Case: Reliance Cellulose Products Ltd Vs. Collector Of Central Excise, Hyderabad

Moreover, the Tribunal has referred to several technical dictionaries and has concluded that the product sodium carboxymethyl cellulose is an ether. In the background of all these facts, we are unable to uphold the contention that the Tribunal has wrongly concluded that the product manufactured by the appellant falls under Tariff Item 15-A. There is ample evidence and technical literature to support the conclusion of the Tribunal and we are not inclined to interfere with the finding made by the Tribunal at this stage 15. The next contention of the appellant was that the Tribunal has failed to consider the way the products of the appellants were known in the trade. It is well settled that excisable commodities have to be understood in the sense in which the market understands them and have to be classified accordingly. This proposition may generally be held to be right but when a technical or scientific term has been used by the legislature, it must be presumed that the legislature has used the term in their technical sense. Tariff Entry 15-A as it stood after its amendment made on 1-3-1982 was "Regenerated cellulose, cellulose nitrate, cellulose acetate and ethers and other chemical derivatives of cellulose, plasticide or not (for example collodions, celluloid)." 16. Regenerated cellulose, cellulose nitrate, cellulose acetate and ethers as well as other chemicals which were derivatives of cellulose have to be understood in the technical sense of the terms. Moreover, it has not been shown that there is a special meaning given to the product of the appellant in the market 17. In the case of Dunlop India Ltd. v. Union of India it was laid down that in interpreting words in a taxing statute, meaning must be given as people in trade and commerce, conversant with the subject, generally treat and understand them. It was further observed that technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, the court should find no difficulty for statutory classification under a particular entry. In that case, it was pointed out that scope of an entry was a matter essentially for determination by the Department. But when extraneous consideration enters the determination, interference by the court was called for. In that case, the dispute was about classification of V.P. Latex. The question was whether V.P. Latex imported by the tyre companies could be classified as rubber in raw state 18. In the case of Indian Cable Co. Ltd. v. CCE it was held that : (SCC p. 615, para 5) "5 .... in construing the relevant item or entry, in fiscal statutes, if it is one of everyday use, the authority concerned must normally, construe it, as to how it is understood in common parlance or in the commercial world or trade circles. It must be given its popular meaning. The meaning given in the dictionary must not prevail. Nor should the entry be understood in any technical or botanical or scientific sense." * 19. A word of caution was added in that judgment at page 615 of the Report which is of significance, "In the case of technical words, it may call for a different approach." 20. In other words, if the word used in a fiscal statute is understood in common parlance or in the commercial world in a particular sense, it must be taken that the Excise Act has used that word in the commonly understood sense. That sense cannot be taken away by attributing a technical meaning to the word. But if the legislature itself has adopted a technical term, then that technical term has to be understood in the technical sense. In other words, if in the fiscal statute, the article in question falls within the ambit of a technical term used under a particular entry, then that article cannot be taken away from that entry and placed under the residuary entry on the pretext that the article, even though it comes within the ambit of the technical term used in a particular entry, has acquired some other meaning in market parlance. For example, if a type of explosive (RDX) is known in the market as Kala Sabun by a section of the people who uses these explosives, the manufacturer or importer of these explosives cannot claim that the explosives must be classified as soap and not as explosive 21. In the case of Chemical and Fibres of India Ltd. v. Union of India 1997 (1) JT 432] the question was whether polymer chips manufactured by the assessee could be classified under Entry 15-A as it stood prior to 28-2-1964 under the heading "Plastics, All Sorts". The Court held that "plastics" was a commercial term and was known in the trade and was used in the trade. The court should not go into the technical analysis of composition and character of a product to decide the nature of the product in preference to the sense in which the market understood it. The court should go by the trade parlance. The Court pointed out that the conclusion drawn by the Court was also supported by the technical literature and dictionaries which were cited before the Court 22. The case before us, is not a case where a commonly understood commercial article like "Plastics" is sought to be given a special meaning by reference to its chemical composition. Cellulose ether has been made specifically taxable under Entry 15-A(1). The product manufactured by the appellant is sodium carboxymethyl cellulose which has been tested and found to be cellulose ether. The question is whether this product will come under Entry 15-A(1). It is not the case of the appellant that this product is known in the market by some other name and that name is to be found in some other entry. The Tribunal was right in holding that SCMC manufactured by the appellant answered the description "Cellulose Ether" and as such was assessable under Entry 15-A(1)

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

Explanation:
0[ds]20. In other words, if the word used in a fiscal statute is understood in common parlance or in the commercial world in a particular sense, it must be taken that the Excise Act has used that word in the commonly understood sense. That sense cannot be taken away by attributing a technical meaning to the word. But if the legislature itself has adopted a technical term, then that technical term has to be understood in the technical sense. In other words, if in the fiscal statute, the article in question falls within the ambit of a technical term used under a particular entry, then that article cannot be taken away from that entry and placed under the residuary entry on the pretext that the article, even though it comes within the ambit of the technical term used in a particular entry, has acquired some other meaning in market parlance. For example, if a type of explosive (RDX) is known in the market as Kala Sabun by a section of the people who uses these explosives, the manufacturer or importer of these explosives cannot claim that the explosives must be classified as soap and not as explosive21. In the case of Chemical and Fibres of India Ltd. v. Union of India 1997 (1) JT 432] the question was whether polymer chips manufactured by the assessee could be classified under Entry15Aas it stood prior to4 under the heading "Plastics, All Sorts". The Court held that "plastics" was a commercial term and was known in the trade and was used in the trade. The court should not go into the technical analysis of composition and character of a product to decide the nature of the product in preference to the sense in which the market understood it. The court should go by the trade parlance. The Court pointed out that the conclusion drawn by the Court was also supported by the technical literature and dictionaries which were cited before the Court22. The case before us, is not a case where a commonly understood commercial article like "Plastics" is sought to be given a special meaning by reference to its chemical composition. Cellulose ether has been made specifically taxable under Entry. The product manufactured by the appellant is sodium carboxymethyl cellulose which has been tested and found to be cellulose ether.The question is whether this product will come under Entry22. The case before us, is not a case where a commonly understood commercial article like "Plastics" is sought to be given a special meaning by reference to its chemical composition. Cellulose ether has been made specifically taxable under Entry. The product manufactured by the appellant is sodium carboxymethyl cellulose which has been tested and found to be cellulose ether.The question is whether this product will come under Entry. It is not the case of the appellant that this product is known in the market by some other name and that name is to be found in some other entry. The Tribunal was right in holding that SCMC manufactured by the appellant answered the description "Cellulose Ether" and as such was assessable under Entry