79. It appears to us that the aforesaid decisions, which were sought to be invoked by the respondent in an effort to submit that the drawings and designs, which came as a part of passenger baggage, were dutiable goods, would not be applicable. In Vazir Sultan (1996) 3 SCC 434 : (1996) 83 ELT 3 and Wallace Flour Mills (1989) 4 SCC 592 : 1990 SCC (Tax) 10 : (1989) 44 ELT 598 cases this Court considered the definition of “excisable goods” in Section 2(d) of the Central Excise Act, 1944 which was as follows: “2. In Vazir Sultan (1996) 3 SCC 434 : (1996) 83 ELT 3 and Wallace Flour Mills (1989) 4 SCC 592 : 1990 SCC (Tax) 10 : (1989) 44 ELT 598 cases this Court considered the definition of “excisable goods” in Section 2(d) of the Central Excise Act, 1944 which was as follows: “2. (d) “excisable goods” means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt.” “80. Under the Customs Act, there are two definitions which are relevant. Section 2(22) defines “goods” as follows: “2. (22) “goods” includes: (a) vessels, aircraft and vehicles. (b) stores. (c) baggage. (d) currency and negotiable instruments. (e) any other kind of moveable property.” In addition thereto, Section 2(14) defines “dutiable goods” as follows: “2. (14) “dutiable goods” means any goods which are chargeable to duty and on which duty has not been paid.” 81. Under the Central Excise Act, 1944 in the definition of the words “excisable goods” under Section 2(d), the very specification or inclusion of goods in the First and Second Schedules of the Central Excise Tariff Act would make them excisable goods subject to duty. Under the Customs Act, the provisions seem to be somewhat different. While by virtue of Section 2(22) all kinds of moveable property would be “goods” but it is only those goods which would be regarded as “dutiable goods” under Section 2(14) which are chargeable to duty and on which duty has not been paid. The expression “chargeable to duty on which duty has not been paid” indicates that goods on which duty has been paid or on which no duty is leviable, and therefore no duty is payable, will not be regarded as “dutiable goods.” It is only if payment of duty is outstanding or leviable that goods will be regarded as dutiable goods. 82. Section 12 of the Customs Act provides that the duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act. When the Customs Tariff Act itself provides that the import of drawings and designs under Heading 49.06 is “free” it must follow that these drawings and designs, though goods, were not chargeable to duty. When the Customs Tariff Act itself provides that the import of drawings and designs under Heading 49.06 is “free” it must follow that these drawings and designs, though goods, were not chargeable to duty. In view of the difference in the language of the Excise and Customs Acts, the decisions in the cases of Vazir Sultan (1996) 3 SCC 434 : (1996) 83 ELT 3 and Wallace Flour Mills (1989) 4 SCC 592 : 1990 SCC (Tax) 10 : (1989) 44 ELT 598 may not be very apposite and if no customs duty is chargeable either by reason of tariff not providing for it or because of the exemption notification, those goods will not be regarded as dutiable goods “on which duty has not been paid.” It is sufficient in the present case to observe that the drawings and designs which were imported by the appellant were correctly classifiable under Heading 49.06 and the tariff itself providing that the import of the same is free, the said drawings and designs were not dutiable articles and, therefore, no customs duty was leviable thereon even as a part of the passenger baggage. On this short ground alone the appeal of Videocon has to be allowed.” 39. The aforesaid judgments do not afford any help to the contentions of the respondent. The reason is that “nil rate” of duty was being considered in different context and under different Acts. The present case requires consideration in the light of the “Explanation” to Item No. 5, IV Schedule in APGST Act. 40. Explanation to Item No. 5 in the IV Schedule as referred to above, provides that the goods mentioned in entry Nos. 5, 6 and 7, shall be the goods included in the relevant heads and sub heads of the I Schedule to the Act No. 58 of 1957, but does not include goods where no additional duties of excise are levied under that schedule. 