G. Claridge
and Company Limited Vs. Collector of Central Excise [1991] INSC 34 (12 February 1991)
Agrawal, S.C. (J) Agrawal, S.C. (J) Shetty, K.J. (J)
CITATION:
1991 SCR (1) 317 1991 SCC (2) 229 JT 1991 (1) 394 1991 SCALE (1)188
ACT:
Central
Excises and Salt Act, 1944/Central Excise Rules, 1944/ Central Excise Tariff
Act, 1985: First Schedule, Item No. 17 & Notification dated 28.2.1982/Rule
8(1)/Chapter 48, Heading 48.18: 'Egg trays'-Whether regarded as 'containers'.
Statutory
Interpretation: Two or more words-Coupled together susceptible of analogous
meaning-Interpretation of.
Words
and Phrases: 'Containers'-Meaning of.
HEAD NOTE:
The
appellant was a manufacturer of egg trays and other similar items. Before the
introduction of Central Excise Tariff Act, 1985 (new Tariff) effective from
1.3.1986, Central Excise and Salt Act, 1944 (old Tariff) was applicable to the
relevant products. The appellant, classifying its product under Item 68 of the
old Tariff, was paying duty accordingly. By Notification dated February 28, 1982, issued under Rule 8(1) of the
Central Excise Rules, 1944, the Central Government exempted articles of paper
and paper-board falling under Item 17(4) of the old Tariff. The appellant filed
a revised classification list for its products seeking classification under
item 17(4). The Asstt. Collector, Central Excise held the products classifiable
as 'articles of pulp' under Item 68 of the old Tariff, and the appellant was
required to pay excise duty accordingly.
On
appeal, the Collector (Appeals) reversed the order of the Asstt. Collector, and
held that the products were made out of waste paper and were classifiable under
Item 17(4) as 'articles of paper and paper-board'. The Revenue filed appeals
before the Customs, Excise and Gold (Control) Appellate Tribunal.
On
introduction of the new Tariff, the appellant classified the relevant products
as 'containers' under sub-heading 4818.19 and claimed exemption. The Asstt.
Collector held that the products were not 'containers' but were 'articles of
pulp' falling under sub-heading 4819.90 and accordingly chargeable to duty.
Setting aside the order in 318 appeal, the Collector held that the products
were 'packing containers' and classifiable under sub-heading 4818.19.
The
Revenue appealed before the Appellate Tribunal, which allowed all the appeals
by a common judgment, but remanded the matter to the Collector (Appeals) with
regard to the recovery for a certain period.
In the
assessee's appeal to this Court it was contended that the `egg trays' manufactured
by the appellant were 'containers' under Item 17 and Heading 48.18 of the
respective Tariffs; that merely because the egg tray was described as a tray
does not mean that it was not a container; and that it was not required that a
container should be closed from all sides.
On the
question whether: egg trays and other similar products manufactured by the
appellant are 'containers' falling under Item No. 17(4) or 17(3) of the First
Schedule to the Central Excises and Salt Act, 1944 and Heading 48.18 of the
Central Excise Tariff Act, 1985.
