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PETITIONER: AKBAR BADRUDIN JIWANI

       Vs.

RESPONDENT: COLLECTOR OF CUSTOMS, BOMBAY

DATE OF JUDGMENT14/02/1990

BENCH: RAY, B.C. (J) BENCH: RAY, B.C. (J) PANDIAN, S.R. (J)

CITATION:  1990 AIR 1579            1990 SCR  (1) 369  1990 SCC  (2) 203        JT 1990 (1)   256  1990 SCALE  (1)176

ACT:     Customs Act, 1962: Sections III(d), 112 and 125--Calcar- eous  stone  imported by appellant--Whether  ’marble’  under Import  &  Export Policy April 1988--March  1991  Entry  62, Appendix  2,  Part  B-Whether can  be  confiscated  on  that ground--Whether  option to clear goods for home  consumption on payment of fine valid: the term ’marble’ to be interpret- ed  in  a manner which is in consonance with  the  statutory context and not as understood in commercial parlance.

HEADNOTE:     The appellant on behalf of his firm, which is engaged in processing  of stone slabs, placed an order  for  calcareous stone  (other than marble) with the exporter in  Italy,  and asked  the exporter to certify that the said goods were  not marble.  The  appellant further obtained  from  the  foreign exporter a sample tile and had the same tested by a  reputed geologist who confirmed that the sample was not marble.  The goods  were imported under OGL Appendix 6, Item I of  Import and Export Policy for April 1988--March 1991.     The  Customs Department sent sealed samples of  the  im- ported  goods for testing to various technical  authorities, and  on the basis of some of  these  reports/opinions/visual observations  issued  a show cause notice to  the  appellant alleging  that the calcareous stone were nothing but  marble only  as per the commercial definition of marble and  there- fore governed by Entry 62, Appendix 2, Part B of the  Import JUDGMENT: lant’s  contention  was  that the said goods  could  not  be regarded  as  ’marble’ in terms of the  expression  ’marble’ appearing  in  heading 25.15 in Schedule  1.  Appendix  I-B, Customs Tariff Amendment Act, 1985.     The  Collector of Customs however passed an  order  that the  goods imported were marble requiring a specific  import licence.  The Collector further ordered confiscation of  the goods  and  imposition  of fine and  penalty.  The  Customs, Excise  and Gold (Control) Appellate Tribunal dismissed  the appellant’s appeal but reduced the penalty amount. 370 Before  this Court it was contended on behalf of the  appel- lant that:

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   (1)  for  the purpose of understanding  the  meaning  of ’marble’  occurring in Appendix 1-B, Schedule I of  the  Im- ports  (Control)  Order, 1955 it is necessary  to  refer  to Mineral Products, in Chapter 25, Tariff Entry No. 25.15.       the term ’marble’ therein does not occur by itself  or in  isolation bal as an inseverable part of a  Tariff  Entry which  deals with five items (a) Marble (b)  Travertine  (c) Ecaussine (d) Other calcareous stone Alabaster;       the  Tariff  Entry draws a clear line  of  distinction between  each of these five items and regards them  as  five distinct products;     (4)  the term ’marble’ has to be given a  meaning  which fits  in  and harmonises in the  above  mentioned  statutory context,  so that ’marble’ continues to remain distinct  and different from the said other four items:       though  the  general principle  of  interpretation  of tariff entries occurring in a tax statute is that of commer- cial  nomenclature or understanding in the trade,  the  said doctrine  or commercial nomenclature or trade  understanding can and should be departed from in a case where the statuto- ry context in which the tariff item appears, requires such a departure;     (6) the principles of interpretation are never  embodied rules  and the same must always yield to the context of  the particular statute;     (7)  as the word ’marble’ has not been defined  and  the tariff  item refers to calcareous stone of an apparent  spe- cific gravity of 2.5 or more,  has to be taken to be used in a technical and scientific sense and as such the same cannot be interpreted in the popular commercial sense;       the  end-use of the particular product  is  irrelevant and  of no consequence for determining  its  classification; and     (9)  if the term ’marble’ is to be given the  commercial meaning  as relied upon by the Customs Authorities then  the inevitable  consequence would be that the term  ’marble’  in Chapter Heading 25.15 would automatically include within  it the  other  four  items thereby rendering the  rest  of  the Tariff Entry otiose, redundant and meaningless. 371 On behalf of the Revenue it was contended that:     (1) the word ’marble’ has not been defined in the Tariff Act  and as such in interpreting the word ’marble’  as  men- tioned in Tariff Item No. 25.15 in Appendix 1-B, Schedule  1 to the Import (Control) Order, 1955, the test in  commercial and  trade  parlance  has to be applied i.e.  how  the  said product came to be commercially known by the trading people;     (2) it is not a scientific or technical word and as such it does not require to be interpreted in its scientific  and technical sense;     (3)  the  word ’marble’ if so interpreted  will  include calcareous stone of 2.5 or more specific gravity;     (4)  marble  is the genus and all other  four  items  of stone mentioned in Tariff Entry 25.15 which are of  apparent specific  gravity of 2.5 are included within marble as  they are commercially and in trade parlance known as marble; and     (5) the end-use of the product i.e. marble and  calcare- ous stone has to be taken into consideration in the determi- nation of the other items of stone mentioned in that Entry. Allowing the appeal, this Court,     HELD:  (1) According to a number of reports as  well  as the  ISI  specification the slabs of rocks  that  have  been imported  by  the  appellant and claimed  to  be  calcareous stones  are  not ’marble’ in the  scientific  and  technical

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sense of the term ’marble’. [387F-G]     (2) Calcareous stone as mentioned in ITC Schedule has to be  taken in scientific and technical sense as  therein  the said  stone  has been described as of an  apparent  specific gravity of 2.5 or more. Therefore, the word ’marble’ has  to be interpreted in the scientific or technical sense and  not in  the sense as commercially understood or as meant in  the trade parlance. [388D-E]     4.  The  general principle of interpretation  of  tariff entries  occurring  in a tax statute is that  of  commercial nomenclature  or understanding in the trade. The  said  doc- trine  of commercial nomenclature or understanding  can  and should  be departed from in a case where the statutory  con- tent in which the tariff item appears requires such a de- 372 parture.  If  the application of the commercial  meaning  of trade  nomenclature  runs counter to the  statutory  context then the said principle of interpretation cannot and  should not be applied. [388E-F]     (5)  Trade meaning or commercial nomenclature  would  be applicable  if  a particular product description  occurs  by itself  in a Tariff Entry and there is no  conflict  between the Tariff Entry and any other Entry requiring to  reconcile and harmonise that Tariff Entry with any other Entry. [388G]     Union  of India v. Delhi Cloth & General  Mills,  [1963] Supp. 1 SCR 586; Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCR 98; Commissioner of Sales Tax, M.P. v.  Jaswant Singh  Charan  Singh, [1967] 2 SCR 720; Grenfell  v.  Inland Revenue  Commissioner, [1876] 1 EX. D. 242, 248; Holt &  Co. v. Collyer, [1881] 16 Ch. D. 718, 720; K.V. Varkey  v. Agri- cultural  Income Tax and Rural Sales Tax Officer,  [1954]  5 STC  384; Cannanore Spinning and Weaving Mills Ltd. v.  Col- lector  of Customs and Central Excise Cochin, [1970]  2  SCR 830;  Collector of Central Excise, Kanpur v. Krishna  Carbon Paper Co., [1989] 1 SCC 150; Collector of Customs, Bombay v. Hargovindas  & Co., [1987] 29 LET 975 and Collector of  Cus- toms,  Bombay v. Swastic Woollens (P) Ltd. and Ors.,  [1988] Supp SCC 796, referred to.     (6) The commercial nomenclature or trade meaning  cannot be  given  to marble in as much as such a meaning  if  given will  render  otiose  and redundant  the  terms  travertine, ecaussine,  alabaster  and other  calcareous  monumental  or building  stone  of an apparent specific gravity of  2.5  or more whether or not roughly trimmed or merely cut by sawing. [397F-G]     (7)  In  interpreting  a product its end-use  is  of  no relevance  in  determining  the  classification  because  in interpreting  a term appearing in the Tariff Item which  has not  been  defined either in the Tariff Schedule or  in  the Import Control Order, the same is to be interpreted in  such a way which is in consonance with the Items specified in the ITC  Schedule  without  leaving out any part  of  the  Items mentioned therein. [399A-B]     (8)  Considering  all the reports, and  since  the  term ’marble’  has not been defined in the Imports Control  Order as  well  as  in the ITC Schedule it has to be  taken  in  a scientific and technical sense as well as in the context the word  has  been  used, and the slabs  of  calcareous  stones imported  by the appellant from Italy cannot be held  to  be marble  as  they have not been recrystallised  and  metamor- phosed in the geological and petrological sense of the term. [398F] 373     (9) The slabs of calcareous stone imported by the appel- lant are not marble as mentioned in Entry No. 62 of Appendix

