Holding

The word "marble" in the tariff schedule must be given its scientific and technical meaning, and the imported calcareous stones are not marble; therefore they are covered by the Open General Licence and cannot be confiscated or penalised.

Summary

The appellant, a stone‑processing firm, imported calcareous stone slabs from Italy, obtaining certificates and expert reports that the material was not marble. Customs seized the goods, classifying them as "marble" under tariff entry 25.15 and the restricted item 62 of the Import‑Export Policy, and ordered confiscation, a fine and a penalty. The Customs Tribunal upheld the confiscation (reducing the penalty), but the Supreme Court held that the term "marble" in the tariff schedule must be interpreted in its scientific/technical sense, not the commercial sense, and that the imported calcareous stones were not marble. Consequently, the goods fell under the Open General Licence, could not be confiscated, and the penalty provisions under Sections 112 and 125 of the Customs Act were unwarranted. The Court set aside the Tribunal’s order, released the goods and the bond, and allowed the appeal.

Issues considered

The proper interpretation of the term "marble" in Tariff Entry 25.15 and Restricted Item 62 – scientific/technical versus commercial meaning.
Whether the imported calcareous stone slabs constitute "marble" within the meaning of the Customs Tariff and Import‑Export Policy.
Whether Customs could confiscate the goods under Section 111(d) of the Customs Act, 1961/1962.
Whether the appellant could be levied a fine under Section 125 and a penalty under Section 112 of the Customs Act.
Whether the option to clear the goods on payment of a fine was valid.

Legislation cited

Customs Act, 1962s. 111(d), s. 112, s. 125
Customs Tariff Amendment Act, 1985
Import and Export Policy, April 1988 – March 1991
Imports and Exports (Control) Act, 1947

Subjects

tariff interpretationmarblecalcareous stonecustoms lawimport licencespecific gravityscientific vs commercial meaningconfiscationpenaltyopen general licence

Judgment

AKBAR BADRUDIN JIWANI A
v.
COLLECTOR OF CUSTOMS, BOMBAY

FEBRUARY 14, 1990.

[B.C. RAY AND S. RATNAVEL PANDIAN, JJ.] B

Customs Act, 1962: Sections lll(d), 112 and 125-Calcareous
stone imported by appellant-Whether 'marble' under Import & Export
Policy April 1988-March 1991 Entry 62, Appendix 2, Part B-
Whether can be confiscated on that ground-Whether option to clear
goods for home consumption on payment of fine valid: the term .'mar- C
ble' to be interpreted in a manner which is in consonance with the
statutory context and not as u.•derstood in commercial parlance.

The appellant on behalf of his firm, which is engaged in proces-
sing of stone slabs, placed an order for calcareous stone (other than
marble) with the exporter in Italy, and asked the exporter to certify that D
the said goods were not marble. The appellant further obtained from
the foreign exporter a sample tile and had the same tested by a reputed
geologist who confirmed that the sample was not marble. The goods
were imported under OGL Appendix 6, Item I of Import and Export
Policy for April 1988-March 1991.
E
The Customs Department sent sealed samples of the imported
goods for testing to various technical authorities, and on the basis of
some of these reports/opinions/visual observations issued a show cause
notice to the appellant alleging that the calcareous stone were nothing .
but marble only as per the commercial definition of marble and there-
fore governed by Entry 62, Appendix 2, Part B of the Import & Export F
Policy for March 1988-1991. In reply the appellant's contention was
that the said goods could not be regarded as 'marble' in terms of the
expression 'marble' appearing in heading 25.15 in Schedule l,
Appendix 1-B, Customs Tariff Amendment Act, 1985.

The Collector of Customs however passed an order that the goods G
imported were marble requiring a specific import licence. The
Collector further ordered confiscation of the goods and imposition of
fine and penalty. The Customs, Excise and Gold (Control) Appellate
Tribunal dismissed the appellant's appeal but reduced the penalty
amount.
H

369
370 SUPREME COURT REPORTS [1990] I S.C.R.

