TMI Blog2018 (6) TMI 1661X X X X Extracts X X X X X X X X Extracts X X X X ..... ether bitumen and bitumen emulsion are one and the same commodity for the purposes of interpretation of Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008 as was originally enacted and whether bitumen emulsion is covered within Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008 which only refers to bitumen . Their Lordships after detailed analysis of various dictionaries as well as Encyclopedia of Science and Technology defining bitumen held that the entry in question uses the word bitumen without any further stipulation or qualification and further held that bitumen emulsion is processed bitumen. Reverting to the facts of the present case, it is quite vivid that it has been held herein-above by the Supreme Court also while dealing with the question whether bitumen emulsion is covered within Entry 22 of Part A of Schedule II to the U.P. Value Added Tax Act, 2008, which only refers to bitumen that bitumen includes bitumen emulsion. It has also been held that the words inside the brackets i.e. coal-tar in front of bitumen would not control the meaning of the words outside the bracket and it would not curtail or limit the scope of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the correct rate applicable would be 4% as per Entry-23 of schedule annexed with the VAT Act. He would further submit that while interpreting different entries, attempts should be made to find out as to whether the same answers the description of the contents of the basic entry and only in the event it is not possible to do so, recourse to the residuary entry should be taken by way of last resort. If two views are possible, one which favours the assessee should be adopted. In case of conflict between two entries one leading to an opinion that it comes within the purview of the tariff entry and another the residuary entry, the former should be preferred. He would rely upon a decision of the Supreme Court in the matter of Mauri Yeast India Private Limited v. State of Uttar Pradesh and another (2008) 5 SCC 680 and also rely upon the case of Commissioner of Commercial Tax, Uttar Pradesh v. A.R. Thermosets Private Limited (2016) 16 SCC 122. He would lastly submit that Entry-23 under Part II of Schedule-II of the VAT Act only uses bitumen (coal-tar) which means that bitumen is commercially known as coal-tar and in its common and commercial parlance coal-tar has been u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise, or consumed or used in the manufacture of goods declared tax-free under Section 15 and Section 15(b) which are disposed off otherwise than by way of sale in the course of export out of the territory of India; or ( b) such goods covered by part III of Schedule II and/or Schedule III are used or consumed in the manufacture of goods; or ( c) such goods covered by part I, II and IV of schedule II and not covered by schedule III, after use or consumption in the manufacture of any goods specified in schedule II, the manufacture goods are disposed of otherwise than by way of sale in the state of Chhattisgarh or in the course of inter-state trade or commerce or in the course of export out of the territory of India, and such tax shall be levied, ( i) in respect of goods referred to in clauses (a) and (b) at the rate specified in column (3) of schedule II, and ( ii) in respect of goods referred to in clause (c) at 4% or at the rate specified in column (3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem. 11. Likewise, in the matter of Commissioner of Central Excise, Calcutta v. Sharma Chemical Works (2003) 5 SCC 60, the Supreme Court has held authoritatively that it is the primary and paramount responsibility of the State to first convincingly prove and establish that the item under no circumstances can be brought under any of the tariff items under the schedule of the Act. It has been further held that classification of goods and the onus of proof lies on the Revenue. Their Lordships of the Supreme Court succinctly held as under: - 12. We have heard the parties and considered the submissions made by them. We have also read the opinion of the majority Bench and the minority opinion of the Technical Member. It is a settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the revenue. Mere fact that a product is sold across the counters and not under a Doctors prescription does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumaran that merely because the percentage of medicament in a product is less does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the general principle is that specific entry would override a general entry. Referring to the decision in CCE v. Wood Craft Products Ltd. (1995) 3 SCC 454, 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. ... 21. A similar opinion has been expressed in Hindustan Poles Corpn. v. CCE (2006) 4 SCC 85 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. 15. It is not in dispute and very well-settled principle of law that when two views are possible, one which favours the assessee should be adopted. (See Bihar SEB v. Usha Martin Industries (1997) 5 SCC 289 and Mauri Yeast India Private Limited (supra).) 16. In Mauri Yeast India Private Limited (supra), the Supreme Court has finally concluded that if there is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxx xxx xxx xxx xxx xxx xxx xxx xxx PART IV S.No. Description of Goods Rate of tax u/s 8 (percent) ( 1) ( 2) ( 3) 1. All other goods not included in Schedule I and in Part I, II and III of this Schedule 12.5 ( 12.5% enhanced to 14% by Notification No.