Full Judgment Text
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CASE NO.:
Appeal (civil) 5823-5832 of 2005
PETITIONER:
M/s. Craft Interiors Pvt. Ltd.
RESPONDENT:
Commissioner of Central Excise,Bangalore & Anr.
DATE OF JUDGMENT: 31/10/2006
BENCH:
Ashok Bhan & Markandey Katju
JUDGMENT:
J U D G M E N T
MARKANDEY KATJU, J.
These appeals have been filed under Section 35L(b) of the
Central Excise Act, 1944 against the impugned order of the
Customs Excise and Service Tax Appellate Tribunal (hereinafter
referred to as ‘The Tribunal’), South Zone Bench, Bangalore dated
10.5.2005.
Heard learned counsel for the parties and perused the record.
The appellant is a private limited company which undertakes
various activities, which includes civil works, painting, ceiling
work, electrical work, laying of vinyl flooring, tables, chairs, sofa
sets, erection of immovable items viz., partitions
(wooden/glass/aluminium/gypsum board), storages, workstations,
laying of wooden flooring, column cladding, skirting, mirror
paneling, window sill, wooden steps, doors, huge conference tables
and huge reception tables depending on the customer’s
requirements. The customer places a purchase order to the
appellants on a turn-key basis for the entire activity. The customer
usually gives a bare open floor which has an exterior wall and
internal columns to the appellants for undertaking the work.
In pursuance of the above said activities, the appellant also
manufactures furniture as part of the above mentioned activities.
The markings based on the drawings approved by the
architect are first made on the floor or the wall, as the case may be,
depending on whether the item to be erected is a storage unit, large
conference table/reception table, running counter etc. Various
materials such as wood and plywood are procured from the open
market. Frames of the wood are cut to size and fixed to the wall or
floor. The plywood required is cut to size and fixed to the wall
using screws and nails. Skeletal boxes are then made and fixed on
the wall on marked position. Interior partitions and shelves are
then made in the case of storage units, running counters, rear unit
etc. Once these activities are completed the whole unit is
laminated or veneered which would cover the screws and nails. In
other words, after these storage units, kitchen counters or
conference tables/reception tables are erected they cannot be
removed as such and cannot be moved from one place to another.
It cannot be dismantled and removed in complete or semi knocked
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condition from one place to another. It can only be cannibalized as
a result of which it gets reduced to broken pieces of wood,
laminates etc.
The Central Excise authorities issued various show cause
notices to the appellants alleging that the appellants had
manufactured and assembled excisable goods i.e. furniture and
furniture parts falling under Chapter 9404 in the premises of
various customers. In response it was contended by the appellants
that activities undertaken by them i.e. erection of storage units,
kitchen counters, reception tables/conference tables etc. results in
emergence of immovable property and could not be considered as
excisable goods.
The Commissioner vide his order dated 24.9.2003 held that
items like storage units, running counters, large reception tables
etc. are classifiable under Chapter 9403 as furniture and liable to
excise duty. Aggrieved by the said order the appellants filed an
appeal to the Customs, Excise and Service Tax Appellate Tribunal,
Bangalore which agreed with the findings of the Commissioner
that although these items emerge on a piece by piece fabrication,
the commodity is known in the market by name of table, storage
counters etc. and as such are classifiable as furniture under Sub-
heading 9403 of the Central Excise Tariff as furniture. Aggrieved,
the appellants have filed the present appeal.
The issue which arises for consideration in these appeals is
whether storage cabinets, kitchen counters, running counters, large
reception/conference tables etc. are excisable as furniture.
Learned counsels for the appellants Shri Laxmikumaran and
Shri Madhav Rao submitted that these items are fixtures and not
furniture, and hence were not subject to the levy of excise duty.
In this connection we may refer to Chapter Sub-heading 9403
of the Central Excise Tariff Act, 1985 which reads as under:
"Other furniture and parts thereof"
Learned counsel for the appellants submits that the word
’furniture’ means objects which are moveable and are complete
before being placed either on the floor or the ground. Learned
counsel also submitted that the word ’furniture’ does not cover
items which emerge either as part of an immoveable property or
are erected stage by stage in its completion. These, he submitted,
were fixtures and not furniture. He submitted that several of the
items in question were erected piece by piece and fixed to the wall
or ground and as such are not moveable property. In other words,
the same cannot be removed without cannibalizing i.e. without
reducing them into broken piece of wood, laminates etc.
In this connection we may refer to the definition of
’furniture’ in various dictionaries. The Concise Oxford English
Dictionary (Tenth Edn. Revised) defines ’furniture’ as follows :
"the movable articles that are used to make a room or
building suitable for living or working in, such as tables,
chairs, or desks".
Similarly, Chambers English Dictionary defines ’furniture’ as
follows :
"movables, either for use or ornament, with which a house
is equipped".
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New Webster’s Dictionary defines ’furniture’ as follows:
" the movable articles, such as tables, chairs, desks,
required for use or ornament in a house or office"
Thus, a perusal of the definitions given in various
dictionaries shows that ordinarily ’furniture’ refers to movable
items such as desks, tables, chairs, required for use or
ornamentation in a house or office. Thus, ordinarily furniture is
not something immovable or something which is fixed in a
position which can be removed only by cannibalizing. We agree
with learned counsel for the appellants that the latter are fixtures
and not furniture.
Several of the items in question in the present case e.g.
kitchen overhead and below counters, storage units are, in our
opinion, clearly not ’furniture’ and hence not excisable under Sub-
heading 9403 as furniture.
In view of the above discussion, we are of the opinion that
these appeals have to be allowed. We hold that items which are
ordinarily immovable or which ordinarily cannot be removed
without cannibalizing e.g. storage units, running counters, over-
head unit, rear and side unit, wall unit, pantry unit, kitchen unit and
other items which are ordinarily immovable or cannot be removed
without cannibalizing are not furniture. However, items like
tables, desks, chairs etc. are furniture and hence excisable.
We may add that sometimes chairs, beds, tables, desks, etc.
are affixed to the ground, but nevertheless they will still be called
as furniture (one may recall the fixed bed in Sherlock Holme’s
story ‘The Speckled Band’). This is because when we interpret a
word we should not only see the dictionary meaning but even more
the popular meaning which the word has acquired in common
parlance. As stated by K.L. Sarkar in his book "Mimansa Rules of
Interpretation" (see second edition published by Modern Law
Publication, Allahabad), "the popular meaning overpowers the
etymological meaning." *
To give an example, the word ‘pankaja’ literally means born
in mud. The word ‘panka’ means ‘mud’, and the word ‘ja’ means
‘which is born in’. Hence the etymological meaning of the word
‘pankaja’ is that ‘which is born in mud’. Many things can be
born in mud e.g. insects, vegetation, water flowers, etc. However,
by popular usage the word ‘pankaja’ has acquired a particular
meaning in common parlance i.e. lotus. This meaning will,
therefore, prevail over the etymological meanings.
Similarly, the word ‘furniture’ has a meaning in common
parlance which every layman understands. It commonly refers to
chairs, desks, tables, beds, etc. Hence we should give it this
popular meaning.
*
The appeals are allowed. The impugned orders are set aside
and the matter is remitted to the Tribunal to pass a fresh order after
hearing the parties preferably within three months from the date of
receipt of this order, in accordance with law and in the light of the
observations made above. No costs.
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