Before this Court it was contended on behalf of the appellant that:
A
(1) for the purpose of understanding the meaning of 'marble'
occurring in Appendix 1-B, Schedule I of the Imports (Control) Order,
1955 it is necessary to refer to Mineral Products, in Chapter 25, Tariff
Entry No. 25.15.
B
(2) the term 'marble' therein dues nut occur by itself or in isola-
tion but as an inseverable part of a Tariff Entry which deals with five .>....
items (a) Marble (b) Travertine (c) Ecaussine (d) Other calcareous stone
and (e) Alabaster;

(3) the Tariff Entry draws a clear line of distinction between each
c of these five items and regards them as five distinct products;

(4) the term 'marble' has to be given a meaning which fits in and
harmonises in the above mentioned statutory context, so that 'marble' -r
continues to remain distinct and different from the said other four
D items;

(5) though the general principle of interpretation of tariff entries
occurring in a tax statute is th•t of commercial nomenclature or under-
standing in the trade, the said doctrine or commercial nomenclature or A
trade understanding can and should be departed from in a case where
E the statutory context in which the tariff item appears, requires such a
departure;

(6) the principles of interpretation are never embodied rules and ~
the same must always yield to the context of the particular statute; J

F (7) as the word 'marble' has not been defined and the tariff item
refers to calcareous stone of an apparent specific gravity of 2.5 or more,
it has to be taken to be used in a technical and scientific sense and as
such the sa1ne cannot be interpreted in the popular commercial sense;

(8) the end-use of the particular product is irrelevant and of no
G consequen~e for determining its classification; and

(9) if the term 'marble' is to be given the commercial meaning as
relied upon by the Customs Authorities then the inevitable consequence
would be that the term 'marble' in Chapter Heading 25.15 would auto-
r
matically include within it the other four items thereby rendering the
H rest of the Tariff Entry otiose, redundant and meaningless.
AKBAR v. COLLECTOR OF CUSTOMS 371

On behalf of the Revenne it was contended that:
A
(1) the word 'marble' has not been defined in the Tariff Act and
as snch in interpreting the word 'marble' as mentioned in Tariff Item
No. 25.15 in Appendix 1-B, Schedule 1 to the Import (Control) Order,
1955, the test in commercial and trade parlance has to be applied i.e.
how the said product came to be commercially known by the trading B

1 people;

(2) it is not a scientific or technical word and as such it does not
require to be interpreted in its scientific and technical sense;

(3) the word 'marble' if so interpreted will include calcareous
stone of 2.5 or more specific gravity; C

(4) marble is the genus and all other four items of stone
mentioned in Tariff Entry 25.15 which are of apparent specific gravity
of 2.5 are included within marble as they are commercially and in trade
parlance known as marble; and D

(5) the end-use of the product i.e. marble and calcareous stone
has to be taken into consideration in the determination of the other
l.. items of stone mentioned in that Entry.

Allowing the appeal, this Court, E

HELD: (1) According to a number of reports as well as the ISi
specification the slabs of rocks that have been imported by the appellant
and claimed to be calcareous stones are not 'marble' in the scientific
and technical sense of the term 'marble'. [387F-G]
F
(2) Calcareous stone as mentioned in ITC Schedule has to be
taken in scientific and technical sense as therein the said stone has been
described as of an apparent specific gravity of 2.5 or more. Therefore,
the word 'marble' has to be interpreted in the scientific or technical
sense and not in the sense as commercially understood or as meant in
the trade parlance. [388D-E] G

4. The general principle of interpretation of tariff entries occur-
ring in a tax statute is lhat of commercial nomenclature or understand~
ing in the trade. The said doctrine of commercial nomenclature or
understanding can and should be departed from in a case where the
statutory content in which the tariff item appears requires such a de- H
372 SUPREME COURT REPORTS [1990J 1 S.C.R.

parture. If the application of the commercial meaning of trade nomen-
A clature runs counter to the statutory context then the said principle of
interpretation cannot and should not be applied. [388E-F]

(5) Trade meaning or commercial nomenclature would be applic-
able if a particular product description occurs by itself in a Tariff Entry
B and there is no conflict l>etween the Tariff Entry and any other Entry
requiring to reconcile and harmonise that Tariff Entry with any other
Entry. [388G]