41. The Explanation, therefore, reads in two parts (i). The first part: it includes the goods which are included in the relevant heads and sub heads of the I schedule to the Act No. 58 of 1957 and (ii). The second part it does not include the goods where no additional duties of excise are levied under I Schedule to the Act No. 58 of 1957. The first part: it includes the goods which are included in the relevant heads and sub heads of the I schedule to the Act No. 58 of 1957 and (ii). The second part it does not include the goods where no additional duties of excise are levied under I Schedule to the Act No. 58 of 1957. In order to attract exemption, under item 5, “man-made fabrics” both the conditions of the explanation are to be satisfied. It must be shown that such good (i) is included in the I Schedule to the Act No. 58 1957, and (ii) once it so shown, it has to be further established that on such good additional duties of excise are levied. If the additional duties of excise are not levied then that good would not be covered in Entry 5. Meaning thereby that such good, which though included in the I Schedule of the Act 58 of 1957, but if the duty has not been levied under the Act 58 of 1957, such good, would be outside the purview of entry 5. On such good, the exemption from tax would not be available under Section 8 of the APGST Act. 42. In our view, nil rate of duty means that no additional duties are levied. 43. If the argument of the learned counsel for respondent, that nil rate of duty is also a rate of duty and therefore, even if the “nil rate” of duty is levied under the Act No. 58 of 1957 still such good would not be liable for tax, is accepted, then that would render the 2nd part of the Explanation as redundant. There was no need for the Legislature to legislate the 2nd part in the Explanation, i.e. “but does not include goods where no additional duties of excise are levied under that Schedule.” There was the 1st part and under the 1st part, all those goods in the I Schedule to Act No. 58 of 1957 could be excluded from tax liability. But, the Legislature did not stop there i.e. goods included in the relevant heads and sub heads of the I Schedule to the additional duties of excise goods of the Special Importance Act, 1957. It proceeded further to provide exclusion clause. But, the Legislature did not stop there i.e. goods included in the relevant heads and sub heads of the I Schedule to the additional duties of excise goods of the Special Importance Act, 1957. It proceeded further to provide exclusion clause. First part is inclusive and the 2nd part excluded the goods, out of the goods included by virtue of 1st part upon which additional duty was not levied. So the goods claiming exemption from tax under entry 5 of the IV Schedule means not all the goods included in the relevant heads of the I Schedule of Act No. 58 of 1957, but only those of that schedule, upon which additional duties has been levied. 44. In S. Sundaram Pillai vs. V.R. Pattabiraman, AIR 1985 SC 582 the Hon’ble Apex Court, on the object of an “Explanation” observed as under in Para No. 53: “53. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is: “(a) to explain the meaning and intendment of the Act itself. (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to sub-serve. (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful. (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment. (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.” 45. In Rajasthan State Electricity Board Jaipur vs. Deputy Commissioner of Income Tax (Assessment) and Another, 2021 (14) SCC 557 the Hon’ble Apex Court held that while interpreting a Tax Legislature, the consequences and hardship are not looked into but the purpose and object by which taxing statutes have been enacted cannot be lost sight. 46. In Rajasthan State Electricity Board Jaipur vs. Deputy Commissioner of Income Tax (Assessment) and Another, 2021 (14) SCC 557 the Hon’ble Apex Court held that while interpreting a Tax Legislature, the consequences and hardship are not looked into but the purpose and object by which taxing statutes have been enacted cannot be lost sight. 46. In AMD Industries Limited vs. Commissioner of Trade Tax, Lucknow and Another, (2023) 4 SCC 231 the Hon’ble Apex Court held that the exemption/deduction provision should be considered and given a literal meaning. The settled position of law, is that in case of an exemption notification/exemption provision, the same is required to be construed literally and the person claiming the exemption must satisfy all the conditions of exemption provision. Paras 9 and 12 of AMD Industries Limited (supra) are as follows: “9. In the case of “expansion or modernisation” the exemption shall be available, if there is an additional production as a result of such modernisation or expansion. In the present case, we are concerned with the case of “diversification.” Therefore, the goods manufactured after diversification must be different goods from the goods manufactured before such diversification. As per the settled position of law, in case of an exemption notification/ exemption provision, the same is required to be construed literally and the person claiming the exemption must satisfy all the conditions of exemption provision. 