COMMISSIONER OF COMMERCIAL TAX, U.P. versus M/S. A.R. THERMOSETS (PVT.) LTD.
[2016] 4 S.C.R. 724, Supreme Court of India, 2016
Outcome: Dismissed (Dismissed)
Segment: Ratio
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[2016] 4 S.C.R. 724 
COMMISSIONER OF COMMERCIAL TAX, U.P. 
v. 
MIS. A.R. THERMOSETS (PVT.) LTD. 
(Civil Appeal No. 2650 of2016) 
SEPTEMBER 06, 2016 
[DIPAK MISRA AND PRAFULLA C. PANT, JJ.) 
VAT Act, 2008: 
Schedule II; Part A Serial no.22 - Bitumen emulsion - Whether 
··bitumen emulsion" is covered within Entry 22 of Schedule II which 
only refers to "bitumen" - Held: Bitumen emulsion comes into 
existence when bitumen is treated with emulsifiers and other 
chemicals to attain a liquid form - Bitumen consi~ts of four forms 
of variants, namely, solid bitumen, polymer bitumen, crumbier rubber 
modified bitumen and bitumen emulsion - Entry 22 does not exclude 
or specifY that it would not include bitumen of all types and varieties 
- Entry in question uses the word •'bitumen" without any further 
stipulation or qualification - Therefore, it would include any product 
which shares the composition identity, and in common and 
commercial parlance is treated as bitumen and can be used as 
bitumen - When applying the three tests, namely, identity, common 
parlance and end use to the goods and the Entry in question, bitumen 
emulsion would be covered by the Entry bitumen - U.P. Trade Tax 
Act, 1948 - s.11. 
Classification of goods - Matching of the goods with the Entry 
or Entries in the Schedules is tested on the basis of identity of the 
goods in question with the Entry or the contesting entries and by 
applying the common parlance test, i.e., whether the
goods as 
understood in commercial or business parlance are identical or 
similar to the description of the Entry. 
Dismissing the appeal, the Court 
HELD: 1.1 Bitumen emulsion, as per Indian standards ICS 
293.08.0.20 published by the Bureau of Indian Standards is a 
destruction of very fine particles in an aqueous medium. 
According to report dated 11.4.2008 of Harcourt Butler 
Technological Institute, Kanpur, when a state of liquefaction is 
724
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
THERMOSETS (PVT.) LTD. 
achieved and the same is constant for a longer period, it can be 
used under diverse moisturic conditions and has a very wide range 
of applications such as surface dressing of low volume roads, 
curing purposes base for high volume roads, surface dressing, 
tack coat, premix carpets, soil stabilization, etc. 
[Paras 13, 17] 
[732-C-D; 733-D-E] 
1.2 A reading of the definitions and the scientific text of 
bitumen and bitumen emulsion clearly reveal that bitumen in its 
original form is solid but melts when heated, for it is used in 
molten stage. Bitumen emulsion comes into existence when 
bitumen is treated with emulsifiers and other chemicals to attain 
a liquid form. It has a huge advantage and add benefit because it 
is not to be heated and detained in its liquid form and has better 
stability and thus, saves time and cost components. That apart, 
it ensures its use at the stage of application. It is comparatively 
less hazardous. Bitumen consists of four forms of variants, namely, 
solid bitumen, polymer bitumen, crumbier rubber modified 
bitumen and .bitumen emulsion. Entry 22 does not exclude or 
specify that it would not include bitumen of all types and varieties. 
[Para 18] [734-A-D] 
2. Matching of the good with the Entry or Entries in the 
Schedules is tested on the basis of identity of the goods in 
question with the Entry or the contesting entries and by applying 
the common parlance
test, i.e., whether the goods as understood 
in commercial or business parlance are identical or similar to the 
description of the Entry. Where such similarity in popular sense 
of meaning exists, the generic entity would be construed as 
including the goods .in question. Sometimes on certain 
circumstances the end use test, i.e., use of the good and its 
comparison with the Entry is applied. The Entry in question uses 
the word "bitumen" without any further stipulation or qualification. 
