Appeal No 2702 of 1984
From the Judgment and Order dated 2061984 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No ED SB 271483 C Harish N Salve Ashok H Desai Miss Meenakshi Grover Rajiv Dutta Ravinder Narain Miss Amrit and Miss Punita Singh for JBD  Co for the Appellants
AK Ganguli k
Swami Dilip Tandon and P Parameshwaran for the Respondents
J Common questions of law arose for decision in these 8 appeals need disposal by this judgment
The question relates to classification of toilet soap in Excise item 15 of the First Schedule to the Central Excise and Salt Act 1 of 1944 as amended in 1964 for short the Act 
In addition in CA Nos 81 386 3632 3488 and 1 10289 sequal to its finding they claim refund of excess excise duty
The facts in CA Nos 270284 and 278584 are sufficient for disposal
The appellants laid before Assiatant Collect or classification list claiming toilet soaps Kalpa and Oasis in other appeals Jai OK Moti Rain drop Gold and Ria as bath soaps under Tariff item 15 1 of the First Schedule Household
By notice dated August 31 1982 the Assistant Collector called upon the appellants to show cause as to why they cannot be classified under tariff item 152 other sorts and to levy excise duty at 15 per cent ad valorem as then stood
The appellants after filing their reply thereto and having had personal hearing by proceeding dated November 27 1982 the Asstt
Collector classified toilet soaps as other sorts under tariff item 152 of the Schedule
On appeal the Collector by Order dated January 21 1983 classified them under tariff item No 151 household On second appeal the CEGAT by its order dated June 20 1984 reversed the appellate order and upheld the Asstt
Collector s order Same is the case with regard to all other appeals except resultant claim for refund
In 1954 tariff item No 15A was introduced in the First Schedule of the Act thus 15A Soap  all varieties of the product known commercially as soap 1
Soap in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power or of steam for heating 1 Soap household and laundry a Plain bars of not less than Rupees one pound in weight fives  annas four per cwt
b ther sorts Rupees six  annas 382 two per cwt
2 Soap toilet Rupees fourteen per cwt
3 Soap other then household Rupees and laundry or toilet
fourteen per cwt
This entry as amended in 1964 reads thus  15 Soap  means all varieties of product known commercially as soap  1Soap household and 20 per cent Laundary ad valorem 2 Other sorts 20 per cent ad valorem Ad valorem rate of tarrif varies from time to time as per amendments
Later it was amended in the year 1979 empowering the Govt
to grant exemption under section 8 of the Act
The details thereof are not material for the purpose of these cases
It is seen that in 1954 in Tariff entry 15A soap means all varieties of the product known commercially as soap
Item 1 provided that soap in relation to its manufacture with the aid of power or of steam for heating they were classified as Plain bars other sorts toilet soaps and soap other then husehold or laundry or toilet
While amending the entry in 1964 the language couched therein as seen earliar is thus soap  means all varities of products known commercially as soap
1 Soap household and Laundry 2 Other sorts and graded ad valorem tariff has been prescribed
It is seen that household and laundry soap was subjected to levy of tariff at a lesser rate than other sorts ad valorem
The contention of Sri Ganguli the learned Senior counsel for the union is that statute always kept distinction between soap household and laundry and other sorts
Toilet soap was kept in the packet of other sorts
Household and laundry soaps are being used for cleaning household articles and utensils and washing the clothes while toilet soaps are for bathing purpose
The latter compose of diverse varieties based on personal liking and 383 taste are being used
They are commercially known as other sorts but not household
The legislative history furnishes unimpeachable evidence that soaps used for household and laundry are compendiously treated as a class and are subjected to imposition of lesser tariff
They receive their colour from each other as compendiously known in the commercial parlance that the former are meant for use for household purposes while toilet soap are for use for bath and are subject to higher rate of tariff at par with soap for commercial and industrial purposes
They bear higher rate of tariff
The explanatory note appended to the Finance Bill 1964 would furnish the legislative intendment to amend the tariff item and the treatment meted out to toilet soap for tariff purpose
It is accordingly understood by the department and also by the trade circles
The appellants too intially treated toilet soap as other sorts but later on legal opinion they claimed them as household soaps
The construction adopted by the tribunal is consistent with the standard works on soaps
Ms Harish Salve and Ashok Desai contended that in 1954 toilet soap was treated as an independent tariff sub item and household and laundry soaps were treated as separate entity and separately subjected to varied rates of tariff
On amendment in 1964 toilet soap was omitted as a separate entity and brought toilet soap as part of genus namely soap house hold as a toilet soap is always a household soap
Therefore the reliance by revenue on varied rates of duty or departmental contemporenia expositio have no bearing
The object of classification does not show that toilet soap is not part of the genus soap household unless it is established otherwise
The question therefore emerges whether toilet soap would be household soap within the meaning of Tariff item 151 of the Schedule
