TMI Blog2018 (7) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... law to apply common parlance test nor committed any error to record the findings of fact that "Sharbat Rooh Afza" is not a fruit drink. It is evident that the commodity in question i.e. "Sharbat Rooh Afza" is neither a fruit drink nor a fruit juice nor a processed fruit rather it is a "Non Fruit Syrup/Sharabat" being a concentrated sugar syrup which is not specified in Schedule-I, II, III & IV of the Act. Therefore, it is an unclassified item falling under the residuary entry of Schedule-V of the Act - Since the commodity "Sharbat Rooh Afza" does not fall under any Entry in Schedule I, II, III and IV, therefore, it shall fall under the residuary entry in Schedule-V of the Act. Revision dismissed - decided against revisionist. - Sales/Trade Tax Revision No. - 617 OF 2012, Sales/Trade Tax Revision No. - 527 OF 2015, Sales/Trade Tax Revision No. – 383, 410 OF 2017,- 47 OF 2018, 528, 529 OF 2015, 7, 8, 9 OF 2018, Sales/Trade Tax Revision Defective No. - 457 TO 469 OF 2012 - - - Dated:- 2-7-2018 - Hon'ble Surya Prakash Kesarwani, J. For Applicant : Krishna Agrawal,M.P. Devnath For Opposite Party : C.S.C. ORDER Hon'ble Surya Prakash Kesarwani, J. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , (2017) 7 SCC 540,(Paras-18, 51 to 55). (iv) In revisionist's own case, i.e. M/S Hamdard (Wakf) Laboratories vs. Union of India, AIR 1965 SC 1167 (para-15), Hon'ble Supreme court held the product Rooh Afza to be a fruit product while considering a controversy under the Fruit Products Order, 1955, therefore, Rooh Afza is classifiable as fruit drink under the aforesaid Entry No.103 of Schedule II Part-A under the U.P. Act, 2008. (v) Neither before the Assessing Authority nor before the first Appellate Authority nor before the Tribunal, the department has placed any material to establish that Rooh Afza is not fruit drink but an unclassified item. Therefore, the impugned order of the Tribunal being not based on any evidence, is liable to be set aside. (vi) Burden is on the Revenue to prove the classification which it alleged but this burden has not been discharged by the Revenue. Judgments in Hindustan Ferodo Ltd. v. Collector of Central Excise, 1997 (89) ELT 16 (SC) (Paras-3 to 6) is relied. (vii) When there is a specific entry being Entry No.103 of Schedule-II, Part-A under the U.P. Act 2008 which covers product in question, i.e. Rooh Afza , the residuary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akf) Laboratories, Ghaziabad vs. Commissioner of Sales Tax U.P. Lucknow, 2005 NTN (Vol.27)-35 (All) (Paras-3 to 7), was made basis by the department to dispute was the classification under Entry 103 whereas in that case it was held that the product 'Rooh Afza' is syrup being concentrate of sugar and its main use is as a table drink. Therefore, the product Rooh Afza is a fruit drink. 5. Sri Nishant Mishra, learned counsel for the revisionist in certain connected revisions, has adopted the arguments advanced by Sri Laksmi Narsimhan. 6. Sri B.K. Pandey, learned standing counsel for the Respondent-Department submits as under: (i) The controversy as to the classification of the Rooh Afza has been settled by this Court in M/S Hamdard (Wakf) Laboratories, Ghaziabad vs. Commissioner of Sales Tax U.P. Lucknow, 2005 NTN (Vol.27)-35 wherein this Hon'ble Court held that Rooh Afza is concentrate of sugar and hence it is a syrup. Since syrup does not fall under any of the entries specified in the Schedule II and as such it is unclassified item under Schedule V. (ii) The Full Bench of the Tribunal in its order dated 9.3.2011 in Rooh Afza , applied the common parlanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U.P. VAT Act. Reliance is placed out the judgment in the case of State of U.P. Vs. D.S.M. Group of Industries and others, (2003)37 STR 171. (vii) The order of the First Appellate Authority filed as Annexure 5 in connected Commercial Tax Revision No.529 of 2015 has elaborately dealt with the classification of Rooh Afza and recorded the findings of fact that it is an unclassified item. (viii) The findings recorded by the Tribunal and other fact finding statutory authorities, are the findings of fact based on consideration of relevant materials on record and the settled principles of interpretation of commodities. Therefore, it can not be interfered with in revisional jurisdiction. The controversy is concluded by findings of fact. Discussion and Findings: 7. I have carefully considered the submissions of learned counsels for the parties. 