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2 of the Import and Export Policy for April 1988--March 1991 and so it is covered by Open General Licence. [399G]     (10)  The  imported goods cannot be confiscated  by  the Government under Section III(d) of the Customs Act, 1961 nor the  appellant  can be given the option to  clear  the  said goods  for  home consumption on payment of fine in  lieu  of confiscation  under  Section 125 of the Customs  Act,  1962. [399H; 400A]     (11)  The  appellant  cannot be said  to  have  imported calcareous  stones  without an import licence  and  as  such there  being no violation of the Import Control  Policy  the imposition of penalty under Section 112 of the Customs  Act, 1962 is unwarranted and not sustainable. [400A]     (12)   Even if it is taken for arguments sake  that  the imported article is marble falling within Entry 62 of Appen- dix  2,  the burden lies on the Customs Department  to  show that  the appellant has acted dishonestly or  contumaciously or  with the deliberate or distinct object of breaching  the law. In the instant case, in view of the finding arrived  at by the Appellate Tribunal that the said product was imported on a bona fide belief that it was not marble, the imposition of such a heavy fine is not at all warranted and  justified. [400B-C; 401A-B]     Merck  Spares v. Collector of Central Excise &  Customs, Delhi,  [1983] ELT 1261; Shama Engine Valves Ltd. Bombay  v. Collector of Customs,  Bombay,  [1984]  18 ELT 533; Madhusu- dan Gordhandas & Co. v. Collector of Customs, Bombay, [1987] 29  ELT  904 and Hindustan Steel Ltd. v.  State  of  Orissa, [1970] 1 SCR 753, referred to.

&     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3655  of 1989.     From  the  Judgment  and Order dated  14.8.1989  of  the Customs, Excise and Gold (Control) Appellate Tribunal,  West Regional  Bench,  Bombay in Appeal No. CD(BOM)A. No  322  of 1989 in Order No. 704 of 1989.     Anil  B.  Diwan,  S. Ganesh,  R.K.  Krishnamurthy,  S.R. Narain and Sandeep Narain for the Appellant. 374     A.K. Ganguli, B. Parthasarthy, K. Swami and P.  Parmesh- waran for the Respondent. The Judgment of the Court was delivered by     RAY,  J. This appeal under Section 130-E(b) of the  Cus- toms  Act, 1962 is directed against the judgment  and  order dated  August 14, 1989 passed by the Customs, Excise &  Gold (Control)  Appellate Tribunal. Bombay in CD(Bom) A. No.  322 of 1989.     The most vital question that comes up for  consideration in this appeal is whether marble as mentioned in Tariff Item No.  25.15 in Appendix 1-B, Schedule I to the  Import  (Con- trol) Order, 1955 mentioning "Marble, travertine,  ecaussine and  other  calcareous monumental or building  stone  of  an apparent  specific  gravity of 2.5 or  more  and  Alabaster, whether  or not roughly trimmed or merely cut, by sawing  or otherwise, into blocks or slabs of a rectangular  (including square)  shape"  is genus within which a11  other  kinds  of calcareous  stones are included or whether marble is a  dis- tinct or different item which is one of the restricted  item in  the  List of Restricted Items described in  Appendix  2, Part  B  of Import and Export Policy for  April  1988--March 1991.     The  matrix of the case is that the Appellant  has  been

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carrying  on business as sole proprietor under the name  and style  of M/s Interior Manufacturers at A-12,  Yuwan  Apart- ments,  413/414, Mount Mary Road, Bandra, Bombay which is  a small  scale industry engaged in processing of stone  slabs. In  the course of his manufacturing activity  the  Appellant utilises and requires as raw material polishable  calcareous stones  viz.  marble, travertine, ecaussine,  alabaster  and other calcareous stones. All these different types of stones are  hard  and capable of taking polish. Marble  is  distin- guished from other calcareous rocks, by the fact that it  is a  metamorphic rock formed from recrystallization  of  lime- stones  and has a visibly crystallined nature. In  order  to import calcareous stones covered by the Open General Licence and  with a view to ensuring that the same was  not  marble, the Appellant took the following precautions: (1) The appellant referred to the Indian Standards  Specifi- cation for Marble viz. IS: 1130-1969 which defines marble as follows: 375 Para 0.2: "Marbles  are  metamorphic rocks capable of  taking  polish, formed from the re-crystallization of limestones or dolomit- ic  limestones and are distinguised from limestone  by  even visibly crystallined nature and non-flaggy stratification". Para 0.7 of the said Specification provides that: "The Sectional Committee responsible for the preparation  of this  standard  has taken into consideration  the  views  of producers,  consumers and technologists and has related  the standard  to the manufacturing and trade practices  followed in the country in this field." (2)  The  Appellant obtained from the  foreign  exporters  a sample  tile of Botticino’, the calcareous rock proposed  to be imported and had the same tested by a reputed  Geologist, Dr.  S.F.  Sethna who tested the sample and  by  his  report dated  October  13,  1988 confirmed that the  same  was  not marble.  His letter dated October 14, 1988 explains now  the sample  tested  was limestone, different  from  marble.  The sample tile tested and attested by Dr. Sethna was  submitted to  the Customs Department vide their letter dated  February 20, 1989. (3)  The  appellant then referred to an Italian  Book  MARHI ITALTA wherein the index evidenced the fact that ’Botticino’ varieties  were covered under polishable  calcareous  rocks’ and  not  under  true  marbles  (re-crystallised  calcareous rocks). (4) The appellant specifically placed an order for  calcare- ous  stones  (other than marble) and asked the  Exporter  to certify  that the said goods were not marble.  The  exporter Elle Marmi of Italy by a certificate dated December 6,  1988 certified  that  all the goods were calcareous  stone  slabs other than marble. (5) The appellant also obtained the certificate dated Decem- ber  6, 1988 from one Gianni C. Baigini, a  Surveyor  regis- tered with the Chamber of Commerce, Carrara and a Specialist for  stones. Gianni C. Baigini after checking the said  con- signment  loaded in the containers for import by the  Appel- lant  in Italy certified that the slabs loaded in  Container Nos.  LMCU  051315/8, 050082/3, 05 15 19/2, 05  1520/6  were calcareous stones other than marble since the same were  not re-crystallised calcareous rocks. 376     The  appellant  alter taking the  aforesaid  precautions placed  an  order  with Elle Marmi of Italy  for  import  of 3120.50  sq.  mtrs. of slabs of calcareous stones  having  a thickness  of 2 cms. at a price of Italian Lira  4.22.56.000

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i.e.  Rs.4,93,000 approximateIy. The said Elle Marmi  issued an invoice dated December 2, 1988 for the said purpose.     The  goods arrived in Bombay by the vessel ’Orient  Tri- umph’ on or about 19th January, 1989. The appellant filed  a Bill  of Entry No. 007569 dated 19.1. 1989 for clearance  of the  goods for home consumption. The goods were declared  as slabs  of  calcareous stones (other than  marble)  and  were imported  under OGL Appendix 6, Item 1 of Import and  Export Policy for April 1988--March 1991.     The  goods  were inspected by  the  Assistant  Collector (Docks) who observed as follows: "These  goods  under import do not appear to  be  marble  or granite  and are not polished, they are roughly squared  and are  having  smooth edges on all four sides but  are  having smooth edges on 2 or 3 sides due to sawing." The sample of the goods was sent by the Assistant  Collector (Docks) to the Assistant Collector of Customs (Group I). The Assistant Collector of Customs (Group I) issued a query memo dated February 6, 1989 on the alleged basis that ’calcareous stones are nothing but marble only’ and therefore,  governed by Entry 62, Appendix 2, Part B of Import and Export  Policy for March 1988 to April 1991. The query was allegedly  based upon explanatory notes contained in the "Harmonised Commodi- ty  Description  and  Coding System" (HSN)  evolved  by  the International Customs Cooperation Council.     The appellant set out the correct position and  informed the Department by several letters dated 7th February,  1989, 13th February, 1989, 16th February, 1989 and 20th  February, 1989  that the said goods could not be regarded as  ’marble’ in  terms  of the expression ’marble’ appearing  in  heading 25.15  in Schedule I, Appendix I-B Customs Tariff  Amendment Act, 1985. The appellant also requested for release of  part of  the goods pending the technical test of the sample  from imported goods.     Pending  the  technical test report, by a  letter  dated February  17, 1989 the appellant was permitted to clear  50% of the goods upon the appellant submitted 100% ITC bond  for the whole backed by a bank 377 guarantee.  The balance 50% of the imported consignment  was detained.  The  appellant  accordingly cleared  50%  of  the imported  consignment. The appellant, however,  paid  import duty on the full consignment.     The  Assistant Collector of Customs (Group 1)  sent  the sealed  samples  of the imported goods for  testing  to  the Deputy  Director  General Petrology  Department,  Geological Survey  of India, Central Region, Nagpur. The  sealed  cover containing  the  samples was sent  through  the  appellant’s representative. The appellant also by a letter dated  Febru- ary  25,  1989  sent a sample of the  same  consignment  for testing to the Geological Survey of India.     The  appellant addressed further letters dated March  7, 1989,  March 8, 1989 to the Customs Department. By a  letter dated March 13, 1989 the appellant forwarded to the  Customs Department a sealed envelope containing a test report  given by  the Geological Survey of India, Nagpur on the sample  of tile imported goods.     The appellant on March 17, 1989 received a letter  dated March 13, 1989 from the Geological Survey of India enclosing the test report on the sample of the imported goods  submit- ted by the appellant to the Geological Survey of India. This test report categorically stated that the sample was  "allo- chemic  (Pelmicritic)  limestone. It cannot be termed  as  a marble."  It  is pertinent to mention  that  the  Geological Survey  of India had tested two samples from  the  materials

