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TMI Blog1991 (12) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... nent to articles or things of every day use which have no statutory definition but are referred to, in any particular statute, have to be construed in their common parlance meaning with which the people are conversant. The learned CIT(A) did not even refer to the authorities cited in support of this proposition. It is submitted in this connection that consumers of "Zarda Yukt Pan Masala" do not consider that they are eating tobacco, they take it as eating Pan Masala mixed with Zarda. 3. That there was no evidence before the learned Income-tax Authorities to come to the conclusion that a consumer of "Zarda Yukt Pan Masala" regarded that he was chewing tobacco; on the contrary, the notification under the Excise Act and the clarifications under the Sales Tax Act provided evidence that "Zarda Yukt Pan Masala" is not regarded as tobacco preparation. 4. That the learned Income-tax authorities fell into error in taking the view that the ingredients, in a small measure, of a product could not be regarded as the product itself. The pharmaceutical product in which alcohol is one of the ingredients could be identified only as the particular pharmaceutical preparation and not an alcohol pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the hearing of the appeal." 2. Ground Nos. 1 to 7 involve a common question of fact and thus we dispose of all these grounds together. The brief facts are that the assessee is manufacturing Pan Masala and is having two units within the same premises having different sets and maintaining different accounts. In one unit, Sada Pan Masala is manufactured and in the other unit Zarda Yukt Pan Masala is manufactured. The assessee has claimed deduction under sections 32AB and 80-I on both the units. ITO allowed the said deductions on the unit manufacturing Sada Pan Masala but did not allow the said deductions on the other unit which was manufacturing Zarda Yukt Pan Masala on the ground that the said product amounted to a tobacco preparation and which was excluded under the said sections as the said product was mentioned in XI Schedule. The said order was also confirmed by the learned CIT(A). The assessee being aggrieved has come up in appeal before the Tribunal. The assessee has also taken up alternative pleas without prejudice to his main plea, that is, that even if on the basis of an entry in the XI Schedule, the assessee is held to be uneligible for deductions under sections 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, it has been stressed that a tobacco preparation should mean that a preparation of which the main content is the tobacco and it has been made out of the same, while in the present case the main content is Pan Masala and it is out of Pan Masala that the Zarda Yukt Pan Masala has been prepared in which Zarda has been mixed in a small quantity to give it a little different taste which is liked by some people and by no stretch of imagination it can be treated to be a tobacco preparation. 4. He has further pointed out that no other statutes, for instance, Excise duty Act and the Sales-tax Act, where the leviability of tax/duty was concerned of such product denominations, classifications and categorisation, the said Acts treated Pan Masala to be different than tobacco preparations. It has been pointed out that in Notification No. 364/86-CE dated 27th September, 1986, under Central Excise Rules, 1944, copy of which has been filed in the compilation, Pan Masala as well as Pan Masala containing Zarda has been grouped and classified in a separate Chapter No. 24. In the same way, under the U.P. Sales-tax Act, the company has been charged to sales-tax of Zarda Yukt Pan Masala whereas v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ram Ballabh Pd. Singh v. State of Bihar AIR 1986 Pat. 218 in which the Hon'ble Full Bench had held that it is possible for a section or a provision of different statutes to be in pari materia but to level two different statutes as in pari materia (unless they are pure carbon copy of each other) is inherently erroneous and inferences from such a presumption would necessarily lead to error. It is not correct to say that since the two Acts were similar in scope, they may be called in pari materia. In matters of construction, the similarity is not identity and no presumptions with regard to the purported policy of different statutes can safely be inferred or raised. The learned Departmental Representative has made out a plea that this decision of the Hon'ble Patna High Court clearly lays down that unless two statutes are similar and are in pari materia, the definition of a word given in either of the statutes cannot be construed while interpretating the provisions of the other statutes. He has thus stressed that the argument of the learned counsel for the assessee that the tobacco preparation has been defined and taken up in a particular manner in an Excise Act and in Sales-tax Act can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obacco. The Hon'ble Supreme Court in the decision in Taj Mahal Hotel's case has held that where the definition of a word has not been given in the enactment, then it must be construed in its popular sense if it is a word of everyday use. Hence, the meaning of the words 'tobacco preparation' has to be understood as it is commonly understood by the common man. The words 'tobacco preparation' as understood by a common man, is that it must be basically a product prepared out of tobacco and the basic content should be tobacco and not otherwise. In the present case, Zarda Yukt Pan Masala, as pointed out by the learned counsel for the assessee in his argument, is that the tobacco content is hardly 4% to 5% while the basic content is pan Masala which is 95%. It also could not be denied that the man does not purchase this Zarda Yukt Pan Masala for the purposes of Zarda only. In fact, he purchases Pan Masala to use Pan Masala as such but in addition to it, he also uses a little tobacco to make it still more tastier. Now, either it is the consumer who mixes tobacco himself after taking Pan Masala or the manufacture of Pan Masala himself mixes the small quantity in the Pan Masala which is to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eople that small quantity of Zarda is mixed but that mixing, in our opinion, itself does not turn the alleged preparation to be a preparation of sufficiently small quantity of item mixed in it. Likewise, a medicine prepared of alcohol base cannot be said to be an alcoholic preparation but a medicine of which alcohol is a base but that too in a very small negligible quantity. Alcoholic preparations are only beer, wine and other alocoholic spirits but no medicine prepared with a base as alcohol is ever treated either in the common parlance or by any law as alcoholic preparations. With all these facts in the background, we hold that Zarda Yukt Pan Masala is not a tobacco preparation and thus it cannot be taken out of the items for which deductions under sections 32AB and section 80-I are allowable. Item 2 in the list of tobacco preparation provided in XI Schedule does not apply to the present case. In our opinion, the order to the contrary, passed by the learned CIT(A) is erroneous and based on certain wrong assumptions. We, therefore, set aside the said order and hold that the unit of the assessee, which manufactures Zarda Yukt Pan Masala, is also entitled for deductions under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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