Union of India v. Delhi Cloth & General Mills, [1963] Supp. 1
SCR 586; Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCR
98; Commissioner of Sales Tax, M.P. v. Jaswant Singh Charan Singh,
c [ 1967] 2 SCR 720; Grenfell v. Inland Revenue Commissioner, [1876] I
EX. D. 242, 248; Holt & Co. v. Collyer, [1881] 16 Ch. D. 718, 720;
K. V. Varkey v. Agricultural Income Tax and Rural Sales Tax Officer,
[1954] 5 SIC 384; Cannanore Spinning and Weaving Mills Ltd. v.
Collector of Customs and Central Excise Cochin, [1970] 2 SCR 830;
D Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co.,
[1989] 1 SCC 150; Collector of Customs, Bombay v. Hargovindas &
Co., [1987] 29 LET 975 and Collector of Customs, Bombay v. Swastic
Woollens (P) Ltd. and Ors., [1988] Supp SCC 796, referred to.

(6) The commercial nomenclature or trade meaning cannot be
E given to marble in as much as such a meaning if given will render
otiose and redundant the terms travertine, ecaussine, alabaster and
other calcareous monumental or building stone of an apparent speci-
fic gravity of 2.5 or more whether or not roughly trimmed or merely
cut by sawing. [397F-G]

F (7) In interpreting a product its end-use is of no relevance in de-
termining the classification because in interpreting a term appearing in
the Tariff Item which has not been defined either in the Tariff Schedule
or in the Import Control Order, the same is to be interpreted in such a
way which is in consonance with the Items specified in the ITC Schedule
without leaving out any part of the Items mentioned therein. [399A-B]
G
(8) Considering all the reports, and since the term 'marble' has
not been defined in the Imports Control Order as well as in the ITC
Schedule it has to be taken in a scientific and technical sense as well as 'r
in the context the word has been used, and the slabs of calcareous stones
imported by the appellant from Italy cannot be held to be marble as
H they have not been recrystallised and metamorphosed in the geological
and petrological sense of the term. [398F]
AKBAR v. COLLECTOR OF CUSTOMS 373

(9) The slabs of calcareous stone imported by the appellant are
A
not marble as mentioned in Entry No. 62 of Appendix 2 of the Import
and Export Policy for April 1988-March 1991 and so it is covered by
Open General Licence. [399G I

(!OJ The imported goods cannot be confiscated by the Govern-
ment under Section 11 l(d) of the Customs Act, 1961 nor the appellant B
can be given the option to clear the said goods for home consumption on
) payment of fine in lieu of confiscation under Section 125 of the Customs
Act, 1962. [399H; 400A)

(ll) The appellant cannot be said to have imported calcareous
stones without an import licence and as such there being no violation of
the Import Control Policy the imposition of penalty under Section 112 C
of the Customs Act, 1962 is unwarranted and not sustainable. [400A)

( 12) Even if it is taken for arguments sake that the imported
article is marble falling within Entry 62 of Appendix 2, the burden lies
on the Customs Department to show that the appellant has acted dis· D
honestly or contumaciously or with the deliberate or distinct object of
breaching the law. In the instant case, in view of the finding arrived at
by the Appellate Tribunal that the said product was imported on a bono
fide belief that it was not marble, the imposition of such a heavy fine is
not at all warranted and justified. [400B-C; 401A-.B)
E
Merck Spares v. Collector of Central Excise & Customs, Ne><
Delhi, [1983] ELT 1261; Shama Engine Valves Ltd. Bombay v. Cul-
lector of Customs, Bombay, [1984] 18 ELT 533; Madhusudu11
Gordhandas & Co. v. Collector of Customs, Bombay, [1987] 29 ELT
904 and Hindustan Steel Ltd. v. State of Orissa, [1970] I SCR 753.
referred to. F
i.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3655
of 1989.

From the Judgment and Order dated 14.8.1989 of the Customs,
Excise and Gold (Control) Appellate Tribunal, West Regional Bench, G
Bombay in Appeal No. CD(BOM)A. No 322 of 1989 in Order No. 704
of 1989.

