http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: THE MUNICIPAL CORPORATION FOR THE CITY OF THANE & OTHERS

       Vs.

RESPONDENT: ASMACO PLASTIC INDUSTRIES & ORS.

DATE OF JUDGMENT:       17/07/1998

BENCH: S.C. AGRAWAL, G.B. PATTANAIK, S. RAJENDRA BABU

ACT:

HEADNOTE:

JUDGMENT: WITH CIVIL APPEAL NOS. 3492/92, 3493/92 & 7087-83/93                       J U D G M E N T RAJENDRA BABU, J.      In  these   appeals,  the   question  that   arise  for consideration are as follows:-           (1) Whether for the purpose of      levy of  Octroi duty  P.V.C. Resins      in powder  form  would  fall  under      plastic and  plastic goods, plastic      powder’ in Item 53(c) of Schedule I      to Maharashtra Municipality (Octroi      duty) Rules,  1968 framed under the      Bombay     Provincial     Municipal      Corporation Act, 1949 or under Item      32(c)  of   Schedule   H   to   the      Municipal  Corporation   (Levy  of)      Octori Rules,  1965   framed  under      the  Bombay  Municipal  Corporation      Act, 1888.      (11) whether  for  the  purpose  of      levy  of   Octroi  duty   Synthetic      Hydrocarbon resin  is to be treated      as  Plastic   and  plastic   goods,      plastic powder’  in Item  32(c)  of      Schedule   H   to   the   Municipal      Corporation (Levy  of) Octroi Rules      1965  framed   under   the   Bombay      Municipal Corporation Act, 1888.      Civil Appeals  Nos. 3491-93  of 1992  relate to  Octroi duty levied  by the  Municipal Corporation of Thane which is governed by the Bombay Provincial Municipal Corporation Act, 1949. Octroi  duty is  levied by  the said Corporation under the Maharashtra  municipality (Octroi  duty) Rules, 1968 and the relevant entries which were considered by the High Court were Entry  40 (b)  relating to  "plastic and plastic goods, plastic powder,  etc."  In  the  impugned  judgment  of  the division Bench of the High court has held that P.V.C. Resins powder form does not fall under "plastic" in Entry 53(C) but falls under "chemicals" in Entry 40(b).      Civil Appeals  Nos. 7087-88 of 1993 relate to Municipal

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

Corporation of  Greater Bombay  which is  governed by Bombay Municipal  corporation   Act,   1888   and   the   Municipal Corporation (levy  of) Octroi  Rules  1965.  In  that  case, relevant Entry is Entry 32(c) and in the said entry also the words "plastic  and plastic goods, plastic powder" have been used.      The respondents  filed writ  petitions to  contend that the said  goods are only ingredients used in the manufacture of plastic  goods and,  therefore, are  neither  plastic  in nature nor  powder in  form; that  it is not a resin and all resin must  be regarded  as polymers  and not plastics; that unless other  ingredients like stabilizer and lubricants are used; that  there cannot be solidarity in its finished state and shaping  by flow at some stages of its manufacture; that the  said   product  is  neither  a  perfume  nor  a  toilet requisite, a  colour or a household good and does not answer the description  of goods  listed under the particular class and, therefore,  they contended  that they do not constitute plastic.  They  also  set  out  before  the  High  Court  in challenging the  action of  the respondent certain technical details as  to the  nature of  the commodity in question and contended that  the levy  of Octroi duty on the said product under Item  No. 32(c)  of  schedule  H  or  Entry  53(c)  of schedule I  under relevant  Rules is  not  appropriate.  The substance of  the contentions  put forth  on behalf  of  the respondents is  that plastic  is a  material that contains a high  polymer   usually  synthetic,   combined  with   other ingredients such  as curatives, fillers, reinforcing agents, colorants, plasticisers  etc. While synthetic resin of which the said  product is  but one type is a polymer synthesized, in this  particular case,  for adhesive use. Secondly it was stated that  synthetic  resin  is  a  polymer  itself  while plastic  is   polymer  plus   the  additives   mentioned  as aforesaid. Therefore, they contended that the product in the form of  pellets and  not in  the form  of powder  could  be covered by  Item No. 32 (c) of the Schedule to the said Act. They further  pointed out that hydrocarbon resin is distinct from plastic.  Entry 40(B) relates to chemical of all sorts, while Entry  53(C) relates  to plastic  and  plastic  goods, plastic powder,  etc. The  Bombay High  court held  that the P.V.C. resin  in powder form does not fall under plastic and plastic goods  under Entry  53(c)  or  entry  32(C)  of  the relevant rules  and falls under head chemical under Entry 40 (b) Schedule of relevant Rules. Hence these appeals.      The Octroi  Schedule  framed  in  accordance  with  the Maharashtra Municipality (Octroi duty) Rules, 1968, class II refers to articles set out in the schedule giving the serial number, description of the goods and their rate at which the octroi is levied. The goods are classified under class II as Articles used  for food  and drink  for men  and animals and drugs and  under  serial  No.  14  all  chemicals,  chemical insecticides, surgical  goods of  all  kinds  are  included. Class III refers to articles used for fuel lighting, washing and industrial  use and  under Item  40 (b) chemicals of all sorts are included.      We may  firstly refer to the Scheme of bringing several commodities to  tax  the  several  goods  under  the  Octroi Schedules. In  either rules  several classes  of  goods  are mentioned  in   various  headings  like  articles  of  good, animals,  articles  used  for  fuel  lighting,  washing  and industrial  use,   articles  used  in  the  construction  of building, roads,  and other  structures and articles made of wood or  cane,  perfumes,  toilet  requisites,  colours  and household goods,  tobacco requisites  and so  on. Under each heading several  goods are  mentioned but  we cannot discern

