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TMI Blog2014 (10) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... common parlance in India. The main use of Gambier and KATTHA are also different. While the general use of Gambier is in dyeing and tanning, the use of KATTHA commonly known to Indian people is its consumption with betel for chewing and also for some medicinal purposes. Gambier and KATTHA are not one and the same commodity and Gambier is an unclassified item under the Act. - Decided against assessee. - Sales/Trade Tax Revision No. 520 of 2014, Sales/Trade Tax Revision No. 952 of 2012 - - - Dated:- 15-10-2014 - Hon'ble Surya Prakash Kesarwani,JJ. For the Applicant : Miss Rashmi Tripathi For the Respondent : C.S.C. ORDER 1- Heard Ms Rashmi Tripathi, learned counsel for the applicant and Sri B.K. Pandey, learned Standing Counsel for the respondent. Both the above noted revisions were admitted on 12.8.2014 on the following questions of law : i.Whether Gambier is catechu liable to tax at the rate of 4% or it is an unclassified item liable to tax at the rate of 12.5% ii.Whether under the facts and circumstances of the case, the impugned order of the Tribunal is based on irrelevant material 2- Learned counsel for the applicant submits that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Appeal No.325 of 2013, which was dismissed by the Appellate authority vide order dated 13.9.2013. 8- Aggrieved with this order, the applicant file Second Appeal No.205 of 2013 before the Member, Commercial Tax Tribunal, Varanasi Bench-I, Varanasi, which was dismissed by the impugned order dated 24.6.2014. 9- Aggrieved with this order, the applicant has preferred the present revision. 10- In the impugned order, the Tribunal has relied upon a Full Bench decision of the Tribunal. The said Full Bench decision of the Tribunal was passed in Appeal No.1 of 2012 on 3.5.2012, whereby the appeal of one M/s R.B.Trading Company, Varanasi, filed against the decision of the Commissioner dated 15.11.2011, under Section 59 of the Act, was rejected. A copy of the Full Bench decision of the Tribunal has been filed as Annexure-12 to the affidavit. In this decision, the Tribunal has well discussed in detail the commodities namely, Gambier and Catechu and held that as per report of the Chief Public Analyst, U.P., Lucknow dated 19.1.2011 given under the provisions of Prevention of Food Adulteration Act, 1954 and the Rules framed thereunder, Gambier is a non- edible commodity which is injurio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used to obtain Catechu or after applying certain process of manufacture it may be used as an alternate for Catechu, it cannot be called as Kattha, as understood in common parlance in India. The main use of Gambier and KATTHA are also different. While the general use of Gambier is in dyeing and tanning, the use of KATTHA commonly known to Indian people is its consumption with betel for chewing and also for some medicinal purposes. 13- In view of the above discussion, I do not find any infirmity in the impugned order of the Tribunal, that Gambier and KATTHA are not one and the same commodity and Gambier is an unclassified item under the Act. 14- Since, the Act does not define the word 'Kattha', therefore, the entry 'Kattha' has to be constituted according to common parlance understanding or common parlance test. The application of common parlance test is an extension of general principles of interpretation of Statute for deciphering the mind of the law-maker. In the absence of a statutory definition in precise term; words, entries and items in physical Statute must be construed in terms of their commercial or trade understanding or according to their popular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is exclusively consumed in medical field while ordinary cotton has so many uses. The main chemical properties desired in a surgical dressing are inertness and lack of irritation in use, which is provided by the surgical cotton only if manufactured as per the standards specified. Raw cotton is purified by a series of processes and rendered hydrophilic in character and free from other external organic impurities for use in surgical dressings. Surgical cotton is, thus, completely different from ordinary cotton. 34. The surgical cotton is made sterile and fit for surgical use and it is not put to the same use to which the unmanufactured cotton is put and vice versa. Therefore, when unmanufactured cotton undergoes a manufacturing process, a new product saleable into the market which is having a distinct identity, comes into existdence which is known in the commercial market by a different name and use. Surgical cotton possesses higher utility than the cotton in its unmanufactured state. 16- In the case of Commissioner of Central Excise, New Delhi Vs. Connaught Plaza Restaurant Private Limited, New Delhi, (2012) 13 SCC 639 (Paragraph Nos. 20 to 33), Hon'ble Supreme Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958. Answering the question in the affirmative, it was observed as follows :(AIR pp.1456-57, paras 4 6) 4. Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manufactured by human agency from products like wood and other things. But it is now well- settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense 6. The result emerging from these decisions is that while construing the word 'coal' in Entry I of Part III of Schedule II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute is being one levying a tax on goods must in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. Viewed from that ang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that, in determining the meaning or connotation of words and expressions describing an article in a tariff schedule, one principle which is fairly well-settled is that those words and expressions should be construed in the sense in which they are understood in the trade, by the dealer and the consumer. The reason is that it is they who are concerned with it and, it is the sense in which they understand it which constitutes the definitive index of the legislative intention . 27. In CCE v. Kanpur Vs. Krishna Carbon Paper Co., this Court has opined thus : 12. It is a well settled principle of construction, as mentioned before, that where the word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the legislature. But there is a word of caution that has to be borne in mind in this connection, the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular statute and then if in respect of that particular items, as artificial definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ientific and technical meanings would not advance the case of the appellants if the same runs counter to how the product is understood in popular parlance. 31. In Naturalle Health Products (P) Ltd.v.CCE, two appeals were under consideration. One was with respect to Vicks Vapo Rub and Vicks Cough Drops while the other was with respect to Sloan's Balm and Sloan's Rub. It was observed that when there is no definition of any kind in the relevant taxing statute, the articles enumerated in the tariff schedules must be construed as far as possible in their ordinary or popular sense, that is, how the common man and persons dealing with it understand it. The Court held that in both the cases the customers, the practitioners in Ayurvedic medicine, the dealers and the licensing officials treated the products in question as Ayurvedic medicines and not as Allopathic medicines, which gave an indication that they were exclusively Ayurvedic medicines or that they were used in the Ayurvedic system of medicine, though they were patented medicines. Consequently, it was held that the said products had to be classified under the Chapter dealing with medicaments. 32. B.P.L. Pharmaceutical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which they understand it that constitutes the definitive index of the legislative intention, when the statute was enacted [see Delhi Cloth and General Mills Co. Ltd. Vs. State of Rajasthan, 34. One of the essential factors for determining whether a product falls within Chapter 30 or not is whether the product is understood as a pharmaceutical product in common parlance [see CCE v. Shree Baidyanath Ayurved, (2009) 12 SCC 413; Commissioner of Central Excise, Delhi v. Ishaan Research Lab (P) Ltd. (2008) 13 SCC 349]. Further, the quantity of medicament used in a particular product will also not be a relevant factor for, normally, the extent of use of medicinal ingredients is very low because a larger use may be harmful for the human body. [Puma Ayurvedic Herbal (P) Ltd. v. CEE, Nagpur (2006) 3 SCC 266; State of Goa v. Colfoax Laboratories (2004) 9 SCC 83 ; B.P.L Pharmaceuticals v. CCE, 1995 Supp (3) SCC1] : 35. However, there cannot be a static parameter for the correct classification of a commodity. This Court in the case of Indian Aluminium Cables Ltd. v. Union of India, (1985) 3 SCC 284, has culled out this principle in the following words: 13. To sum up the true position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prophylactic ingredient is not a relevant factor. In the instant case, it is not in dispute that this is used by the surgeons for the purpose of cleaning or degerming their hands and scrubbing the surface of the skin of the patient before that portion is operated upon. The purpose is to prevent the infection or disease. Therefore, the product in question can be safely classified as a medicament which would fall under chapter sub-heading 3003 which is a specific entry and not under chapter sub-heading 3402.90 which is a residuary entry. 18- In the case of Commissioner of Trade Tax, U.P. v. Cartos International and others 2011 (6) SCC 705, Hon'ble Supreme Court held that classification of commodity cannot be made on its scientific and technical meaning. It is only common parlance meaning of the term which should be taken into consideration for the purpose of determining the tax liability. Application of common parlance test for interpretation of a commodity in Taxing Statute has always been recognized by Hon'ble Supreme Court as aforenoted. Reference in this regard may also be had to the judgments of Hon'ble Supreme Court in the case of Commissioner of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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