TMI Blog2023 (4) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... PREME COURT ] and Commissioner of Sales Tax, MP, Indore Vs. M/s Jaswant Singh Charan Singh [ 1967 (2) TMI 65 - SUPREME COURT] , on the principle that while interpreting items in the taxing statues resort should be not to the scientific or technical meaning of such terms but to their popular meaning, attached to them in their commercial sense, the Apex Court in DUNLOP INDIA LTD. MADRAS RUBBER FACTORY LTD. VERSUS UNION OF INDIA AND OTHERS [ 1975 (10) TMI 94 - SUPREME COURT ] has observed that 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 difficulty for statutory classification under a particular entry. Similarly, the Apex Court in COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS KRISHNA CARBON PAPER CO. [ 1988 (9) TMI 50 - SUPREME COURT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 24.05.2019 whereby the Commissioner (Appeals) dismissed the appeal filed by the appellant herein and affirmed the classification of their product, namely Papad (Topioca) under CTH 19030000 and the consequent differential duty. 2. Brief facts of the case are that the appellant is engaged in the business of manufacturing, trading and importing Papad . According to them, they imported Papad from Indonesia, which is made of Tapioca Flour, Tapioca Starch and Salt and Spices which they have been clearing under the heading 19059040, which is meant for Papad . Presently, the appellant imported the same Papad from China and submitted the Bill of Entry No. 8968312 dated 20.04.2015. The Bill of Entry was examined on 25.04.2015 by the Officers of Customs (Prev.) New Delhi. The goods in the containers were found to be as per the packing list and the description of goods was given as:- Tapioca Papad (Production Date November, 2014) (Expiry date November, 2016) (ingredients: Tapioca Starch, Salt, Sugar permitted food colours) of Assorted colours. 3. During examination of the consignment, it was observed that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on by the Revenue as well as by the appellant and also the relevant Chapter Notes:- Chapter 19 Preparations of cereals, flour, starch or milk; pastry cooks products 1903 00 00 Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms. 1905 Bread, Pastry, Cakes, Biscuits and other bakers wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products 1905 90 40 --- Papad Chapter Notes: 19.03- Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms. This heading covers edible products prepared from manioc starch (tapioca), sago starch (sago), potato starch (farinoca, potato tapioca, potato sago) or form similar starches (arrow-root, salep, yucca, etc.) The starch is mixed with water to form a thick paste, which is put into a strainer or perforated pan from which it falls in drops on to a metallic plate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) Gingerbread and the like, which are products of a spongy, often elastic consistency, made from rye or wheat flour, sweetening (for example, honey, glucose, invert sugar, refined molasses) and flavouring or spices, whether or not also containing egg yolk or fruit. Certain types of gingerbread are covered with chocolate or icing made from preparations of fat and cocoa. Other types may contain or may be covered with sugar. (7) Pretzels , i.e, brittle, glazed and salted crackers made of cylindrical length of dough often twisted into a form resembling the letter B . (8) Biscuits. These are usually made from flour and fat to which may have been added sugar or certain of the substances mentioned in Item (10) below. They are baked for a long time to improve the keeping qualities and are generally put up in closed packages. There are various types of biscuits including: (a) Plain biscuits containing little or no sweetening matter but a relatively high proportion of fat; this type includes cream crackers and water biscuits. (b) Sweet biscuits , which are fine bakers' wares with long-keeping qualities and a base of flour, sugar or other sweetening matter and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any combination thereof (e.g., pies consisting of meat enclosed in pastry) (Chapter 16). (b) Products of heading 20.05. (B) Communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products. This heading covers a number of products made from flour or starch pastes, generally baked in the form of discs or sheets. They are used for various purposes. Communion wafers are thin discs made by cooking very pure wheat flour paste between iron plates. Empty cachets of a kind suitable for pharmaceutical use are small, shallow cups made from flour or starch paste. They are made to fit together in pairs to form a container. Sealing wafers are cut out of thin sheets of baked, dried and sometimes coloured paste. They may also contain adhesive substances. Rice paper consists of thin sheets of baked and dried flour or starch paste. It is used for coating certain confectionery articles, particularly nougat. It should not be confused with the so-called rice paper made by slicing the pith of certain palms (see Explanatory Note to heading 14.04). 8.1 Learned Counsel for the appellant while submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the test laid down by the Courts. 