REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.4309-4311 of 2008

M/s. Pleasantime Products and Anr.      … Appellant (s)

Versus

Commissioner of Central Excise,  Mumbai-I                      … Respondent(s)

J U D G M E N T

S. H. KAPADIA, J.

1. This  batch of  civil  appeals  filed by the  assessee  involves common  

issue  of  classification  of  branded  word  game  “Scrabble”  –  whether  the  

product “Scrabble” is classifiable under sub-heading 9503.00 or sub-heading  

9504.90 of the First  Schedule to the Central  Excise and Tariff Act,  1985  

(“CETA”, for short).   

2. Assessee is a proprietary firm engaged inter alia in the business of  

manufacture and trade of toys, games and puzzles of various kinds falling  

under  Chapter  95  of  the  First  Schedule  to  the  CETA.   The  goods  are  

manufactured by the assessee either under their own brand name of “United  

Toys” or under different brand names.  One of the items manufactured by

the assessee is “Scrabble” which is a registered brand name owned by M/s.  

J.W. Spears & Sons Ltd., U.K.  According to the assessee, “Scrabble” is a  

puzzle or in the alternative it is an educational toy falling under sub-heading  

9503.00 of the CETA. Assessee holds a licence from M/s. J.W. Spears &  

Sons Ltd., U.K., to use the brand name(s) “Scrabble” and to manufacture the  

product in India.  Assessee pays royalty to M/s. J.W. Spears & Sons Ltd.,  

U.K., on sale of “Scrabble” in India.  In these civil appeals we are concerned  

with the period March 1996 to June 2001.

3. On  12.4.96,  the  assessee  filed  a  declaration  under  Notification  

No.13/92-CE (NT) dated 14.5.92 informing the Department that the assessee  

manufactured  toys  and puzzles  falling  under  sub-heading  9503.00 of  the  

CETA  which  were  fully  exempt  from  payment  of  excise  duty  as  per  

Notification No.81/90-CE amended by Notification No.56/94-CE.   In  the  

declarations  for the relevant  years in question,  according to assessee,  the  

Department was informed that they were manufacturing items classifiable  

under sub-heading 9503.00 as well as under Heading 95.04 either on their  

own  account  or  by  using  the  brand  name  of  others.   According  to  the  

assessee,  along with the  declaration(s),  a  list  of toys manufactured by it,  

classifiable under sub-heading 9503.00, was also furnished.  In the list the  

assessee stated that “Scrabble” was classifiable under sub-heading 9503.00.  

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According to the assessee, subsequent to the filing of annual declarations,  

visits  were  made  by  the  jurisdictional  Central  Excise  Authorities  and  

samples were collected by the Department.   

4. It  may  be  mentioned  that  in  this  batch  of  civil  appeals  we  are  

concerned with the period March 1996 to June 2001 covered by two show  

cause notices dated 23.3.2001 and 18.1.2002.  On 23rd March, 2001, assessee  

was served with a show cause notice (SCN) issued by the Commissioner  

alleging that “Scrabble” was not a puzzle, it was not a toy but a game and,  

therefore,  it  could  not  be  classified  under  sub-heading  9503.00;  that,  all  

games which contain boards and pieces were classifiable under sub-heading  

9504.90 and since  “Scrabble”  has  board(s)  and pieces  it  was  classifiable  

under sub-heading 9504.90 of the CETA.  The SCN also invoked longer  

period of limitation under Section 11A(1) of the Central Excise Act, 1944  

(“1944 Act”, for short) alleging that the declarations filed by the assessee  

failed to mention that the assessee was manufacturing board games and that  

they had deliberately suppressed the process of manufacturing “Scrabble”.  

On these allegations, the Commissioner made the demand of Rs.22,72,233  

(by  first  SCN)  and  Rs.71,690  (by  second  SCN)  on  the  clearances  of  

“Scrabble” made by the assessee during the period March 1996 to June 2001  

charging excise duty for a longer period of limitation.   In reply to SCN,  

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assessee submitted that the longer period of limitation could not be invoked  

