Paints India Ltd. Vs. Collector of Central Excise  INSC 82 (23 March 1988)
Sabyasachi (J) Mukharji, Sabyasachi (J) Rangnathan, S.
1988 AIR 1087 1988 SCR (3) 339 1988 SCC (2) 470 JT 1988 (2) 8 1988 SCALE (1)628
INFO : RF 1991 SC 999 (14)
Excise and Salt Act, 1944-Section 35L and Tariff Item Nos. 14(1)(3)(iv) and 14
(1)(v) of the First Schedule-Classification for purpose of excise levy-Whether
"Decoplast" is plastic emulsion paint-Resort to be made to the
commercial and popular meaning attached to the items by those dealing in
them-Not to scientific and technical meaning.
Construction-Excise Act-Sales tax Act-Tariff Items not defined-Interpretation
of-To be construed in popular sense-Commercial meaning attached to items by
people who deal in them to be given.
question as to whether "Decoplast" manufactured by the appellant is
plastic emulsion paint or not had been determined in the affirmative by the
Revenue, and revision application before the Government of India was rejected.
the appellant moved the Bombay High Court, which directed the Customs Excise
and Gold (Control) Appellate Tribunal to hear the petition and to decide the
same as an appeal before it. On behalf of the appellant, elaborate evidence had
been adduced before the Tribunal.
was made to the specifications of plastic emulsion paint and the definition as
given by ISI. The Tribunal addressed itself to the question whether "Decoplast"
could be considered as plastic emulsion paint having regard to (i) its
composition; (ii) its characteristics; (iii) its uses and (iv) its reputation
in trade parlance, and held that "Decoplast" is a plastic emulsion
by the order the appellant appealed under Section 35L of the Central Excise and
Salt Act, 1944 to this Court, which.
the appeal, ^
1.1 The commercial meaning has to be given to the expressions in Tariff items.
Where definition of a word has not been given, it 340 must be construed in its
popular sense. Popular sense means that sense which people conversant with the
subject-matter with which the statute is dealing, would attribute to it. [343G]
the instant case the use of these two items and their composition, when analysed,
revealed that in essence they performed the same functions as plastic emulsion
paint does, though there was some difference in them. The affidavits of traders
and others were examined by the Tribunal. The Revenue did not adduce evidence
in view of the composition, characteristics, uses and how it is known in the
trade, the Tribunal came to the conclusion that "Decoplast" was
plastic emulsion paint. This is a finding of fact arrived at on relevant and
valid materials. There was no misdirection in law. [344C-E]
interpreting items in statutes like the Excise Act or Sales Tax Act, resort
should be had, not to the scientific and technical meaning of the terms or
expressions used, but to the popular meaning, that is to say, the meaning
attached to them by those dealing in them.
344A-B] C.l. T., Andhra Pradesh v. M/s. Taj Mahal Hotel, Secunderabad  1
SCR 168 and Indo International Industries v. Commissioner of Sales Tax, U.P.,
 3 SCR 294,referred to.
v. Planter's Co.  CLR (Ex.) 122 and 'Two
Hundred Chests of Tea', 6 L.Ed. 128, referred to.
APPELLATE JURISDICTION: Civil Appeal No. 2456 of 1987.
the Order dated 27.5.1987 of the Customs Excise and Gold (Control) Appellate Tribunal,
New Delhi in Appeal No. E-2312/85-C.
R. Narain, S. Ganesh, R. Shah, R.K. Ram and D.N. Mishra for the Appellant.
Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. In this appeal
under section 35L of the Central Excise and Salt Act, 1944 (hereinafter called
'the Act'), the question involved is whether "Decoplast" manufactured
by the Asian Paints India Ltd., the appellant herein, is plastic emulsion paint
341 and, therefore, classifiable under Tariff Item 14(I)(3)(iv) of the First
Schedule of the Act as plastic emulsion paint or it should be classifiable
under Tariff Item No. 14(I)(v) that is as "paints not otherwise
Customs Excise and Gold (Control) Appellate Tribunal (hereinafter called 'the
CEGAT'), by the impugned order challenged in this appeal held that Decoplast is
plastic emulsion paint. The appellant felt aggrieved thereby. In so holding the
Technical Member of the Tribunal observed that in view of its composition,
characteristics and uses, Decoplast should be considered as emulsion paint.
Judicial Member of the Tribunal was of the view that the Revenue had not
adduced any evidence of rebuttal of the evidence adduced by the appellant as
the commercial understanding but the evidence adduced by the appellant was
intrinsically untrustworthy. Therefore, inspite of the affidavits and absence
of evidence in rebuttal, he agreed with the other member that Decoplast is
plastic emulsion paint and the appeal before the Tribunal should be dismissed.