Therefore, it would include any product which shares the 
composition identity, and in common and commercial parlance is 
treated as bitumen and can be used as bitumen. When applying 
the three tests, namely, identity, common parlance and end use 
to the goods and the Entry in question, bitumen emulsion would 
be covered by the Entry bitumen. Bitumen emulsion matches 
the Entry as it is only one of the varieties of bitumen. Bitumen 
emulsion is processed bitumen, but the process has not changed 
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[2016] 4 S.C.R. 
its composition, commercial identity or its use. Bitumen emulsion 
is regarded and performs the same function as bitumen. As a 
result of processing, neither the primary character nor the 
composition is lost. Emulsification only eases and provides 
proficiency to the use of application of bitumen. Hence, in popular 
and commercial sense, bitumen emulsion is nothing but bitumen, 
which is in liquid form and is user friendly. 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. (Paras 19, 20, 24) (734-F-H; 735-A-B; 736-E) 
State of Maharashtra v. Bradma of India Limited (2005) 
2 SCC 669; Collector of Central Excise, Shillong v. 
Wood Craft Products Ltd. 1995 (2) SCR 797 : (1995) 3 
SCC 454; Hindustan Poles Corpn. v. Commissioner of 
Central Excise, Calcutta 2006 (3) SCR 461 : (2006) 4 
SCC 85; Commercial Taxes Officer v. Jalani Enterprises 
2011 (3) SCR 951 : (2011) 4 SCC 386; Collector of 
Customs and others v. Kumudam Publications (P) 
Limited and others (1998) 9 SCC 339; Indian Tool 
Manufacturers v. Asstt. Collector of Central Excise, 
Nasik and others 1994 (4) Suppl. SCR 1: (1994) Supp
(3) SCC 632; Commissioner of Ce11tral Excise, Cochin 
v. Mannampalakkal Rubber Latex Works (2007) 217 
ELT 161 (SC) - relied on. 
Hindustan Aluminium Corporation Ltd. v. State of Uttar 
Pradesh and another 1982 (1) SCR 129 : (1981) 3 
sec 578 - held inapplicable. 
CST v. Ashok Grah Udyog Kendra Private Ltd. (2004) 
UPTC 1827; CST v. Bechu Ram Kishori Lal (1976) 36 
STC 236; Mis lndodan Milk Products v. Commissioner 
Sales Tax (1974) 33 STC 381; Commissioner of Central 
Excise, Bangalore v. Osnar Chemical Private Limited 
2012 (2) SCR 1035 : (2012) 2 SCC 282; Sonebhadra 
Fuels v. Commissioner, Trade Tax, U.P., Lucknow 2006 
(4) Suppl. SCR 213 : (2006) 7 SCC 322; N. Eswari v.
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
727 
THERMOSETS (PVT.) LTD. 
K. Swarajya Lakshmi 2009 (14) SCR 500 : (2009) 9 
A 
SCC 678; Allied Bitumen Complex (India) Private 
Limited v. Collector of Central Excise, Calcutta - 1 
(1997) 90 ELT 374 (Tri); SR Projects Limited v. 
Commissioner of Commercial Taxes (2013) 63 VST 49 
(Kar); MP. Agencies v. State of Kera/a 2015 (2) 
B 
SCR1061: (2015) 7 SCC 102 - referred to. 
Case Law Reference 
(2004) UPTC 1827 
referred to 
Para 4 
(1976) 36 STC 236 
relied on 
Para 4 
(1974) 33 STC 381 
referred to 
Para 4 
c 
2012 (2) SCR 1035 
referred to 
Para 6 
2006 (4) Suppl. SCR 213 
referred to 
Para 8 
2009 (14) SCR 500 
referred to 
Para 8 
(2005) 2 sec 669 
relied on 
Para 22 
D 
1995 (2) SCR 797 
relied on 
Para 22 
2006 (3) SCR 461 
relied on 
Para 22 
2011 (3) SCR 951 
relied on 
Para 23 
(1998) 9 sec 339 
relied on 
Para 25 
E 
1994 (4) Suppl. SCR 1 
relied on 
Para 25 
(2007) 217 ELT 161 (SC) 
relied on 
Para 25 
1982 (1) SCR 129 
held inapplicable Para 26 
(1997) 90 ELT 374 (Tribunal) referred to 
Para 27 
F 
(2013) 63 VST 49 (Kar) 
referred to 
Para 27 
2015 (2 ) SCR 1061 
referred to 
Para 27 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2650 of 
2016. 
