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PETITIONER: ASIAN PAINTS INDIA LTD.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE

DATE OF JUDGMENT23/03/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 1087            1988 SCR  (3) 339  1988 SCC  (2) 470        JT 1988 (2)     8  1988 SCALE  (1)628  CITATOR INFO :  RF         1991 SC 999  (14)

ACT:      Central Excise  and  Salt  Act,  1944-Section  35L  and Tariff Item  Nos. 14(1)(3)(iv)  and 14  (1)(v) of  the First Schedule-Classification for  purpose of  excise levy-Whether "Decoplast" is  plastic emulsion  paint-Resort to be made to the commercial  and popular meaning attached to the items by those  dealing  in  them-Not  to  scientific  and  technical meaning.      Statutory Construction-Excise  Act-Sales tax Act-Tariff Items  not  defined-Interpretation  of-To  be  construed  in popular sense-Commercial meaning attached to items by people who deal in them to be given.

HEADNOTE: %      The question  as to whether "Decoplast" manufactured by the appellant  is plastic  emulsion paint  or not  had  been determined in  the affirmative  by the Revenue, and revision application before the Government of India was rejected.      Thereafter the  appellant moved  the Bombay High Court, which  directed   the  Customs  Excise  and  Gold  (Control) Appellate Tribunal  to hear  the petition  and to decide the same as  an appeal  before it.  On behalf  of the appellant, elaborate evidence  had been  adduced before  the  Tribunal. Reference was made to the specifications of plastic emulsion paint and  the definition  as given  by  ISI.  The  Tribunal addressed itself  to the  question whether "Decoplast" could be considered as plastic emulsion paint having regard to (i) its composition;  (ii) its  characteristics; (iii)  its uses and (iv)  its reputation  in trade  parlance, and  held that "Decoplast" is a plastic emulsion paint.      Aggrieved by  the order  the appellant  appealed  under Section 35L of the Central Excise and Salt Act, 1944 to this Court, which.      Dismissing the appeal, ^      HELD: 1.1 The commercial meaning has to be given to the expressions in  Tariff items. Where definition of a word has not been given, it

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340 must be  construed in its popular sense. Popular sense means that sense  which people  conversant with the subject-matter with which  the statute  is dealing,  would attribute to it. [343G]      1.2 In  the instant case the use of these two items and their composition,  when analysed,  revealed that in essence they performed  the same functions as plastic emulsion paint does,  though   there  was  some  difference  in  them.  The affidavits of  traders  and  others  were  examined  by  the Tribunal. The  Revenue did  not adduce evidence in rebuttal. Therefore, in view of the composition, characteristics, uses and how  it is  known in the trade, the Tribunal came to the conclusion that "Decoplast" was plastic emulsion paint. This is a  finding of  fact arrived  at  on  relevant  and  valid materials. There was no misdirection in law. [344C-E]      2. In  interpreting items  in statutes  like the Excise Act or  Sales Tax  Act, resort  should be  had, not  to  the scientific and technical meaning of the terms or expressions used, but  to the  popular meaning,  that  is  to  say,  the meaning  attached   to  them   by  those  dealing  in  them. [343H; 344A-B]      C.l. T.,  Andhra  Pradesh  v.  M/s.  Taj  Mahal  Hotel, Secunderabad  [1972]   1  SCR  168  and  Indo  International Industries v.  Commissioner of Sales Tax, U.P., [1981] 3 SCR 294,referred to.      King v.  Planter’s Co.  [1951] CLR  (Ex.) 122  and ’Two Hundred Chests of Tea’, [1824]6 L.Ed. 128, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2456 of 1987.      From the  Order dated  27.5.1987 of  the Customs Excise and Gold  (Control) Appellate  Tribunal, New Delhi in Appeal No. E-2312/85-C.      K.K. Venugopal, R. Narain, S. Ganesh, R. Shah, R.K. Ram and D.N. Mishra for the Appellant.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J. In  this appeal  under section 35L of  the Central  Excise and  Salt Act, 1944 (hereinafter called  ’the   Act’),  the   question  involved  is  whether "Decoplast" manufactured by the Asian Paints India Ltd., the appellant herein, is plastic emulsion paint 341 and, therefore,  classifiable under Tariff Item 14(I)(3)(iv) of the  First Schedule  of the Act as plastic emulsion paint or it  should be classifiable under Tariff Item No. 14(I)(v) that is as "paints not otherwise specified".      The  Customs   Excise  and   Gold  (Control)  Appellate Tribunal (hereinafter  called ’the  CEGAT’), by the impugned order challenged  in this  appeal  held  that  Decoplast  is plastic  emulsion   paint.  The   appellant  felt  aggrieved thereby. In  so holding the Technical Member of the Tribunal observed that  in view  of its  composition, characteristics and uses,  Decoplast should be considered as emulsion paint. The Judicial Member of the Tribunal was of the view that the Revenue had  not adduced  any evidence  of rebuttal  of  the evidence  adduced   by  the   appellant  as  the  commercial understanding but  the evidence adduced by the appellant was intrinsically  untrustworthy.   Therefore,  inspite  of  the affidavits and  absence of  evidence in  rebuttal, he agreed with the  other member  that Decoplast  is plastic  emulsion paint  and   the  appeal   before  the  Tribunal  should  be