Anil B. Diwan, S. Ganesh, R.K. Krishnamurthy, S.R. Narain
and Sandeep Narain for the Appellant.
H
374 SUPREME COURT REPORTS [1990] 1 S.C.R.

A.K. Ganguli, B. Parthasarthy, K. Swami and P. Parmeshwaran
A
for the Respondent.

The Judgment of the Court was deliYered by

B RAY, J. This appeal under Section 130-E(b) of the Customs Act,
1962 is directed against the judgment and order dated August 14, 1989
passed by the Customs, Excise & Gold (Control) Appellate Tribunal,
Bombay in CD(Bom) A. No. 322 of 1989.

The most vital question that comes up for consideration in this
c appeal is whether marble as mentioned in Tariff Item No. 25. 15 in
Appendix 1-B, Schedule I to the Import (Control) Order, 1955 men-
tioning "Marble, travertine, ecaussine and other calcareous monu-
mental or building stone of an apparent specific gravity of 2.5 or more
and Alabaster, whether or not roughly trimmed or merely cut, by
sawing or otherwise, into blocks or slabs of a rectangular (including
D square) shape" is genus within which all other kinds of calcareous
stones are included or whether marble is a distinct or different item
which is one of the restricted item in the List of Restricted Items
described in Appendix 2, Part B of Import and Export Policy for April
1988-March 1991.

E
The matrix of the case is that the Appellant has been carrying on
business as sole proprietor under the name and style of M/s Interior
Manufacturers at A-12, Yuwan Apartments, 413/414. Mount Mary
Road, Bandra, Bombay which is a small scale industry engaged in
processing of stone slabs. Jn the course of his manufacturing activity
F the Appellant utilises and requires as raw material polishable cal-
careous stones viz. marble, travertine, ecaussine, alabaster and other
calcareous stones. All these different types of stones are hard and
capable of taking polish. Marble is distinguished from other calcareous
rocks, by the fact that it is a metamorphic rock formed from re-
crystallization of limestones and has a visibly crystallined nature. In
G order to import calcareous stones covered by the Open General Licence
and with a view to ensuring that the same was not marble, the Appel-
lant took the following precautions:

( 1) The appellant referred to the Indian Standards Specification
for Marble viz. IS: 1130-1969 which defines marble as follows:
H
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.l 375

Para 0.2: A
"Marbles are metamorphic rocks capable of taking polish,
formed from the re-crystallization of limestones or dolo-
mitic limestones and are distinguised from limestone by
even visibly crystallined nature and non.flaggy stratifica-
tion.''
B
Para 0. 7 of the said Specification provides that:
) "The Sectii:mal Committee responsible for the preparation
of this standard has taken into consideration the views of
producers, consumers and technologists and has related the
standard to the manufacturing and trade practices followed
in the country in this field." C
(2) The Appellant obtained from the foreign exporters a sample
tile of 'Botticino', the calcareous rock proposed to be imported
and had the same tested by a reputed Geologist, Dr. S.F. Sethna
who tested the sample and by his report dated October 13, 1988
confirmed that the .same was not marble. His letter dated D
October 14, 1988 explains now the sample tested was limestone,
different from marble. The sample tile tested and attested by Dr.
Sethna was submitted to the Customs Department vide their
letter dated February 20, 1989.

(3) The appellant then referred to an Italian Book MARHI E
ITALTA wherein the index evidenced the fact that 'Botticino'
varieties were covered under 'polishable calcareous rocks' and
not under true marbles (re-crystallised calcareous rocks).

(4) The appellant specifically placed an order for calcareous
stones (other than marble) and asked the Exporter to certify that F
the said goods were not marble. The exporter Elle Marmi of Italy
by a certificate dated December 6, 1988 certified that all the
goods were calcareous stone slabs other than marble.