Dismissing
the appeals, this Court,
HELD:
1. 1 'Egg trays' being receptacles which are not covered or enclosed cannot be
used for transportation of articles and cannot be regarded as 'containers'
under Item 17 of the First Schedule to Central Excise and Salt Act, 1944 and
Heading 48.18 of the Schedule to Central Excise Tariff Act, 1985. [326B]
1.2 Moulded
pulp egg trays containing the eggs are put in a standard case for the purpose
of transport. The case in which the egg trays are put, are 'containers' and not
the 'egg trays' itself. [326E-F]
1.3
The expression 'container' is used in three different senses: in a broad sense,
it means a receptacle which contains; in a narrower sense, it means a
receptacle in which articles are covered or enclosed and transported; and in a
more limited sense, it means enclosures used in shipping or railway for
transport of goods. If used in a broad sense, `container' would include a tray
because it is a receptacle which contains articles and, therefore, an egg tray
would be a 'container'. But an egg tray would not be a 'container' in a
narrower sense because articles placed in it are not covered or enclosed and
they cannot be transported as such. [325D-F] 319
1.4 In
item 17 of the First Schedule to Central Excises and Salt Act, 1944 the word
'containers' is preceded by the words 'boxes, cartons, bags and other packing'
and in Heading 48.18 of the Schedule to Central Excise Tariff Act, 1985, the
word 'containers' is preceded by the words 'cartons, boxes' and is followed by
the words 'and cases'. Considering the expression 'containers' in the context
in which it is used in the relevant tariff items, the said expression has to be
construed to mean 'packing containers' which are analogous to boxes and
cartons, that is, an enclosed receptacle which can be used for storage and
transportation of articles. [325G, 326A-B] Webster's New Collegiate Dictionary,
1975 Chambers' 20th Century Dictionary Indian Standard- Glossary of Terms
Glossary of Packaging Terms (USA) Glossary of Packaging Terms (Australia) New Encyclopedia Britannica,
referred to.
2. It
is a well-accepted canon of statutory construction that when two or more words
which are susceptible of analogous meaning are coupled together they are
understood to be used in their cognate sense. It is based on the principle that
words take as it were their colour from each other, that is, more general is
restricted to a sense analogous to a less general. [325G-H, 326A) Dr. Devendra
M. Surti v. State of Gujarat, [1969] 1 SCR 235, relied on.
CIVIL
APPELLATE JURISDICTION: Civil Appeal Nos. 160-63 of 1990.
From
the Order dated 25.9.89 of the Customs Excise and Gold (Control) Appellate
Tribunal, New Delhi in Appeal No. E/1883/85-C,
E/2031/85-C, E/ 1468/88-C and E/ 1986/88-C (Order No. 543-546 of 1989-C).
M.L. Lahoty,
Mrs. Meeta Sharma and P.S. Jha (NP) for the Appellant.
M. Chander
Sekaran, Additional Solicitor General (N.P.). M. Gouri Shanker Murthy, G. Venkatesh
Rao and P. Parameshwaran for the Respondent.
The
Judgment of the Court was delivered by 320 S.C. AGRAWAL, J. These appeals raise
for consideration the question as to whether egg trays and other similar
products manufactured by the appellant can be regarded as 'Containers' under
the relevant entries in the Central Excise Tariff.
Till February 28, 1986 the excise tariff was contained in
the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter
referred to as 'the old Tariff') and with effect from March 1, 1986, the excise tariff is contained in
the Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as
'the new Tariff). The relevant entry in the old Tariff was Item 17. During the
period March 1, 1982 to February, 1983, the said Item 17
read thus:
"Paper
and paper board, all sorts (including paste-board, mill board, straw board,
cardboard and corrugated board) and articles thereof specified below, in or in
relation to the manufacture of which any process is ordinarily carried on with
the aid of power-
(1) Uncoated
and coated printing and writing paper (other than poster paper)
(2)
Paper board and all other kinds of paper (including paper or paper boards which
have been subjected to various treatments such as coating, impregnating,
corrugation, creping and design printing), not elsewhere specified.
(a)
All sorts of paper commonly known as Kraft paper, including paper and paper
board of the type known as Kraft liner or corrugating medium, of a substance
equal to or exceedings 65 gram per square metre in each case.
(b)
Others.
(3)
Carbon and other copying papers (including duplicator stencils) and transfer
papers, whether or not cut to size and whether or not put up in boxes.
(4)
Boxes, cartons, bags and other packing containers (including flattened or folded
cartons, whether or not printed and whether in cartons), whether or not printed
and whether in assembled or unassembled conditions." 321 Item 68 of the
old Tariff was in the nature of residuary entry.
By
notification No. 66/82-CE dated February 28, 1982, the Central Government, in exercise of the powers
conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, exempted
articles of paper or paper-board falling under sub-item (4) of item 17 of the
old Tariff from the whole of the duty of excise leviable thereon. The said
exemption was, however, not applicable to printed boxes and printed cartons
(including flattened or folded printed boxes and flattened or folded printed
cartons) whether in assembled or unassembled condition.