under Section 11A(1) of the 1944 Act as the assessee had stated in their  

declarations  that  they  were  manufacturing  toys  and  puzzles  classifiable  

under sub-heading 9503.00 as well as under sub-heading 9504.90 and they  

had specifically stated in the declarations that they were manufacturing toys  

and puzzles which also bear the brand name of M/s. J.W. Spears & Sons  

Ltd., U.K., and since “Scrabble” was a product of M/s. J.W. Spears & Sons  

Ltd., U.K., it could not be said that they had deliberately suppressed the fact  

that they manufactured “Scrabble”.  On merits, the assessee replied to the  

SCN that even if “Scrabble” would be treated as a table game still it would  

be covered by the genus “puzzles of all kinds” in sub-heading 9503.00.  On  

the basis  of  definitions under  various dictionaries,  internet  search on the  

subject  etc.,  the  assessee  submitted  that  in  any event  “Scrabble”  was an  

educational toy.  Assessee also relied upon various dictionary meanings to  

show that “Scrabble” was a puzzle and, therefore,  classifiable under sub-

heading  9503.00  of  the  CETA.   Assessee  also  furnished  affidavits  of  

purchasers of “Scrabble” who deposed that “Scrabble” was an educational  

toy used for imparting education to children and is treated as a puzzle by  

adults.

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5. Vide orders dated 30.1.02 and 30.9.03, the Commissioner (A) held  

that “Scrabble” was a board game classifiable under sub-heading 9504.90 of  

the  CETA  and  liable  for  levy  of  central  excise  duty  thereunder.   The  

Commissioner further held that the assessee had deliberately suppressed the  

fact  of  manufacturing  and  clearance  of  dutiable  brand  goods  “Scrabble”  

under sub-heading 9504.90 and, therefore,  the longer period of limitation  

was invocable.

6. Aggrieved by the Orders of the Commissioner (A), Assessee went in  

appeal  to  CESTAT bearing  Nos.E/1554/02,  E/1553/02 and E/32/04.   All  

three appeals filed by the assessee were collectively heard by CESTAT and  

disposed  of  by  a  common  Final  Order  No.A/346-348/08/C-I/EB  dated  

21.3.08.  By the said order it has been held that “Scrabble” was neither an  

educational toy nor a puzzle.  In other words, CESTAT has confirmed the  

order  of  the  lower  authorities,  hence  these  civil  appeals  filed  by  the  

Assessee.  

7. As stated above, in this batch of civil appeals we are concerned with  

the  classification  of  an  item called  as  “Scrabble”.   Before  entering  into  

dictionary meaning of the word “puzzle” we need to analyse relevant entries  

in Chapter 95 of the CETA which are reproduced hereinbelow:

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“CHAPTER 95

TOYS, GAMES AND SPORTS REQUISITES;  PARTS AND ACCESSORIES THEREOF

Heading  No.

Sub-heading No. Description of goods Rate of duty

(1) (2) (3) (4) 95.01 9501.00 Wheeled  toys  designed  to  be  

ridden  by  children  (for  example,  tricycles,  scooters,  pedal cars);  dolls’ carriages

NIL

95.02 9502.00 Dolls representing only human  beings

NIL

95.03 9503.00 Other  toys;  reduced-size  (“scale”)  models  and  similar  recreational  models,  working  or not; puzzles of all kinds

NIL

95.04 Articles for funfair, table or  parlour games, including  pintables, billiards, special tables  for casino games and automatic  bowling alley equipment

9504.10 Playing cards NIL 9504.90 Other 16%

(emphasis supplied by us)

8. The said chapter refers to “Toys, Games and Sports Requisites; Parts  

and Accessories thereof”.  Heading Nos.95.01, 95.02 and 95.03 deal with a  

subject-matter, namely, “Toys” whereas Chapter Heading 95.04 deals with  

“Articles for funfair, table or parlour games,  including pintables, billiards,  

special  tables  for casino games and automatic  bowling alley equipment”.  

Broadly, therefore, we have two subject-matters, namely, Toys on one hand  

and  Articles meant for funfair, table or parlour games on the other hand.  

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This conclusion is arrived at by applying a rule of interpretation called as  

“companion test”.  Within the subject-matter “toys”, we find that Heading  

9501 covers ‘wheeled toys’, Heading 9502 covers ‘dolls’ whereas Heading  

9503 covers ‘other toys; reduced-size models; puzzles of all kinds’.  In sub-

heading 9503.00, the expression “other  toys” indicates that all  toys other  

than wheeled toys and dolls would come under sub-heading 9503.00.  In a  

way  sub-heading  9503.00  is  a  residuary  to  sub-headings  9501.00  and  

9502.00.   According to the assessee, sub-heading 9503.00 in turn covers  

three separate and distinct items, namely, other toys; models; puzzles of all  

kinds.   