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imported  by  the  appellant, one sample  forwarded  by  the Customs  Department  and  the other by  the  appellant.  The report  of  the  Geological Survey of India  on  the  sample forwarded by the Customs Department was set out earlier  and sent in a sealed cover to the Customs Department.     The  Customs  Department, however, did not  release  the goods  inspite of the categorical report of  the  Geological Survey of India and instead issued a show cause notice dated March  17,  1989. The Customs Department inter  alia  relied upon  the opinion based on visual observation received  from the Indian Bureau of Mines, Government of India, Udaipur and test  reports  based  on technical test  received  from  the Director of Mines & Geology Department, Udaipur and Geologi- cal Survey of India, Nagpur. The test report received by the respondent  from the Geological Survey of India, Nagpur  was kept  back and not disclosed to the appellant. None  of  the three  reports/opinions were disclosed to the  appellant  at the  time  of issue of show-cause notice. On  the  basis  of these reports/opinions it was alleged in the show-cause 378 notice that the imported goods were marble allegedly as  per the commercial definition of marble enunciated in the  show- cause  notice. The Department threatened to  confiscate  the goods  and initiate the penal action against  the  appellant pursuant to Section 112 of the Customs Act. The appellant by a  letter dated March 20, 1989 called upon the  Customs  De- partment to set aside the show-cause notice.     The  Collector  of Customs, New Customs  House,  Ballard Estate,  Bombay passed an order that the goods imported  are marble  and thus require a specific import licence. He  also held  that  these  goods are liable  for  classification  as marble and the import of these goods under OGL is not admis- sible  and  therefore in exercise of  the  powers  conferred under Section 111(d) of the Customs Act, 1962, the Collector of  Customs ordered the confiscation of the  imported  goods and further ordered that the Bond be enforced towards a fine of Rs.4,93,199 imposed on the said goods in lieu of  confis- cation.  The Assistant Collector of Customs was directed  to enforce the said Bond and the Bank Guarantee for realisation of  this  amount of fine. However, the  importer  was  given option  to  clear  the said goods for  home  consumption  on payment of fine of Rs.5,00,000 in lieu of confiscation under Section  125  of  the Customs Act, 1962, the  option  to  be exercised  within  60 days from the date of receipt  of  the said order. He further held that since the importer  contra- vened  the provisions of section 111(d) of the Customs  Act, 1962 read with Section 3 of the Import and Export  (Control) Act,  1947  rendering the said goods for  confiscation,  the importer  is  liable for penal action  under  provisions  of Section 112 of the Customs Act. Accordingly, the penalty  of Rs. 10,00,000 under Section 112 of the said Act was directed to be paid forthwith.     Against this order, the appellant filed a writ  petition being Writ Petition No. 1398 of 1989 which was dismissed  at the admission stage on the ground that it involves  disputed questions  of fact which were difficult to be decided  in  a writ  jurisdiction. However, the appellant was permitted  to clear the goods on payment of redemption fine and furnishing full bank guarantee for the penalty amount.     Aggrieved by this order, an appeal being Appeal No. 6 18 of  1989  was filed in the High Court of  Bombay.  The  said appeal  was  dismissed with liberty to file  a  departmental appeal by Order dated June 15, 1989. The appellant  thereaf- ter  filed  the said appeal before the Customs,  Excise  and Gold  (Control)  Appellate Tribunal,  West  Regional  Bench,

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Bombay. The said Appellate Tribunal after hearing the appel- lant  as well as the Revenue dismissed the appeal  and  con- firmed the order of 379 the Collector of Customs but reduced the penalty amount from Rs. 10,00,000 to Rs.5,00,000.     Feeling aggrieved by the said order the appellant  filed the  instant  appeal under Section 130-E(b) of  the  Customs Act,  1962. The entire controversy relates to  the  question whether the calcareous stone which has been imported by  the appellant falling within the Tariff Item No. 25.15 of Sched- ule  I,  Appendix  I-B commonly known as  I.T.  Schedule  is marble as mentioned in Entry No. 62 of the List of Restrict- ed Items, Annexure 2, Part B of the Import and Export Policy for  April  1988  to March 1991 and as such  the  import  of calcareous  stone  made by the appellant being  not  covered under OGL, is liable for confiscation and penalty for  ille- gal import without the specific import licence obtained from the respondent. In Appendix I-B, Schedule 1 of ITC Schedule, Entry No. 25.15 of Chapter 25 (Mineral Products) mentions: "Marble  travertine,  ecaussine  and  any  other  calcareous monumental or building stone of an apparent specific gravity of 2.5 or more and Alabaster, whether or not roughly trimmed or merely cut by sawing or otherwise, into blocks, of  slabs of a rectangular (including square) shape."     In  the said Appendix I-B, Schedule I states  that  each heading  number in Column (1) corresponds to the  respective Chapter  and  heading number of the first  Schedule  to  the Customs, Tariff Amendment Act, 1985 as amended on 24.1. 1986 and each entry in Column (2) has the same scope and  meaning as  the corresponding Chapter and heading of the said  first Schedule.     It  is appropriate to refer to Appendix 6 of the  Import and  Export Policy for April 1988 to March, 1991 which  men- tions import of items under Open General Licence. The  cate- gories  of  importers, the items allowed to be  imported  by them under Open General Licence and the conditions governing their importation have been set out therein:             Items              Category of eligible                                importers 1. Raw materials components and consumables Actual Users  (Non-iron and steel items) other than      (Industrial)  those included in the Appendices 2, 3  Part A, 5 and 8 380     In Appendix II-B, in the List of Restricted Items, Entry 6.2,  of  Import and Export Policy for March 1988  to  April 1991 refers to marble/granite/onyx.     Mr.  Diwan, learned counsel appearing on behalf  of  the appellant has submitted that for the purpose of  understand- ing  the  meaning  of ’marble’ occurring  in  Appendix  I-B, Schedule I of the Imports (Control) Order, 1955 it is neces- sary  to  refer to Mineral Products, in Chapter  25,  Tariff Entry  No. 25.15 which refers to Marble, Travertine,  Ecaus- sine  and other calcareous monumental and building stone  of an  apparent specific gravity of 2.5 or more and  Alabaster, whether  or not roughly trimmed or merely cut by  sawing  or otherwise  into blocks or slabs of a rectangular  (including square) shape. The term ’marble’ does not occur by itself or in  isolation  but as a inseverable part of a  Tariff  Entry which deals with five items referred to hereinbelow:    (a) Marble    (b) Travertine    (c) Ecaussine    (d) Other calcareous stone

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  (e) Alabaster Each  of these five items is a monumental or building  stone which  is  hard and can be cut and sawed into  the  required sizes  and can take polish. The Tariff Entry draws  a  clear line  of  distinction between each of these five  items  and regards them as five distinct products. The basic scheme  of the  Tariff  Entry  is important for  the  purposes  of  the present appeal. The term ’marble’ has to be given a  meaning which fits in and harmonises in the above mentioned statuto- ry  context, so that ’marble’ continues to  remain  distinct and different from the said other four items. Thus  whatever principle  of  interpretation or canon  of  construction  is applied it cannot be said that the term ’marble’ include and takes  within its fold any or more distinct items  or  goods mentioned in the said Tariff Entry, thereby rendering a part of  the  said  Entry meaningless. It  has,  therefore,  been submitted on behalf of the appellant that the term  ’marble’ has  to  be interpreted in a manner which is  in  consonance with the context and which does not militate against it.  It is  appropriate  to refer in this connection  the  following passage  from  Maxwell on Interpretation of  Statutes,  12th Edition. Page 294 set out hereunder: "The word ’land’ is generally understood as including build- ing. but if, after imposing a rate on houses, buildings, 381 works, tenements and hereditaments, an Act exempted  ’land’, this  word  would  be restricted  to  land  unburdened  with houses, buildings, or works which would otherwise have  been unnecessarily enumerated."     It  has been secondly submitted on behalf of the  appel- lant that the general principle of interpretation of  tariff entries  occurring  in a tax statute is that  of  commercial nomenclature  or  understanding in the trade. It is  also  a settled legal position that the said doctrine of  commercial nomenclature  or trade understanding can and should  be  de- parted  from in a case where the statutory context in  which the  tariff item appears, requires such a departure. If  the application of the commercial meaning or trade  nomenclature runs counter to the statutory context then the said  princi- ple  of  interpretation cannot and should  not  be  applied. Commercial  nomenclature or trade understanding is merely  a general principle of interpretation, It is well settled that the  principles of interpretation are never  embodied  rules and the same must always yield to the context of the partic- ular statute which comes up for interpretation. It has  also been submitted in this connection that the trade meaning  or commercial nomenclature would be applicable if a  particular product description occurs by itself in a Tariff Entry,  and there  is no competition between that Tariff Entry  and  any other  tariff entry, nor is there any need to reconcile  and harmonise  that  tariff entry with any other.  It  has  been submitted  in  this respect that the reading of  the  Tariff Entry No. 25.15 in Appendix I-B of Imports (Control)  Order, 1955 which refers to Marble, Ecaussine, Travertine and other calcareous  monumental or building stones as well  as  Entry No.  62 in Appendix 2-B of Import and Export  Policy,  April 1988-March  1991  refer only to marble/granite/onyx  as  re- stricted items of import in such a way that such interpreta- tion  does not exclude or render redundant any of the  items included  in Tariff Entry No. 25.15. It has next  been  con- tended that the end-use of the particular product is irrele- vant  and of no consequence for determining its  classifica- tion. In support of this proposition several decisions  have been  cited. It has been further submitted that each of  the five distinct items referred to in Chapter Heading 25.15  of