12. The words used in Section 4-A are very clear and unambiguous. As per the settled proposition of law and as observed hereinabove, the statute and more particularly, the exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning.” 47. In Checkmate Services Private Limited vs. Commissioner of Income Tax, (2023) 6 SCC 451 the Hon’ble Apex Court held that rule is that any deduction or exemption is available on compliance at certain conditions, the conditions are to be strictly complied with. The taxing statutes are to be construed strictly and there is no room for equitable considerations. Paras 55 to 57 of Checkmate (supra) are as follows: “55. One of the rules of interpretation of a tax statute is that if a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with. The taxing statutes are to be construed strictly and there is no room for equitable considerations. Paras 55 to 57 of Checkmate (supra) are as follows: “55. One of the rules of interpretation of a tax statute is that if a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with. [See e.g. Eagle Flask Industries Ltd. v. CCE, (2004) 7 SCC 377 ] This rule is in line with the general principle that taxing statutes are to be construed strictly, and that there is no room for equitable considerations. 56. That deductions are to be granted only when the conditions which govern them are strictly complied with. This has been laid down in State of Jharkhand v. Ambay Cements, (2005) 1 SCC 368 as follows: (SCC p. 378, Paras 23-26) “23........In our view, the provisions of exemption clause should be strictly construed and if the condition under which the exemption was granted stood changed on account of any subsequent event the exemption would not operate. 24. In our view, an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the industrial policy and the exemption notifications. 25. In our view, the failure to comply with the requirements renders the writ petition filed by the respondent liable to be dismissed. While mandatory rule must be strictly observed, substantial compliance might suffice in the case of a directory rule. 26. Whenever the statute prescribes that a particular Act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance with the same must result in cancelling the concession made in favour of the grantee, the respondent herein.” This was also reaffirmed in a number of judgments, such as CIT v. Ace Multi Axes Systems Ltd. (2018) 2 SCC 158 : 57. The Constitution Bench, in Commissioner of Customs v. Dilip Kumar and Co. (2018) 9 SCC 1 endorsed as following: (SCC pp. 19 & 23-24, Paras 24 & 34) “24. In construing penal statutes and taxation statutes, the Court has to apply strict rule of interpretation. The penal statute which tends to deprive a person of right to life and liberty has to be given strict interpretation or else many innocents might become victims of discretionary decision-making. Insofar as taxation statutes are concerned, Article 265 of the Constitution [“265. Taxes not to be imposed save by authority of law - No tax shall be levied or collected except by authority of law”] prohibits the State from extracting tax from the citizens without authority of law. It is axiomatic that taxation statute has to be interpreted strictly because the State cannot at their whims and fancies burden the citizens without authority of law. In other words, when the competent legislature mandates taxing certain persons/certain objects in certain circumstances, it cannot be expanded/interpreted to include those, which were not intended by the legislature. 34. The passages extracted above, were quoted with approval by this Court in at least two decisions being CIT v. Kasturi and Sons Ltd. (1999) 3 SCC 346 and State of West Bengal v. Kesoram Industries Ltd. (2004) 10 SCC 201 (hereinafter referred to as Kesoram Industries case, for brevity). In the later decision, a Bench of five Judges, after citing the above passage from Justice G.P. Singh's treatise, summed up the following principles applicable to the interpretation of a taxing statute: “(i) In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. In the later decision, a Bench of five Judges, after citing the above passage from Justice G.P. Singh's treatise, summed up the following principles applicable to the interpretation of a taxing statute: “(i) In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency. (ii) Before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. (iii) If the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and there is nothing unjust in a taxpayer escaping if the letter of the law fails to catch him on account of the legislature's failure to express itself clearly.” 