With
effect from March 1,
1983, Item 17 was
substituted and during the period March 1, 1983 to February
28, 1986, it read as
under:
c
"Paper and Paper board, all sorts (including pasteboard, mill board,
strawboard, cardboard and corrugated board), and articles thereof specified
below, in or in relation to the manufacture of which any process is ordinarily
carried on with the aid of power- (1) Paper board and all other kinds of paper
(including paper or paper boards which have been subjected to various
treatments such as coating, impregnating, corrugation, creping and design
printing), not elsewhere specified.
(2)
Carbon and other copying papers (including duplicator stencils) and transfer
papers, whether or not put up in boxes.
(3)
Boxes, cartons, bags and 'Other packing containers (including flattened or
folded boxes and flattened or folded cartons), whether or not printed and
whether in assembled or unassembled conditions." In the new Tariff, the
relevant entry under Heading 48.18 in Chapter 48 is as follows:
G
------------------------------------------------------------ "48.18 OTHER
ARTICLES OF PAPER PULP, PAPER. PAPERBOARD, CELLULOSE WADDING OR WEES OF
CELLULOSE FIBRES:
Cartons,
boxes, containers and cases (including flattened or folded boxes and flattened
or folded cartons), whether in assembled or unassembled condition:
322
4818.11 Intended for packing of match sticks 4818.12 Printed cartons, boxes,
containers and cases, made wholly out of paper or paper-board of heading No.
or
sub-heading No. 48.04, 4805.11, 4806.19, 4807.91, 4807.92, 48.08 or 4811.10, as
the case may be 4818.13 Other printed cartons, boxes and cases 4818.19
Other" ------------------------------------------------------------
4818.20 Toilet tissues, handkerchiefs and cleansing tissues of paper 4818.90
Other." ------------------------------------------------------------ On
products falling under sub-Heading 4818.19, the excise duty was nill whereas on
products falling under sub-Heading 4818.90, the excise duty was payable at the
rate of 12%.
M/s.
G. Claridge & Company Ltd. the appellant herein manufactures (i) egg filler
flats, (ii) egg cartons, (iii) tube light packing trays, (iv) duck egg trays
and (v) apple trays. It filed a classification list for the above goods
effective from April 1,
1981 classifying the
products under Item 68 of the old Tariff and it was paying duty at the
prevailing rate under Item 68. After the introduction of the revised Item 17
with effect from February 28, 1982/March 1, 1982, the said appellant filed a
revised classification list effective from March 1, 1982 for the aforesaid five
products seeking classification under Item 17(4) and claiming full exemption
from central excise duty under notification dated February 28, 1982. This
classification list was approved by the Assistant Collector of Central Excise, Pune
Division on March 11, 1982, but on re- examination Department felt that the
said products did not merit classification under Item 17(4) but under Item 68
of the old Tariff and a show cause notice dated May 4, 1984 was issued. After
considering the reply of the appellant to the said show cause notice, the
Assistant Collector of Central Excise, Pune Division passed an order dated
January 28, 1985 whereby he held that 'egg trays' manufactured by the appellant
were correctly classifiable under Item 68 of the old Tariff and not under Item
17(4) and the appellant was required to pay central excise duty at the
appropriate rate leviable on all types of egg trays manufactured and cleared
from its unit during the period of six months prior to the notice dated May 4,
1984. The Assistant Collector was of the view that the articles manufactured by
the appellant were articles manufactured directly from the pulp and were,
therefore, classifiable as 'articles of pulp' under Item 68.
The
said order of the Assistant Collector was reversed in appeal by the Collector
of Central Excise 323 (Appeals) by his order dated April 30, 1985 on the view
that the products manufactured by the appellant were made out of waste paper
and they were classifiable under Item 17(4) as 'articles of paper and
paper-board'. Feeling aggrieved by the said order of the Collector (Appeals),
the Department filed appeals Nos. E/1883/85-C and E/2031/85-C before the
Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to
as 'the Appellate Tribunal').