Undoubtedly true as contended by Sri Ganguli that preceding amendment toilet soap was classified separately under sub item 2 and assessed to duty accordingly
But by amendment the distinction was wiped out and toilet soap was brought into common hotchpoch
So the contention that the variety of products known commercially as soaps have been enumerated or included compendiously retaining their original colour even after the amendment made in the Finance Act 1964 and falls into other sorts same genus prima facie though attractive on consideration from proper perspective and in its setting in common commercial parlance soap toilet appears to fall in household in sub item 1 of tariff item 15 of the Schedule
It is true that the heading soaps are commercially known to be of diverse variety
The provisions of the Tariff do not determine the relevant entity ofthe goods
They deal whether and under what entry the indentified entity attracts duty
The goods are to be identified and then to find the appropriate heading sub heading under which the identified goodsproducts would be classified
To find the appropriate classification description employed in the tariff nomenclature should 384 be appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon
For exigibility  to excise duty the entity must be specified in positive terms under a particular tariff entry
In its absence be deduced from a proper construction of the tariff entry
There is neither intendment nor equity in a taxing statute
Nothing is implied
Neither can we insert nor anything can we delete but it should be interpreted and construed as per the words the legislature has chosen to employ
in the Act or Rules
There is no room for assumption or presumptions
The object of the parliament has to be gathered from the language used in the statute
The contention that toilet soap is commercially different from household and laundry soaps as could be seen from the opening words of entry 15 needs careful analysis
It is well at the outset to guard against confusion between the meaning and the legal effect of an expression used in a statute
Where the words of the statute are plain and clear there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute
The court would interpret them as they stand
The object and purpose has to be gathered from such word themselves
Words should not be regarded as being surplus nor be rendered Otiose
Strictly speaking there is no place in such cases for interpretation or construction except where the words of statute admit of two meanings
The safer and more correct course to deal with a question of construction of statute is to take the words themselves and arrive if possible at their meaning without in the first place reference to cases for theories of construction
Let us therefore consider the meaning of the word soap household
The word household signifies a family living together
In the simplistic language toilet soap being used by the family as household soap is too simplification to reach a conclusion
Therefore one has to gather its meaning in the legal setting to discover the object which the Act seeks to serve and the purpose of the amendment brought about
The task of interpretation of the statute is not a mechanical one
It is more than mere reading of mathametical formula
It is an attempt to discover the intention of the legislature from the language used by it keeping always in mind that the language is at best an imperfect instrument for the expression of actual human thoughts
it is also idle to expect that the draftman drafted it with divine prescience and perfect and unequivocal clarity
Therefore court would endeavour to eschew literal construction if it produces manifest absurdity or unjust result
In Manmohad Das vs Vishnu Das  a Constitution bench held as follows The ordinary rule of construction is the provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons such as where a leteral construction would reduce the provision to absurdity or prevent manifest intention of the legislature from being carried out
385 In Ramavatar Budhaiprasad etc
vs Assit
Sales Tax Officer Akola and Anr   another Constitution Bench was to consider whether betal leaves are vegetable within the meaning of item 6 of the 11 Schedule to the MP Sales Tax Act
It was contended that betal leaves are vegetable and therefore they are exempted from the payment of sales tax
While construing item 6 this court held that the words must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance
It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning that sense which people conversant with the subject matter with which the statute is dealing would attribute
to it
It is to be construed as understood in common language
Therefore betal leaves were held to be not vegetable
The term vegetables  is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table
The same view was reiterated in Motipur Zamindari Co Pvt Ltd vs State of Bihar 1962 Supp 1 SCR 498 and State of West Bengal and Ors
vs Washi Alumed etc
19773 SCR 149
In Washi Ahmed s case green ginger was held to be vegetable within the meaning of the word used in common parlance
In Motipur Zaminadari s case it was held that sugarcane was not vegetable
In Porritts  Spencer Asia Lid
vs State of Haryana  this Court held that Dryer felts  are not textiles
In that context the principle of understanding the meaning of the word in common parlance was adopted
In Indo International Industries vs Commissioner of Sales Tax