From the Judgment and Order dated 30.08.2012 of the High Court 
G 
of Judicature at Allahabad in Commercial Tax Revision No. 1156 of 
2009. 
Pawan Shree Agarwal, Abhinav Malik, Ravi Prakash Mehrotra, 
Advs. for the Appellant. 
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Kavin Gulati, Sr. Adv., Avi Tandon, Rohit Sthalekar, Santosh K. 
Gupta, T. Mahipal, Advs. for the Respondent. 
The Judgment of the Court was delivered by 
DIPAK MISRA, J. I. In this appeal, by special leave, the 
Revenue has called in question the legal sustainability of the judgment 
and order passed by the High Court of Judicature at Allahabad in 
Commercial Tax Revision no. 1156 of2009 preferred by the assessee-
respondent under Section 11 of the U.P. Trade Tax Act, 1948 (for brevity, 
'the 1948 Act') read with Sections 81 and 58 of the VAT Act, 2008 (for 
short, 'the VAT Act') whereby the learned Single Judge has allowed the 
revision negativing the stand put forth in opposition by the State to the 
stance highlighted by the assessee. 
2. The facts on which the controversy rests is in a narrow compass. 
The respondent manufactures "bitumen emulsion". It filed an application 
before the Commissioner, Commercial Taxes, Lucknow, U.P. under 
Section 59 of the VAT Act seeking a clarification about the rate of tax 
applicable to the sales of bitumen emulsion. The Commissioner of 
Commercial Taxes, vi de order dated 23 .1.1999 opined that bitumen 
emulsion is an unclassified commodity and, therefore, is excisable to tax 
at the rate of 12.5% as it would fall under the residuary Entry. 
3. Being aggrieved by the order dated 23.1.1999, the respondent 
preferred Appeal No. 6 of2009 under the VAT Act before the
Tribunal 
Commercial Taxes, U.P., Lucknow (for short 'the tribunal') which was 
heard by the Full Bench. It was contended before the tribunal by the 
assessee-appellant therein that bitumen as a commodity is taxed at 4% 
under Serial no. 22 Part A of Schedule II to the VAT Act and bitumen is 
found in solid state and to bring it in the liquid form, water is added to it 
and very little quantity is used in the process. Elaborating the said 
submission, it was urged that when bitumen is available in the liquid 
form, it is known as bitumen emulsion and is commonly known as bitumen 
when it is available in the solid form; and both the commodities are 
understood in the same manner in the commercial world and the end use 
is the same and, therefore, the rate of tax to be determined has to be the 
same as prescribed for bitumen. 
4. Be it stated, as per Notification No, ).00 dated 15.1.2000 issued 
under the erstwhile U.P. Trade Tax Act, 1948, bitumen was taxed at 
20%. Under the VAT Act, bitumen has been classified under Part A of
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
729 
THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.] 
Schedule II and the tax leviable is 4%. Before the tribunal, the assessee-
A 
appellant produced reports from Harcourt Butler Technical Institute, 
Kanpur to bolster the stand that there is no difference between the two 
commodities and they are to be categorised as one item, if common 
parlance test is applied. To buttress the submissions, the assessee relied 
upon CST v. As/wk Gra/1 Udyog Kendra Private Ltd. 1, CST v. Bec/1u 
B 
Ram Kislwri Lal', and Mis Indodan Milk Products v. Commissioner · 
Sales Tax3. The tribunal referred to one of its earlier decisions in appeal 
no. 17 of2000 decided on 3.4.2009 and on the basis ofreasons ascribed 
therein dismissed the revision. 
· 5. The dissatisfaction caused by the said adjudication, constrained 
the assessee to approach the High Court in Commercial Tax Revision 
no. 1156 of2009. The High Court formulated the point in issue which 
reads as follows:-
"Whether the Bitumen and Bitumen Emulsion are one and the 
same commodity for the purposes of interpretation of Entry No. 