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dismissed.      It appears  that  the  appellants  had  filed  revision application before the Government of India against the order of  the   Revenue  authorities.  Ultimately,  the  same  was rejected by  the Government of India. It is not necessary to set out  in detail  all the  events. The appellant had moved the High Court of Bombay against the order of the Government of India  and the  High  Court  by  its  order  directed  as follows:           "The order dated 17th December, 1979 passed by the           Govt. Of  India in  revision in  the  Petitioners’           case  is   set  aside  inasmuch  as  the  Revision           Authorities have  not controverted or rebutted the           evidence in  the form  of affidavits  relied on by           the Petitioners  to show  that their product could           not  be  regarded  as  a  plastic  emulsion  paint           amongst persons  dealing  in  such  products.  The           Revision order  thus failed  to  follow  the  well           established rule  of interpreting  entries in  the           Excise Tariff namely to classify products by their           common parlance and trade understanding and not by           their  scientific  or  technical  meaning.  It  is           necessary that  the  matter  be  remanded  to  the           Revision Authorities  to decide  the  same  afresh           according  to   law.  However,   as  the  Revision           Authority under  the demanded  Central Excise  and           Salt Act  has been  replaced by the Customs Excise           and Gold  (Control) Appellate  Tribunal, the  said           Tribunal is directed to 342           hear the  Petitioners’ Revision  Petition  and  to           determine the  same as  an appeal  before it.  The           Tribunal shall  give an  opportunity to  both  the           petitioners and  the Excise Authorities to rely on           any evidence  and material  either  on  record  or           otherwise  which  they  may  lead  or  produce  in           support of  their case.  The parties will be given           full opportunity  of affidavits  if any during the           hearing".      In pursuance  to the said order, the matter came before the Tribunal. Before the Tribunal it was contended on behalf of the  appellant that  the manufacture  was water  thinable paint but  the same could not be held to be plastic emulsion paint for  the product was not known in the trade as plastic emulsion paint  nor was  it bought and sold so. According to the appellant,  the paint  essentially comprised  of pigment and a  binder or a vehicle and that while the binder and the vehicle were  interchangeable, it was stated that the binder generally referred  to solid  part which  in this  case  was synthetic resin and the solvent could be water or some other diluent. There  was elaborate  evidence adduced  before  the Tribunal on  behalf of  the appellant. Reference was made to the specifications  of plastic  emulsion paint  as given  by ISI. It  was contended  on  behalf  of  the  appellant  that Decoplast could  not be considered as plastic emulsion paint for reasons, inter alia, as follow:           i)   Plastic  emulsion   paint  comprises  of  one                emulsion  as   against   two   contained   in                Decoplast;           ii)  In the  case of plastic emulsion drying takes                place by evap oration of water whereas in the                case of decoplast by oxidation of alkyd;           iii) Trade  did not recognise decoplast as plastic                emulsion paint;           iv)  In  the   literature   published   by   them,