48. We are of the considered view that HDPE Woven Fabrics even if included in the I Schedule under the head and sub head, entry No. 59.03 with “nil rate” may be subject to or liable for the additional duties to be levied under that Act No. 58 of 1957, but, unless and until the additional duty is levied i.e. actual levy, with some percentage, and not “nil rate” it would be excluded from the category of goods mentioned in entry 5 of IV Schedule of the APGST Act. It would be liable to tax under APGST Act, and would not be exempted from tax under Section 8 of the APGST Act. 49. The submission of the learned counsel for the respondent that nil rate is also a rate of duty, may be correct for the purposes of the Additional Duties of Excise Act, 1958, as once such good is included in the I Schedule thereto, it may be subject to levy of additional duty i.e. the duty may be levied at same time, at an affective rate, but, when it comes to the APGST Act, 1957, for the purpose of Section 8 read with entry 5 in the IV Schedule and the Explanation, mere inclusion of the good in the I Schedule to Act No. 58 of 1957 is not sufficient. If it is so included, only the first part of the Explanation would be satisfied. The 2nd part of the Explanation would be satisfied only when the additional duty is levied on such good under Act No. 58 of 1957. 50. At this stage, we observe that the Appellate Tribunal has recorded specifically that HDPE Woven Fabric though the material used is plastic, it is to be considered as man-made fabric under item No. 5 of the IV Schedule. Before the Appellate Tribunal, the commodity itself was produced as is evident from the judgment of the Appellate Tribunal which found that the commodity was HDPE Woven Fabric, in the nature of cloth. The petitioner has not challenged such finding. Any question of law with respect to the HDPE Woven Fabric, “a manmade fabric” or not, has not been framed. It has also not been argued before us that HDPE Woven Fabric is not a man-made fabric. 51. Thus, considered, we are of the view that HDPE Woven Fabric is made with plastic granules. It may be “man-made fabric” in entry 5 of the IV Schedule, but it does not qualify for exemption from tax as though included in the I Schedule of the Act No. 58 of 1957, but there is no additional duties levied on such good. The HDPE Woven Fabric being made of plastic would be an article of plastic under entry 187 in I Schedule. In Entry 187, it is not excluded. What has been excluded is HDPE Woven Sacks, which is a different item. 52. Resultantly, HDPE Woven Fabric was liable for taxation under the APGST Act, 1957. The Appellate Tribunal has erroneously decided the question of law regarding the taxability or exemption from tax, with respect to the HDPE Woven Fabrics. QUESTION OF LAW No. (ii) 53. What has been excluded is HDPE Woven Sacks, which is a different item. 52. Resultantly, HDPE Woven Fabric was liable for taxation under the APGST Act, 1957. The Appellate Tribunal has erroneously decided the question of law regarding the taxability or exemption from tax, with respect to the HDPE Woven Fabrics. QUESTION OF LAW No. (ii) 53. Section 22 (1) of APGST Act provides for revision and reads as under: (1) Within ninety days from the date on which an order under sub-section (4) of section 21 was communicated to him the dealer or the authority prescribed in this behalf may prefer to the Special Appellate Tribunal against the order on the ground that the Appellate Tribunal has either decided erroneously, or failed to decide, any question of law: Provided that the Special Appellate Tribunal may admit a petition preferred after the period of ninety days (2) to (8)........” aforesaid if it is satisfied that the petitioner has sufficient cause for not preferring the petition within that period. 54. In Baby (supra), the scope of revision under Section 103 of the Kerala Land Reforms Act was considered which used the expression “has either decided erroneously or failed to decide any Question of Law” as in Section 22(1) of the APGST Act. Section 103 of the Kerala Act is as under: “103. Revision by High Court: (1) Any person aggrieved by: (i) any final order passed in an appeal against the order of the Land Tribunal. (ii) any final order passed by the Land Board under this Act. (iii) any final order of the Taluk Land Board under this Act, may within such time as may be prescribed, prefer a petition to the High Court against the order on the ground that the appellate authority or the Land Board, or the Taluk Land Board, as the case may be, has either decided erroneously, or failed to decide, any question of law.” 55. In Baby (supra), finding was recorded on the question of existence of tenancy. That was a question of fact. The Hon’ble Apex Court held that mere non consideration of relevant documents including the relevance of certain judicial proceedings would not strictly fall within Section 103 of that Act. In Baby (supra), finding was recorded on the question of existence of tenancy. That was a question of fact. The Hon’ble Apex Court held that mere non consideration of relevant documents including the relevance of certain judicial proceedings would not strictly fall within Section 103 of that Act. The same would not be covered by expression “has either decided erroneously or failed to decide any question of law.” The Hon’ble Apex Court however further held that, the High Court had still the power under Article 227 of the Constitution of India to quash the orders passed by the Tribunal if the findings of fact had been arrived at by non-consideration