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TMI Blog1988 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner in W.P. No. 3062/84) were for 200 tons each, M/s. Mala International (Petitioner in W.P. Nos. 3060 and 3061 of 1984) got two licences for 100 M.T. each. These goods were exported from the Bombay Port. Even though this commodity viz., 'blanched and roasted peanuts' in bulk was not subject to any export duty, the Customs Authorities demanded payment of export duty as groundnut kernel falling under Heading No. 20(i) of Schedule n to the Customs Tariff Act at Rs. 3,000/- per metric ton. As the goods were of a perishable nature and as the shipments were to be effected within the specified period granted in the licence, the petitioners were constrained to pay the export duty under protest and without prejudice to claim refunds. Each of the three petitioners paid the export duty of Rs. 6 lakhs to the Bombay Customs. They filed applications before the Assistant Collector of Exports, Bombay for refund of the amounts. The claims were rejected and the appeals preferred to the Collector of Customs (Appeals), Bombay, shared the same fate. Though further appeals lay to the Customs, Excise and Gold Control (Appellate) Tribunal, in view of the fact that the said Tribunal had already held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal and chemical composition, usage etc., as follows : Sl No. Physical Properties Groundnut Kernal Roasted and Blanched Peanuts 1. (A) Appearance Bold (Round) Split into 2 half beans (B) Colour Red, Rose, Light Rose with skin on White, without skin (C) Taste Raw Roasted (D) Palatability Nil Palatable (E) Loss of weight 8 to 10% consisting of: Loss of moisture 2.0% Loss of Blanching 3.5% Loss due to breakages 2.5% 8.0% 2. Chemical Changes: (A) Moisture 5.20% 3.20% (B) Oil content 48.00% 50.66% (C) Density Less More (D) Odour Raw Roasted Aroma 3. Usage : (A) Bulk industrial, extraction of Oil & Cake, extraction of protein, isotope in manufacture of snacks, butter candy and least but not last to manufacture roasted an salted peanuts Direct consumption as no further proceeding is possible 4. Trade Name Groundnut Kernels Roasted and blanched peanuts 5. Value Less More-almost double 6. Shelf life 3 months 10 months (packed suitably) 7. Availability From the fields A manufactured product only from a factory 6. Neither the process for the preparation of blanched and roasted peanuts nor the distinction between the groundnut ker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncil paper could not be classified as paper for the purposes of the Orissa Sales Tax Act. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer on the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass mirror, the consumer recalls primarily the reflective function of the Article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror. It was observed by this Court in Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan, 1980 3 SCR 1109; (AIR 1980 SC 1552) which was a case under the Sales Tax Law: "In determining the meaning or connotation of words and expressions describing an arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a seed within its husk." In the Universal English Dictionary edited by Henry Cecil Wyld, the meaning given is "the germinating part or seed of a fruit especially one contained in a fruit stone." In Webster's Third New International Dictionary 'kernel' is described as "a fruit seed; the inner portion of a seed within the integuments usually used of edible seeds; a whole grain or seed of a cereal." It is clear from these Dictionary meanings that what is meant by kernel is the raw seed inside the shell. The bleached and roasted peanuts are edible products produced from the raw kernels by a process of roasting and blanching. The blanched and roasted peanut is half spherical in shape white in colour and completely distinct from the raw kernel. In the commercial sense traders and customers understand by kernel the raw seed inside the shell of the groundnut and by blanched and roasted peanut the edible product prepared therefrom and fit for direct consumption. It is this common and commercial meaning that has to be given to the term 'kernel' found in heading No. 20 (i) of the Export Tariff. The observation of the Collector of Customs that the words "groundnut kernel" in the Export Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading No. 23 covers all varieties of tea including instant tea, tea bags, besides package tea as well as tea exported in bulk and so groundnut kernel must include blanched and roasted peanuts, is unsound and untenable. The Collector of Customs has failed to see that all the varieties of coffee and all the varieties of tea are intended for consumption which is not the case of the groundnut kernels and blanched roasted peanuts. The former is primarily used for extraction of oil while the latter is intended for direct consumption. Hence the conclusion of the Department that groundnut kernel covers blanched and roasted peanuts and they fall under Heading No. 20(i) of the Export Tariff is such as no reasonable person could adopt. 10. I, therefore, hold that blanched roasted peanuts do not fall under the category of groundnut kernels in item 20(i) of the Export Tariff. Admittedly the export of blanched and roasted peanuts is not taxable and the amounts of export duty collected from the petitioners are liable to be refunded. It seems that as per the order of this Court in W.M.P. No. 4686 to 4689 of 1984, the amounts of export duty collected from the petitioners have been directed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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