Full Judgment Text
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PETITIONER:
OSWAL AGRO MILLS LTD. ETC. ETC.
Vs.
RESPONDENT:
COLLECTOR OF CENTRAL EXCISE AND ORS.
DATE OF JUDGMENT27/04/1993
BENCH:
RAMASWAMY, K.
BENCH:
RAMASWAMY, K.
SAHAI, R.M. (J)
CITATION:
1993 AIR 2288 1993 SCR (3) 378
1993 SCC Supl. (3) 716 JT 1993 (3) 260
1993 SCALE (2)660
ACT:
%
Central Exercises and Salt Act, 1944:
First Schedule, Item 15-Soap-Toilet Soap-"Household" and
"other sorts"-Interpretation of "Toilet Soap"-Whether
household soap within the meaning of Tariff item 15 (1).
Interpretation of statutes;
In interpreting a provision nothing to be added or deleted-
Object of legislature to be gathered from the language used.
HEADNOTE:
The appellant-Mills claimed that the "toilet soaps" produced
by them were bath soaps failing under tariff item 15 (1) of
the First Schedule (Household) to the Central Excises and
Salt Act, 1944, but the Assistant Collector classified the
same as "other sorts" under tariff item 15(2) of the
schedule attracting higher levy of excise duty. On appeal,
the Collector held that they fell under tariff item No. 15
(1) "household".
On second appeal, the Tribunal reversed the appellate order,
against which the appellant-Mills preferred the instant
appeals.
The appellants 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-, that on amendment in
1964 toilet soap was omitted as a separate entity and
brought toilet soap as part of genus, namely, soap
"household", as toilet soap has always been a household
soap.
The respondents contended that statute always kept
distinction between soap "household and laundry" and "other
sorts" and that toilet soap was kept in the packet of other
sorts; that household and laundry soaps were being used for
cleaning household articles and utensils and washing the
clothes, while toilet soaps are for bathing purpose. The
latter, composed of diverse varieties based on personal
liking and taste, are being used; and that they are
commercially known as other sorts but not household.
379
Allowing the appeals, and remitting the matter to primary
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authority, this Court,
HELD:1.1 The provisions of the Tariff do not determine the
relevant entity of the goods. They deal whether and under
what entry, the identified entity attracts duty. The goods
are to be identified and then to find the appropriate
heading, sub-heading under which the identified goods/prod-
ucts would be classified. To find the appropriate
classification the description employed in the tariff
nomenclature should he 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 he specified in
positive terms under a particular tariff entry. In its
absence it has to be deducted from a proper construction of
the tariff entry. There is neither intendment nor equity in
a taxing statute. Nothing is implied. 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 assumptions or presumptions.The object of Parliament has
to be gathered from the language used in the statute. (383-
H, 384-A-B)
1.2"toilet soap" being of everyday household use for the
purpose of the bath and having removed its sperate identity
which it enjoyed preceding amendment and having been not
specifically included in’other sorts’, it took its shelter
In commercial parlance under household’. If any body goes
to the market and asked for toilet soap, he must asked any
for household bathing purpose and not for industrial or
other sorts. Even the people dealing with it would supply
it only for household 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 house-hold is compendiously used,
toilet soap is used only by the family for bathing purpose.
Individual preference or choice or taste 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. (384-B-C,)
Ajoy kumar Bannerjee and-Ors. v. Union of India and Ors.,
[1984] 3 SCC 127; and Urkal Contractors and Joinery Pvt.
Ltd. and Ors. v. State of Orissa and Ors.: [1987] 3 SCC 279,
distinguished
Manmohan Das v- Vishnu Das, AIR 1967 SC 643; Ramavatar
Budhaipasad etc. v. Asstt. Sales Tax Officer, Akola and
Anr, [1962] 1 SCC 279; Motipur Zamindari Co. (Pvt. ) Ltd. v.
State of Bihar:
380
[1962] Supp. 1 SCR 498; State of West Bengal and Ors. v.
Washi Ahmed etc., [1977] 3 SCR 149; Porritts & Spencer
(Asia) Ltd. v. State of Haryana, [1979] 1 SCR 545; Indo
International Industries v. Commissioner of Sales Tax, U.P.,
[1981] 3 SCR 294 at 297 C; P.A. Chillai Chidambara Nadar v.
Addl. Appellate Asstt. Commissioner, Madurai and Anr.,
[1985] 4 SCC 30; Khandelwal Metal Works v. Union of India,
[1985] Supp. 1 SCR 750 at 774 B-C; Shri-Bharuch Coconut
Trading Co. and Ors. v. Municipal Corporation of the city of
Ahmedabad and Ors., [1992] Supp. 1 SCC 298; Hansraj Gordhan
Das v. H.H. Dave Assti. Collector of Central Excise &
Customs and Ors., [1969] 2 SCR 253; Dunlop India Ltd. v.