After
the introduction of the new Tariff with effect from March 1, 1986, the
appellants filed a classification list classifying their products as
'containers' falling under sub-heading 4818.19 of the new Tariff and since no
duty was payable under the said sub-heading, the appellants claimed exemption
from payment of excise duty on their products. The said classification list was
approved provisionally but subsequently the Assistant Collector, Central Excise
issued a show cause notice dated October 16, 1986 proposing to classify the
goods under sub-heading 4818.90 chargeable to duty @ 12% ad valorem. After
considering the reply to the said show cause notice, the Asstt. Collector,
Central Excise, by his orders dated April 15, 1987 and July 1, 1987 held that
the products manufactured by the appellant were not 'containers' but were
'articles of pulp' falling under sub-heading 4818.90. The said orders were set
aside by the Collector of Central Excise (Appeals) by his orders dated March
22, t988 and June 6, 1988. The Collector (Appeals) held that the products
manufactured by the appellant were 'packing containers' and classifiable under
sub-heading orders of the Collector (Appeals), 4818.19. Feeling aggrieved by the
Department filed appeals before the Appellate Tribunal which were registered as
Appeals Nos. E/1468/88-C and E/1986/88-C. All the above four appeals were
disposed by the Appellate Tribunal by a common order whereby the said appeals
were allowed. The Appellate Tribunal held that the products manufactured by the
appellant cannot come within the sub- classification below containers and were
not classifiable under sub-heading 4818.19 but were classifiable under
sub-head-ing 4818.90 of the new Tariff and similarly they were not classifiable
under item 17(4) or 17(3) of the old Tariff. The Appellate Tribunal was also of
the view that the products manufactured by the appellant are articles of paper
because starting raw materials is waste paper. The Appellate Tribunal has held
that the duty demanded by the Assistant Collector for six months prior to the
issue of show cause notice dated May 4, 1984, i.e., from November 4, 1983 is
legally sustainable and with regard to recovery of the duty for the earlier
period from March 1, 1982 by invoking the proviso to Section 11- A(l) of the
Central Excises and Salt Act, 1944, the Appellate Tribunal remanded the matter
to the Collector (Appeals) for considering the said question.
324
The question which arises for consideration in these appeals is whether the egg
trays and other similar products manufactured by the appellants are
'containers' falling under Item 17(4) of 17(3) of the old Tariff and
sub-heading 4818.19 of the new Tariff.
The
learned counsel for the appellant has urged that the products manufactured by
it are 'containers' and in support of this submission the learned counsel has
invited our attention to the meaning of the term 'container' as contained in
the Dictionaries and the Indian Standard Glossary of Terms relating to paper or
paper-board, packaging materials, Glossary of Packaging Terms (USA) and
Glossary of Packaging Terms (Australia). The submission of the learned counsel
is that a 'container' is a receptacle which holds, restrains or encloses the
item to be stored or transported and that the egg tray and other similar
products manufactured by the appellant are 'containers' because they are
receptacles for holding, storing and transporting the things kept in them. It
has been urged that a 'tray' is a shallow lidless container and merely because
an egg tray is described as a tray does not mean that it is not a 'container'.
It is
contended that egg trays are so designed as to protect the eggs from breakage
and that egg trays provide the best mode for storage and transport of eggs. The
learned counsel has submitted that the Appellate Tribunal was in error in
proceeding on the basis that egg tray and other similar products manufactured
by the appellant cannot be regarded as 'containers' because when a single egg
tray is reversed or turned upside down or tilted sideways vertically at 90%
angle, the contents would fall down. The submission of the learned counsel is
that it is not required that a container should be closed from all sides and
that a container can also be open.
The
expression 'container' has been thus defined in the dictionaries and Glossaries
of Packaging Terms:
"Container:
One that contains; a receptacle or flexible covering for shipment of goods.
(Abstract
from Webster's New Collegiate Dictionary, 1975) "Container: that which
contains that in which goods are enclosed for transport.
