Rajasthan High Court - Jaipur
M/S Rayban Sun Optics vs Dy Commissioner(Appeals)Com Tax Deptt on 15 October, 2013
Author: Arun Bhansali
Bench: Arun Bhansali
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR : O R D E R : 1. S.B. SALES TAX REVISION NO.78/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 2. S.B. SALES TAX REVISION NO.543/2011 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 3. S.B. SALES TAX REVISION NO.544/2011 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 4. S.B. SALES TAX REVISION NO.545/2011 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 5. S.B. SALES TAX REVISION NO.79/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 6. S.B. SALES TAX REVISION NO.80/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 7. S.B. SALES TAX REVISION NO.81/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 8. S.B. SALES TAX REVISION NO.82/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 9. S.B. SALES TAX REVISION NO.83/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 10. S.B. SALES TAX REVISION NO.84/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 11. S.B. SALES TAX REVISION NO.85/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 12. S.B. SALES TAX REVISION NO.86/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department 13. S.B. SALES TAX REVISION NO.87/2012 RayBan Sun Optics India Ltd. vs. Dy. Commissioner (Appeals), Commercial Tax Department Date of Order :: 15th October, 2013 P R E S E N T HON'BLE MR. JUSTICE ARUN BHANSALI Mr. M.P. Devnathan) Mr. Sameer Jain ) Ms. Mahi Yadav ) for the petitioner. Mr. R.B. Mathur ) Ms. Tanvi Sahai ) for the respondents. ---- REPORTABLE BY THE COURT:
These revision petitions under Section 84 of the Rajasthan Value Added Tax Act, 2003 ('VAT Act') have been filed aggrieved against the judgment dated 12.07.2011/17.11.2011 passed by the Rajasthan Tax Board, Ajmer ('Tax Board'), whereby, the appeal filed by the petitioner against orders dated 24.07.2009 passed by the Dy. Commissioner (Appeals), Commercial Taxes Department, Alwar ['DC (Appeals)'] was partly allowed, wherein, while order relating to the rate of tax was maintained, the penalty imposed was set aside. The DC (Appeals) had upheld the imposition of tax and penalty by the Commercial Taxes Officer (Anti Evasion), Rajasthan First, Jaipur ['CTO (AE)'] and Commercial Taxes Officer, Circle-A, Bhiwadi ('CTO') vide assessment orders passed on various dates.
These 13 petitions arise out of assessment orders passed on different dates by CTO (AE) and CTO pertaining to different quarters. For the sake of convenience facts as narrated in S.B. Sales Tax Revision No.78/2012 are being considered.
The revision petitions were admitted by this Court by order dated 19.04.2012 on the following question of law:-
Whether in the facts and circumstances of the case, Rajasthan Tax Board was legally justified in not classifying the 'sun-glasses' under Entry 125 of Schedule IV of Part A as 'Spectacles, parts & components thereof, contact lens and lens cleaner' taxable @ 4% but classifying under the residuary clause under Schedule V @ 12.5%?
The facts in brief may be noticed thus: the petitioner is a registered dealer under the VAT Act and is engaged in manufacturing/importing/trading and selling of sunglasses and frames thereof. A survey of the dealers' premises was conducted by the CTO (AE) and, on investigation, it was found that the petitioner was collecting and depositing Value Added Tax ('VAT') @ 4% on the sale of sunglasses, whereas, in the opinion of the CTO (AE), the rate of VAT on sunglasses was @ 12.5% as per the Schedule notified for the rate of tax on the goods under VAT Act. In the opinion of the CTO (AE), the product sunglasses was not covered under Serial No.125 of Schedule IV (goods taxable @ 4%) of the VAT Act and the dealer was wrongly paying tax by classifying its product sunglasses under Entry 125 and, therefore, a show cause notice was issued to the petitioner.
The petitioner filed reply and contested the show cause notice.
The CTO (AE) vide his order dated 04.02.2008 after considering the submissions made by the petitioner concluded that the goods viz. RayBan brand sunglasses were classifiable under Entry 1 of Schedule V (residuary entry) and was taxable at 12.5% of VAT and that the petitioner had willfully avoided payment of tax, imposed penalty under Section 61 of the VAT Act. The CTO (AE) held thus:-
7. On the above facts, for proper and correct classification of the impugned goods it is required to be decided whether :-
A. Entry at Sr. No.-125 of the Schedule -IV is inclusive/illustrative or restrictive exhaustive one.
B. Can sunglasses be considered finding a place in the entry for spectacles, parts and components thereof, contact lens and lens cleaner.