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

any scientific  basis in  bringing  these  goods  under  one heading or the other. For example in class III Articles used for fuel,  lighting, washing  and industrial  use, it is not clear whether  charcoal which is at Item No. 14 when brought into a  local area  which is  to be  used to  industrial use could be  subjected to  octroi duty. similarly, when soap of all kinds  is used in Item No. 17, boot and metal polish are lugged in.  While detailing the rates of duty what is stated is 2  per cent  ad valorem  for washing  soap and  bath soap costing not  more than Rs. 1.25 per cake. It obviously would indicate that  these goods  need not  lighting  or  washing. While soap  is used  as a  washing material,  boot and metal polish cannot  be stated  to be  a washing  material.  Again various  detergents  used  in  washing  clothes,  floor  and utensils are  referred to  Item No.  18.  It  is  not  clear whether it is related only to such goods which are meant for the purpose of industrial use. Viewed from this angle, we do not think  the classification of goods made in these entries are on  any scientific  basis and heading as such in any one group does  not by itself control the meaning to be attached to each of such goods.      In entry  32 (c)  or the rules framed under Corporation Act or  under Entry  53 (c)  of the  Octroi Schedule  framed under  Municipalities   Act,  we   are  concerned  with  the expression "plastic,  plastic goods  and plastic powder". We may contradistinguish  this Entry  with a relatable entry in the  Customs   Tariff  Act   where  the   goods   are   more scientifically categorised.  Under Chapter 39 of the Customs Tariff Act,  expression "plastic  and articles  thereof"  is used to  bring  within  that  heading  the  "Primary  forms, polymers of  ethylene, polymers  of propylene  or  of  other olefins, polymers  of styrene,  vinylacetate or  other vinyl esters". Polymers  of vinyl chloride or of other halogenated olefins in  primary forms  and vinyl  chloride polymers  are also brought in under this heading. In the present enactment when the  expression "plastic,  plastic  goods  and  plastic powder" is  used along  with bakelite and bakelite goods and the manner  in which  the legislature uses these expressions will clearly  indicate that  the intention  is the cover all kinds of  plastic material whether in primary form or in any other secondary form.      Learned counsel  on either  side  relied  on  technical literature on  the matter to impress upon us the strength of their respective  cases.   We  do  not  think  it  would  be appropriate to rely upon such data to interpret the Entry in question  in   one  manner  or  the  other  because  in  tax enactments  when   particular  commodities  are  brought  to taxation the  meaning attributed  to the commodities will be with reference  to their  commercial parlance,  that is,  if those who  deal with  the goods understand the said goods in one manner  or the  other. The  technical material though of course may  be useful  on certain aspects, the same will not be decisive of the matter.      It is  necessary to  advert to  a few  decisions relied upon by  the learned  counsel. In chemicals and Fibres India Ltd. Vs.  Union of India and Others 1982 E.L.T. 917 (Bom), a distinction was  sought to  be drawn  about between  resins, polymers, polymer  plus additives and plastics. The question that  fell  for  consideration  in  that  case  was  whether polyester chips  of textile  grade was  assessable to excise duty under  Item No. 15A of Schedule I of Central Excise and Salt Act,  1944. The  goods were  classified in  a different manner and polymer terene was specifically added therein. In the manufacture polythene films, lay-flat tubings and P.V.C. sheets  and  polyvinyl  chloride  sheets  were  specifically

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

mentioned. In  that context  the court  had to  examine  the various meanings  given to  the  expression  thereunder  and adopted the  nomenclature of  the January  1978  Edition  of Brussels Tariff  Nomenclature. It  was not  disputed in that case that  the polymer  chips fibre  grade  is  a  saturated linear polyester.  Considering the  nature of the product on the material  placed before  the Court,  it was held that it fell within  clause (1)  of Item  No.  51  A  of  the  First schedule to  the  Excise  Act.  On  that  basis  the  resins polymers and polymer additives were separately considered.      In Industrial  Plastic Corporation  Private Limited and Others vs.  union of  India  and  another  1983  E.L.T.  425 (Bom.), distinction between plastic and resin was noted. The expression  "plastic"  was  held  to  be  broader  than  the expression "resin"  but it  was also noticed that both these terms are  used indiscriminately.  Though etymologically and scientifically, the  products such  as clay, glass or rubber could be  considered to be plastic, they were never regarded as such.   Again  the entry  that fell for consideration was item No.  51 A  of the  First Schedule to the Central Excise and Salt Act.      We think  that the  appropriate  manner  in  which  the commodity in  the present  case, namely, plastic powder, has been treated  as a separate entry it is brought to tax under Item No.  32(c) or  53 (c)  to Schedule H under the Relevant Rules. Similar  would be  the  position  with  reference  to Hydrocarbon resins. Even Hydrocarbon resin is treated on the same footing  as a  synthetic plastic  and,  therefore,  the goods in  question cannot  be treated  as plastic  goods  or plastic powder  but as  separate  goods  and  therefore,  we cannot accept  the contention  put forth  on behalf  of  the respondents that  the said  goods  are  neither  plastic  in nature  nor  powder  in  form  and  we  do  not  accept  the contention that Hydrocarbon resin is distinct from plastic.      In view  of the  above discussion, we allow the appeals filed by  the Municipal  Corporation and  Municipal Council, Thane and  set aside  the order  made by  the High  court by declaring the  goods as  falling within  the Entry as stated earlier. In  the circumstances  of the  case, the parties on either side shall bear their respective costs.