Case: Commissioner Of Commercial Tax U.P Vs. M/S A.R. Thermosets (Pvt.) Ltd

4 SCC 85 )stating that residuary Entry is made to cover only those category of goods which clearly fall outside the ambit of the main Entry. The opinion proceeds further to state that unless the Revenue can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be made to the residuary Entry.23. In this context, reference to the authority in Commercial Taxes Officer v. Jalani Enterprises (2011) 4 SCC 386 ) would be profitable. While dealing with the question of sales tax/VAT under the Rajasthan Sales Tax Act, it was held that if from records it was established that the product in question could be brought under a specific Entry, then there was no reason to take resort to the residuary Entry. Revenue cannot be permitted to travel to the residuary Entry when a product can be covered under a specific Entry.24. In the present context, when the word “bitumen” has been used as a generic expression, it would be erroneous not to cover a product that is only a type or form of bitumen and retains all its essential characteristics, and treat it as covered by the residuary Entry by some kind of ingenuous reasoning. Taking it outside the purview of the specific Entry is incorrect.25. At this juncture, we may refer to certain pronouncements commended to us by the learned counsel for the appellant. In Collector of Customs and others v. Kumudam Publications (P) Limited and others (1998) 9 SCC 339 ), while adverting to the issue of classification it has been held that it would not be correct to say that in no case can the end use or function of the goods be relevant in the question of classification, as was held in Indian Tool Manufacturers v. Asstt. Collector of Central Excise, Nasik and others (1994) Supp (3) SCC 632). The decision in Commissioner of Central Excise, Cochin v. Mannampalakkal Rubber Latex Works (2007) 217 ELT 161 (SC))emphasizes and holds that in the matters of classification, “composition test” is important test and the “end user test” would only apply if the Entry says so. We have referred to the aforesaid authorities for sake of completeness only because we have applied the “composition test” as well as the “commercial or common parlance” test in addition to the “end use test”.26. Reliance placed by the Revenue on the decision in the case of Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh and another (1981) 3 SCC 578 ), is of no assistance, for in the context of the particular notification it was held that aluminium ingots, billet, roll products, extrusion, etc. would not be covered by the exemption, which was granted to all kinds of minerals, ore, metals or alloys, including sheets and circles used in the manufacture of brasswares and scraps. In this context, referring to Section 3A of the U.P. Sales Tax Act and the notification as applicable, it was held that the earlier notifications issued from time to time would show that the expression “metal” had been employed with reference to metal in its primary sense. The principle laid down in the said authority is in the context in issue and is based upon the schematic arrangement indicated and specified in the notification under consideration therein. That apart, the said decision also emphasizes that a word describing a commodity in a sales tax statute should be interpreted according to its popular sense and words of everyday use must be construed not in their scientific or technical sense, but as understood in common parlance.27. We have also been commended to a judgment of the Customs, Excise and Service Tax Appellate Tribunal in Allied Bitumen Complex (India) Private Limited v. Collector of Central Excise, Calcutta – 1 (1997) 90 ELT 374 (Tribunal), which holds that conversion of bitumen into bitumen aqueous emulsion amounts to manufacture. Per contra, the respondent-assessee has relied on judgment of the Karnataka High Court in SR Projects Limited v. Commissioner of Commercial Taxes (2013) 63 VST 49 (Kar). However, it is not necessary to dilate on the said aspect for there is a distinction between what can be regarded as manufacture under the Excise Act and what is the sale or transfer of property in goods under the Sales Tax Act and the Value Added Tax Act. In M.P. Agencies v. State of Kerala (2015) 7 SCC 102 ), it has been held that the decisions under the Excise Act may have some play and relevance, but the question of manufacture by itself would not be per se relevant under the Sales Tax or Value Added Tax Act. Thus, there is a distinction between what is exigible to tax under the excise law and the incidence of tax when the legislation relates to sales or value added tax. What is relevant is the classification. In this context, the verdict in Osnar Chemical Private Limited (supra) is significant. The said authority refers to two other variants of bitumen, namely, polymer modified bitumen and crumbled rubber modified bitumen which are created by the process of mixing of polymer and additive to bitumen. It has been held that the aforesaid processes result in improvement of the quality of bitumen and there is no change in the characteristics or identity of bitumen so as to transform bitumen into a new product having an identity, characteristic and use. It has been ruled therein that there is a fallacy in the argument raised by the Revenue that bitumen per se would only include its solid hard form which melts at high temperature and not bitumen emulsion. The two varieties and types carry the same composition, do not differ in character and have the same commercial identity i.e. bitumen. That apart, the use or end use test is also satisfied.28. In view of the aforesaid analysis, we find the view expressed by the High Court to be absolutely flawless and, accordingly, we concur with it.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]24. In the present context, when the wordhas been used as a generic expression, it would be erroneous not to cover a product that is only a type or form of bitumen and retains all its essential characteristics, and treat it as covered by the residuary Entry by some kind of ingenuous reasoning. Taking it outside the purview of the specific Entry isthere is a distinction between what is exigible to tax under the excise law and the incidence of tax when the legislation relates to sales or value added tax. What is relevant is the classification.said authority refers to two other variants of bitumen, namely, polymer modified bitumen and crumbled rubber modified bitumen which are created by the process of mixing of polymer and additive to bitumen. It has been held that the aforesaid processes result in improvement of the quality of bitumen and there is no change in the characteristics or identity of bitumen so as to transform bitumen into a new product having an identity, characteristic and use. It has been ruled therein that there is a fallacy in the argument raised by the Revenue that bitumen per se would only include its solid hard form which melts at high temperature and not bitumen emulsion. The two varieties and types carry the same composition, do not differ in character and have the same commercial identity i.e. bitumen. That apart, the use or end use test is also satisfied.28. In view of the aforesaid analysis, we find the view expressed by the High Court to be absolutely flawless and, accordingly, we concur with it.