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TMI Blog2018 (6) TMI 1661X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in A.R. Thermosets Private Limited's case [ 2016 (9) TMI 410 - SUPREME COURT ] considered the question as to whether bitumen and bitumen emulsion are one and the same commodity for the purposes of interpretation of Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008 as was originally enacted and whether bitumen emulsion is covered within Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008 which only refers to bitumen . Their Lordships after detailed analysis of various dictionaries as well as Encyclopedia of Science and Technology defining bitumen held that the entry in question uses the word bitumen without any further stipulation or qualification and further held that bitumen emulsion is processed bitumen. Reverting to the facts of the present case, it is quite vivid that it has been held herein-above by the Supreme Court also while dealing with the question whether bitumen emulsion is covered within Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008, which only refers to bitumen that bitumen includes bitumen emulsion. It has also been held that the words inside the brackets i.e. coal-tar in front of bitume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould further submit that while interpreting different entries, attempts should be made to find out as to whether the same answers the description of the contents of the basic entry and only in the event it is not possible to do so, recourse to the residuary entry should be taken by way of last resort. If two views are possible, one which favours the assessee should be adopted. In case of conflict between two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred. He would rely upon a decision of the Supreme Court in the matter of Mauri Yeast India Private Limited v. State of Uttar Pradesh and another (2008) 5 SCC 680 and also rely upon the case of Commissioner of Commercial Tax, Uttar Pradesh v. A.R. Thermosets Private Limited (2016) 16 SCC 122. He would lastly submit that Entry-23 under Part II of Schedule-II of the VAT Act only uses bitumen (coal-tar) which means that bitumen is commercially known as coal-tar and in its common and commercial parlance coal-tar has been used which does not mean any variation or condition in the entry which contains bitumen. It is covered by the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff otherwise than by way of sale in the course of export out of the territory of India; or ( b) such goods covered by part III of Schedule II and/or Schedule III are used or consumed in the manufacture of goods; or ( c) such goods covered by part I, II and IV of schedule II and not covered by schedule III, after use or consumption in the manufacture of any goods specified in schedule II, the manufacture goods are disposed of otherwise than by way of sale in the state of Chhattisgarh or in the course of inter-state trade or commerce or in the course of export out of the territory of India, and such tax shall be levied, ( i) in respect of goods referred to in clauses (a) and (b) at the rate specified in column (3) of schedule II, and ( ii) in respect of goods referred to in clause (c) at 4% or at the rate specified in column (3) of schedule II whichever is lower. Explanation The rate of tax specified in schedule II shall be the rate at which tax would have been levied on the sale of such goods within the State on the date of such purchase. ( 2) No tax under this section shall be levied in respect of any year on ( a) A dealer whose turnover in a year does not exceed the limit prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and considered the submissions made by them. We have also read the opinion of the majority Bench and the minority opinion of the Technical Member. It is a settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the revenue. Mere fact that a product is sold across the counters and not under a Doctors prescription does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumaran that merely because the percentage of medicament in a product is less does not ipso facto mean that the product is not a medicament. Generally the percentage or dosage of the medicament will be such as can be absorbed by the human body. The medicament would necessarily be covered by fillers/ vehicles in order to make the product usable. It could not be denied that all the ingredients used in Banphool Oil are those which are set out in the Ayurveda text Books. Of course the formula may not be as per the text books but a medicament can also be under a patented or proprietary formula. The main criteria for determining classification is normally the use it is put to by the customers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residuary entry. 15. It is not in dispute and very well-settled principle of law that when two views are possible, one which favours the assessee should be adopted. (See Bihar SEB v. Usha Martin Industries (1997) 5 SCC 289 and Mauri Yeast India Private Limited (supra).) 16. In Mauri Yeast India Private Limited (supra), the Supreme Court has finally concluded that if there is a conflict between two entries, the course adopted to be followed would be as follows: - 56. We, therefore, are of the opinion that if there is a conflict between two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred. 17. Having noticed the principle of law relating to interpretation of tariff entry and when the residuary entry has to be resorted in the relevant Act, reverting to the dispute brought before the Court, the question involved is, whether the assessing authority and the revisional authority are justified in holding that bitumen emulsion would not fall within Entry 23 under Part II of Schedule-II appended to the VAT Act and would fall within the residuary entry and VAT would be chargeable at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal that bitumen in its original form is solid but melts when heated, for it is used in molten stage. There is no difficulty to appreciate that bitumen emulsion comes into existence when bitumen is treated with emulsifiers and other chemicals to attain a liquid form. It has a huge advantage and add benefit because it is not to be heated and detained in its liquid form and has better stability and thus, saves time and cost components. That apart, it ensures its use at the stage of application. Needless to say it is comparatively less hazardous. 