(5) The appellant also obtained the certificate dated December
6, 1988 from one Gianni C. Baigini, a Surveyor registered with G
the Chamber of Commerce, Carrara and a Specialist for stones.
Gianni C. Baigini after checking the said consignment loaded in
the containers for import by the Appellant in Italy certified that
the slabs loaded in Container Nos. LMCU 051315/8, 0500t>2/3,
051519/2, 051520/6 were calcareous stones other than marble
since the~ame were not re-crystallised calcareous rocks. H
376 SUPREME COURT REPORTS [ 1990] 1 S.C.R.

The appellant alter taking the aforesaid precautions placed an
A order wth Elle Marmi of Italy for import of 3120.50 sq. mtrs. of slabs
of calcareous stones having a thickness of 2 ems. at a price of Italian
Lira 4.22.56.000 i.e. Rs.4,93,000 approximately. The said Elle Marmi
issued an invoice dated December 2, 1988 for the said purpose.

B The goods arrived in Bombay by the vessel 'Orient Triumph' on
or about 19th January, 1989. The appellant filed a Bill of Entry No.
007569 dated 19. I. 1989 for clearance of the goqds for home consump- ·'.,,
tion. The goods were declared as slabs of calcareous stones (other than ·
marble) and were imported under OGL Appendix 6, Item I of Import
and Export Policy for April 1988-March 1991.

c The goods were inspected by the Assistant Collector (Docks)
who observed as follows:

"These goods under import do not appear to be marble or
granite and are not polished, they are roughly squared and
D are having smooth edges on all four sides but are having
smooth edges on 2 or 3 sides due to sawing."

The sample of the goods was sent by the Assistant Collector (Docks)
to the Assistant Collector of Customs (Group I). The Assistant
Collector of Customs (Group I) issued a query memo dated February
E 6, 1989 on the alleged basis that 'calcareous stones are nothing but
marble only' and therefore, governed by Entry 62, Appendix 2, Part B
of Import and Export Policy for March 1988 to April 1991. The query
was allegedly based upon explanatory notes contained in the
"Harmonised Commodity Description and Coding System" (HSN)
evolved by the International Customs Cooperation Council.
F
The appellant set out the correct position and informed the )
Department by several letters dated 7th February, 1989, 13th
February, 1989, 16th February, 1989 and 20th February, 1989 that the
said goods could not be regarded as 'marble' in terms of the expression
'marble' appearing in heading 25.15 in Schedule I, Appendix I-B
d Customs Tariff Amendment Act, 1985. The appellant also requested
for release of part of the goods pending the technical test of the sample
from imported goods.

Pending the technical test report, by a letter dated February 17,
1989 the appellant was permitted to cleat 50% of the goods upon the
H appellant submitted 100% ITC bond for the whole backed by a bank
AKBAR v. COLLECTOR OF CUSTOMS !RAY, J.) 377

guarantee.· The balance 50% ot the imported consignment was
detained. The appellant accordingly cleared 50% of the imported con-
A
signment. The appellant, however, paid import duty on the full
consignment.

The Assistant Collector of Customs (Group I) sent the sealed
l samples of the imported goods for testing to the Deputy Director
General Petrology Department, Geological Survey of India, Central
B
I Region, Nagpur. The sealed cover containing the samples was sent
through the appellant's representative. The appellant also by a letter
dated February 25, 1989 sent a sample of the same consignment for
testing to the Geological Survey of India.

The appellant addressed further letters dated March 7, 1989, c
March 8, 1989 to the Customs Department. By a letter dated March
13, 1989 the appellant forwarded to the Customs Department a sealed
envelope containing a test report given by the Geological Survey of
India, Nagpur on the sample or the imported goods.
D
The appellant on March 17, 1989 received a letter dated March
13, 1989 from the Geological Survey of India enclosing the test report
on the sample of the imported goods submitted by the appellant to the
Geological Survey of India. This test report categorically stated that
the sample was "allochemic (Pelmicritic) limestone. It cannot be
termed as a marble." It is pertinent to mention that the Geological E
Survey of India had tested two samples from the materials imported by
the appellant, one sample forwarded by the Customs Department and
the other by the appellant. The report of the Geological Survey of
India on the sample forwarded by the Customs Department was set
out earlier and sent in a sealed cover to the Customs Department.