C. Presumptive inclusion in an entry be allowed for taxation matter.
D. In common parlance and in trade parlance, are spectacles treated/understood as sunglasses.
E. If applied principle of ejusdem-generis, would sunglasses get a place in an entry for spectacles and contact lens.
8. An entry in taxation matter, broadly, can be either ----
(1) Illustrative and inclusive entry.
(2) Restrictive and exhaustive entry.
An entry having references- all types of, all kinds of, such as, such goods, like articles, similar types, this kind, including, etc----, is an entry of inclusive and illustrative one. Such types of entries are of larger scope and ambit than what is described there in.
Where as entry which sans references all types of, all kinds of, such goods, like articles, similar types, this kind, including, etc ---, is entry of restrictive and exhaustive in nature. Such entries are by name, with specific description and some times with reference like that is to say, namely. The scope and ambit of such entry is specific, limited and confined to what has been described there in.
The entry at Sr. No.-125 of the Schedule -IV, as claimed by the assessee, is read as spectacles, part and components thereof, contact lens and lens cleaner.
This entry is plain, clear and without any use of genus, hence, it is an exhaustive and restrictive entry. This view would get further strength if it is compared with those entries of inclusive and illustrative ones of this schedule only. For example, entries of this Schedule IV at Sr. No.-104 - printed material including diary, calender etc. These all entries are found with genus and comparison between these on one hand and that at Sr. No.-125 would show a distinction is that all the entries at Sr. No.-2, 3, 21 & 104 are with a genus and scope enlarging words- such as, like, other, etc, including, hence inclusive and illustrative entries. Whereas, entry at Sr. No.-125 is with specific description and it ends without having any genus and scope enlarging word, hence it is a restrictive and exhaustive entry. Accordingly, inclusion of sunglasses into it, found to be not permissible.
11. The principle which has been explained in the black law dictionary VIII edition, same is reproduced EJUSDEM-GENERIS [Latin - of the same kind or same class] A canon of construction that when a general word or phrase follow a list of specific, the general word or phrase will be interpreted to include only items of the same type as those listed. For example, in the phrase Horse, Cattle, Sheep, Pigs, Goats or any other farm animal despite its seeming breadth would probably be held to include only four legged, hoofed mammals typically found on farm, and this would exclude chicken.
From above, it is very clear that inclusion would be allowed only if genus is there. The Hon'ble Apex Court has held that - but unless there is a genus which can be comprehended from the preceding words, there can be no question of invoking this rule. Nor can this rule have any application where the general words precede with specific words. Vide paragraph-6 of the decision in case of Asstt. Collector of C.Ex v/s Ramdev Tobacoo Company 1991 (51) ELT 631 (SC).
It has been further elaborated by the Hon'ble Apex Court in case of M/s Grasim Industries Ltd. V/s Collector of Customs, Bombay-2002(141) ELT 593 (SC), Paragraph 8, 9 and 10. In these paras, the Hon'ble Court has held that whenever the language used in the statue is clear, the intension must be gathered from the language used. And construction which requred for its support addition or substitution of words, must be avoided.
In view of the law as settled by the Hon'ble Apex Court, as discussed above addition of word 'sunglasses' in the entry at Sr. No-125 of the Schedule IV to be avoided.
Similarly, it has been held by the Hon'ble Court, in the decision, supra, that no word or expression used in any statute can be said to be redundant or superflows. In the present case, classification of the impugned goods, sunglasses, has to be decided either of two following entries-?
(a) Sr. No. - 125, Schedule-IV spectacles, parts & components thereof, contact lens and lens cleaner,
(b) Sr. No.-1, Schedule-V- goods not covered in any other schedule under the Act or under any notification issued under section 4 of the Act.
If sunglasses, which are not covered by the entry mention at Sr. No.-1 above but still allowed to be include on presumption basis within its ambit, then the entry at Sr. No.-2 above would become redundant which is not allowed in the law.
12. General meaning/understanding of the goods in the trade parlance is an important basis for classification purpose and this issue is no longer a res integra though the assessee has pleaded this principle in their favour, however not found with any support for concluding this being to in this case, on the contrary in the trade also, sunglasses are not sold/bought as spectacles or contact lens. Spectacles and contact lenses are used to correct the defects & deficiencies of vision, whereas sunglasses are normally used to protect eyes from sunrays, dust, wind and for beautification but not in any case to correct the defect of vision.