(Abstract
from Chambers' 20th Century Dictionary) "Containers-Any receptacle which
holds, restrains or 325 encloses any article or commodity or articles or
commodities to be stored or transported.
(Abstract
from Indian Standard-Glossary of Terms: 1.8. 4261- 1967) "Container. (1)
In general, any receptacle or enclosure used in packaging and shipping.
(2)
Relatively large, reusable enclosures to be filled with smaller packages and
discrete objects, to consolidate shipments and allow transport on railway flat
cars, flatbed trailers, aircraft, in ships' holds or as deckloads, etc. (See
CARGO TRANSPORTER; CONTAINERIZATION).
(3)
Any receptacle for holding a product." [Abstract from Glossary of
Packaging Terms (USA)] "Container. A large box for intermodal transport,
containing many smaller boxes of different shapes and sizes as well as
individual articles.
[Abstract
from Glossary of Packaging Terms (Australia)] The above definitions would show
that the expression 'container' is used in three different senses:
in a
broad sense, it means a receptacle which contains; in a narrower sense, it
means a receptacle in which articles are covered or enclosed and transported;
and in a more limited sense, it means enclosure used in shipping or railway for
transport of goods. If used in a broad sense, 'container' would include a tray
because it is a receptacle which contains articles and, therefore, an egg tray
would be a 'container'. But an egg tray would not be a 'container' in a
narrower sense because articles placed in it are not covered or enclosed and
they cannot be transported as such. It is,therefore, necessary to ascertain
whether the expression 'container' in Item 17 of the old Tariff and Heading
48.18 of the new Tariff has been used in the broad sense to include all
receptacles or in a narrower sense to mean those receptacles in which the
articles are covered or enclosed and transported. For this purpose, the context
in which the word 'container' has been used in these entries has to be
examined. In Item 17 of the old Tariff, the word 'containers' is preceded by
the words 'boxes, cartons, bags and other packing' and in Heading 48.18 of the
new Tariff, the word 'containers' is preceded by the words cartons, boxes' and
is followed by the words 'and cases'. It is a well-accepted canon of statutory
construction that when two or more words which are susceptible of analogous
meaning are coupled together they 326 are understood to be used in their
cognate sense. It is based on the principle that words take as it were their colour
from each other, that is, the more general is restricted to a sense analogous
to a less general. [See: Dr. Davendra M Surti v. State of Gujarat, [1969] 1 SCR 235 at p. 240].
Considering the expression 'containers' in the context in which it is used in
the relevant tariff items, we are of the opinion that the said expression has
to be construed to mean 'packing containers' which are analogous to boxes and
cartons, that is, an enclosed receptacle which can be used for storage and
transportation of articles. Egg trays being receptacles which are not covered
or enclosed cannot be used for transportation of articles and, therefore, they
cannot be regarded as 'containers' under the abovementioned entries in the
Excise Tariff.
According
to the New Encyclopaedia Britannica, the practice followed in the various
countries for the packaging of eggs for transport is as follows:
"Packaging.
For retail use in the United
States, eggs are
repackaged in dozen and half-dozen paperboard cartons. In some other countries
they are packed with straw or excelsior in long wooden boxes. In many parts of
the world, they are marketed in baskets or boxes and the individual eggs are
sold by weight. Several European countries stamp each egg with a date and
number to meet the import restrictions of other nations." [p. 444, Vol. 6,
1974 edition] The Glossary of Packaging Terms (USA) also shows that moulded
pulp egg trays are put in a standard case which indicates that the egg trays
containing the eggs are put in a case for the purpose of transport. In other
words, the case in which the egg trays are put are `containers' and not the
'egg tray' itself.
For
the reasons aforesaid, we are of the opinion that the Appellate Tribunal was
right in taking the view that the egg trays and other similar products
manufactured by the appellant cannot be regarded as `containers' under the
relevant items of the Excise Tariff.
The
appeals, therefore, fail and are accordingly dismissed. There will be no orders
as to costs.
R. P.
Appeals dismissed.
Back