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Appendix  I-B  of Imports (Control) Order, 1955  is  a  hard stone  capable  of being cut into the required size  and  of taking polish. If, therefore, the term marble is to be given the  said commercial meaning as relied upon by  the  Customs Authorities  then the inevitable consequence would  be  that the  term ’marble’ in Chapter Heading 25.15 would  automati- cally include within it the other four items thereby render- ing  the  rest of the Tariff Entry,  otiose,  redundant  and meaningless. On this ground alone, it has been submit- 382 ted that the test of commercial meaning or trade understand- ing  necessarily has to be rejected and the same  cannot  be applied  in the present case. It has also been contended  on behalf of the appellant that from the language of the Tariff Entry  itself it is only the technical meaning which can  be applied for interpreting Chapter Heading 25.15. The  expres- sions  calcareous, travertine, ecaussine, and alabaster  are all  technical expressions known to the science  of  Geology which  are found defined in dictionaries of  Geology.  These are not terms of trade or expressions which businessmen  use in  the  ordinary use to describe a product  they  deal  in. Moreover,  the  reference  to the  requirement  of  specific gravity  of  2.5 or more is also more or  less  a  technical requirement which evinces that the principle of trade nomen- clature or commercial understanding is not applicable to the Tariff Item. Valuable guidance can also be obtained from the notes  which are part of the Harmonised System of  Nomencla- ture (HSN) with which the present Customs Tariff as  amended in  1986, has been fully aligned. The HSN Explanatory  Notes specifically state that ecaussine, on being fractured, shows a  granular surface, similar to granite and  is,  therefore, known  sometimes  as Belgian granite, Flanders  Granite  and Petiti  granite. It needs to be understood that,  therefore, even  though ecaussine may be known in the market as a  spe- cies of granite and may be dealt with and treated as a  type of  granite,  the same is, nevertheless  not  classified  as granite  under Chapter Heading 25.16. This is  only  because the  technical nature of ecaussine has been taken into  con- sideration and applied by HSN as opposed to the trade nomen- clature or commercial understanding.     It  has also been submitted that the said HSN also  con- tains specific note regarding serpentine rocks to the effect that the same are sometimes called ’Marble’, but the same is excluded from Chapter Heading 25.15. This clearly shows that according  to HSN, Chapter Heading 25.15 must  be  construed according to its technical meaning. Technically,  serpentine does not fall under Heading 25.15 and the same is according- ly excluded therefrom by the HSN. If, on the other hand, the commercial meaning is to be applied, then, serpentine  would definitely have to be classified under Chapter Heading 25.15 in as much as it is sometimes called marble. The HSN Explan- atory  notes, therefore, clearly and conclusively  establish that Chapter Heading 25.15 must necessarily be construed  by its  technical  meaning and not by applying  the  commercial nomenclature  test. If the commercial nomenclature  test  is applied,  then,  as explained hereinabove,  two  fundamental principles of interpretation are infringed: (a) the  princi- ple that no part of a statute may be construed as to  render it redundant 383 and otiose, and (b) that a tariff item is not to be  classi- fied on the basis  end-use-in other words an item cannot  be considered  to  be marble merely because it is a  hard  rock which is capable of being cut and polished and being put  to same  use as marble. It has, therefore, been submitted  that

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the  findings  arrived at by the Customs,  Excise  and  Gold (Control) Appellate Tribunal that the calcareous stone  slab imported  by  the appellant is marble as understood  in  the commercial  or trade nomenclature and as such the import  of the  said  slab being without a licence, is subject  to  the liability  of  confiscation and imposition  of  penalty  and wholly unwarranted.     Mr. Ganguli, learned counsel appearing on behalf of  the Revenue has submitted that in interpreting the word ’marble’ as mentioned in Tariff Item No.25.15 in Appendix 1-B, Sched- ule  1  to  the Import (Control) Order, 1955,  the  test  in commercial and trade parlance has to be applied i.e. how the said  product came to be commercially known by  the  trading people. It is further submitted that it is not a  scientific or  technical  word and as such it does not  require  to  be interpreted  in its scientific and technical sense. He  fur- ther  submitted that the general principle of expression  of Tariff  Entries  in  a text statute is  that  of  commercial nomenclature  or understanding in the trade. The word  ’mar- ble’ if so interpreted will include calcareous stone of  2.5 or more specific gravity. He has cited certain decisions  in support of his above contention. Mr. Ganguli also  submitted referring  to the said Tariff Entry 25.15 that  it  includes calcareous  stones of specific gravity of 2.5 or more  which are  capable  of polish. Marble is the genus and  all  other four items of stone mentioned in the said Entry which are of apparent specific gravity of 2.5 are included within  marble as  they  are commercially and in trade  parlance  known  as marble. He further submitted that the ISI specification  for marble  as referred to in IS: 1130-1969, item No. 0.2  which defines  marble as metamorphic rocks can not be  applied  in the instant case especially in view of the note to the  said item  that  sometimes  rocks, such as  serpentine  are  also polished  and used in trade as marble. Mr.  Ganguli  further submits that taking into consideration this note, calcareous stone imported by the appellant falls within marble which is one of the restricted ’items in the list of restricted items as mentioned in Appendix 2, Part B of the Import and  Export Policy, April 1988-March 1991. Mr. Ganguli further submitted that  the word marble cannot be taken in its  Geological  or Petrological  sense in as much as the whole purpose of  put- ting the marble stone slabs in the list of restricted  items for  import is to restrict the outflow of  foreign  exchange from  the country. Mr. Ganguli next submitted that the  end- use of the product i.e. marble and calcareous 384 stone  mentioned  in Item No. 25.15 of Appendix 1-B  of  the Import  and Export Policy April 1988--March 1991 has  to  be taken  into consideration in the determination of the  other items  of stones mentioned in that Entry. Viewed  from  this angle, the said calcareous stone being capable of polish and used for monumental or building purposes has to be taken  to be  marble as has been done by the Revenue and it being  one of the restricted items, a licence for import of the same is mandatory. It has also been submitted in this connection  by Mr.  Ganguli that the word ’marble’ has not been defined  in the Tariff Act and as such the meaning of the said word  has to  be given as understood by the trading communities as  is known  in trade parlance. Mr. Ganguli,  therefore  submitted that  there is no infirmity in the findings and  conclusions of  the Appellate Tribunal and as such the calcareous  stone slabs  imported  by the appellant being marble, one  of  the restricted  items,  the order of confiscation  of  the  said stone  slabs and in lieu thereof the imposition of the  cus- toms duty and the penalty is quite in accordance with law.

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   The  sole  question to be considered in this  appeal  is whether the word calcareous monumental or building stones of more  than  2.5  or more specific gravity  as  mentioned  in Tariff Item No. 25.15 in Appendix 1-B, Schedule 1,  commonly known  as ITC Schedule to the Imports (Control) Order,  1955 comes  within the purview of the restricted items  mentioned in  Item  62, Appendix 2, Part B of the  Import  and  Export Policy  April  1988--March 1991. In Entry No.  62,  the  re- stricted item is described as ’Marble/granite/onyx’.  Marble has not been defined either in the ITC Schedule or in Appen- dix  2, Part B of Import and Export Policy dealing with  the list of restricted items. It is convenient to refer in  this connection to para 64 of the Hand Book of Procedures,  April 1988--March 1991 which is in the following terms: "Classification of Items 64. (1) The Schedule I to the Imports (Control) Order, 1955, reproduced  in Appendix 1-B to this Book, commonly known  as the I.T.C. Schedule,. contains the classification of all the articles that enter into the import trade.          (2) With effect from 1st April, 1988 the Schedule 1 to the Imports (Control) Order, 1955 reproduced in  Appendix I-B  to  this Book has been revised in  alignment  with  the First Schedule of the Customs Tariff (Amendment) Act,  1985. The  Revised  ITC Schedule contains 21  Sections  subdivided into 99 Chapters." 385     It  is  also  convenient to refer to the  note.  to  the Appendix  1-B,  Schedule I to the Imports  (Control)  Order, 1955 which is to the following effect:       Note:-- Each heading number in Column (1)  corresponds to  the respective Chapter and heading number of this  first Schedule to the Customs Tariff Amendment Act, 1985 as amend- ed  on 24.1.1986 and each entry in Column (2) has  the  same scope  and meaning as the corresponding Chapter and  heading of the said first Schedule.     It is also appropriate to set out hereunder the relevant portion  of Appendix 6 of the Import and Export  Policy  for April 1988--March 1991: Items                       Categories of eligible                             Importers ------------------------------------------------------------ Raw materials, components and               Actual Users consumables (Non-iron and steel items)      (Industrial) other than those included in the Appendices 2, 3 Part A, 5 and 8.     Section  3(1) of the Imports and Exports (Control)  Act, 1947 as amended upto 30th April, 1979 provides that: "The  Central  Government  may, by order  published  in  the Official Gazette, make provisions for prohibiting, restrict- ing  or otherwise controlling in all cases or  in  specified classes  of cases and subject to such exceptions if any,  as may be made by or under the order  ......................  "     Chapter 25 of Schedule I, Appendix i-B of the ITC Sched- ule  mentions mineral products which can be  imported  under O.G.L. Entry No. 25.15 refers to marble which is as under: "Marble, travertine, ecaussine and other calcareous monumen- tal or building stone of an apparent specific gravity of 2.5 or  more  and Alabaster, whether or not roughly  trimmed  or merely cut, by sawing or otherwise, into blocks or slabs  of a rectangular (including square) shape." 386     Appendix  2, Part B of the Import and Export Policy  for April 1988-March 1991 enumerates the restricted items.  Item No.  62 deals with marble which is to the  following  effect ’Marble/granite/onyx’.