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              decoplast  was   not  described   as  plastic                emulsion paint;           v)   Decoplast was substitute for cement paint;           vi)  Even though  decoplast could be used both for                interior and  exterior use,  it was a product                inferior to plastic emulsion paint;           vii) In case of plastic emulsion paint, primer had                to be  applied to  The surface  to be  pained                while in the case of Decoplast on 343                coating  on  Decoplast  itself  serves  as  a                primer. A      In support  of appellant’s  contention, affidavits  had been filed  by them  and the same were considered in extenso by the  Tribunal. Reference  has also  been made to the Book "Outlines of  Paint Technology" by W.M. Morgan. On the other hand, on  behalf of  the Revenue,  it was stated that it was not disputed  that Decoplast  is a  water soluble  paint and that it had got two resins in emulsion form, namely, Polymer Vinyle Acetate  and copolymer alkyds. Attention was drawn to the  Indian  Standard  Specification  for  plastic  emulsion paint, which is as follow:           "The  material  shall  consist  of  pigments  with           suitable extenders  in suitable  proportions, in a           medium consisting  of any  state synthetic polymer           emulsion in  water with other suitable ingredients           as may  be necessary to produce a material so also           satisfy the requirements of this standard. "      Our attention was also drawn to the definition given by ISI, which is as under:           "Generally, a  paint in  which the  medium  is  an           ’emulsion’ or  an emulsion-like  dispersion of  an           organic binder  in water. Industrially the same is           mainly restricted  to those  paints in  which  the           medium is  an ’emulsion’ of a synthetic resin. The           medium may  also be called a latex by analogy with           a natural  rubber latex, polyvinyl acetat emulsion           paint is a typical example".      The Tribunal  addressed itself  to the question whether Decoplast could  be considered  as plastic emulsion paint in view of (i) its composition; (ii) its characteristics; (iii) its uses; and (iv) its reputation in trade parlance.      It is  well settled  that the commercial meaning has to be  given   to  the   expressions  in  Tariff  items.  Where definition of  a  word  has  not  been  given,  it  must  be construed in  its popular  sense. Popular  sense means  that sense which  people conversant  with the subject-matter with which the  Statute is  dealing, would  attribute to it. See- C.I.T.,  Andhra   Pradesh   v.   M/s.   Taj   Mahal   Hotel, Secunderabad, [1972]  1 SCR 168. This Court observed in Indo International Industries v. Commissioner of Sales Tax, U.P., [1981] 3 SCR 294 that in interpreting items in statutes like the Excise Act or Sales Tax Acts, whose primary object 344 was to  raise revenue  and for  which  purpose  to  classify diverse products,  articles and substances, resort should be had, not  to the  scientific and  technical meaning  of  the terms or expressions used but to their popular meaning, that is to  say, the meaning attached to them by those dealing in them.      Justice Cameron of the Canadian Exchequer Court in King v. Planter’s  Co., [1951]  CLR (Ex.) 122 and the decision of the United  States Supreme  Court in  ’Two Hundred Chests of Tea’,  [1824]   6  L.Ed.   128  emphasised  that  commercial understanding in  respect of  the  tariff  items  should  be

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preferred. It  was observed  that the  legislature does  not suppose our  merchants to  be naturalists  or geologists, or botanists.      In this  case the  use of  these two  items  and  their composition when  analysed, revealed  that in  essence  they performed the same functions as plastic emulsion paint does, though there  was some  difference in  them.  Affidavits  of traders and  others had  been filed. These were examined and accepted by the Technical Member and these were not rejected by the  Judicial Member.  The Revenue  did  not  adduce  any evidence in rebuttal. Therefore, in view of the composition, characteristics, user  and how it is known in the trade, the Tribunal came  to the  conclusion that Decoplast was plastic emulsion paint.  This is  a finding  of fact  arrived at  on relevant and  valid materials.  There was no misdirection in law. Therefore, there is no ground for interference with the said order.      In the  aforesaid view  of the  matter, we  decline  to entertain the  appeal under  section 35L  of  the  Act.  The appeal is, therefore, dismissed. G.N.                                       Appeal dismissed. 345