Union of India & Ors. [1976] 2 SCR 98; Anant B. Timbodia v.
Union of India, [1992] 1 Scale 527; Superintendent of
Central Excise, Surat v. Vac Metal Corporation Ltd., AIR
1986 SC 1167; Spaco Carburettors (India) Ltd. v. Collector
of Customs, Bombay, (1988) 3 SCR 37; Shashikant Laxman Kale
and Anr. v. Union of India and Anr., [1990] 4 SCC 366 at 376
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Para 17; Mitra Prakashan Pvt. Ltd. v. Collector of Customs,
(1991) 51 E.L.T. 115 para 15; Desh Bandhu Gupta and Ors. v.
Delhi Stock Exchange: [1979] 3 SCR 373; J.K. Coton Spinning
and Weaving Mills Ltd. and Anr. v. Union of India and Ors.,
[1987] Supp. SCC 350; Dovack Systems Pvt. Ltd. etc. v.
Union of India & Ors. etc.[1988] 2 SCR %2 at 1000 F to H and
State of Madhya Pradesh v. M/s G. S. Dall and Flour Mills:,
[1992] Supp. 1 SCC 150 at 153 para 18, referred to,
Craises on Statute Law (7th Edition) at Page 164, referred
to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2702 of 1984.
From the Judgment and Order dated 20.6.1984 of the Customs
Excise and Gold (Control) Appellate Tribunal, New Delhi in
Appeal No. ED (SB) 2714/83 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.
A.K. Ganguli, k.Swami, Dilip Tandon and P. Parameshwaran for
the Respondents.
381
The Judgment of the Court was delivered by
K. RAMASWAMY. 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 C.A. Nos. 81 3/86, 3632-34/88 and 1
102/89 sequal to its finding, they claim refund of excess
excise duty. The facts in C.A. Nos. 2702/84 and 2785/84 are
sufficient for disposal. The appellants laid before
Assiatant Collect or classification list claiming "toilet
soaps" Kalpa and Oasis, in other appeals Jai, O.K. 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 15(2) 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 15(2) of the Schedule. On appeal the Collector
by Order dated January 21, 1983 classified them under tariff
item No. 15(1) "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:
"15(A) ’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.
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(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-:
(1)Soap, 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
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is consistent with the standard works on soaps. M/s 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 15(1) 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 goods/products 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
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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 v.
Vishnu Das, AIR 1967 SC 643 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. v. Assit. Sales Tax Officer,
Akola and Anr. [1962] 1 SCR 279, another Constitution Bench
was to consider whether "betal leaves" are "vegetable"
within the meaning of item 6 of the 11 Schedule to the M.P.
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. v. State of Bihar [1962] Supp. 1
SCR 498 and State of West Bengal and Ors. v. Washi Alumed
etc. [1977]3 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. v. State of Haryana, [1979] 1 SCR 545 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 v. Commissioner of Sales Tax. U. P., [1981] 3
SCR 294 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
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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 P.A. Chillai
Chidambara Nadar v. Addl. Appellate Asst. Commissioner.
Madurai and Anr. [1985] 4 SCC 30 that coconut is neither a
fresh fruit nor a vegetable. In khandelwal Metal Works v.
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. v. 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 v. H.H. Dave.
Assn. Collector of Central Excise & Customs and Ors., [
1969] 2 SCR 25 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. v.
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Union of India & Ors. [1976] 2 SCR 98 this Court found the
entry not in residuary but placed in the parentage and
relieved it from orphanage. in Anant B. Timbodia v. Union of
India, [1992] 1 Scale 527, 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 v. 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. v.
Collector of Customs. Bombay [1988] 3 SCR 37 whether
special purpose complex machine tool fell in entry 84-89 or
84,45/48, 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, 45/48 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. v. Union of India and Anr., [1990] 4 SCC 366 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. v. Union of India and ors. [1984] 3 SCC
127 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 s. 16 of the General
Insurance Business (Nationalisation) Act, 1972 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. Lid. and
Ors. v. State of Orissa and Ors. [1987] 3 SCC 279 also is of
no assistance to the Revenue. The doctrine of reading down
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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 i.e. 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. v.
Collector of central Excise (1991) 51 E.L.T 165 (S.C) 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 v. Delhi Stock Exchange
[1979] 3 SCR 373 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. v. Union of India and Ors.
[1987] Supp. SCC 350 and in Doypack Systems Pvt. Lid. case
[1988] 2 SCR 962 at 1000 F to H. In State of Madhya Pradesh
v. M/s. G.S. 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 i.e. parentage or orphanage i.e. in placement
of toilet soaps
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in either sub-items is not attracted to the facts as it is
not a case of residuary items but of sub-classification
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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.
V.M.
Appeal allowed.
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