9. According to the assessee, a “Scrabble” is very similar to a crossword  

or jigsaw puzzle and, therefore, “Scrabble” falls under sub-heading 9503.00  

which refers to “puzzles of all kinds”.  According to the assessee, since the  

expression “other toys” in sub-heading 9503.00 is followed by a semi-colon,  

the said expression “other toys” constitutes one separate and distinct class  

from “puzzles of all kinds” which itself constitutes a different and distinct  

class from “reduced-sized models” because, according to the assessee, each  

of the three classes are followed by a semi-colon.   

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10. The key question which we have to answer is : whether “Scrabble” is  

a puzzle.  In our opinion “Scrabble” is not a puzzle.  Let us first see how  

“Scrabble” was invented and how it evolved.  When the Great Depression  

left architect Alfred Mosher Butts out-of-work, he decided to invent a board  

game.  He did his market research and produced a document entitled “Study  

of  Games”.   He  concluded  that  there  are  three  kinds  of  parlour  games:  

“number games”, such as dice and bingo; “move games”, such as chess and  

checkers; and “word games”, such as anagrams.  He stated that “it is curious  

that while two of the three kinds of table games has yielded such interesting  

developments, the third has produced nothing better than anagrams”.  Thus  

Butts  wanted  to  create  a  game  that  combined  the  vocabulary  skills  of  

crossword  puzzles  and anagrams,  with  the  additional  element  of  chance.  

The game was originally named Lexico, but Butts eventually decided to call  

the  game  “Criss-Cross  Words”.   “Scrabble”  which  means  “to  grope  

frantically”, was trademarked in 1948.  [See: Success at 60, letter by letter  

by Oliver Burkeman at http://www.gulf-times.com].  

11. The difference between a “game” and a “puzzle” is brought out by  

three  distinct  features,  viz.,  outcome,  clue-chance  and skill.   In  a  puzzle  

outcome  is  pre-determined  and  fixed.   It  is  not  so  in  “Scrabble”.   For  

example, in crossword, outcome is pre-determined or fixed.  In a crossword  

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puzzle,  there  is  a  grid  of  squares  and blanks  into  which  words  crossing  

vertically or horizontally are written according to clues. [See: Encyclopaedia  

Britannica].  Similarly, a jigsaw puzzle is a contrivance for testing ingenuity.  

In jigsaw puzzle there is a set of varied, irregularly shaped pieces, which  

when properly assembled form a map or picture.  These are examples to  

demonstrate that in a puzzle the outcome is fixed or pre-determined which is  

not there in “Scrabble”.  A person solving a puzzle, unlike games, does not  

aim at wining by scoring more points but aims at arriving at the solution by  

finding the correct answer or by putting it together properly, and winning or  

losing can only come by way of time taken in solving the puzzle.   

12. The other important  difference is  that  in a “Scrabble” there are no  

clues whereas  in  crossword  puzzle,  as  stated  above,  words  are  written  

according to clues.   

13. One more distinguishing feature to be kept in mind is,  in “Scrabble”  

there  is  an  element  of  chance  and  skill.   The  player  in  “Scrabble”  gets  

lettered tiles to create words by chance.  According to The Concise Oxford  

English Dictionary, Tenth Edition, Revised, “Scrabble” is defined as a board  

game in  which  players  use  lettered  tiles  to  create  words  in  crossword  

fashion.  These tiles are initially kept in a pouch from which every player  

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picks up the tiles.  This is pure matter of chance.  Further, apart from the  

element of chance there is also an element of skill involved in “Scrabble”.  

Each lettered tile has an assigned value and the player has to create words.  

He  tries  to  create  words  which  attain  maximum  value;  tries  to  gain  

maximum value from the lettered tiles which come by chance to him.  This  

is where skill comes in.  Each player uses his skill to achieve the highest  

value.  In other words, if a player has command over language, he can coin  

or create words with highest maximum value.  Thus, these two elements of  

chance and skill are the key elements of a “Scrabble”.   In “Scrabble” no  

clues are given as in the case of crossword or jigsaw puzzles.  In “Scrabble”,  

outcome is not fixed or pre-determined as in the case of puzzle.  The game is  

essentially in the nature of anagrams played on a board (of 15 X 15 squares)  

which uses the concept of a crossword only to the extent of arrangement of  

words formed either vertically or horizontally.  The essential characteristic  

of  crossword  to  lay  down  clues  and  having  a  solution  is  absent  from  

“Scrabble”.  Thus, “Scrabble” is an ingenious mix of anagrams, crosswords,  

chance and skill.  It involves a lot of luck.  One of the crucial ingredients is  

that you cannot know what tiles are on your opponent’s rack or which you  

will draw next.  So, aided by artful strategy there is a good chance of beating  

someone with a better vocabulary.  [See: Spell Bound, by Oliver Burkeman,  

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The Guardian, June 28, 2008 at http://www.guardian.co.uk].   Hence, it  is  

seen that  luck lacks  in  a  puzzle  unlike  in  the  game of “Scrabble”  as  an  

essential constituent.   