10.1 He next submitted that the goods imported needs to be classified under specific heading i.e. sub-heading 1905 9040 of CTH 1905 and not the general or residuary entry i.e. 1903 0000. He relied on the term Papad , which has not been included in the heading 1903 and the same is specifically included under heading 1905. Consequently, the term Papad would stand excluded from heading No. 1903. He tried to distinguish the product under the two entries by saying that the goods covered under heading No. 1905 are not intended to be used as raw material, such as bread, pastry, cakes, biscuits, communion wafer, sealing wafers, rice paper all having common characteristics inter alia, consolidated fixed shape and the granules of the commodity cannot disperse etc. 11. The Revenue pressed for confirmation of the classification of the product in question under heading 1903 as it described the goods as Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms whereas HSN 1905 describes the goods as bread, pastry, cakes etc. According to his submissions, Tapioca is not specially mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product to be classifiable therein are not only required to be preparations made of tapioca starch but also have to be in a specified form of flakes, grains, pearls and siftings etc. for the reason that its use is intended to be for thickening of food items and that is the reason why the legislature has not specifically added Papad under this heading. It also cannot be ignored that the Chapter Notes itself provides that the products are marketed in the form of flakes, grains, pearls, siftings, seeds or similar forms. The product 'Papad' cannot be classified under the category of 'similar forms' even by applying the principle of ejusdem generis. We feel that the lower authorities and the revenue have only gone by the fact that the product is mainly made from tapioca starch and the other weighing factors have been completely ignored. Therefore, we are not agreeable with their analogy. 15. We now come to CTH 1905 which covers bakers' wares and the common ingredients of such wares have been specified in the Chapter Notes is cereal flours, leaves and salt but they may also contain other ingredients such as gluten, starch, flour of leguminous vegetables, malt extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 19.05 where it specifically provides for inclusion of certain products and at S NO. 14, it refers to Pizza but at the same time it distinguishes uncooked Pizza to be classified under Heading 19.01. So the cooked Pizza with dressing is classified under 19.05 but uncooked Pizza would be classifiable under 19.01. For ready reference the relevant part of Chapter Notes of Heading 19.05 is quoted below; The heading includes the following products: - 14. Pizza (pre-cooked or cooked), consisting of a pizza base (dough) covered with various other ingredients such as cheese, tomato, oil, meat, anchovies. However, uncooked pizza is classified in heading 19.01. 18. The settled principle for considering the issue of classification as laid down in catena of judgments is principle of common parlance, how the product is known in the commercial world. The term 'Tapioca' in Hindi is commonly known as 'Sabudana' and is available in the market in granulated form by the name of Sabudana. If a common man asks for Sabudana (Tapioca) he will not be given Papad (Tapioca) or vice-a-versa. So the basic test to determine the classification is how the product is known in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one standard scientific definition of ice-cream that distinguishes it from other products like soft serve , we do not see why such a definition must be resorted to in construing excise statutes. Fiscal statutes are framed at a point of time and meant to apply for significant periods of time thereafter; they cannot be expected to keep up with nuances and niceties of the gastronomical world. The terms of the statutes must be adapted to developments of contemporary times rather than being held entirely inapplicable. It is for precisely this reason that this Court has repeatedly applied the common parlance test every time parties have attempted to differentiate their products on the basis of subtle and finer characteristics; it has tried understanding a good in the way in which it is understood in common parlance. (Emphasis laid) 21. In a recent decision in Commissioner of Customs CEx Amritsar Vs. D.L. Steels 2022(381) ELT 289, the Apex Court has referred to the aforesaid judgment in Connaught Plaza Restaurant and decided the classification of 'Anardana' on the principle that words in a taxing statue must be construed in consonance with their commonly acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance on Rule 3(a) by the Revenue is solely on the basis of the nomenclature, Tapioca under CTH 1903. We do not agree with the submissions of the revenue rather find that the same principle would be more appropriately applicable, as Papad is specifically provided under CTH 19059040 whereas the same do not find mention under CTH 1903. The products under CTH 1903 are specifically restricted to be in the form of flakes, grains, pearls, siftings,seeds or similar form and for this reason itself the product Papad (Tapioca) cannot be classified under this heading. Alternatively, recourse can be taken to Rule 3(c), i.e. when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. In the present case we are of the considered view, that in terms of Rule 3(a) the goods in question cannot be classified under CTH 1903 and Rule 3(b) has no application and so on the principle of Rule 3(c), the term Papad under CTH 19059040 occurs last in numerical order and it equally merits consideration therein. 24. It is a settle principal of law that classification of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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