Municipal Corporation for the City of Thane & Ors Vs. Asmaco Plastic Industries & Ors  INSC 338 (17 July 1998)
Agrawal, G.B. Pattanaik, S. Rajendra Babu Rajendra Babu, J.
CIVIL APPEAL NOS. 3492/92, 3493/92 & 7087-83/93
these appeals, the question that arise for consideration are as follows:- (1)
Whether for the purpose of levy of Octroi duty P.V.C. Resins in powder form
would fall under plastic and plastic goods, plastic powder' in Item 53(c) of
Schedule I to Maharashtra Municipality (Octroi duty) Rules, 1968 framed under
the Bombay Provincial Municipal Corporation Act, 1949 or under Item 32(c) of
Schedule H to the Municipal Corporation (Levy of) Octori Rules, 1965 framed
under the Bombay Municipal Corporation Act, 1888.
whether for the purpose of levy of Octroi duty Synthetic Hydrocarbon resin is
to be treated as Plastic and plastic goods, plastic powder' in Item 32(c) of
Schedule H to the Municipal Corporation (Levy of) Octroi Rules 1965 framed
under the Bombay Municipal Corporation Act, 1888.
Appeals Nos. 3491-93 of 1992 relate to Octroi duty levied by the Municipal
Corporation of Thane which is governed by the Bombay Provincial Municipal
Corporation Act, 1949. Octroi duty is levied by the said Corporation under the Maharashtra municipality (Octroi duty) Rules,
1968 and the relevant entries which were considered by the High Court were
Entry 40 (b) relating to "plastic and plastic goods, plastic powder,
etc." In the impugned judgment of the division Bench of the High court has
held that P.V.C. Resins powder form does not fall under "plastic" in
Entry 53(C) but falls under "chemicals" in Entry 40(b).
Appeals Nos. 7087-88 of 1993 relate to Municipal Corporation of Greater Bombay
which is governed by Bombay Municipal corporation Act, 1888 and the Municipal
Corporation (levy of) Octroi Rules 1965. In that case, relevant Entry is Entry
32(c) and in the said entry also the words "plastic and plastic goods,
plastic powder" have been used.
respondents filed writ petitions to contend that the said goods are only
ingredients used in the manufacture of plastic goods and, therefore, are
neither plastic in nature nor powder in form; that it is not a resin and all
resin must be regarded as polymers and not plastics; that unless other
ingredients like stabilizer and lubricants are used; that there cannot be
solidarity in its finished state and shaping by flow at some stages of its
manufacture; that the said product is neither a perfume nor a toilet requisite,
a colour or a household good and does not answer the description of goods
listed under the particular class and, therefore, they contended that they do
not constitute plastic. They also set out before the High Court in challenging
the action of the respondent certain technical details as to the nature of the
commodity in question and contended that the levy of Octroi duty on the said
product under Item No. 32(c) of schedule H or Entry 53(c) of schedule I under
relevant Rules is not appropriate. The substance of the contentions put forth
on behalf of the respondents is that plastic is a material that contains a high
polymer usually synthetic, combined with other ingredients such as curatives,
fillers, reinforcing agents, colorants, plasticisers etc. While synthetic resin
of which the said product is but one type is a polymer synthesized, in this
particular case, for adhesive use. Secondly it was stated that synthetic resin
is a polymer itself while plastic is polymer plus the additives mentioned as
aforesaid. Therefore, they contended that the product in the form of pellets
and not in the form of powder could be covered by Item No. 32 (c) of the
Schedule to the said Act.
further pointed out that hydrocarbon resin is distinct from plastic. Entry
40(B) relates to chemical of all sorts, while Entry 53(C) relates to plastic
and plastic goods, plastic powder, etc. The Bombay High court held that the
P.V.C. resin in powder form does not fall under plastic and plastic goods under
Entry 53(c) or entry 32(C) of the relevant rules and falls under head chemical
under Entry 40 (b) Schedule of relevant Rules. Hence these appeals.
Schedule framed in accordance with the Maharashtra Municipality (Octroi duty) Rules, 1968, class II
refers to articles set out in the schedule giving the serial number,
description of the goods and their rate at which the octroi is levied. The
goods are classified under class II as Articles used for food and drink for men
and animals and drugs and under serial No. 14 all chemicals, chemical insecticides,
surgical goods of all kinds are included.
III refers to articles used for fuel lighting, washing and industrial use and
under Item 40 (b) chemicals of all sorts are included.
firstly refer to the Scheme of bringing several commodities to tax the several
goods under the Octroi Schedules. In either rules several classes of goods are
mentioned in various headings like articles of good, animals, articles used for
fuel lighting, washing and industrial use, articles used in the construction of
building, roads, and other structures and articles made of wood or cane,
perfumes, toilet requisites, colours and household goods, tobacco requisites
and so on. Under each heading several goods are mentioned but we cannot discern
any scientific basis in bringing these goods under one heading or the other.