appears that the appellants had filed revision application before the
Government of India against the order of the Revenue authorities. Ultimately,
the same was rejected by the Government of India. It is not necessary to set
out in detail all the events. The appellant had moved the High Court of Bombay
against the order of the Government of India and the High Court by its order
directed as follows:
order dated 17th
December, 1979 passed
by the Govt. Of India in revision in the Petitioners' case is set aside
inasmuch as the Revision Authorities have not controverted or rebutted the
evidence in the form of affidavits relied on by the Petitioners to show that
their product could not be regarded as a plastic emulsion paint amongst persons
dealing in such products. The Revision order thus failed to follow the well
established rule of interpreting entries in the Excise Tariff namely to
classify products by their common parlance and trade understanding and not by
their scientific or technical meaning. It is necessary that the matter be
remanded to the Revision Authorities to decide the same afresh according to
law. However, as the Revision Authority under the demanded Central Excise and
Salt Act has been replaced by the Customs Excise and Gold (Control) Appellate
Tribunal, the said Tribunal is directed to 342 hear the Petitioners' Revision
Petition and to determine the same as an appeal before it. The Tribunal shall
give an opportunity to both the petitioners and the Excise Authorities to rely
on any evidence and material either on record or otherwise which they may lead
or produce in support of their case. The parties will be given full opportunity
of affidavits if any during the hearing".
pursuance to the said order, the matter came before the Tribunal. Before the
Tribunal it was contended on behalf of the appellant that the manufacture was
water thinable paint but the same could not be held to be plastic emulsion
paint for the product was not known in the trade as plastic emulsion paint nor
was it bought and sold so. According to the appellant, the paint essentially
comprised of pigment and a binder or a vehicle and that while the binder and
the vehicle were interchangeable, it was stated that the binder generally
referred to solid part which in this case was synthetic resin and the solvent
could be water or some other diluent. There was elaborate evidence adduced
before the Tribunal on behalf of the appellant. Reference was made to the
specifications of plastic emulsion paint as given by ISI. It was contended on
behalf of the appellant that Decoplast could not be considered as plastic
emulsion paint for reasons, inter alia, as follow:
Plastic emulsion paint comprises of one emulsion as against two contained in Decoplast;
the case of plastic emulsion drying takes place by evap oration of water
whereas in the case of decoplast by oxidation of alkyd;
Trade did not recognise decoplast as plastic emulsion paint;
the literature published by them, decoplast was not described as plastic emulsion
was substitute for cement paint;
Even though decoplast could be used both for interior and exterior use, it was
a product inferior to plastic emulsion paint;
In case of plastic emulsion paint, primer had to be applied to The surface to
be pained while in the case of Decoplast on 343 coating on Decoplast itself
serves as a primer. A In support of appellant's contention, affidavits had been
filed by them and the same were considered in extenso by the Tribunal.
Reference has also been made to the Book "Outlines of Paint
Technology" by W.M. Morgan. On the other hand, on behalf of the Revenue,
it was stated that it was not disputed that Decoplast is a water soluble paint
and that it had got two resins in emulsion form, namely, Polymer Vinyle Acetate
and copolymer alkyds. Attention was drawn to the Indian Standard Specification
for plastic emulsion paint, which is as follow:
material shall consist of pigments with suitable extenders in suitable
proportions, in a medium consisting of any state synthetic polymer emulsion in
water with other suitable ingredients as may be necessary to produce a material
so also satisfy the requirements of this standard. " Our attention was
also drawn to the definition given by ISI, which is as under:
a paint in which the medium is an 'emulsion' or an emulsion-like dispersion of
an organic binder in water. Industrially the same is mainly restricted to those
paints in which the medium is an 'emulsion' of a synthetic resin. The medium
may also be called a latex by analogy with a natural rubber latex, polyvinyl acetat
emulsion paint is a typical example".
Tribunal addressed itself to the question whether Decoplast could be considered
as plastic emulsion paint in view of (i) its composition; (ii) its
characteristics; (iii) its uses; and (iv) its reputation in trade parlance.
well settled that the commercial meaning has to be given to the expressions in
Tariff items. Where definition of a word has not been given, it must be construed
in its popular sense. Popular sense means that sense which people conversant
with the subject-matter with which the Statute is dealing, would attribute to
it. See- C.I.T., Andhra Pradesh v. M/s. Taj Mahal Hotel, Secunderabad,  1
SCR 168. This Court observed in Indo International Industries v. Commissioner
of Sales Tax, U.P.,  3 SCR 294 that in interpreting items in statutes
like the Excise Act or Sales Tax Acts, whose primary object 344 was to raise
revenue and for which purpose to classify diverse products, articles and
substances, resort should be had, not to the scientific and technical meaning
of the terms or expressions used but to their popular meaning, that is to say,
the meaning attached to them by those dealing in them.
Cameron of the Canadian Exchequer Court in King v. Planter's Co.,  CLR
(Ex.) 122 and the decision of the United States Supreme Court in 'Two Hundred
Chests of Tea',  6 L.Ed. 128 emphasised that commercial understanding in
respect of the tariff items should be preferred. It was observed that the
legislature does not suppose our merchants to be naturalists or geologists, or
this case the use of these two items and their composition when analysed,
revealed that in essence they performed the same functions as plastic emulsion
paint does, though there was some difference in them. Affidavits of traders and
others had been filed. These were examined and accepted by the Technical Member
and these were not rejected by the Judicial Member. The Revenue did not adduce
any evidence in rebuttal. Therefore, in view of the composition,
characteristics, user and how it is known in the trade, the Tribunal came to
the conclusion that Decoplast was plastic emulsion paint. This is a finding of
fact arrived at on relevant and valid materials. There was no misdirection in
law. Therefore, there is no ground for interference with the said order.
aforesaid view of the matter, we decline to entertain the appeal under section
35L of the Act. The appeal is, therefore, dismissed.