18. The entry in question uses the word bitumen without any further stipulation or qualification. Therefore, it would, in our opinion, include any product which shares the composition identity, and in common and commercial parlance is treated as bitumen and can be used as bitumen. When we apply the three tests, namely, identity, common parlance and end-use to the goods and the entry in question, bitumen emulsion would be covered by the entry bitumen. It is worthy to note that bitumen emulsion matches the entry as it is only one of the varieties of bitumen. Bitumen emulsion is processed bitumen, but the process has not changed its composition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Grolier New Webster's Dictionary defines the word 'parenthesis' as under :- parenthesis- a word, phrase or sentence, usually having its own complete meaning, inserted into a sentence which is grammatically complete without this insertion, and marked off from it by punctuation || either of the punctuation marks (or) used to contain such a word, phrase etc., to insert parentheses in (a speech etc.) to insert (a word etc.) in a sentence as a parenthesis to place parentheses around (a written word etc.). 25. It appears that the purpose of a parenthesis is ordinarily to insert an illustration, explanation, definition, or additional piece of information of any sort into a sentence that is logically and grammatically complete without it. In other words, a parenthesis is defined to be an explanatory or qualifying clause, sentence, or paragraph, inserted in another sentence, or in the course of a longer passage, without being grammatically connected with it. 26. In this regard, a reference can be made to the judgment of the Supreme Court in the matter of Fuerst Day Lawson Limited v. Jindal Exports Limited (2011) 8 SCC 333. The question for consideration before the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition, to the violent one of a separate sentence complete in itself.' (emphasis supplied) 50. The Merriam-Webster Online Dictionary defines 'parenthesis' as follows: '1 a : an amplifying or explanatory word, phrase, or sentence inserted in a passage from which it is usually set off by punctuation b : a remark or passage that departs from the theme of a discourse : digression 2 : INTERLUDE, INTERVAL 3: one or both of the curved marks ( ) used in writing and printing to enclose a parenthetical expression or to group a symbolic unit in a logical or mathematical expression.' 51. The Law Lexicon, The Encyclopaedic Law Dictionary by P. Ramanatha Aiyar, 2000 Edition, defines 'parenthesis' as under: 'Parenthesis.-a parenthesis is defined to be an explanatory or qualifying clause, sentence, or paragraph, inserted in another sentence, or in course of a longer passage, without being grammatically connected with it. (Cent. Dist.) Parenthesis is used to limit, qualify or restrict the meaning of the sentence with which it is connected, and it may be designated by the use of commas, or by a dash, or by curved lines or brackets (United States v. Schilling [53 Fed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Chamber of Commerce'. 28. The Supreme Court while interpreting the words in the brackets appearing in Article 23.1 opined in paragraph 15 as under: - 15. If we see the language of article 23.1 in the light of article 22.1, it is clear that the parties had agreed that the disputes arising out of the agreement between them would be finally settled by the arbitration in Seoul, Korea. Not only that, but the rules of arbitration to be made applicable were the Rules of the International Chamber of Commerce. This gives the prima facie impression that the seat of arbitration was only in Seoul, South Korea. However, Ms. Mohana, learned counsel appearing on behalf of the petitioner drew our attention to the bracketed portion and contended that because of the bracketed portion which is to the effect 'or such other place as the parties may agree in writing', the seat could be elsewhere also. It is based on this that Ms. Mohana contended that, therefore, there is no express exclusion of Part I of the Act. It is not possible to accept this contention for the simple reason that a bracket could not be allowed to control the main clause. The bracketed portion is only for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n front of bitumen would not control the meaning of the words outside the bracket and it would not curtail or limit the scope of the words employed outside the bracket. The word bitumen is also known as commercially, coal-tar as such, the word coal-tar in brackets in front of bitumen is only clarificatory in nature and would not control the meaning and scope of the word bitumen in Entry-23 under Part II of Schedule-II of the VAT Act. 32. It was the duty on the part of the State / Revenue to bring strong evidence on record to establish the fact that a particular commodity will not fall within Entry-23 under Part II of Schedule-II of the VAT Act and would only fall under the residuary entry. A focused perusal of the record would show that no material much less reliable evidence has been brought on record to hold that bitumen emulsion would not fall within Entry-23 under Part II of Schedule-II of the VAT Act and the word coal-tar would control the meaning of the word bitumen as used in the said entry which was incumbent on the part of the assessing authority. The assessing authority simply relying upon the decision of the M.P. High Court in Tiki Enterprises (supra) has held that bitum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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