22 Schedule II Part A of the U.P. Value Added Tax Act, 2002 as 
was originaly enacted i.e. upto enforcement of notification no. 
2758 dated 29.9.2008? 
6. The learned Single Judge took note of the various technical 
materials from the Government approved laboratory which had been 
brought before the tribunal, and opined that the controversy had not 
been appositely
appreciated by the tribunal, for the materials clearly 
establish that bitumen and bitumen emulsion is the same thing. The 
High Court analysed the concept of end use, i.e. the end result of bitumen 
emulsion and came to hold that bitumen emulsion makes the bitumen 
easily usable in its emulsified form and both the items are used in the 
construction of road, etc. It further opined that the identity, commercial 
character and use of both the things are the same, though the tribunal, 
despite having the material before it, proceeded to record findings 
otherwise. That apart, the High Court took note of the decision of this 
Court in Commissioner of Central Excise, Bangalore v. Osnar 
Cllemical Private Limited 4 and ultimately ruled that it could not be 
said that mixing of some material would amount to manufacture unless it 
I (2004) UPTC I 827 
2 (1976) 36 STC 236 
3 ( 1974) 33 STC 381 
• (2012) 2 sec 282 
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results in a change when the commodity concerned cannot be recognised 
as an original commodity but rather new and distinct article emerges 
having different commercial use and identity. On the basis of the 
aforesaid analysis, the High Court allowed the revision and set aside the 
orders of the forums below. 
7. We have heard Mr. Pawan Shree Agarwal, learned counsel for 
the appellant and Mr. Kavin Gulati, learned senior counsel along with 
Mr. Avi Tandon, learned counsel for the respondents. 
8. Criticising the view of the High Court, it is submitted by Mr. 
Agarwal that it has erred in opining that bitumen in its emulsified form 
also remains bitume;:n. He has drawn inspiration from the language used 
in Section 2(t) of the VAT Act to structure the submission that in the 
process of conversion, manufacturing takes place. It is his further 
argument that the decision in Osnar Cllemical Private Limited (supra) 
is not applicable to the present controversy as the said decision was 
rendered in the context of the Central Excise Act, 1944 whereas the lis 
herein hinges on the definition of manufacturing. For the said purpose, 
he has relied upon the authority in Sonebltadra Fuels v. Commissioner, 
Trade Tax, U.P., Lucknow>. Learned counsel for the Revenue contends 
that when the view expressed by the lower authorities is neither perverse 
nor arbitrary, the High Court in exercise ofits revisionaljurisdiction
should 
not have interfered with the findings and for the said purpose he has 
commended us to the authority in N. Eswari v. K. Swarajya Laks/1m1'6. 
Mr. Agarwal has canvassed that the intention of the legislature, as is 
manifest, is to charge a particular rate of tax on bitumen and it remotely 
does not conceive of bitumen emulsion and the Court should not enlarge 
the scope oflegislation or the intention ofit by adding a word to the term 
in the statute, which is not permissible, for a taxing statute has to be 
understood what is clearly stated therein and not what is intended to be 
said. 
9. Mr. Gulati, learned senior counsel appearing forthe assessee in 
support of the view expressed by the High Court would contend that 
four principles relating to interpretation of entries and taxing statute are 
required to be considered in the present case. According to Mr. Gulati, 
they are(a) plain meaning to be given to the taxing provision; (b) burden 
to prove classification in a particular Entry is always on the Revenue; 
s (2006) 1 sec 322 
• (2009) 9 sec 678
COMMISSIONER OF COMMERCIAL TAX, U.P. v. M/S. A.R. 
THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.] 