(44-A) dt. 26-12-2009 with effect from 1-1-2010.) 19. At this stage, it would be appropriate to notice whether use of bitumen and bitumen emulsion is one and same or both are different commodities. It is no more res integra and stand decided by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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. 19. 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. 21. Following the principle of law laid down by the Supreme Court in A.R. Thermosets Private Limited's case (supra), in the instant case, it is held that bitumen as used in Entry 23 under Part II of Schedule-II appended to the VAT Act, bitumen e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lawson Limited v. Jindal Exports Limited (2011) 8 SCC 333. The question for consideration before the Supreme Court was whether an order, though not appealable under Section 50 of the Arbitration and Conciliation Act, 1996, would nevertheless be subject to an appeal under the relevant provisions of the letters patent of the High Court. The Supreme Court while considering the issue held that Section 50 of the Arbitration and Conciliation Act, 1996, unlike Section 39 of the Arbitration Act, 1940 and Section 37 of the Arbitration and Conciliation Act, 1996 did not have the words (and from no others) and that made all the difference. It was further held that it would be subject to an appeal under the letters patent of the High Court and observed as under: - 45. According to the New Oxford Dictionary of English, 1998 Edition, brackets are used to enclose words or figures so as to separate them from the context. 46. Oxford Advanced Learner's Dictionary, Seventh Edition, defines 'bracket' to mean- 'either of a pair of marks, ( ) placed around extra information in a piece of writing or part of a problem in mathematics.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a parenthesis is defined to be an explanatory or qualifying clause, sentence, or paragraph, inserted in another sentence, or in course of a longer passage, without being grammatically connected with it. (Cent. Dist.) Parenthesis is used to limit, qualify or restrict the meaning of the sentence with which it is connected, and it may be designated by the use of commas, or by a dash, or by curved lines or brackets (United States v. Schilling [53 Fed 81 ; 3 CCA 440]).' 52. Having regard to the grammatical use of brackets or parentheses, if the words, '(and from no others)' occurring in section 39 of the 1940 Act or section 37 of the 1996 Act are viewed as an explanation or afterthought' or extra information separate from the main context, then, there may be some substance in Mr. Dave's submission that the words in parenthesis are surplusage and in essence the provisions of section 39 of the 1940 Act or section 37 of the 1996 Act are the same as section 50 of the 1996 Act. Section 39 of the 1940 Act says no more and no less than what is stipulated in section 50 of the 1996 Act. But there may be a different reason to contend th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at of arbitration was only in Seoul, South Korea. However, Ms. Mohana, learned counsel appearing on behalf of the petitioner drew our attention to the bracketed portion and contended that because of the bracketed portion which is to the effect 'or such other place as the parties may agree in writing', the seat could be elsewhere also. It is based on this that Ms. Mohana contended that, therefore, there is no express exclusion of Part I of the Act. It is not possible to accept this contention for the simple reason that a bracket could not be allowed to control the main clause. The bracketed portion is only for the purposes of further explanation. In my opinion, Shri Gurukrishna Kumar, learned counsel appearing on behalf of the respondent, is right in contending that the bracketed portion is meant only for the convenience of the Arbitral Tribunal and/or the parties for conducting the proceedings of the arbitration, but the bracketed portion does not, in any manner, change the seat of arbitration, which is only Seoul, Korea. The language is clearly indicative of the express exclusion of Part I of the Act. If there is such exclusion, then the law laid down in Bhatia Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State / Revenue to bring strong evidence on record to establish the fact that a particular commodity will not fall within Entry-23 under Part II of Schedule-II of the VAT Act and would only fall under the residuary entry. A focused perusal of the record would show that no material much less reliable evidence has been brought on record to hold that bitumen emulsion would not fall within Entry-23 under Part II of Schedule-II of the VAT Act and the word coal-tar would control the meaning of the word bitumen as used in the said entry which was incumbent on the part of the assessing authority. The assessing authority simply relying upon the decision of the M.P. High Court in Tiki Enterprises (supra) has held that bitumen emulsion would not fall within the meaning of Entry-23 under Part II of Schedule-II of the VAT Act and residuary article would apply ignoring the fact that after the decision in Tiki Enterprises (supra), the Supreme Court in A.R. Thermosets Private Limited's case (supra) while considering similar issue with reference to the U.P. Value Added Tax Act, 2008, has clearly held that bitumen emulsion is covered by the charging entry whereas the U.P. Value Added Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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