Infact, in the trade both are distinct product, known differently and used for different purpose. In Rajasthan, these are known and called as DHOOP KE CHASHME & NAZER KE CHASHME, dhoop ke chashme as sunglasses and nazer ke chashme as spectacles. These are used by different name and for different purpose.
Empteen number of decision of judicial foura including Hon'ble Apex Court's decision, it has been held that for classification of goods, proper meaning attached to them by those using products should prevail over scientific & technical meanings of the products, vide paragraph-e of the decision in case of Shree Baidya Nath Ayurved Bharat Ltd V/s CCE, Nagpur 1996 (83) ELT, 492, SC. Similar view has been approved & upheld consistently by the Hon'ble Apex Court, as note and follow the ratio settled in following decision------
(I) Kedia Agglomerated Marbles Ltd V/s CCE-2003 (152) ELT 22, SC (II) Associated Cement Co. Ltd V/s State of M.P. -2004 (168) ELT 151, SC (III) Dabur (India) Ltd V/s CCE, Jamshedpur-2005 (182) ELT, 290, SC.
All the persons using vision correcting frames, refer them as spectacles, in trade also, spectacles are understood, dealt with and referred for correction of defects of the sight, no person whether commoner/trader or opthnmologists call vision correcting spectacles as sunglasses or vice-versa.
Accordingly, applying this cardinal principle of classification, the impugned goods viz- sunglasses cannot be formed as spectacles.
While Assessing Officer distinguished the judgment in the case of Ramchandra Choitram Sons v. Collector of Central Excise, a decision of the CEGAT, Harmonized system of nomenclature (HSN), order dated 03.01.2006 passed by the authority for classification and advance ruling under Karnataka Value Added Tax, 2003, he inter alia, observed and held as under:-
As discussed earlier, classification structure of the goods in R-VAT Act, 2003 is very different from those two major indirect tax statutes of the Custom Tariff Act, 1975 and the Central Excise Tariff Act, 1985. In these statutes, the goods are covered in various sections and then sections into chapters, headings, sub-headings etc. For classification purpose in these statutes, rules for interpretation, section notes, chapter notes and heading notes etc. have also been provided.There are separate chapters for a class/type of the goods e.g. Livestock, minerals, spices, Rubber, papers .... etc. Whereas in the R-VAT Act, 2003, the goods have been grouped in different tax schedules. Hence, it becomes more imperative to go by specific description of the goods given in an entry. It can not be a case that particular goods have to be fit in an entry, though not having any mention of that goods, specifically when that entry is not an inclusive or illustrative but a restrictive and exhaustive one i.e. entry no 125 of Schedule IV. Therefore the reply submitted by the dealer deserves to be disallowed and the relied upon cited decisions are not applicable in the facts and circumstances in the present case.
On the grounds as discussed here in above, the goods viz. RayBan brand sunglasses is determined under entry -1 of the Schedule-V of the Notification No-F.12(63)FD/Tax/2005-158 Dated 31/03/2006, @ 12.5 of the VAT.
Feeling aggrieved by the assessment order dated 04.02.2008, the petitioner filed appeal before the DC (Appeals), who by order dated 24.07.2009 while upholding the conclusions arrived at by the CTO (AE) both on tax and penalty, dismissed the appeal filed by the petitioner. The DC (Appeals) held as under:-