14. Hence, in our view, “Scrabble” will not fall in the category or class  

mentioned in sub-heading 9503.00, namely, “puzzles of all kinds”.   

15. Applying  the  dictionary  meaning,  “Scrabble”  is  a  board  game  in  

which players use lettered tiles to create words in a crossword fashion. [See:  

The Concise Oxford English Dictionary, Tenth Edition, Revised].

16. Apart from the analysis of the entries in Chapter 95 and apart from the  

dictionary meaning, discussed above, we may now refer to trade meaning of  

the word “Scrabble” in India.

17. In the case of The Dy. Commissioner of Sales Tax (Law) Board of  

Revenue (Taxes), Ernakulam v. M/s. G.S. Pai and Company – AIR 1980  

SC page 611, this Court held that while interpreting the entries in Sales-tax  

Legislation, it should borne in mind that the words used in the entries must  

be  construed  not  in  any  technical  sense  but  as  understood  in  common  

parlance.  Courts must give the words, used by the legislature, their popular-

sense meaning “that sense which people conversant with the subject-matter  

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with which the statute is dealing, would attribute to it”.  The word in the  

entry must, therefore, be interpreted according to ordinary parlance and must  

be given a meaning which people conversant  with the commodity  would  

ascribe to it.  Applying the said test of “common parlance” or trade meaning  

and  commercial  nomenclatures,  we  are  of  the  view that  “Scrabble”  is  a  

board game.  If one attends any departmental store in Mumbai like Oxford  

or Crossword, “Scrabble” is put in the board game section and not in the  

section  for  puzzles.   Therefore,  even  by  the  test  of  common  parlance  

“Scrabble” is not the puzzle.  It is a game.   

18. The word “game” in commercial sense means an article or apparatus  

used  in  playing  games.   According  to  Words  and  Phrases,  Permanent  

Edition, the word “game” also defines, in certain context,  instrumentalities  

used in playing them.  According to Stroud’s Judicial Dictionary, a “game”  

is a form of a play or sport especially a competitive one, played according to  

rules and  decided by skill and chance.  According to Words and Phrases,  

Permanent Edition, the instruments by which chance may be developed and  

upon which skill  may be exercised are also games –  such as cards,  dice,  

balls, figures, letters, checks etc.  Therefore in a game there is a trial of skill  

or chance between two or more contesting parties according to some rule(s)  

by which one may succeed or fail.  It is a contest for success, for a trial of  

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chance or skill and it embraces every contrivance which has for its object  

sport, recreation or amusement.  These are the various dictionary meanings  

of the word “game”.  Applying the dictionary meaning, we are of the view  

that “Scrabble” is a board game.  It is not a puzzle.  In the circumstances, it  

falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA.

19. In  the  alternative,  it  is  the  case  of  the  assessee  that  they  are  also  

selling what is called as “Junior Scrabble” which is an educational toy which  

falls  in  sub-heading  9503.00  of  the  CETA  under  the  expression  “Other  

Toys”.  It is submitted that “Junior Scrabble” has an element of playfulness  

and recreation.  It is submitted that it is not a process but an article a child  

can play and develop his word power with the scrabble.  It is submitted that  

“Junior Scrabble” is a pictorial dictionary and in it every child has to put the  

character and arch after identifying it.  We find no merit in this contention.  

At the outset, it may be stated that according to the pleadings “Scrabble” is a  

toy in the nature of a puzzle.  This plea indicates that even according to the  

appellant it is a “toy puzzle” and consequently it can only fall in the category  

of “puzzles of all kinds”.  However, as stated above, “Scrabble” (a branded  

word game) is not a puzzle as in “Scrabble” there is no fixed outcome, there  

is no clue as in the case of a puzzle and there is an element of skill and  

chance.    