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   In the instant case, admittedly the appellant on  behalf of  his  firm  which is a small scale  industry  engaged  in processing  of  stone slabs placed an order  for  calcareous stone  (other than marble) with the exporter Elle  Marmi  of Italy  asking  the exporter to certify that the  said  goods were not marble. The exporter, Elle Marmi of Italy issued  a certificate  dated December 6, 1988 certifying that all  the goods  in  question were calcareous stone slabs  other  than marble. The appellant also obtained from the foreign export- er a sample tile of ’Botticino’ the calcareous rock proposed to  be imported and had the same tested by a reputed  Geolo- gist, Dr. S.F. Sethna who submitted his report dated October 13, 1988 confirming that the same sample was not marble.  It has  been  stated in the said report that the  sample  is  a limestone  and  thus  differs from the marble  in  being  of sedimentary origin and has not undergone any metamorphism to be  considered under metamorphic rocks to be described as  a marble. If the rock would have shown any slightest amount of metamorphism  the  recrystallization of  carbonate  crystals would make the individual crystals distinctly visible  under the microscopic examination.     The  appellant  also referred to an Italian  Book  MARMI ITALTA wherein the index evidenced the fact that "Botticino" varieties  were covered under "Polishable Calcareous  Rocks" and  not  under ’True Marbles’  (Re-crystallised  Calcareous Rocks).  The  appellant also while placing order  asked  the exporter  to send a certificate about the calcareous  stones for  which order was placed for importation.  The  exporter, Elle  Marmi of Italy issued a certificate dated December  6, 1988 certifying that all the rough slabs loaded are ’calcar- eous  stone  slabs other than marble’.  The  appellant  also obtained a certificate from one Gianni C. Baigini, a survey- or  registered with the Chamber of Commerce, Carrara  and  a specialist  for control of marble, calcareous stones  (other than Marble) and Granite. The said expert after checking the said consignment loaded in the containers for import by  the appellant  in Italy certified that all rough slabs are  cal- careous stone slabs of good quality. He also certified  that these  are calcareous stones other than marble because  they are not recrystallized calcareous rocks and that the calcar- eous stone slabs in the above consignment are not marble. In Indian Standard Specification for Marble, IS: 1130-1969, 387 Entry  No.  0.2 marbles have been described  as  metamorphic rocks capable of taking polish, formed from the  re-crystal- lization  of  limestones  or dolomitic  limestones  and  are distinguished  from limestone by even  visible  crystallined nature and non-flaggy stratification. Note to the said Entry states  that  sometimes rocks, such as serpentine  are  also polished and used in trade as marble.     The  Director, Regional Petrology Laboratory  where  the appellant sent a sample of the rocks ordered of importation, for  examination  has also forwarded a technical  report  on study of sample by Dr. H.M. Ramachandra, a Geologist,  which states: "The rock is an allochemic (Pelmicritic)  limestone, it cannot be termed as a marble."     The Indian Bureau of Mines in its letter dated March  3, 1982 has mentioned that: "Technical Definition: Geologically   (petrologically)  marble  is   recrystallised (metamorphosed) limestone. Ordinary limestone is a  sedimen- tary  rock  but once it is metamorphosed i.e.  once  it  has undergone  recrystallisation,  it is turned  to  marble.  So marble is metamorphosed limestone which consist  essentially the minerals calcite, dolomite or a combination of the

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two. " "The specimen has been examined and it is observed that  the rock  is  cryptocrystalline, fine grained,  mildly  metamor- phosed  with few bigger grains of calcite. The  specimen  is hard  and  compact and is capable of being cut  into  slabs/ blocks of desired size and can take a good polish."     Thus, according to all these reports as well as the  ISI specification the slabs of rocks that have been imported  by the  appellant and claimed to be calcareous stones  are  not ’marble’  in the scientific and technical sense of the  term marble.  As we have already stated hereinbefore that  Tariff Item No. 25.15 mentions five kinds of rocks such as  Marble, Travertine, Ecaussine, Alabaster and other calcareous  monu- mental  or  building stone of a specific gravity of  2.5  or more  whereas in the List of Restricted Items--Item  No.  62 only  mentions  Marble/ granite/onyx are mentioned.  In  the absence  of any definition of the term ’marble’ it is to  be decided what is the scope and meaning of the word marble and whether it includes within it the other kinds of 388 calcareous  stones such as travertine, ecaussine,  alabaster and  other  calcareous  monumental or building  stone  of  a specific  gravity  of  2.5 or more in order  to  saddle  the importer with the burden of obtaining a licence for  import- ing  the  said  restricted item. It has  been  submitted  on behalf of the appellant that as the word marble has not been defined and the tariff item refers to calcareous stone of an apparent specific gravity of 2.5 or more, it has to be taken to  be used in a technical and scientific sense and as  such the  same  cannot be interpreted in the  popular  commercial sense or as understood in trade parlance by persons  dealing with the’ said stones.     In deciding this question the first thing that  requires to be noted is that Entry No. 25.15 refers specifically  not only  to marble but also to other calcareous stones  whereas Entry  No. 62 refers to the restricted item marble only.  It does  not refer to any other stones such as ecaussine,  tra- vertine or other calcareous monumental or building stone  of a certain specific gravity. Therefore. on a plain reading of these two Entries it is apparent that travertine,  ecaussine and  other calcareous monumental or building stones are  not intended to be included in ’marble’ as referred to in  Entry No.  62  of Appendix 2 as a restricted item.  Moreover,  the calcareous  stone  as mentioned in ITC Schedule  has  to  be taken in scientific and technical sense as therein the  said stone has been described as of an apparent specific  gravity of  2.5  or  more. Therefore, the word ’marble’  has  to  be interpreted, in our considered opinion, in the scientific or technical sense and not in the sense as commercially  under- stood  or as meant in the trade parlance. There is no  doubt that  the  general  principle of  interpretation  of  Tariff Entries  occurring  in  a text statute is  of  a  commercial nomenclature and understanding between persons in the  trade but  it is also a settled legal position that the said  doc- trine  of  commercial nomenclature  or  trade  understanding should  be departed from in a case where the statutory  con- tent  in  which the Tariff Entry appears,  requires  such  a departure. In other words, in cases where the application of commercial meaning or trade nomenclature runs counter to the statutory  context in which the said word was used then  the said  principle  of interpretation should  not  be  applied. Trade meaning or commercial nomenclature would be applicable if  a particular product description occurs by itself  in  a Tariff  Entry  and there is no conflict between  the  Tariff Entry and any other Entry requiring to reconcile and  harmo-