????????? ?? ?? ?? ???????? ????, ?? ?? ??? ??? ???????? ?? ?????? ??????? ?? ?????? ?? ?????? ???? ???? ?? ??????? ?? ?????? ???? ?? ?? ????? ????? ?? ?????????? ??????? ??-12 (63) ????/?????/2005-158 ?????? 31-03-2006 ?? ???????? 4 ?? ????????? ??????? 125 ??? Sun glasses ?? ???????? ???? ???? ??? ??, ????? ????? "Spectacles, parts and components thereof, contact lens and lens cleaner ?? ?????? ?? ?? 4 ??????? ?? ?? ?? ???????? ?? ?? ?? ????? Sun glasses ?? ????? ????? ???? ???? ?? ????, ????? Sun glasses ?? ???? ?????????? ?? ????????? ?????? 125 ??? ????? ???? ???? ??? ?? ??? ????? ????? ?? ?????????? ??????? ??-12 (63) ????/?????/2005-158 ?????? 31-03-2006 ?? ?????? Sun glasses ?? ??? ??? ?? ?? ?? ???????? ???? ?? ?? ??, ????? ???? ?????????? ?? ???????? 5 ?? ????????? ??????? 1 ??? Sun glasses ?? ????? ???? ???? ???? ??? ???????? 5 ?? ??????? 1 ?? ???????? ?? ?? ?? ????? ?????? ???????? ???? ??? ??:-
Goods not covered in any other schedule under the Act or under any notification issued under section 4 of the Act, is taxable @12.5% ?? ??????? ??? ???????? ???????? ?????? (????) ????????? ?? ?????, ???????? ????? ?????? ?????? ????? ??????????? ??????? ??-103 ??????? ????? ?? ?????? ???, ???? 36 ?? ????? ????, 2003 ?? ??? ????? ?????? ?????? 29-12-07 ???, ?? ???????????? ???? ?? ?? Sun glasses, Spectacles ???? ???? ????? Sun glasses ?? 12.5 ??????? ?? ?? ?? ?? ??????? ???? ??, ?? ?????? ?? ??????? ??? ???? ???? ???? ???? ???? ??, ??? ?????? ??? ???? ?????? ????????? ???? ?? ????, ????? ??????? ?????? Sun glasses ?? ?????? ??? 41,57,163/- ?? 12.5 ??????? ?? ?? ?? ??????? ????????? ???? ???, 8.5 ??????? ?? ?? ?? ?????? ????? ?? ??? 3,53,359/- ??? ????? ?? ??????? ?? ??? ???? 61 ?? ????? ???? 2003 ?? ??? ?????? ?????? ??? 7,06,718/- ???? ???? ?? ???? ????????? ?????? ???????? ???? ???????? ?? ???? ????"
The petitioner aggrieved by the orders passed by the CTO (AE) and DC (Appeals) approached the Tax Board by way of filing appeal under Section 83 of the VAT Act.
The Tax Board after hearing the parties, while maintaining the findings of the CTO (AE) and DC (Appeals) regarding applicability of tax on the goods dealt with by the petitioner @ 12.5% set aside the penalty imposed by the CTO (AE) and upheld by DC (Appeals). The Tax Board concluded thus:-
6. ??????? ??????? ????????? ?????? ???? ????? ??? ????????? ?? ?????? ?? ??????? ????? ???? "??? ?? ?????" (Sun Glasses) ?? ??????? ????? ??? ?? ???? ?? ?? Rayban originates from sunglasses used to ban harmful rays, namely, the ultraviolet rays. This name has become famous world over. ??? Oxford Companion to Medicine (Volume II) ??? ?? ?? ??????? ?? ?????? SPECTACLES are frame-mounted lenses which correct refractive errors of vision, or reduce the amount of light reaching the eye. ???? ??? ?? ????????? ?????? ???????? The New International Webster's Comprehensive Dictionary of the English Language (Deluxe Encyclopedc Edition 2003) ??? "??????????" ? "?????????" ?? ???-??? ??? ?? ???????? ???? ??? ??? ??? ?? ?? Spectacle - A pair of eyeglasses with hinged bows to secure them before the eyes; used to correct vision or to protect the eyes, as from glare. ??? Sunglasses Spectacles that protect the eyes form the glare of the sun by their coloured lenses. ??? Dornland Illustrated Medical Dictionary ??? Spectacles ?? a pair of lenses in a frame to assist vision ?? ??? ??? ???????? ???? ??? ??? ???? ??????? ????????? ??????? ?? ????????? (appreciation) ?? ?????? ?? ?? "??????????" (Spectacles) ?? ?????? ??? "??? ?? ?????" ?? ??????? ?????? ?? ?? ???????? ???? ??? ?? ?? "??? ?? ?????" (sunglasses) ?? ??????? ?? ?????? ?? ?????? ??? ???????? ???? ?? ??????? ?? ?????? ????? ?? ?????? ?? ?? ????? ?????????? ? ??????? ????? ?? ?????? ????