8. The crux of the submissions of learned counsels for the revisionists is that the product Sharbat Rooh Afza is not an unclassified commodity falling under residuary entry 1 of Schedule-V rather it is classifiable under Entry 103 of Part A of Schedule II of the U.P. VAT Act (hereinafter referred to as 'the Act ') being fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for manufacture of goods was specified as under: Fruits syrups, squashes from purchased fruit juice/pulp, non fruit syrups/sarbat 14. It appears that an information was sought by the Commissioner-cum-Principal Secretary, Commercial Tax Department, Bihar, from the Food Safety and Standards Authority of India as to whether Rooh Afza falls under heading of fruits drinks/fruit juice/fruit squash/fruit paste or not. It appears that the information, after due examination was submitted by the Assistant Director General (PFA), Food Safety and Standards Authority of India, New Delhi, vide letter dated 31.7.2009 (Annexure 11 to Revision No.617 of 2012) which is reproduced below: No. P. 15025/82/2009- PFA Div. Food Safety and Standards Authority of India Office of A.D.G. (PFA) FDA Bhawan, Kotla Road, New Delhi- 110002 Dated the 31st, July, 2009 To, Sh. Subhakirti Majumdar Commissioner-Cum-Principal Secretary, Commercial Taxes Department, Bihar, Vikas Bhawan, Patna- 800013. Subject:- Information whether Rooh-Afza comes under heading of fruits drinks/fruit juice/fruit squash/fruit paste or not-reg. Sir, Please r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2332;ा की मांग करनें पर उसे केवल शरबत रूहआफजा की ही आपूर्ति की जाती है तथा किसी ग्राहक द्वारा फूट ड्रिंक्स की मांग किये जानें पर दुकानदार अथवा व्यापारी द्वारा शरबत रूहआफजा की आपूर्ति किया जाना सम्&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ण किया गया है तथा प्रश्नगत मामले की विवादित वस्तु अधिनियम की किसी भी अनुसूची में वर्गीकृत नहीं है। यदि विधायिका की मंशा प्रश्नगत वस्तु विशेष को किसी अनुसूची में रखनें की रही होती तो उसे उसी ना ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 357; अन्य ए०आई० आर-1985 ( एस०सी०)-1167 के मामले में मा० उच्चतम न्यायालय का निर्णय आवश्यक वस्तु अधिनियम से सम्बन्धित है तथा सर्व श्री गोदरेज फूड्स लि० बनाम कमिश्नर, सेन्ट्रल एक्साईज इन्दौर-2000 (121) ई०एल०टी०-231 का संद& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; सं० 56/10 में पूर्ण पीठ द्वारा पारित निर्णय दिनांक 9-3-11 का अवलोकन किया गया, जिसमें मा० पूर्ण पीठ द्वारा अपनें आदेश के पृष्ठ-5 के पैरा-2 में यह अवधारित किया गया है किः- कमिश्नर वाणिज्य कर, उत्तर प्रदेश द्वा& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0;ंदर्भित न्याय निर्णयों में प्रतिपादित व्यवस्था को दृष्टिगत रखते हुऐ अवर्गीकृत वस्तु की श्रेणी में मानते हुऐ कर की दर के सम्बन्ध में कमिश्नर, वाणिज्य कर उत्तर प्रदेश द्वारा किये गये विनिश्चय &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2324;र उसमें किसी हस्तक्षेप की आवश्यकता नहीं है। 17. In another Revision No.527 of 2015 being part of the present Bunch cases arising from another order of the Commercial Tax Tribunal (Bench-I), Ghaziabad, dated 14.08.2015, the product Sharbat Rooh Afza has been held to be not a fruit juice or drink, as under: 10. After having carefully gone through the findings recorded by the additional commissioner in appeal and also the findings recorded by the assessing officer we finds ourselves in complete agreement with. The assessing officer had rightly applied the common/commercial parlance principle which is a well established principle/ test to be applied for determining the true nature of any product for the purposes of assessing tax. According to this common/commercial parlance test the nature of any product or its classification is done on the basis of as to how it is perceived by its users or for what kind of use its users purchase it. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, and Trade and Commerce in, certain commodities in the interest of general public. In Hamdard (Wakf) Laboratories Vs. Collector of Central Excise, Meerut 1999 (113)ELT 20(SC) relied by learned counsel for the revisionist, the controversy was whether Sharbat Rooh Afza falls within Tariff Heading 2202.90 or under Heading 21.07 of the Central Excise Tariff Act, 1985. Considering the Tariff entries, Hon'ble Supreme Court held that it falls within the terms of the Heading 2201.90 of the Central Excise Tariff Act, which is residuary entry of the items beverages and Vinegar. In Parle Agro (P) Ltd.(supra), the controversy was with respect to classification of a Product Appy Fizz under Section 6(1)(a) of the Kerala Value Added Tax Act, 2003. The relevant entry included non alcoholic beverages, fruit juice and aerated water etc. On the facts of that case and the relevant provisions of the Kerala VAT Act, Hon'ble Supreme Court found that the word aerated has been used in scientific term in entry 2 under Section 6(1)(a) of the Kerala VAT Act and, therefore, the technical meaning of the word aerated can be looked into for finding out of the real import of the entry. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries under the U.P. VAT Act as discussed above, it would be appropriate to refer to certain judgments of Hon'ble Supreme Court with respect to the tests to be applied for interpretation of commodities in tax matters. 21. In the case of Mamta Surgical Cotton Industries Rajasthan Versus Assistant Commissioner (Anti Evasion), Bhilwara, Rajasthan, 2014 (4) SCC 87 ( paragraph Nos. 32 to 34 ), Hon'ble Supreme Court held as under:- 32.The aforesaid view is further fortified by the common parlance test. It can be said that when a consumer requires surgical cotton, he would not be satisfied with cotton being provided to him and the same principle would reversibly apply that a customer of cotton would not use surgical cotton as a substitute. Further the purpose for which cotton and surgical cotton are used are diametrically opposite. While surgical cotton finds utility primarily for medical purposes in households, dispensaries, hospitals, etc. raw cotton being, inter alia, non-sterilised and riddled with organic impurities cannot be used as such at all. 33.For both these commodities operational territories are different and both have a different consumer segment. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mind of the law maker; [i] 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. [(See :Oswal Agro Mills Ltd. v. CCE, 1993 Supp(3) SCC 16. (Emphasis supplied by me) 21. A classic example on the concept of common parlance is the decision of the Exchequer Court of Canada in R. v. Planter Nut and Chocolate Co. Ltd. The question involved in the said decision was whether salted peanuts and cashew nuts could be considered to be fruit or vegetable within the meaning of the Excise Tax Act. Cameron J., delivering the judgment, posed the question as follows: ...would a householder when asked to bring home fruit or vegetables for the evening meal bring home salted peanuts, cashew or nuts of any sort? The answer is obviously `no'. Applying the test, the Court held that the words fruit and vegetable are not defined in the Act or any of the Acts in pari materia. They are ordinary words in every-day use and are therefore, to be construed according to their popular sense. (Emphasis supplied by me) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... variety of coal would arise that a distinction would be made between coal and charcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense be spoken as coal. (Emphasis supplied by me) 24. In Dunlop India Ltd. v. Union of India, at p. 251, while holding that VP Latex was to be classified as raw rubber under Item 39 of the Indian Tariff Act, 1934, this Court observed:(SCC pp.252-54, paras 29 34) 29. It is well established that in interpreting the meaning of words in a taxing statute, the acceptation of a particular word by the trade and its popular meaning should commend itself to the authority. 34. We are, however, unable to accept the submission. It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. 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, we then see no dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of that type of goods dealt with by that type of goods in that type of market, should be searched. (Emphasis supplied by me) 28. In Reliance Cellulose Products Ltd. v. CCE, it was observed : 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was under consideration for the purpose of classification under the Tariff Act. According to the manufacturers this shampoo was a medicated shampoo meant to treat dandruff which is a disease of the hair. This Court held that having regard to the preparation, label, literature, character, common and commercial parlance, the product was liable to be classified as a medicament. It was not an ordinary shampoo which could be of common use by common people. The shampoo was meant to cure a particular disease of hair and after the cure it was not meant to be used in the ordinary course. 33.Therefore, what flows from a reading of the afore-mentioned decisions is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words they have to be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. This, however, is by no means an absolute rule. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd use to which it is put, cannot necessarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff. What is more important is whether the broad description of the article fits in with the expression used in the Tariff... (Emphasis supplied by me) 36. Moreover, the functional utility and predominant or primary usage of the commodity which is being classified must be taken into account, apart from the understanding in common parlance [see O.K. Play (India) Ltd. v. CCE, (2005) 2 SCC 460; Alpine Industries v. CEE, New Delhi (1995) Supp. (3) SCC 1; Sujanil Chemo Industries v. CEE Customs (2005) 4 SCC 189; ICPA Health Products (P) Ltd (supra) v. CEE (2004) 4 SCC 481; Puma Ayurvedic Herbal (Supra); Ishaan Research Lab (P) Ltd.(Supra) ; CCE v. Uni Products India Ltd., (2009) 9 SCC 295]. (Emphasis supplied by me) 37. A commodity cannot be classified in a residuary entry, in the presence of a specific entry, even if such specific entry requires the product to be understood in the technical sense [see Akbar Badrudin v. Collector of Customs, (1990) 2 SCC 203; Commissioner of Customs v. G.C. Jain, (2011) 12 SCC 713] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgments of Hon'ble Supreme Court in the case of Commissioner of Central Excise v. Baidyanath Ayurved Bhawan Ltd. 2009(12) SCC 419, B.O.C. India Ltd v. State of Jharkhand 2009 (15) SCC 590 (Pararaph-24), Godrej Industries Ltd. v. CCE 2008 (8) SCC-600, Ponds India Ltd. v. Commissioner of Trade Tax 2008(8) SCC 369, U.P. State Agro Industrial Corporation Ltd. v. Kisan Upbhokta Parishad, 2007 (13) SCC 246, Trutuf Safety Coal Industries CST 2007 (8) SCC 242 (paragraph 13), Craft Interiors (P) Ltd. v. CCE 2006(12) SCC 250 (paragraph 18 and 20 ), Parley Biscuits Pvt. Ltd. v. State of Bihar, 2005 (9) SCC 669, Associated Cement Company Ltd. v. State of M.P. 2004 (9) SCC 72, Alpine Industries v. CCE 2003(3) SCC 111, S. Samuel MD, Harrisons Malyalam v. Union of India 2004(1) 256 (Paragraph 13), Union Of India v. Harjeet Singh Sandhu 2001(5) SCC 593, Collector of Custom and Central Excise v. Surendra Cotton Oil Mill Company 2001(1) SCC 578, Pappu Sweets and Biscuits V. Commissioner of Trade Tax, U.P., 1998 (7) SCC 228, Metagraphs (P) Ltd. v.CCE 1997(1) SCC 262, Purewal Associate Ltd. v. CCE, 1996(10) SCC 752, Indian Cable Co. Ltd. v. CCE, 1994(6) SCC 610, Novapan India Ltd. v. CCE 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with in that type of market should be searched. The process of manufacture of a product and the end use to which it is put, cannot necessarily be determinative of the classification of that product under a fiscal statute. What is more important is whether the broad description of the article fits in with the expression used in the Tariff.... Moreover, the functional utility and predominant or primary usage of the commodity which is being classified must be taken into account, apart from the understanding in common parlance. A residuary entry can be taken refuge of only in the absence of a specific entry. The word Fruit drink and Fruit Juice used in entry 103 of Part A of the IInd Schedule to the U.P. VAT Act has neither been defined under the Act nor it has been used in technical sense. If a person asks for fruit Juice or fruit drink, he will not be given Sharbat Rooh Afza and vice-versa. Therefore, the Tribunal has neither committed any error of law to apply common parlance test nor committed any error to record the findings of fact that Sharbat Rooh Afza is not a fruit drink. 26. The submissions of learned counsels for the revisionist relying upon the licence under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tains 10% fruit juice (volume by volume) which is classified as per Part IV of the second Schedule of FPO 1955 as Non Fruit Syrup which is also indicated from the declaration on the label of this product. As per copy of the licence No.10013051000525, dated 22.1.2013, issued by the designated Officer, Food Safety and Standards Authority of India, Ministry of Health and Family Welfare, Government of India, filed as Annexure 9 to the Revision No. 527 of 2015, the revisionist has been authorised to manufacture two products, firstly, Synthetic Sharbat and, Secondly, Fruit Syrups and Squashes. As per letter of the Food Safety and Standards Authority of India, dated 31.7.2009 (aforequoted) the product Rooh Afza is a Non Fruit Syrup . 28. A concurrent findings of fact have been recorded by the fact finding authorities including the Tribunal that Sharbat Rooh Afza is not a Fruit Drink but an unclassified item. A Full Bench of the Tribunal in the case of Ashutosh Trading Company (supra) has considered in detail the product in question and held it to be an unclassified item under the U.P. VAT Act. In M/s Hamdard (Wakf) Laboratories, Ghaziabad (supra), this Court, while considering N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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