U P  at 297C this Court held that it is well settled that in interpreating items in statutes like the Excise Tax Acts or Sales Tax Acts whose primary object is to raise revenue and for which purpose they classify diverse products articles and substances resort should be had not to the scientific anti technical  meaning of the terms or expression used but to their popular meaning that is to say the meaning attached to them by those dealing in them
If any term or expression has been defined in the emphasis supplied enactment then it must he understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted
In that case the clinical syringes manufactured and sold by the assessee were not considered as glassware  falling within entry 39 of the First Schedule of the Act
In commercial sense Glassware would never comprise of articles like clinical syringes etc or specialised significance and utility
Same view was reiterated in PA Chillai Chidambara Nadar vs Addl
Appellate Asst
Commissioner
Madurai and Anr
 that coconut is neither a fresh fruit nor a vegetable
In khandelwal Metal Works vs Union of India 1985 Supp 1 SCR 750 at 774 B C this Court held that court cannot decide classification 386 of goods under Import Tariff by implication
If rules of interpretation are made in the Act they should be applied and interpretation would be made with their aid for classification
The court held that brass scrap is not metal alloy
Craises on Statute Law 7th Edition at pace 164 specified one of the Rules of Interpretation of Statutes as extracted below The second Rule is that if the statute is passed with reference to a particular trade business or transaction and words are used therein which everybody conversent with that trade business or transaction knows and understands to have a particular meaning in it then the words are to be construed as having that particular meaning In Shri Bharuch Coconut Trading Co and Ors
vs Municipal Corporation of the city of Ahemdabad and Ors 1992 Suppl
1 SCC 298 this Court applied the test as would a householder when asked to bring some fresh fruits or some vegetable for the evening meal bring Coconut too as vegetable Obviously the answer is in the negative
Again when a person goes to a commercial market ask for coconuts no one will consider brown coconut to be vegetable or fresh fruit no householder would purchase it as a fruit
Therefore the meaning of the word brown coconut whether it is a green fruit has to be understood in its ordinary commercial parlance
Accordingly it was held that brown coconut was not green fruit
In interpreting the statute the individual appraisal of the wisdom or unwisdom of a particular course consciously selected by the Legislature is to be put aisde
In Hansraj Gordhan Das vs HH Dave
Collector of Central Excise  Customs and Ors  3 this court held that the operation of the statutory notification had to be judged not by the object which authority had in mind but by the words it had employed to effectuate the legislative interest
The question whether the cotton textiles manufactured by handlooms are entitled to exemption this court held to be positive
It may be noted that marketability of the product is an essential facet to attract dutiability of the goods under the Act
The general purpose or common use of the product though may not be conclusive but may be relevant to classify it in a tariff entry when it was not specifically enumerated in a particular entry or sub entry
The construction of the word must yield in favour of promoting and effectuating the object and purpose of the Act
In Dunlop India Ltd vs Union of India  Ors  this Court found the entry not in residuary but placed in the parentage and relieved it from orphanage
in Anant B Timbodia vs Union of India   this Court was to consider whether imported cloves fell with item 169 in List 8 of Appendix 6 or para 167 of chapter 8 of import and export policy 1990 93
Para 167 of Chapter 8 of import policy clearly provided the heading Import of Spices includes cloves cinnamon cassia nupneg and Mace
Therefore it was held that import permit is necessary
The doctrine of popular sense or trade or its use in making medicine as crude drug 387 was not accepted
Dictionary meaning or meaning given in Indian Pharmaceutical Codex was not accepted as given in in view of specific enumeration
In Superintendent of central Excise Surat vs Vac Metal Corporaion Ltd AIR 1986 SC 1167 when the revenue contended that metalised yarn fell within general Tariff entry 18 yarn and synthetic fibres this court held that entry 15A 2 first schedule of Central Excise  Salt Act s specific entry relating to articles made of plastics of all sorts and metalised yam wax exigible to lessor tariff duty
In Spaco Carburettors India Ltd vs Collector of Customs
Bombay  whether special purpose complex machine tool fell in entry 84 89 or 844548 this court held after taking into account the purpose and use of it that it is a multipurpose machine tool and fell in item 84 4548 of 1st Schedule
The contention of the Revenue which finds favour with the tribunal that the legislative history and memorandum appended to the Finance Bill would furnish aid to the construction of the word household soap is not apposite to the fact situation
When there is ambiguity in the word statement and objects the legislative history the memorandum appended to the Bill and the speech of the mover of the Bill are relevant material to discover the intention intention of the legislature
In Shashikant Laxman Kale and Anr
vs Union of India and Anr
  at 376 para 17 this Court held that for determining the purpose or object of the legislation it is permissible to look into the circumstances which prevailed at the time when _the law was made the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady can be used for the limited purpose of appreciating the background and the antecedent state of affairs leading to the legislation