7. ??????" (??????) MACRO ???, ???????" (???????) (MICRO) ?? ????? ???? ?? ???? ??, ?????? ??????? (????????) ??? ?????? (??????) ???????? ???? ???? ???? ?? ????? "Micro could not be said to include macro, but conversely it could be said to include micro into macro. ???? ?????? ?? ???????? ?? ???????? ?????? (Macro) ???? ???? ?? ??????? ??????? ?? ???????? ?? ??????? ???? ???????? ?? ??/????? ?? ?????? ???? ?? ?????? ?? ??????? ?? ???? ?? ?? ??? ??????? (Interpretation) ???? ?? ???? ?????? ???? ????, ??? ?? ????????? ?????? "??????????" (Spectacle) ??? "?????????" (Sunglasses) ?? ???????? ???? ???? ???????? ?????????? ?? ???????? 1990 (06) LCX, 2006 before the Cegat, Special Bench-D, New Delhi, Ramchandra Choitram sons V/s Collector of Central Excise. ?? ?????? ?? ?? ????? ??????? ??? ??? ??, ??? ?? ????? ????? ?????? ????? ??? ?????? ????? ????? ?? ?????? ????? ??? ??, ?? ???? ?? ???? (Glass Materials) ???? ?? ?? ?????? T.I.-23 A(4) ?? ????, ?????????? ?? ??? ???? ?????? 38 ?? ????? ????? ??? ?????? ????? ???? ???? ???? ??? ??: ?? ??????? ???????? ???????? ????? ?? ????????? ???? ?? ???? ?? ?????? ??? ????????? ?? ?????? ?????? ???? ?????
?? ???????? ?? ???? ??????? ?????? ?? ???????? ? ??????? ?? ?? ?????? ?? ?? "??? ?? ?????" (Sunglasses) ??, ??? ?? ?????" (Spectacle) ?? ?????? ??? ???????? ???? ???? ?? ???? ??? "??? ?? ?????" (Sunglasses) ???? ?????? ??? ??????? ??????? ?? ????? ??? ?? ???? ??? ?? ??? ???????? ?? ??????? 4 ?? ?? ??. 125 ??? ?????? ?????? ?? ????????? ?? ? ???? ??????? ?? ????? ??????, ???, ???, ??? ?? ???????/???? ??? ????/???????? ?????? ?? ?????????? ?????? ?? ??? ??? ???????? ???? ???? ?? ??? ?? ?????? ??????? ?? ???? ??????????? ?????????? ?? ???/??????? ???? ?????? ????? ???????? ???? ???? ???? ??? ??? ??? "??? ?? ?????" (Sunglasses) ?? ??????? ??? ??????? ?? ??????? 5 ?? ??????? ?????????? ?? ?? ???????? ???? ???? ?? ???? ????"
Being aggrieved by the orders passed by the CTO (AE), DE (Appeals) and the Tax Board, the petitioner has approached this Court by way of present revision petitions questioning the legality and validity of the concurrent conclusions reached by three authorities below.
It was submitted by learned counsel for the petitioner that Entry 125 of Schedule-IV to the VAT Act reads thus:-
Spectacles, parts and components thereof, contact lens and lens cleaner.
It was submitted that the terms spectacle and lens have nowhere been defined in the VAT Act and, therefore, the dictionary meaning of the said terms need to be resorted to and referred to certain medical dictionaries/dictionaries, Wikipedia etc., a reference to which would be made in later part of the judgment and submitted that the term spectacles is understood to include sunglasses and that sunglasses were merely type of spectacles : spectacles include sunglasses. Reference was made to an order of CEGAT in the case of Ramchand Choithram Sons v. Collector of Central Excise : 1990 (50) ELT 193 (Tribunal) and a order dated 03.01.2006 passed by the Authority of Advance Rulings under Section 60 of the Karnataka Value Added Tax Act. It was also submitted that the term spectacles cannot be restricted to corrective eyewear and even protective eyewear would be included in the said term. Reference was also made to the Gazette Notification dated 31.03.2006, whereby, Schedule -IV was notified and the entry at Item No.126 at the relevant time reads as under:-
?????? ???? ?????? ?? ???, ????????? ???? ?? ???? ??????"
It was contended that there was no warrant for the CTO (AE) and the Tax Board to read 'dhoop ke chasme' and 'nazar ke chasme' in the said entry. Reference was made to the judgment of Hon'ble Supreme Court in the case of Pappu Sweets & Biscuits v. Commissioner of Trade Tax : 2004 (178) ELT 48, whereby, Hon'ble Supreme Court placed emphasis on the Hindi meaning of the product in dispute to clear the confusion. Reference was also made to the Harmonized System of Nomenclature ('HSN') to indicate that under HSN also spectacles cover sunglasses.
Reliance was also placed on the judgment of Hon'ble Supreme Court in the case of Indian Metals & Ferro Alloys Ltd. v. Collector of Central Excise : 1991 (51) ELT 165 and Bharat Forge & Press Industries (P) Ltd. v. Collector of Central Excise : 1990 (45) ELT 525 to contend that unless the department can establish that the goods in question cannot be brought under any of the specific items mentioned in the tariff, resort cannot be had to the residuary item. Learned counsel also referred to certificates issued by the certain dealers and hospitals in support of his contentions.