For example in class III Articles used for fuel, lighting, washing and
industrial use, it is not clear whether charcoal which is at Item No. 14 when
brought into a local area which is to be used to industrial use could be
subjected to octroi duty. similarly, when soap of all kinds is used in Item No.
17, boot and metal polish are lugged in. While detailing the rates of duty what
is stated is 2 per cent ad valorem for washing soap and bath soap costing not
more than Rs. 1.25 per cake. It obviously would indicate that these goods need
not lighting or washing.
soap is used as a washing material, boot and metal polish cannot be stated to
be a washing material. Again various detergents used in washing clothes, floor
and utensils are referred to Item No. 18. It is not clear whether it is related
only to such goods which are meant for the purpose of industrial use. Viewed
from this angle, we do not think the classification of goods made in these
entries are on any scientific basis and heading as such in any one group does
not by itself control the meaning to be attached to each of such goods.
entry 32 (c) or the rules framed under Corporation Act or under Entry 53 (c) of
the Octroi Schedule framed under Municipalities Act, we are concerned with the
expression "plastic, plastic goods and plastic powder". We may
contradistinguish this Entry with a relatable entry in the Customs Tariff Act
where the goods are more scientifically categorised. Under Chapter 39 of the
Customs Tariff Act, expression "plastic and articles thereof" is used
to bring within that heading the "Primary forms, polymers of ethylene,
polymers of propylene or of other olefins, polymers of styrene, vinylacetate or
other vinyl esters". Polymers of vinyl chloride or of other halogenated
olefins in primary forms and vinyl chloride polymers are also brought in under
this heading. In the present enactment when the expression "plastic,
plastic goods and plastic powder" is used along with bakelite and bakelite
goods and the manner in which the legislature uses these expressions will
clearly indicate that the intention is the cover all kinds of plastic material
whether in primary form or in any other secondary form.
counsel on either side relied on technical literature on the matter to impress
upon us the strength of their respective cases. We do not think it would be
appropriate to rely upon such data to interpret the Entry in question in one
manner or the other because in tax enactments when particular commodities are
brought to taxation the meaning attributed to the commodities will be with
reference to their commercial parlance, that is, if those who deal with the
goods understand the said goods in one manner or the other. The technical material
though of course may be useful on certain aspects, the same will not be
decisive of the matter.
necessary to advert to a few decisions relied upon by the learned counsel. In
chemicals and Fibres India distinction was sought to be drawn about between
resins, polymers, polymer plus additives and plastics. The question that fell
for consideration in that case was whether polyester chips of textile grade was
assessable to excise duty under Item No. 15A of Schedule I of Central Excise
and Salt Act, 1944. The goods were classified in a different manner and polymer
terene was specifically added therein. In the manufacture polythene films,
lay-flat tubings and P.V.C. sheets and polyvinyl chloride sheets were
specifically mentioned. In that context the court had to examine the various
meanings given to the expression thereunder and adopted the nomenclature of the
January 1978 Edition of Brussels Tariff Nomenclature. It was not disputed in
that case that the polymer chips fibre grade is a saturated linear polyester.
Considering the nature of the product on the material placed before the Court,
it was held that it fell within clause (1) of Item No. 51 A of the First
schedule to the Excise Act. On that basis the resins polymers and polymer
additives were separately considered.
Industrial Plastic Corporation Private Limited and Others vs. union of India and another 1983 E.L.T. 425 (Bom.),
distinction between plastic and resin was noted. The expression
"plastic" was held to be broader than the expression "resin"
but it was also noticed that both these terms are used indiscriminately. Though
etymologically and scientifically, the products such as clay, glass or rubber
could be considered to be plastic, they were never regarded as such. Again the
entry that fell for consideration was item No. 51 A of the First Schedule to
the Central Excise and Salt Act.
think that the appropriate manner in which the commodity in the present case,
namely, plastic powder, has been treated as a separate entry it is brought to
tax under Item No. 32(c) or 53 (c) to Schedule H under the Relevant Rules.
Similar would be the position with reference to Hydrocarbon resins. Even
Hydrocarbon resin is treated on the same footing as a synthetic plastic and,
therefore, the goods in question cannot be treated as plastic goods or plastic
powder but as separate goods and therefore, we cannot accept the contention put
forth on behalf of the respondents that the said goods are neither plastic in
nature nor powder in form and we do not accept the contention that Hydrocarbon
resin is distinct from plastic.
view of the above discussion, we allow the appeals filed by the Municipal
Corporation and Municipal Council, Thane and set aside the order made by the
High court by declaring the goods as falling within the Entry as stated
earlier. In the circumstances of the case, the parties on either side shall
bear their respective costs.