The memorandum explaining the provisions in the Finance Bill which were not part of the Notes on Clauses  appended to the Statement of Objects and Reasons of the Bill cannot be used to draw support therefrom as it is not an accurate guide of the final Act
In that behalf this Court relied on the statement of law profounded by Francis Bennion in his Statuitory Interpretation Second Edition 1984 at p 529 relied on by the appellants in this case too
In Ajoy Kumar Bannerjee and Ors
vs Union of India and ors
relied on by Sri Ganguli in this behalf renders no assistance to the Revenue
Therein the question was the object of delegated legislation
Therein the memorandum appended to the Bill incorporating section 16 of the was considered in the context of fixation of the pay scales of the employees
The doctrine of reading down placing reliance on Utkal contranctors and Joinery Pvt
and Ors
vs State of Orissa and Ors
 also is of no assistance to the Revenue
The doctrine of reading down has been applied only to sustain the constitutionality of the statute which question is not before us
There is no quarrel with the proposition that in ascertaining the meaning of the word or a clause or 388 sentence in the statute in its interpretation everything which is logically relevant should be admissible
It is no doubt true that the doctrine of Noscitur A Sociis meaning thereby that it is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them ie when two or more words which are susceptible of analogous meaning are clubbed together they are understood to be used in their cognate sense
They take as it were their colour from each other the meaning of the more general is restricted to a sense analogous to a less general
The philosophy behind it is that the meaning of doubtful words may be ascertained by reference to the meaning of words associated with it
This doctrine is broader than the doctrine of ejusdem generis
This doctrine was accepted by this Court in catina of cases but its application is to be made to be context and the setting in which the words came to be used or associated in the statute or the statutory rule
Equally the doctrine of  contemporanea erpositio is also being invoked to cull out the intendment by removing ambiguity in its understanding of the statute by the executive
This Court in a latest case Indian metals  Ferro Alloys Lid
vs Collector of central Excise cited all the decisions upto date and applied the doctrine to the understanding by the revenue of the provisions in income tax Act  In Desh Bandhu Gupta and Ors vs Delhi Stock Exchange  this Court held that this principle can be invoked though the same will not always be decisive on the question of construction
But the contemporaneous construction placed by administrative or executive officers charged with executing the statute although not controlling is nevertheless entitled to considerable weight as highly persuasive
We may also add that if the interpretation is erroneous court would without hesitation refuse to follow such construction
This Court also equally expressed the view that its application was in restricted sense to ancient legislation in J K Cotton Spinning and Weaving Mills Ltd and Anr
vs Union of India and Ors
1987 Supp
SCC 350 and in Doypack Systems Pvt
case  at 1000 F to H In State of Madhya Pradesh vs Ms GS Dall and Flour Mills 1992 Supp
1 SCC 150 at 153 para 18 this Court doubted the application of the doctrine of contemporanea exposito as given to the construction or its applicability to a recent statute that too in the first few years of its enforcement
In this case also the question whether toilet soap is a household soap had arisen within a short period after the Amendment Act 1964 came into force Therefore the understanding by the executive and its interpretation in bringing toilet soap in sub item 2 other sorts instead of item 1 household being of formative period of statutory operation the doctrine became inapplicable
The ratio in Indo Metal case therefore is inapplicable
As rightly contended by Sri Ganguli that the doctrine of placement of a particular goods in a particular tariff item or residuary ie parentage or orphanage ie in placement of toilet soaps 389 in either sub items is not attracted to the facts as it is not a case of residuary items but of sub classification within the same item
Thus considered in the legal setting and commercial parlance we are of the considered view that toilet soap being of everyday household use for the purpose of the bath and having removed its separate identity which it enjoyed preceding amendment and having been not specifically included in other sorts it took its shelter in commercial parlance under household
As stated if any body goes to the market and asks for toilet soap he must ask only for household bathing purpose and not for industrial or other sorts
Even the people dealing with it would supply it only for houshold purpose
It may be true that Household consists of soap used for cleaning utensils laundry used for cleaning soiled clothes and soap toilet is used for bathing but household is compendiously used toilet soap is used only by the family for bathing purpose
Individual preference or choice or teste of a particular soap for bath is not relevant
The soap toilet would therefore fall within the meaning the word of household in sub item 1 of item 15 of the Schedule
The classification shall accordingly be adopted
The appeals are accordingly allowed
the cases are remitted to the primary authority to deal with the matters accordingly