Replying to the submissions, it was contended by learned counsel for the Department that all the three authorities below have held concurrently against the petitioner and, therefore, in fact no question of law arises in the present case. It was submitted that the intention of Legislature has always been to charge tax at a low rate on the spectacles, which did not include sunglasses. Reference was made to the entry which existed in the year 1995-96, which provided for 'spectacles upto Rs.400/-', which later on was amended from time to time and, ultimately, resulted in the Entry 125 of Schedule-IV of VAT Act in its present form. It was submitted that it is the common parlance test, which needs to be applied while interpreting the entry in the Schedule and spectacles are always associated with correction of defective eyes.
Reliance was placed on the judgment of Hon'ble Supreme Court in Atul Glass Industries Pvt. Ltd. v. Collector of Central Excise : AIR 1986 SC 1713, wherein, 'glass mirrors' were held to be not falling in tariff entry 'glass and glassware'. Reference was also made to dictionary meaning of the term spectacles and sunglasses.
After having given thoughtful consideration to the rival submissions and having examined the record, this Court is clearly of the view that the question of law as formulated in the present petitions deserves to be answered against the petitioner- assessee and in favour of the respondent-department.
While the claim of the petitioner is that the sunglasses dealt with by it are included in Entry 125 of Schedule-IV of VAT Act, the stand of the Department is that the sunglasses cannot fall within the said entry and, therefore, are taxable under the residuary clause. The Entry 125 of Schedule-IV as noticed more than once hereinbefore reads as under:-
Spectacles, parts and components thereof, contact lens and lens cleaner.
The entry as indicated in Hindi as relied on by counsel for the petitioner in the Gazette Notification dated March 31, 2006 may also be noticed, which reads as under:-
?????? ???? ?????? ?? ???, ????????? ???? ?? ???? ??????"
While the petitioner seeks to use dictionary meaning of spectacles for the purpose of interpreting the said entry and to examine whether sunglasses are included therein, the Department seeks the common parlance test for the said purpose.
Recently, the Hon'ble Supreme Court in Commissioner of Central Excise, New Delhi v. Connaught Plaza Restaurant (P) Ltd. : 2012 (286) ELT 321 after observing the rules of interpretation in para 15, reiterated the use of principle of common parlance as the standard for interpreting terms in taxing statute and finally after taking a bird's eye view of several decisions rendered by the Apex Court concluded that entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. The relevant part of the said judgment may be noticed thus:-
15. According to the rules of interpretation for the First Schedule to the Tariff Act, mentioned in Section 2 of the Tariff Act, classification of an excisable goods shall be determined according to the terms of the headings and any corresponding chapter or section notes. Where these are not clearly determinative of classification, the same shall be effected according to Rules 3, 4 and 5 of the general rules of interpretation. However, it is also a well known principle that in the absence of any statutory definitions, excisable goods mentioned in tariff entries are construed according to the common parlance understanding of such goods.
18. Time and again, the principle of common parlance as the standard for interpreting terms in the taxing statutes, albeit subject to certain exceptions, where the statutory context runs to the contrary, has been reiterated. The application of the common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law maker; it is an attempt to discover the intention of the Legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts. [(See Oswal Agro Mills Ltd (supra)].
31. Therefore, what flows from a reading of the aforementioned decisions is that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words they have to be constructed in the sense that the people conversant with the subject-matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. This, however, is by no means an absolute rule. When the Legislature has expressed a contrary intention, such as by providing a statutory definition of the particular entry, word or item in specific, scientific or technical terms, then, interpretation ought to be in accordance with the scientific and technical meaning and not according to common parlance understanding.
The dictionary meaning etc. as cited by learned counsel for the petitioner may be noticed thus:
In the Dorland Illustrated Medical Dictionary, spectacles have been defined as :-
Spectacles (spek'tah-k'lz) [L. spectacula; spectare to see] a pair of lenses in a frame to assist vision; see also glasses and lens. Compound s., spectacles fitted with extra colored glasses, or extra lenses, to be used as occasion requires. decentered s., spectacles with lenses formed from ecentric portions of two convex lenses. divided s., bifocal glasses. industrial s., protective s. Masselon's spectacles with an attachment for keeping the upper lid raised in cases of paralytic ptosis. mica s., spectacles sheet mica used to protect the eye from foreign bodies pantoscopic s., bifocal glasses. periscopic s., spectacles with either menisci or concavoconvex lenses, with concave surfaces toward the eyes; they allow the eyes considerable latitude of motion. prismatic s., spectacles with prismatic lenses for correcting muscular defects protective s., spectacles designed to protect the eyes rather than to correct defective vision; the spectacles may have side shields, plastic or hardened lenses, or lenses that protect against ultraviolet or infrared rays. pulpit s., spectacle containing the lenses in the lower segments of the glass only. safety s., protective s. stenopeic s., spectacle fitted with metal plates, having each a small central aperture. tinted s., spectacles of a glass so colored as to protect the eyes from the effects of too bright light. wire frame s., a kind of spectacles of wire gauze worn to protect the eye from the entrance of foreign bodies.