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20. According  to  “The  Concise  Oxford  English  Dictionary,  Tenth  

Edition”, a “toy” is an object for a child to play with, typically a model or  

miniature,  replica  of  something.   The  gadget  or  a  machine  providing  

amusement is a toy.  In 1914 even a car was a toy for a rich man.  According  

to Stroud’s Judicial Dictionary, Fifth Edition, construction kits for making  

model  are  “toys  and  games”.   According  to  Encyclopedia  Americana  

originally a “toy” was made for adults rather than children, however, by 19th  

century  the  word  came  to  denote  a  child’s  play-thing.   According  to  

Encyclopedia Americana toys are tools of the human child, training him in  

physical  skills,  developing  his  imagination  and  stimulating  his  thinking.  

Predominantly,  it  is  a  play-thing.   Toys  imitate  in  miniature  the  world  

familiar to children.  According to Encyclopedia Americana, “educational  

toys”  includes  kits  for  building  structures  such  as  bridges  and  geodesic  

domes.  Miniature railways on tracks are educational toys.  However, with  

the change in educational methods in the 20th century the pattern of toys has  

undergone a change.  Advance thinking in child welfare has influenced the  

shape of toys and special standards of safety and hygiene are enforced today.  

Kindergarten methods have influenced the pattern of  toys and introduced  

building blocks and constructor sets, colour mosaics and educational jigsaws  

into the definition of the expression “educational toys”.  However, in 20th  

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century also soft toys remain popular like “teddy bear”.  In 20th century vinyl  

plastic  and  foam  rubber  has  revolutionized  the  toy  industry  and  has  

communal toys - climbing frames, splash pools and sand trays.  

21. Thus, going by the dictionary meanings of the word “educational toy”  

one finds that “educational  toys” remain  even today tools of amusement.  

They remain an object for a child to play with.   One needs to apply the  

predominant test in such cases.  Applying these tests, we are of the view that  

even a “Junior Scrabble” will not fall in the category of “educational toys”.  

As stated earlier,  the two main elements of “Scrabble” are – chance and  

skill.  These elements are absent in a toy.  Hence even a “Junior Scrabble” is  

not an educational toy.  It is a game.  It remains a board game and in the  

context  of  the  placement  of  the  entries  in  Chapter  95  which  we  have  

discussed  above,  in  our  view,  even  “Junior  Scrabble”  will  come  under  

Chapter Heading 95.04 of the CETA.

22. Now, coming to the question of extended period of limitation, it is the  

case of the assessee that they bonafidely believed that “Scrabble” is a toy in  

the nature of a puzzle and, therefore, it was classifiable under sub-heading  

9503.00  of  the  CETA.   According  to  the  assessee,  the  longer  period  of  

limitation was not invocable under the proviso to Section 11A(1) of the 1944  

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Act as the assessee had stated in all their annual declarations that they are  

manufacturing toys and puzzles classifiable under Heading 95.04 and sub-

heading 9503.90 of the CETA; particularly, when in their declarations they  

had declared that they were manufacturing toys and puzzles which carried  

the brand name of their licensors M/s. J.W. Spears & Sons Ltd., U.K., and  

since “Scrabble” was a product of M/s. J.W. Spears & Sons Ltd., U.K., it  

cannot be said that they had deliberately suppressed the fact of manufacture  

of “Scrabble”.  We do not find merit in this submission.  Firstly, as stated  

above, the case of the assessee was that they had annexed a list of items  

manufactured by them which included items falling under Headings 95.03  

and 95.04 of the CETA.  This has not been proved.  The list is not there on  

record.  In the circumstances, the authorities below were right in rejecting  

this contention of the assessee.  Secondly, we find that in the declaration(s)  

even though the assessee had doubts about the excisability of the said item  

and even though the assessee  had sought  clarification  as  far  back on 5th  

September, 1994; they did not mention the word “Scrabble” in the body of  

the  declaration(s)  filed  with  the  Department.   They  did  not  mention  the  

details  of  the  game “Scrabble”.   Therefore,  this  conduct  of  the  assessee  

clearly indicates that the assessee herein deliberately declared branded goods  

under sub-heading 9503.00 of the CETA to avoid any enquiry in the matter  

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by the Department.   For  the  above reasons,  we are  of  the  view that  the  

Department was justified in invoking the proviso to Section 11A (1) of the  

1944 Act.   

23. For the above reasons, we find no merit in the civil appeals herein and  

the same are accordingly dismissed with no order as to costs.

……………………………J.                                    (S.H. KAPADIA)

……….………………….J.                                     (AFTAB ALAM)   

New Delhi; November 12, 2009.

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