(c) any ambiguity has to be resolved in favour of the assessee; and (d) 
resort to residuary Entry is to be taken as a last measure. He would put 
forth that in the instant case, the Revenue, prior to taxing the respondent 
under the residuary Entry, did not place any evidence before the 
Commissioner or the tribunal to show that the emulsified bitumen is not 
covered by the expression bitumen as found in Entry 22 of Part A of 
Schedule II to the VAT Act. It is urged by him, whether the activity of 
mixing water with bitumen amounts to manufacture under Section 2(t) 
of the VAT Act is wholly irrelevant for deciding the issue at hand. It is, 
according to Mr. Gulati, where goods are purchased on paying tax and 
process thereafter is undertaken, a question often arises as to whether 
such process amounts to manufacture or not, and if it amounts to 
manufacture, then it would enable the department to levy tax again as 
the commodity in different, a new one, for the purposes of this Act and · 
the tax can be imposed as a single point levy again, but in the case at 
hand, that is not the situation. Learned senior counsel further submits 
that every process involved in the manufacture of a commodity does not 
relate to manufacture of a new product as the end product continues to 
retain the character of the original product. According to him, solely 
because some process has been carried
out, it cannot be held that a new 
product has come into existence. Expatriating the said submission, it is 
put forth that the process of heating on high degree temperature and 
then adding water to it to obtain emulsified bitumen does not alter the 
basic nature of bitumen but only brings a change in physical appearance 
of the product. He has heavily relied on Osnar Chemical Private 
Limited (supra) to highlight that bitumen would include bitumen emulsion. 
10. The principal controversy, as we perceive, is "whether "bitumen 
emulsion" is covered within Entry 22 of Schedule II of the VAT Act 
which only refers to "bitumen"". 
According to Academic Press 
Dictionary of Science and Technology, "bitumen" means:-
"Bitumen Geol.ogy and naturally occurring flammable substance 
mainly of a mixture of hydrocarbons such as petroleum or asphalt. 
Materials I. Originally, a type of asphalt occurring naturally in 
Asia Minor. 2. Any similar black, sticky mixture of hydrocarbons 
occurring naturally or pyrolytically in the atmosphere and 
completely soluble in carbon disulfide: obtained mainly from natural 
oxidized petroleum products or from a petroleum distillation 
process." 
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11. The McGraw-Hill Concise Encyclopedia of Science & 
Technology (Third Edition) defines "bitumen" as under:-
" Bitumen A term used to designate naturally occurring or 
pyrolytically obtained substances of dark to black color consisting 
almost entirely of carbon and hydrogen with very little oxygen, 
nitrogen, and sulphur. Bitumen may be of variable hardness and 
volatility, ranging from crude oil to asphaltites and is largely soluble 
in carbon disulfifde." 
12. The above definitions when appreciated clearly show that 
they expressively define the word "bitumen" as a commodity and explain 
its chemical composition, colour or appearance and qualities and the 
process by which it comes into existence. 
13. Bitumen emulsion, as per Indian standards JCS 293.08.0.20 
published by the Bureau oflndian Standards is a destruction of very fine 
particles in an aqueous medium. Harcourt Butler Technological Institute, 
Kanpur, in its report dated 11.4.2008 states that:-
"The components derived from fractional distillation of petroleum, 
at various temperature levies, are (I) Gas (II) Naphtha, (III) 
Kerosene, (IV) Diesel and lubricating oil, (V) Bitumen and furnace 
oil, and (VI) residue. This bitumen is known as penetration grade 
bitumen because, the specification, by which it is designated, is 
obtained from the penetration test. There could be two other 
forms of Bitumen: Namely (I) Emulsion and (II) Cutback.
In the 
emulsion, bitumen is in the suspension from as small globules in 
water, whereas in cutback, the bitumen is dissolved in suitable 
solvent. In bituminous construction, the choice between penetration 
grade bitumen and the bitumen emulsion is made depending upon 
the factors like, weather conditions, availability, economy and 
available construction time." 
14. The said report discussing about its composition explicates:-
"Bitumen is basically a hydrocarbon with I 0% by weight of atoms 
of sulphur, nitrogen and oxygen, attached to hydrocarbon 
molecules. The carbon content in bitumen is 80-87%. Three 
basic components of bitumen are (I) asphaltene, (II) maltene and 
(III) carbine. The chemical bonds in bitumen are weak and break 
when heat is applied. When it is cooled, it comes back to its 
original structure, but not necessarily the same as before."
! 
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.] 
15. The said report has further proceeded to state that emulsion is 
a two phase system consisting of two immiscible liquids, one being 
dispersed as finite globules in the other. In bitumen emulsion, bitumen 
globules are suspended as emulsion in water with the help of emulsifiers, 
which are used to stabilize the emulsion. Emulsifiers break into ions and 
charge the bitumen particles. Charged particles repel each other and 
the suspension remains stable and this stability remains as long as water 
does not evaporate, freeze or emulsifier does not break. 