In the Oxford English Dictionary on Historical Principles, spectacle has been defined as :-
A means of seeing; something made protecting the eyes from dust, light, etc., consisting of two glass lenses set in a frame which is supported on the nose, and freq. kept in place by 'legs' passing over the ears.
In the Webster's Dictionary and Thesaurus of the English language, spectacle has been defined as :-
....(pl.) a pair of lenses, mounted in a light frame which rests on the bridge of the nose and hooks or rests behind the ears, designed to correct certain defects of vision or to protect the eyes spec-ta-cled adj. wearing spectacles.....
In the New Encyclopedia Britannica, spectacles have been used as synonyms to eye glasses and in so far as relevant have been defined as :-
eyeglasses, also called GLASSES, or SPECTACLES, lenses set in frames for wearing in front of the eyes to aid vision or correct defects of vision....
In sunglasses, the lenses are tinted to reduce light transmission and avoid glare. See also contact lenses; lense.
Besides the above, reliance has been placed on the way sunglasses have been described in Wikipedia, which reads as under:-
Sunglasses or sun glasses are a visual aid, variously termed spectacles or glasses, which feature lenses that are coloured or darkened to prevent strong light from reaching the eyes.
A bare look at the said definitions would reveal that in the Dorland Illustrated Medical Dictionary while the plain meaning of spectacles indicated is pair of lenses in a frame to assist vision and thereafter several variations have been indicated therein, which includes 'tinted s.' which is described as spectacles of a glass so coloured as to protect the eyes from the effects of too bright lights.
The definition indicated in the Oxford English Dictionary may not be of much assistance as the said dictionary deals with historical principles.
Again the New Webster's Dictionary and Thesaurus has defined the term spectacles as a pair of lenses, mounted in a light frame.... designed to correct certain defects of vision or to protect the eyes.
Again in the New Encyclopedia Britannica the apparent emphasis is on lenses set in frames for wearing in front of the eyes to aid vision or correct defects of visions and thereafter sunglasses have been separately described.
An analysis of the above definitions reveals that in all the definitions cited by learned counsel for the petitioner, the emphasis has been either to assist vision or to correct certain defects of vision or to aid vision or correct defects of vision, which appears to be the primary function, use and purport of the term 'Spectacles'.
The development of the entry in the Schedule appended to the erstwhile Rajasthan Sales Tax Act, 1994 and the VAT Act has been as under:
S.No. With effect from (w.e.f.) Description of Goods
(i) 27/03/95 Spectacles, their frames and lenses upto Rs. 400/- per item
(ii) 12/03/97 Spectacles, their frames and lenses
(iii) 2001-02 Spectacles, their frames and lenses
(iv) 2003-04 Spectacles, their frames and lenses
(v) 01/04/06 Spectacles, parts and components, contact lens and lens cleaner The above development of entries from time to time would reveal that while spectacles, their frames and lenses have been the basic entry, which started with a rider 'upto Rs.400/-' with the passage of time, came to be substituted as spectacles, parts and components thereof, contact lens and lens cleaner.
The inclusion of contact lens and lens cleaner, meant for correction of vision, which has gained sizable use over a period of time, as compared to the year 1995 when the entry was first introduced, further establishes the fact that the entry in question relates to only corrective equipment and not so called protective equipment i.e. the sunglasses as sought to be projected by the petitioner.
The Harmonized System of Nomenclature (HSN) relied on by learned counsel for the petitioner indicates as under:-
90.04 Spectacles, goggles and the like, corrective, protective or other.
9004.10 Sunglasses 9004.90 Other.
It would be noticed that the entry by itself specifically includes sunglasses and the heading of the entry is very wide and sweeping and the use of the word 'the like, corrective, protective or other' and entry 9004.90 'other' in fact indicates that the use of words spectacles and goggles have been used as genus.