of the relevant and material documents, the consideration of which could have led to an opposite conclusion. The power of the High court under the Constitution of India was held always to be in addition to the powers of revision under Section 103 of the Act. Paras 5 and 6 of Baby (supra), read as under: “5. It is very clear that the jurisdiction can be exercised by the High Court under Section 103 of the Act only if the Tribunal has decided any question of, law erroneously or failed to decide the question of law at all. 6. The impugned order of the learned Single Judge shows that no question of law whatsoever has been formulated before the High Court and there is no finding that the. Tribunal or the appellate authority has either decided a question of law erroneously or has failed to decide a question of law. Hence, we are of the considered view that learned Single Judge has acted without jurisdiction in interfering with the orders of the Land Tribunal and the appellate authority.” 56. In Kerala Ayurveda Vydyasala Limited (supra), the Hon’ble Apex Court held that the jurisdiction can be exercised by the High Court under Section 103 of the Kerala Land Reforms Act, only if the Tribunal had decided any question of law erroneously or has failed to decide the question of law. In that case, no question of law was formulated by the High Court. There was also no finding recorded that the Appellate Tribunal had either decided a question of law erroneously or failed to decide the question of law. Therefore, the Hon’ble Apex Court held that the High Court acted without jurisdiction in interfering with the orders of the appellate Tribunal. There was also no finding recorded that the Appellate Tribunal had either decided a question of law erroneously or failed to decide the question of law. Therefore, the Hon’ble Apex Court held that the High Court acted without jurisdiction in interfering with the orders of the appellate Tribunal. 57. In view of clear language of Section 22(1) of APGST Act and the law as laid down in the aforesaid judgment, there cannot be any dispute on the proposition of law that the power of revision is open to be exercised by this court only when the Appellate Tribunal has either erroneously decided a Question of Law or has failed to decide any Question of Law. 58 “Erroneous” has been defined in Black Law Dictionary as under: “Incorrect; inconsistent with the law or the facts.” “Erroneous judgment” is defined as under: “A judgment issued by a court with jurisdiction to issue it, but containing an improper application of law. This type of judgment is not void, but can be corrected by a trial court while the court retains plenary jurisdiction, or in a direct appeal.” 59. It is clear that an order can be termed as erroneous if it is not in accordance with law. An order which suffers from an error of law or even on facts would be erroneous. The order which decides a question of law, not as per law or contrary to law, ignoring the legal provisions or wrongly interpreting the legal provisions would be an erroneous order. A revision under Section 22(1) would lie if the question of law has been decided erroneously. It may not be on erroneous question of fact. Present is a case of erroneously deciding a question of law. It cannot be said that the question of law has been decided according to law. The decision of the Appellate Tribunal on a question of law is erroneous. Such an order would be open to interference. It cannot be said that the order is not open for interference in the exercise of revisional jurisdiction under Section 22 of the APGST Act, 1957. CONCLUSION: 60. On the Questions of Law framed above, we hold as under: Question No. (i): The disputed turnover relating to the sale of HDPE Woven fabric was not entitled for exemption from tax under Section 8 of the Andhra Pradesh General Sales Tax Act, 1957. CONCLUSION: 60. On the Questions of Law framed above, we hold as under: Question No. (i): The disputed turnover relating to the sale of HDPE Woven fabric was not entitled for exemption from tax under Section 8 of the Andhra Pradesh General Sales Tax Act, 1957. Question of Law No. (ii): Sales Tax Appellate Tribunal is not justified in allowing the cases of the respondents by setting aside the orders of the Deputy Commissioner (ST) No. 2/99-2000, dated 11.08.1999, No. 46/98-99 dated 22.03.1999 & No. 1/99-2000, dated 11.08.1999. RESULT: 61. In the result, the Tax Revision Case Nos. 210, 211 and 212 of 2002 are allowed. The orders dated 25.07.2002, passed by the Andhra Pradesh State Sales Tax Appellate Tribunal in T.A. Nos. 1456 of 1999, 634 of 1999 and 1455 of 1999 are set aside. The orders of the Deputy Commissioner (ST) No. 2/99-2000, dated 11.08.1999, No. 46/98-99 dated 22.03.1999 & No. 1/99-2000, dated 11.08.1999 imposing tax liability on the respondents are restored. No order as to costs. 62. Consequently, the Miscellaneous Petitions, if any, pending shall also stand closed.