Cookers Limited Vs. State of Kerala  INSC 728 (29 April 2008)
ASHOK BHAN & DALVEER BHANDARI
REPORTABLE CIVIL APPEAL NOS. 6469-6470
OF 2002 With Civil Appeal No. 7169 of 2004 Talent Marketing Agencies .....Appellant(s)
- Versus - Additional Sales Tax Officer, Ernakulam & Anr. .....Respondent(s)
Civil Appeal No. 1203 of 2008 Hawkins Cookers Limited .....Appellant(s) - Versus
- State of Kerala ....Respondent(s) BHAN, J.
1. This order shall dispose of Civil
Appeal Nos. 6469- 6470 of 2002, 7169 of 2004 and 1203 of 2008.
Civil Appeal Nos. 6469-6470 of 2002 &
1203 of 2008
2. The issue which arises for
consideration in these appeals is, whether the satilon brand cookware sold by
the appellants is an "aluminium household utensil made of aluminum" and "aluminium
alloys" classifiable under Entry 5 of the First Schedule under the Kerala
General Sales Tax Act, 1963 (for short "the Act") or whether the said product
would fall under Entry 104 which pertains to "pressure cooker, cook and serve
ware to keep food warm, casseroles, water filters and similar home appliances
not coming under any other entry".
3. The authority in original i.e.
Assistant Commissioner (Assessment III), Ernakulam at the first instance
accepted the appellant's case and held that the Hawkins Satilon Cookware
manufactured by the appellant was classifiable under Entry 5 of the First
Schedule to the Act. The Deputy Commissioner of Commercial Taxes in exercise of
his suo motu powers of revision, sought to revise the assessment. A notice dated
10.9.1999 was issued under Section 35 of the Act. Appellant replied to the said
notice. The Deputy Commissioner by an order dated 25.9.1999 set aside the
earlier assessment and remanded the matter for fresh disposal. The Deputy
Commissioner held that as the satilon coating made the goods non-stick, it would
make it different from the aluminium household utensils made of aluminium,
covered under Entry 5 of the First Schedule. Aggrieved by the order passed by
the Deputy Commissioner, the appellant filed an appeal before the Sales Tax
Appellate Tribunal, Ernakulam (for short "the Tribunal"). The Tribunal by its
order dated 18.4.2001 upheld the order of Deputy Commissioner.
4. Against the order of the Tribunal,
the appellant filed Tax Revision case before the Kerala High Court, which has
been disposed of by the impugned order. The High Court by a short order while
agreeing with the findings recorded by the Tribunal, dismissed the revision and
held that the products manufactured by the appellants were classifiable under
the heading "similar home appliances" under Entry 104 of the Act. It was further
held that the amendment to Entry 104 in the year 1999 by which the word
"non-stick cookware" was added was only clarificatory in nature. The case of the
appellant was that prior to the said amendment of 1.4.1999 the appellant's
product would clearly fall under Entry 5 and not under Entry 104.
5. We are in agreement with the view
taken by the Tribunal as well as the High Court that "satelon coated aluminium
products" are not identical with "aluminium household utensils made of aluminium
and aluminium alloys".
The coating of satilon makes all the
difference to the product. The Tribunal has further recorded a finding that in
trade parlance, no one would describe satilon coated aluminium products as
aluminium household utensils.
6. We do not agree with the submission
made on behalf of the assessee that coating of satilon on the surface of the
metal product does not bring about any change in the nature and utility of the
product. By no stretch of imagination, satilon coated cookware can be treated as
ordinary aluminium household utensils. Price of the satilon coated cookware is
much more than the aluminium household utensils made of aluminium and its
alloys. The Hawkins cookware sold by the assessee cannot be categorized as
household utensils made of aluminium for the reasons that the satilon coating
makes the goods non-sticky and hence different from the aluminium household
utensils. In common parlance, Hawkins cookware with satilon coating is not
understood as aluminium ware. We further agree with the view taken by the High
Court that the amendment to Entry 104 of the First Schedule is clarificatory in
7. Learned counsel for the appellant
has relied upon the following three judgments:
(i) Gujarat Steel Tubes Ltd and others
v. State of Kerala and others, 1989 (3) SCC 127 (ii) Metlex (I) (P) Ltd. v.
Commissioner of Central Excise, New Delhi, 2005 (1) SCC 271 (iii) Commissioner
of Central Excise, Cochin v. Apollo Tyres Ltd., 2005 (11) SCC 444
8. All these judgments are
distinguishable on facts and would have no applicability to the facts of the
present case. We have decided the point in issue on its own facts. Under the
circumstances, we reject the plea of the appellants without adverting to the
facts of the said cases.
9. For the reasons stated above, the
appeals are dismissed.
Civil Appeal No. 7169 of 2004
10. In this case the product is
slightly different in the sense that the articles are coated with tuflon instead
of satilon. Coating of tuflon also makes the article non- stick. Before the High
Court the learned counsel, who had appeared for the assessee, conceded that the
point in issue was squarely covered by the earlier decision of the High Court of
Kerala in W.A. No. 1405 of 2004 dated 4.8.2004, which has been upheld by us
today (Civil Appeal No. 6469-70 of 2002). No other point was urged.
11. Since we have upheld the order
passed by the High Court in the connected Civil Appeal Nos. 6469-70 of 2002, we
have no hesitation in dismissing this appeal as well.
The Orders passed by the High Court
and the Tribunal are upheld and the appeal filed by the appellant is dismissed.