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nise that Tariff Entry with any other Entry.     In Union of India v. Delhi Cloth & General Mills, [1963] Supp.  (1)  SCR 586 the question arose as to  how  the  term "refined oil" 389 occurring  in the Tariff was to be construed. There  was  no competition  between that Tariff Entry with any  other,  nor was there any need to reconcile and harmonise the said entry with  any other provision of the tariff. This Court,  there- fore,  considered  the term "refined oil"  by  applying  the commercial meaning or trade nomenclature test and held  that only  deodorised  oil can be considered to be  refined  oil. This  Court also referred to the specification  of  "refined oil" by the Indian Standards Institution and held that: "This  specification  bY the  Indian  Standards  Institution furnishes  very  strong and indeed  almost  incontrovertible support for Dr. Nanji’s (respondent’s) view and the respond- ent’s  contention that without deodorisation the oil is  not "refined  oil" as is known to the consumers and the  commer- cial community."     In Dunlop India Ltd. v. Union of India and Ors.,  [1963] Supp. 1 SCR 586 the question arose whether the product known as  V.P.  Latex which was imported by the appellant  can  be considered  to be ’rubber raw’ within the meaning of  Tariff Entry No. 87 of the Indian Tariff Act, 1934. The choice  was between  classifying  V.P.  Latex as ’rubber  raw’  and  the general residuary entry at the end of the Tariff (a  general catch)  all entry which was described as "the  orphanage  of the  residuary clause". In these circumstances,  this  Court applied the commercial meaning or nomenclature test.     In  the case of Commissioner of Sales Tax, M.P. v.  Jas- want Singh Charan Singh, [1967] 2 SCR 720 the respondent was a  dealer  in  firewood and charcoal. In  a  proceeding  for assessment  of  sales tax under the M.P. General  Sales  Tax Act, the respondent claimed that charcoal was ’coal’  within the meaning of Entry 1 of Part III of the Schedule II to the Act and therefore was taxable at the ’rate of 2%. The  Sales Tax  Authorities however, held that charcoal was not  ’coal’ and was taxable at 4% as it fell under the residuary Entry 1 of Part VI of Schedule II. The Board of Revenue and the High Court  held in favour of the respondent relying on the  dic- tionary  meaning  of the word ’coal’.  The  Commissioner  of Sales-tax appealed. It was held by this Court that in inter- preting  items  in statutes like the Sales Tax  Acts  resort should be had not to the scientific or technical meaning  of the  terms used but to their popular meaning or the  meaning attached  to them by those dealing in them, that is to  say, in  their commercial sense. Viewed from this angle,  both  a merchant dealing in coal and a consumer wanting to  purchase it would regard coal not in its geological sense but in 390 these  sense  as  ordinarily understood  and  would  include ’charcoal’ in the term ’coal’     It  may be pointed out that this Court has  clearly  and unequivocally  laid down that it is not permissible  but  in fact  it  is absolutely necessary to depart from  the  trade meaning  or commercial nomenclature test where the trade  or commercial  meaning  does  not fit into the  scheme  of  the commercial statements. This Court referring to the  observa- tions  of Pullock B. in Grenfell v. Inland  Revenue  Commis- sioner, [1876] 1 Ex. D. 242,248, observed: "that  if  a statute contains language which is  capable  of being construed in a popular sense such statute is not to be construed  according to the strict or technical  meaning  of the language contained in it, but is to be construed in  its

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popular  sense,  meaning of course, by the  words  ’popular- sense’,   that  sense  which  people  conversant  with   the subject-matter  with  which  the statute  is  dealing  would attribute  to it." But "if a word in its popular  sense  and read in an ordinary way is capable of two constructions,  it is  wise  to adopt such a construction as is  based  on  the assumption  that Parliament merely intended to give so  much power  as was necessary for carrying out the objects of  the Act and not to give any unnecessary powers. In other  words, the  construction of the words is to be adapted to the  fit- ness of the matter of the statute."     The Court has also referred to the observations of  Fry, J  in Holt & Co. v. Coilyet, [1881] 16 Ch. D. 718, 720.  The observation is: "If it is a word which is of a technical  or scientic  character then it must be construed  according  to that which is its primary meaning, namely, its technical  or scientific meaning." Referring to the above decisions this Court held that: "While construing the word ’coal’ in Entry 1 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." 391     This Court in K.V. Varkey v. Agricultural Income Tax and Rural  Sales  Tax  Officer, [1954] 5  STC  384  specifically declined to apply the popular or commercial meaning of ’Tea’ occurring in the sales tax statute holding that the  context of  the  statute required that the technical meaning  of  ’a product of plant life’ required to be applied and  therefore green tea leaves were tea even though they might not be  tea was known in the market.     In Cannanore Spinning and Weaving Mills Ltd. v.  Collec- tor of Customs and Central Excise Cochin and Ors., [1970]  2 SCR 830 this Court held that the word ’hank’ occurring in  a Central Excise Notification could not be interpreted accord- ing  to  the well-settled commercial meaning  of  that  term which was accepted by all persons in the trade in as much as the  said  commercial  meaning would  militate  against  the statutory context of the said exemption Notification  issued in  June, 1962. The word ’hank’ as used in the  Notification meant a ’coil of yarn’ and nothing more.     In Collector of Central Excise, Kanpur v. Krishna Carbon Paper  Co.,  [1989] 1 SCC 150 it has been observed  by  this Court  that it is a well settled principle  of  construction that  where the word has a scientific or  technical  meaning and  also in 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. It  has  also  been observed  that whether the general principle of  interpreta- tion  was applicable or not depended on the  statutory  con- text. If special type of goods is subject matter of a fiscal entry  then that entry must be understood in the context  of that particular trade, bearing in mind and particular  word. The trade meaning is one which is prevalent in that particu- lar trade where that goods is known or traded. Where, howev- er,  there  is no evidence either way  then  the  definition given  and  the meaning flowing from particular  statute  at particular  time would be the decisive test. It has  further been observed by this Court in this case that:          "Where  no  definition is provided in  the  statute

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itself, as in this case, for ascertaining the correct  mean- ing  of  a  fiscal entry reference to a  dictionary  is  not always  safe. The correct guide, it appears in such a  case, is  the  context and the trade meaning. In  this  connection reference has been made to the observations of this Court in CST v. M/s. S.N. Brothers, Kanpur, [1973] 3 SCC 496." 392     In  Collector of Customs, Bombay v. Hargovindas  &  Co., [1987] 29 ELT 975 the import policy restricted the import of milk  powder. The importer had imported skimmed milk  powder and relied upon the principle of commercial nomenclature  or trade  understanding  in order to contend that there  was  a settled  and  accepted distinction between milk  powder  and skimmed  milk powder which was specifically  recognised  and accepted  by  this  Court in Healthways Dairy  v.  State  of Haryana.  The Special Bench of the Tribunal  negatived  that contention and held that: "unlike the central excise tariff the import schedule itself provided a statutory basis of interpretation. The controver- sy  before us relates to a period during which  the  Imports (Control) Order, 1955, issued under the Imports and  Exports (Control) Act, 1947, had a separate import schedule  annexed to  it.  This import schedule was aligned  with  the  import schedule of the Customs Tariff Act, 1975. The import  sched- ule under the Import (Control) Order itself did not  contain any  rules  of  interpretation, section  notes  and  chapter notes.  However,  a statutory Note at the beginning  of  the import  schedule stated that the scope of various terms  and headings  in it was to be the same as in the  import  tariff schedule in the Customs Tariff Act, 1975. Thus the elaborate statutory  scheme of the customs tariff import schedule  got applied  to the import schedule as well. It is by  now  well known  that the customs tariff import schedule  hardly  left any  scope  to go in for trade parlance or  common  parlance because  it statutorily defined almost everything  with  the help  of rules of interpretation and explanatory  notes.  In such  a scheme, the statutory definitions must prevail  over the trade parlance or any other aides to interpretation."     In Collector of Customs, BOmbay v. Swastic Woollens  (P) Ltd. and Ors., [1988] Supp. SCC 796 this Court has  observed that the expression ’wool wastes’ which has not been defined in the Customs Tariff Act, 1975 or in the relevant Notifica- tion  is not an expression of art. It may be understood,  as in most of financial measures where the expressions are  not defined not in a technical or pre-conceived basis but on the basis  of trade understanding of those who deal  with  these goods.  When no statutory definition is provided in  respect of  an item in the Customs Act or the Central  Excises  Act, the  trade understanding, meaning thereby the  understanding in the opinion of those who 393 deal with the goods in question, is the safest guide. It has also been observed therein that the Tribunal has not ignored the Technical Committee’s observation nor the Board’s Tariff Advice.     On a conspectus of all these decisions mentioned herein- before the position thus emerges is that when the expression ’marble’  has not been defined in the Customs Tariff Act  as well  as in the Customs Act or in the relevant  Notification regarding the restriction on import of Marble in the List of Restricted Articles, it is necessary to decide the  signifi- cance  and true meaning of the word ’marble’ as used in  the ITC  Schedule  as well as in the List of  Restricted  Items, Customs  Tariff Act and the Customs Act not in  its  popular sense i.e. people who are dealing with this trade meant  the