16. About the characterization of the bitumen, report states:-
"Bitumen materials have certain characteristics such as (I) 
waterproofing (II) durability, (III) resistance to strong acids and 
(IV) cementing properties. At normal temperature, bitumen is 
semi-solid and takes time to flow. At higher temperatures, it . 
behaves like a viscous liquid, whereas at very low temperature, is 
brittle as glass. Bitumen is believed to behave 'viscoelastically' at 
the standard operating temperature at highways." 
17. According to the report when a state ofliquefaction is achieved 
and the same is constant for a longer period, it can be used under diverse 
moisturic conditions and has a very wide range of applications such as 
surface dressing of low volume roads, curing purposes base for high 
volume roads, surface dressing, tack coat,
premix carpets, soil stabilization, 
etc. The report has clearly stated that the use of bitumen is because of 
its characteristics which includes cementing properties. Be it noted, the 
use of both bitumen and bitumen emulsion is similar, that is, surface 
dressing, tack coat, premix carpets, soil stabilization, etc. The concluding 
remarks of the report is extracted below:-
"Bitumen and Emulsion are two forms of bituminous binders which 
serve some common purposes in road construction and 
maintenance. Bitumen and emulsion are selected for various 
applications depending upon some parameters like weather 
conditions, availability of material, economic aspects and availability 
of construction time. Bitumen needs preheating whereas emulsion 
is ready to use. It has been observed from previous studies that 
the physical properties of the emulsion after natural sun drying 
are almost similar to that of bitumen as the water present. In the 
binder evaporates and makes the matrix harder as obtained with 
the bitumen. It may, therefore, be concluded that bitumen and 
emulsion may be treated at par as far as their significance for 
application. In their respective area is concerned." 
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18. A reading of the aforesaid definitions and the scientific text 
clearly reveal that bitumen in its original form is solid but melts when 
heated, for it is used in molten stage. There is no difficulty to appreciate 
that bitumen emulsion comes into existence when bitumen is treated 
with emulsifiers and other chemicals to attain a liquid form. It has a 
huge advantage and add benefit because it is not to be heated and detained 
in its liquid form and has better stability and thus, saves time and cost 
components. That apart, it ensures its use at the stage of application. 
Needless to say it is comparatively less hazardous. Bitumen consists of 
four forms of variants, namely, solid bitumen, polymer bitumen, crumbier 
rubber modified bitumen and bitumen emulsion. The stand of the Revenue 
is that the word "bitumen" must be conferred a narrow meaning for the 
reason that the legislature has not thought it appropriate to use the prefix 
or suffix like "all", in all forms or of all kinds. It may be immediately 
clarified that bitumen is a generic expression which would include 
different types of bitumen. Revenue, however, as stated earlier, intends 
to apply it restrictively. The said submission has a fundamental fallacy. 
Entry 22 does not exclude or specify that it would not include bitumen of 
all types and varieties. This is not the principle or precept applied to 
interpret the entries under the Schedule
of the Act. We will be deliberating. 
in detail on the said aspect at a later stage. Prior to that, we would like 
to advert to certain other aspects. 
19. At the very inception, we think it absolutely seemly to state 
that the nature and composition of the product or the good and the 
particular entity in the classification table is important. Matching of the 
good with the Entry or Entries in the Schedules is tested on the basis of 
identity of the goods in question with the Entry or the contesting entries 
and by applying the common parlance test, i.e., whether the goods as 
understood in commercial or business parlance are identical or similar to 
the description of the Entry. Where such similarity in popular sense of 
meaning exists, the generic entity would be construed as including the 
goods in question. Sometimes on certain circumstances the end use 
test, i.e., use of the good and its comparison with the Entry is applied. 
20. The Entry in question uses the word "bitumen" without any 
further stipulation or qualification. Therefore, it would, in our opinion, 
include any product which shares the composition identity, and in common 
and commercial parlance is treated as bitumen and can be used as
COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R. 
THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.] 
parlance and end use to the goods and the Entry in question, bitumen 
emulsion would be covered by the Entry bitumen. It is worthy to note 
that bitumen emulsion matches the Entry as it is only one of the varieties 
of bitumen. Bitumen emulsion is processed bitumen, but the process 
has not changed its composition, commercial identity or its use. Bitumen 
emulsion is regarded and performs the same function as bitumen. As a 
result of processing, neither the primary character nor the composition 
is lost. Emulsification only eases and provides proficiency to the use of 
application ofbitumen. Hence, in popular and commercial sense, bitumen 
emulsion is nothing but bitumen, which is in liquid form and is user friendly. 
21. It is perceivable that the legislature has used the word 
"bitumen" and treated it as a separate entity. As we notice, it has not 
indicated that this was done with the intention and purpose to exclude 
some type or variety of bitumen. All bitumen products, which share and 
have common composition and commercial entity, and meet the popular 
parlance test, is, therefore, meant to be covered by the said Entry. In the 
instant case, even the end use test is satisfied. There is nothing in the 
Entry to suggest and show that the Entry is required to be given a 
restrictive and a narrow meaning. 
22. In this regard, another aspect needs to be noted. The Revenue 
does not
rely upon another Entry under which bitumen emulsion can be 
taxed. The Revenue relies upon the residuary Entry which would only 
include goods, which cannot be covered under any other Entry in the 
schedule on application of the three-fold criteria. In the State of 
Maharashtra v. Bradma of India Limitetl', the Court had observed 
that the general principle is that specific Entry would override a general 
Entry. Referring to the decisions in the case of Collector of Central 
Excise, Shillong v. Wood Craft Products Ltd. 8, it has been ruled that 
resort can be made to a residuary heading only when by liberal construction 
the specific Entry cannot cover the goods in question. Referring to 
Entry No. 90 in the said case, which covered tabulating, calculating, 
cash registering, indexing and data processing, etc, other than computer 
machines, it was held that the words did not contain words off imitation 
and would cover every species of cash registering machines, irrespective 
of their mode of operation. In the absence of any limitation or qualification 
as to the different kind of cash registering machines, there was no reason 
for such qualification and limit the Entry to a particular kind of cash 
1 , 2005) 2 sec 669 
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(2016] 4 S.C.R. 
registering machine. However, computers had been specifically excluded 
and were separately dealt with in Entry 97(a). The assessee, who was 
manufacturing electronic cash registers would, therefore, be covered by 
Entry 90 and not by the Entry relating to computers. A similar opinion 
has been expressed in Hindustan Poles Corpn. v. Commissioner of 
Central Excise, Calcutta9 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 10 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 resot1 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 ofingenuous 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 
otlters 11 , 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 otlters
1 ~. The decision in Commissioner of Central 
Excise, Cochin v. Mannampa/akkal Rubber Latex Works 13 
• (2006) 4 sec 85 
10 (2011) 4 sec 386 
11 ( 1998) 9 sec 339 
12 (1994) Supp (3) sec 632 
13 (2007) 217 ELT 161 (SC)
COMMISSIONER OF COMMERCIAL TAX, U.P. v. M/S. A.R. 
THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.] 
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'', 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 ofbrasswares and scraps. In this context, referring 
to Section 3Aofthe 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 -
1'5, which holds that conversion of bitumen into bitumen aqueous emulsion 
amounts to manufacture. Per contra, the respondent-assessee has relied 
on judgment of the Kamataka High Court in SR Projects Limited v. 
Commissioner of Commercial Taxes 16• 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 Kerala17, it has been held 
that the decisions under the Excise Act may have some play and relevance, 
"(1981) 3 sec s1s 
"(1997) 90 ELT 374 (Tribunal) 
16 (2013) 63 VST 49 (Kar) 
17 (2015)7SCC 102 
737 
A 
B 
c 
D 
E 
F 
G 
H
738 
A 
B 
c 
D 
E 
SUPREME COURT REPORTS 
[2016] 4 S.C.R. 
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 modifietl 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. Our
concurrence with the view of the High Court entails dismissal 
of the appeal and, accordingly, it is so directed. There shall be no order 
as to costs. 
Devika Gujral 
Appeal dismissed.