Strong reliance was placed by learned counsel for the petitioner on the law laid down by the Hon'ble Supreme Court in the case of Pappu Sweets (supra), in which, the Hon'ble Supreme Court considered the Hindi version of the Notification for the word sweetmeat as the word 'mithai' was used and held that the word 'mithai' has a definite connotation and it can be said with reasonable amount of certainty that people in this country do not consider toffee as 'mithai'.
Applying the said test to the present case where the Hindi version of the Notification indicates the entry '?????? ???? ?????? ?? ???, ????????? ???? ?? ???? ??????'. In ??????? ?????? ???, 2013 Edition, published by Adish Book Depot, New Delhi, a standard publication on Hindi language, ????? has been indicated to mean '???' and further '???' has been indicated to mean '??? ?? ?????'.
The above menaing also indicates that even the Hindi version of the Notification does not include anything like sunglasses in the fold of ?????.
Merely because a commodity/term used in a Notification may include in its widest expansion, certain commodities with variation on account of the dictionary meaning of the commodity/term indicated in the Schedule/Notification, the same by itself cannot be a reason to include/classify the said commodity as indicated in the Schedule/Notification.
Further, merely because sunglasses have been described as 'tinted spectacles' in a dictionary cannot be a reason enough to include the same in the entry 'spectacle'. The above aspect has been considered by the Hon'ble Supreme Court as follows: In Atul Glass Industries Pvt. Ltd. (supra) while dealing with 'glass mirror' it was held that glass mirror cannot be classified as 'glass-ware'. In the said judgment, the fact that glass mirrors were classified by Indian Standard Institution as 'glass and glassware' was held to be a mere piece of evidence; in the case of State of U.P. v. Kores (India) Ltd. : AIR 1977 SC 132 it was held that 'carbon paper' cannot be classified as 'paper'; in Collector of Customs v. New Trade Links : 1996 (88) ELT 23 it was held that bulbs which are utilized in any specially designed scientific apparatus cannot be classified as 'electric bulb' and in Purewal Associates Ltd. v. Collector of Central Excise : 1996 (87) ELT 321 it was held that items like 'lid screw, barrel axle screw, bridge screw and dial key screw' cannot be classified as 'screws'.
The CTO recorded a finding of fact that in the trade spectacles and sunglasses are distinct product, known differently and used for different purposes and also observed that in Rajasthan while sunglasses are called dhoop ke chashme, spectacles are called nazer ke chashme, which finding has been upheld by the Tax Board as well. The submission of learned counsel for the petitioner that such a distinction was not warranted and there was no reason to read the said distinction in the entry cannot be accepted. It was well within the jurisdiction of the authorities below, while considering the issue involved, to record the finding based on the common parlance test as to what the product in issue is called in common parlance.
In terms of the judgments of Hon'ble Supreme Court in the case of Indian Metals & Ferro Alloys Ltd. (supra) and Bharat Forge & Press Industries (P) Ltd. (supra) cited by learned counsel for the petitioner, the department has clearly established that the sunglasses cannot be brought under Entry 125 of Schedule IV and, therefore, the same would fall in residuary item.
So far as the reliance placed on the judgment of CEGAT in the case of Ramchandra Choitram (supra) and the order passed by the authority of Advance Ruling under the Karnataka Value Added Tax is concerned, the same looses its significance in view of the findings recorded hereinbefore.
The so called certificates issued by certain dealers and hospitals in support of petitioner's contentions are mere subjective opinions; have been obtained on the same day i.e. 30.04.2008 and are omnibus in their contents and, therefore, the same cannot advance the cause of the petitioner.
From what has been considered hereinbefore, it is apparent that on applying common parlance test, the history of the entry and even the fundamental/basic meaning of the term 'spectacles' as indicated in the various dictionaries cited by learned counsel for the petitioner and the Hindi version of the Notification, it is apparent that entry spectacles in the Schedule is clearly related to and means corrective spectacles and the same in its sweep does not include sunglasses as sought to be projected/argued by the petitioner.
Concurrent finding in this regard arrived at by three authorities below i.e. the Commercial Taxes Officer, Dy. Commissioner (Appeals) and Rajasthan Tax Board does not call for any interference.
Accordingly, the question of law as formulated is answered against the petitioner-assessee, there is no substance in the present revision petitions and the same are, therefore, dismissed. No order as to costs.
(ARUN BHANSALI), J.
A.K. Chouhan/-
135-147