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same  or what that term is commercially known in trade  par- lance  but  it has to be given a meaning in the  context  in which this word has been used in the ITC Schedule as well as in the List of Restricted items of Import. It is also neces- sary  to decide whether the word ’marble’ as stated  in  the ITC  Schedule refers to only marble or includes  travertine, ecaussine,  alabaster  and other  calcareous  monumental  or building  stones and can be termed as marble in the  commer- cial sense or in trade nomenclature so as to bring the  same within  the  restricted  Item No. 62 of  Appendix-2  of  the Import and Export Policy for April 1988-March 1991. We  have already  stated hereinbefore that in the List of  Restricted Items  under item No. 62 only marble has been mentioned  and not  the  other stones including calcareous stone  used  for building  or monumental purposes which have been  left  out. Therefore,  per  se it may be difficult to say  that  marble includes  the other calcareous stones mentioned in  the  ITC Schedule.  It is pertinent to mention in this connection  to the Report of Dr. S.F. Sethna of the Department of  Geology, St.  Xaviers  College, Bombay to whom a sample of  the  said calcareous  slab of stone intended to be imported  has  been sent. Dr. Sethna, a noted Geologist after examination of the sample specifically stated that the sample under  investiga- tion  is a sedimentary rock which does not show any sign  of metamorphic recrystallization and thus cannot be  considered as a marble. The report sent by the exporters of Italy, Elle Marmi and Andree Muciani dated December 6, 1988 also  states that  all the rough slabs loaded are calcareous stone  slabs other than marble. Furthermore, Gianni C. Baigini, a Survey- or registered with the Chamber of Commerce of Carrara and  a Specialist  for control of Marble, Calcareous Stones  (other than marble) and Granite sent a certificate on inspection of the sample that all rough slabs stuffed are calcareous stone slabs  of  good quality. These are calcareous  stones  other than  marble because they are not recrystallized  calcareous rocks. He 394 further  certified that the calcareous stone slabs in  above consignment are not marble. One Shri S.V. Chaudhary,  Direc- tor,  Regional  Petrology Laboratory, Geological  Survey  of India  after examination of the sample sent a  report  dated March 13, 1989 under the signatures of Dr. H.M. Ramachandra, Geologist  to  the appellant. The said report  states  that, ’the rock is a allochemic (Palmicritic) limestone, it cannot be termed as a marble’. In Invoice No. 126-88 a  certificate has been given by the exporter to the following effect: "We certify that merchandise is of Italian origin.  Contents are true and authentic, prices correct and current and  that it is the only invoice for the goods described therein."     In  the  said invoice the goods has  been  described  as slabs  of calcareous stone of 2 Cms thick quantity. Thus  it appears from all the aforesaid reports and certificates that the  slabs of stone which have been imported from Italy  are nothing but calcareous stones and the same cannot be  termed as marble. Even according to item No. 0.2 of Indian Standard Specification for Marble (Blocks, Slabs and Tiles) the stone slabs  imported by the appellant being  not  re-crystallized and  even  being not metamorphosed cannot be  considered  as marble. Of course, the  Revenue has tried to contend relying on  the  Note to the same wherein it has  been  stated  that sometimes  rocks, such as serpentine are also  polished  and used  in trade as marble that the slabs of calcareous  stone imported are used as marble in trade.     In Harmonised System of Nomenclature (H,S.N.) marble has been  defined  as a hard calcareous stone,  homogeneous  and

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finegrained, often crystallie and either opaque or  translu- cent, Marble is usually variously tinted by the presence  of mineral oxides (coloured veined marble, onyx marble,  etc.), but there are pure white varieties. The  Revenue Authorities sent the sample of  the  calcareous stone imported by the appellant to the Department of  Mines, Indian  Bureau Mines. A report has been sent by them to  the Superintendent, Central Excise and Customs Division, Udaipur after  testing  of  the sample of March 3,  1989.  The  said report  gives  the’ Technical and Commercial  definition  of marble as: Technical definition: "(Geologically  (Petrologically)  marble  is  recrystallised (Metamorphosed) limestone. Ordinary limestone is a sedi- 395 mentary  rock but once it is metamorphosed i.e. once it  has undergone  recrystallisation,  it is turned  to  marble.  So marble is metamorphosed limestone which consist  essentially the minerals calcite, dolomite or a combination of the two." Commercial Definition:-- "The  usage of the term ’marble’ has a much  vider  applica- tion.  In  the  commercial circle, any  limestone  which  is sufficiently  hard  and coherent to take a good  polish  and which  can be cut into desired sizes (into blocks)  free  of cracks can be called marble." It has also been stated therein that commercial marble refer to  a crystalline rock composed of predominantly of  one  or more of following minerals; calcite, dolomite or  serpentine and  capable of taking a polish. It has been further  stated under  the said report that the specimen has  been  examined and it is observed that the rock is cryptocrystalline,  fine grained,  mildly  metamorphosed with few  bigger  grains  of calcite. The specimen is hard and compact and is capable  of being  cut into slabs/blocks of desired size and can take  a good polish. Keeping above visual observations into view, it has  been  concluded that the specimen  under  reference  is marble as per commercial definition. The Director of  Mines, and  Geology Department, Udaipur also sent a report  to  the Assistant  Collector of Customs. It has been stated  in  the said  report that the sample is of a fine grained  off-white rock.  It gives very good effervescence with  dilute  hydro- chloric  acid and its hardness indicates that it is  a  fine grained  carbonate  rock. It takes good polish  and  can  be used  as  marble. Regarding the  microscopic  characters  it states that the rock is mainly composed of very fine grained cherty calcitic mass and iron oxides. No polygonal  crystals are present. Recrystallization has not taken place. The rock sample  has  been identified as ’fine grained  cherty  lime- stone’. It has also been stated that technically marble is a product  of thermal metamorphism of limestone (impure  lime- stone)  in which recrystallisation takes place and  silicate minerals  are also produced. Commercially the term  ’marble’ has  been  applied to any stone, other than those  known  in trade  as granite, that has a pleasing appearance  and  will take a polish. Thus, the term ’marble’ adopted in the  trade is based on the general properties and use of the stone.  It has been further stated that the definition of marble  given in  IBM  publication ’Marble in India’ 1983,  Government  of India is as under: 396 "Marble:--  Petrologically    marble    is    recrystallised (Metamorphosed)  limestone. But in commercial  parlance  the term marble has a much wider application. Commercial  marble is  any crystalline rock composed predominantly of  calcite,

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dolomite or serpentine that is capable of taking polish."     In   Webster  Comprehensive  Dictionary,   International Edition,  the word ’Marble’ has been defined as "A  compact, granular,  partly crystallized limestone, occuring  in  many colours, valuable for building or ornamental purposes."     In Shorter Oxford English Dictionary, the word  ’Marble’ has  been defined as "Limestone in a crystalline  (or,  less strictly,  also  a granular) state and capable of  taking  a polish, occurring in many Varieties; much used in  sculpture and architecture."     The Appellate Tribunal after considering various reports referred  to  hereinbefore observed that the  term  ’marble’ cannot be construed on geological and petrological consider- ation,  but has to be construed in commercial  parlance.  It has also been observed that the Tribunal is unable to  place reliance  on these reports. In Commercial circle  any  lime- stone  which is sufficiently hard and coherent to take  good polish  and  which  can be cut into desired  sizes  free  of cracks  can be called as marble as per the opinion given  by the Indian Bureau of Mines. The Tribunal also observed  that the Tribunal has found that the specimen could be termed  as ’marble’ as per the commercial definition but not technical- ly referring to the report of the Director, Mines and Geolo- gy  Department,  Udaipur. It has also been observed  by  the Tribunal that in the sample re-crystallization has not taken place. The Tribunal has also held that it was not  necessary to go into any other aspects in term’s of the ISI or techni- cal  and  scientific definition and held that  the  impugned goods  do  fall under marble in trade understanding  and  as such  the same comes within the List of Restricted Items  in Item No. 62, of Appendix 2. This finding cannot be sustained in as much as all the above reports referred to hereinbefore clearly  lay  down  that any stone to be  termed  as  marble falling within Entry No. 62 of the List of restricted  Items in  Appendix 2, has to be recrystallised. The Indian  Stand- ards  Institution  has also given a  similar  definition  of marble  as  recrystallization  of  limestones  or  dolomitic limestones. Furthermore, Petrologically and Geologically the slabs  of  stones which have been  imported  are  allochemic (pelmicritic)  limestone and it cannot be termed as  marble. The Indian Bureau of Mines also observed 397 on testing the sample of rock that it is  cryptocrystalline, fine grained, mildly metamorphosed with few bigger grains of calcite and identified the same as very fine grained  cherry calcitic limestone.     It is apparent from all these reports that the  calcare- ous stone of specific gravity of 2.5% is not marble  techni- cally  and  scientifically.  The finding  of  the  Appellate Tribunal  is, therefore, not sustainable. it is, of  course, well settled that in Taxing Statute the words used are to be understood in the common parlance or commercial parlance but such a trade understanding or commercial nomenclature can be given  only in cases where the word in the Tariff Entry  has not  been used in a scientific or technical sense and  where there  is no conflict between the words used in  the  Tariff Entry  and  any other Entry in the Tariff Schedule.  In  the instant  case,  in  the Tariff Entry No. 25.15  in  the  ITC Schedule,  Appendix  1-B,  Marble,  Travertine,   Ecaussine, Alabaster and other calcareous stones of an apparent specif- ic  gravity  of 2.5 or more have been mentioned  whereas  in Entry  No. 62 only the word marble has been mentioned  as  a restricted item for import, the other calcareous stones such as  travertine,  ecaussine,  alabaster etc.  have  not  been mentioned  in  Entry No. 62. In  these  circumstances,  some