We do not propose to go into the question of refund as it is a matter to be dealt with by the authorities concerned in accordance with the law
 The appellants shall have to apply for refund and the authorities shall be required to deal with it in accordance with law
It is for the authority therefore to decide the question as per law
In the circumstances parties are directed to bear their own costs
VM Appeal allowed


Summary:
The Respondents acquired some lands for setting up Brick Kilns
The lands consisted of Abi cultivated land Barani rainfed land and ghair munkin waste land and the Collector fixed the compensation  at Rs 23600 Rs 17000 and Rs 12000 per acre of the respective lands
On a reference the Civil Court enhanced the compensation to Rs33600 per acre for Abi lands
No enhancement was allowed in respect of the other categories of land
It however allowed solatium at 15  and interest at 6  pa on the enhanced compensation
On appeal a Single Judge of the High Court confirmed the same
These appeals were filed against the said Judgment of the High Court
The appellants contended that the acquired lands had the potential value for residential and commercial purposes and there was no justification for classification of the lands and all the lands shall be treated at party in determination of market value that in a similar case the market value was enhanced to Rs 75000 per acre and in view of the fact that certain mutation entries showed a market value of similar lands ranging from Rs 116000 to Rs 160000 per acre the appellants claimed for compensation of at least at Rs 75000 per acre
On behalf of the Respondents it was contended that the mutation record was not admissible as no one connected with the sale transactions was examined to prove the documents the ground for sales comparative advantages and their respective situation that the lands possessed comparable or better amenities and whether the lands are very near to the lands under 372 acquisition
The compensation awarded by the Collector at the rate of Rs 15525 per acre was upheld by the Reference Court and this offered  a reasonable base to fix the market value of the lands under acquisition
Partly allowing the appeals this Court HELD 1
Neither the appellants nor the Land Acquisition Officer had examined witnesses in proof of the sale transactions referred in the mutation entries
It is settled law that a claimant is entitled to just and reasonable compensation under section 23 To determine the market value of the lands it is necessary to examine witnesses to prove the prevailing prices as on the date of publication of the notification under section 41
The sale transaction of the same Lands or sales of lands situated in the neighbourhood possessed of same or similar advantages would furnish as evidence of comparable sales
It would be possible to have reliable evidence when sale transactions are proved by either the vendor or the vendee and if either of them was not available the attesting witness who had personal knowledge of the transactions is to be examined by producing either the original sale deed or certified copies thereof as evidence
Since at the relevant time it was not being insisted upon none of the witnesses were called to prove the sale deeds or to prove the sale transactions
Thus the documentary evidence of sale transactions or the mutation entries on either side are clearly not admissible and therefore they cannot be looked into and are accordingly excluded from consideration
375 GH 376 H E 2
The situation of the lands dearly shows that the lands are situated very dose to developed Chandigarh planned city and are very near to Sukha Lake and the railway track
They are situated within the freezed zone for future potential development of the city
Though the acquisition was for establishment of Brick Kilns by its very nature the lands may not immediately be capable of being used for residential or commercial purposes but certainly possessed of potential value for future development as residential and commercial purposes
There is a distinction between the lands acquired for Motor Market or Mansa Housing Complex on the one hand and the lands under acquisition on the other hand though the lands are Abi lands going by the situation of the lands the market value of the land acquired for motor market do not render any assistance as a comparable price
This would be of assistance to assess a fair and reasonable compensation in fixing the market value though an amount of guess work is involved
This Court is conscious of the fact that it should not be founded on feats of imagination hedged with 373 undue emphasis of compulsory deprivation of the possession of the lands of the appellant
For the exercise of State s power of eminent domain statutory solatium is the premium the State pays
Therefore the approach should he pragmatic to recompense the appellants to secure alternative lands or to invest in profitable business for rehabilitation
It is seen that the Reference Court awarded a sum of Rs 33600 per acre to Abi land
No doubt there is a steady rise in prices of lands
Considering the totality of the facts and circumstances the market value  Rs 42000 per acre would be just and fair for Abi lands and at Rs 38000 per acre for Barani lands
The market value of ghair munkin land at Rs 12000 per acre awarded by the Civil Court is confirmed
The appellants are entitled to solatium and interest on the inhanced market value at 15 per cent and 6 per cent respectively from the date of taking possession till the date of payment as the award and the order of the Civil Court are prior to the periods mentioned in the Amendment Act 1984 came into force
376GH 371 A F