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significance has to be attached to the omission of the words travertine,  ecaussine  and other calcareous  monumental  or building  stones of an apparent specific gravity of  2.5  or more and Alabaster from the ITC Schedule in Entry No. 62  of Part  B,  Appendix 2 of Import and Export Policy  for  April 1988--March 1991. The only natural meaning that follows from this  is that Entry 62 is confined only to marble as  it  is understood  in  a petrological or geological  sense  and  as defined  by  the Indian Standard Institute and not  as  men- tioned in the opinion given by the Indian Bureau of Mines on visual  observation  and it does not extend to or  apply  to other  calcareous  stones  mentioned in  the  ITC  Schedule. Moreover,  the  commercial  nomenclature  or  trade  meaning cannot  be given to marble in as much as such a  meaning  if given  will render otiose, redundant the  terms  travertine, ecaussine,  alabaster  and other  calcareous  monumental  or building  stone of an apparent specific gravity of  2.5%  or more whether or not roughly trimmed or merely cut by sawing. Moreover,  in  Appendix 6 i.e. Import of  items  under  Open General Licence, Item No. t refers to Raw Materials,  compo- nents, and consumables (Non-iron and steel items other  than those in Appendices 2, 3, Part A, 5 and so the other calcar- eous  stones excluding marble which is a restricted item  of import fall within import items under Open General  Licence. Although  much stress has been laid on the note to Item  No. 0.2  of Indian Standards Specification for  Marble  (Blocks, Slabs and Tiles) wherein it has been stated that some- 398 times  rocks, such as serpentine are also polished and  used in trade as marble but it cannot be taken into consideration in  coming to the finding that marble is the genus  and  all the other calcareous stones referred to in Tariff Entry  No. 25.15  in  ITC Schedule, Appendix I-B are  included  in  it. Moreover, the onus heavily lays upon the Revenue Authorities to prove by adducing cogent evidence that limestone  without Metamorphism  and  recrystallisation  not  being  opaque  or translucent  will fall within the category of  stone  called ’marble’  in  Entry No. 62 of Appendix 2 as one of  the  re- stricted items. The appellant before placing the order  took considerable  precaution in ascertaining from  the  exporter that  the  calcareous  stone to be imported  from  Italy  is calcareous  stone and not marble. Moreover, he referred  the sample of the calcareous stone to be imported to the Depart- ment of Geology, Bombay and to the Regional Petrology  Labo- ratory of the Geological Survey of India to ascertain wheth- er calcareous stone in question is marble or not in order to enable him to import the same under open general licence. He also  asked his exporter to send a certificate  whether  the calcareous stone for which order is placed is marble or not. The exporter sent a certificate alongwith the report of  the expert stating that the slabs of calcareous stones contained in the containers sent by the exporter are calcareous stones and  not marble. No tangible evidence has been produced  nor even  affidavits  of persons attached to this trade  to  the effect  that the slabs of calcareous stone imported  by  the appellant  are marble as defined within Entry No. 62 of  the List  of Restricted Items have been filed. The  Revenue  has not  taken  any steps to ascertain  whether  the  calcareous stones imported are marble not by any scientific, geological or petrological test.     Considering all these reports we are of the opinion that since  the term marble has not been defined in  the  Imports Control  Order as well as in the ITC Schedule, it has to  be taken in a scientific and technical sense as well as in  the context  the word has been used and the slabs of  calcareous

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stones  imported by the appellant from Italy cannot be  held to be marble as they have not been recrystallised and  meta- morphosed  in the geological and petrological sense  of  the term.  It is pertinent to refer in this connection the  fol- lowing passage of Maxwell on the Interpretation of Statutes, Twelfth Edition by P. St. J. Langan: "The word "land" is generally understood as including build- ings,  but if, after imposing a rate of  houses,  buildings, works, tenements and hereditaments, an Act exempted  "land", this  word  would  be restricted  to  land  unburdened  with houses, buildings or works which would ,otherwise have  been unnecessarily enumerated." 399     As regards the submission that the end-use of a particu- lar item has to be taken into consideration in  interpreting a product is of no relevance in determining its  classifica- tion  as we have stated hereinbefore that in interpreting  a term appearing in the Tariff Item which has not been defined either  in  the  Tariff Schedule or in  the  Import  Control Order, the same is to be interpreted in such a way which  is in  consonance with the Items specified in the ITC  Schedule without leaving out any part of the Items mentioned therein. In other words, a harmonised interpretation has to be  given to  each  of  the calcareous stones mentioned  in  the  said Tariff  Item in ITC Schedule and nothing should be left  out or made redundant in giving the interpretation. The  commer- cial  nomenclature  or understanding in the trade  which  is generally given in tax statute can not be taken recourse  to in  the instant case in as much as the statutory context  in which  the  Tariff Item appears requires  departure  in  the instant case. In the Tariff. Item the calcareous stones used for monumental or building purposes and of a specific gravi- ty  of 2,5% or more is used in the scientific  or  technical sense and as such the commercial nomenclature or understand- ing  in the trade should not be taken recourse to in  inter- preting the word ’marble’. The reference to the  requirement of gravity of 2.5% or more is also a purely technical crite- ria  or requirement which shows that the principle of  trade nomenclature  or commercial understanding is not  applicable to that Tariff Item. Moreover, the said Harmonised System of Nomenclature  (HSN) contains a specific note regarding  ser- pentine  rocks  to the effect that the same are  some  times called marble, but the same is excluded from Chapter Heading 25.15.  This  again  clearly shows that  according  to  HSN, Chapter  Heading 25.15 has to be construed according to  its technical  meaning.  Technically, serpentine does  not  fall under  Heading  25.15 and the same is  accordingly  excluded therefrom by the HSN. If commercial meaning is to be applied then serpentine would have to be classified under Item 25.15 in  as much as is sometimes called marble in the trade.  The HSN  Explanatory  Notes, therefore, establish  that  Chapter Heading 25.15% must be construed by its technical sense  and not by applying a commercial nomenclature test.     Considering all these aspects, there is no other  alter- native  but to conclude that the slabs of  calcareous  stone imported  by  the appellant are not marble as  mentioned  in Entry  No. 62 of Appendix 2 of the Import and Export  Policy for  April  1988--March 1991 and so it is  covered  by  open general licence. The imported goods cannot be confiscated by the Government under section 111(d) of the Customs Act, 1961 nor the appellant can be given the option to clear the  said goods 400 for home consumption on payment of fine of Rs. Five lakhs in lieu  of confiscation under Section 125 of the Customs  Act,

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1962. The appellant cannot be said to have imported calcare- ous stones without an import licence and as such there being no violation of the Import Control Policy the imposition  of penalty  of Rs.Ten lakhs under section of the  Customs  Act, 1962 is also unwarranted and not sustainable.     Before  we  conclude it is relevant to mention  in  this connection that even if it is taken for arguments sake  that the  imported article is marble falling within Entry  62  of Appendix  2,  the burden lies on the Customs  Department  to show  that the appellant has acted dishonestly  or  contuma- ciously or with the deliberate or distinct object of breach- ing the law.     In the present case, the Tribunal has itself specifical- ly stated that the appellant has acted on the basis of  bona fide  behalf  that the goods were importable under  OGL  and that,  therefore, the Appellant deserves lenient  treatment. It  is, therefore, to be considered whether in the light  of this  specific finding of the Customs, Excise &  Gold  (Con- trol)  Appellate Tribunal, the penalty and fine in  lieu  of confiscation require to be set aside and quashed.  Moreover, the quantum of penalty and fine in lieu of confiscation  are extremely harsh, excessive and unreasonable bearing in  mind the  bona fides of the Appellant, as specifically  found  by the Appellate Tribunal.     We refer in this connection the decision in Merck Spares v. Collector of Central Excise & Customs, New Delhi,  [1983] ELT  1261; Shama Engine Valves Ltd. Bombay v.  Collector  of Customs, Bombay,[1984] 18 ELT 533 and Madhusudan  Gordhandas &  Co.  v. Collector of Customs, Bombay, [1987] 29  ELT  904 wherein it has been held that in imposing penalty the requi- site  mens rea has to be established. It has also  been  ob- served  in Hindustan Steel Ltd. v. State of Orissa,  [1970]1 SCR 753 by this Court that: "The discretion to impose a penalty must be exercised  judi- cially. A penalty will ordinarily be imposed in cases  where the party acts deliberately in defiance of law, or is guilty of  contumacious or dishonest conduct, or acts in  conscious disregard  of its obligation; but not, in cases where  there is a technical or venial breach of the provisions of the Act or  where the breach flows from a bona fide belief that  the offender  is not liable to act in the manner  prescribed  by the statute." 401     In the instant case, even if it is assumed for arguments sake that the stone slabs imported for home consumption  are marble still in view of the binding arrived at by the Appel- late  Tribunal that the said product was imported on a  bona fide belief that it was not marble, the imposition of such a heavy fine is not at all warranted and justifiable.     In  the premises aforesaid, we allow the appeal and  set aside the judgment and order passed by the Appellate  Tribu- nal  and  direct the Tribunal to release the  goods  to  the appellant forthwith. We also direct the Tribunal to  release the  personal  bond  given by the Appellant  for  a  sum  of Rs.2,50,000 on the basis of which one container  wasreleased as  per order of this Court dated October 25, 1989 and  also to  release the appellant from payment of detention  charges and  demurrage  for retaining the goods. In  the  facts  and circumstances  of  the  case there will be no  order  as  to costs. R.S.S.                                   Appeal allowed. 402