' The Customs Department, however, did not release the goods
inspite of the categorical report of the Geological Survey of India and
instead issued a show cause notice dated March 17, 1989. The Customs
Department inter alia relied upon the opinion based on visual observa-
tion received from the Indian Bureau of Mines, Government of India,
Udaipur and test reports based on technical test received from the G
Director of Mines & Geology Department, Udaipur and Geological
Survey of India, Nagpur. The test report received by the respondent
from the Geological Survey of India, Nagpur was kept back and not
disclosed to the appellant. None of the three reports/opinions were
disclosed to the appellant at the time of issue of show-cause notice. On
the basis of these reports/opinions it was alleged in the show-cause H
378 SUPREME COURT REPORTS [1990] 1 S.C.R.

notice that the imported goods were marble allegedly as per the com-
A
mercial definition of marble enunciated in the show-cause notice. The
Department threatened to confiscate the goods and initiate the penal
action against the appellant pursuant to Section 112 of the Customs
Act. The appellant by a letter dated March 20, 1989 called upon the
Customs Department to set aside the show-cause notice.
B
The Collector of Customs, New Customs House, Ballard Estate,
Bombay passed an order that the goods imported are marble and thus
require a specific import licence. He also held that these goods are
I
liable for classification as marble and the import of these goods under
OGL is not admissible and therefore in exercise of the powers confer-
red under Section lll(d) of the Customs Act, 1962, the Collector of
c Customs ordered the confiscation of the imported goods and further
ordered that the Bond be enforced towards a fine of Rs.4,93, 199
imposed on the said goods in lieu of confiscation. The Assistant Col-
lector of Customs was directed to enforce the said Bond and the Bank
Guarantee for realisation of this amount of fine. However, the impor-
D ter was given option to clear the said goods for home consumption on
payment of fine of Rs.5,00,000 in lieu of confiscation under Section
125 of the Customs Act, 1962, the option to be exercised within 60
days from the date of receipt of the said order. He further held that
since the importer contravened the provisions of section lll(d) of the
Customs Act, 1962 read with Section 3 of the Import and Export
E (Control) Act, 1947 rendering the said goods for confiscation, the
importer is liable for penal action under provisions of Section 112 of
the Customs Act. Accordingly, the penalty of Rs.10,00,000 under Sec-
tion 112 of the said Act was directed to be paid forthwith.

Against this order, the appellant filed a writ petition being Writ
p Petition No. 1398 of 1989 which was dismissed at the admission stage
on the ground that it involves disputed questions of fact which were )
difficult to be decided in a writ jurisdiction. However, the appellant
was permitted to clear the goods on payment of redemption fine and
furnishing full bank guarantee for the penalty amount.

G Aggrieved by this order, an appeal being Appeal No. 618 of 1989
was filed in the High Court of Bombay. The said appeal was dismissed
with liberty to file a departmental appeal by Order dated June 15, 1989.
The appellant thereafter filed the said appeal before the Customs, )-
Excise and Gold (Control) Appellate Tribunal, West Regional Bench,
Bombay. The said Appellate Tribunal after hearing the appellant as
H well as the Revenue dismissed the appeal and confirmed the order of
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 379

the Collector of Customs but reduced the penalty amount from
A
Rs.10,00,000 to Rs.5,00,000.

Feeling aggrieved by the said order the appellant filed the instant
appeal under Section 130-E(b) of the Customs Act, 1962. The entire
\ controversy relates to the question whether the calcareous stone which
has been imported by the appellant falling within the Tariff Item No. B

I 25.15 of Schedule I, Appendix 1-B commonly known as LT. Schedule
is marble as mentioned in Entry No. 62 of the List of Restricted Items,
Annexure 2, Part B of the Import and Export Policy for April 1988 to
March 1991 and as such the import of calcareous stone made by the
appellant being not covered under OGL, is liable for confiscation and
penalty for illegal import without the specific import licence obtained
from the respondent. In Appendix 1-B, Schedule I of ITC Schedule, c
Entry No. 25 .15 of Chapter 25 (Mineral Products) mentions:
' I

"Marble travertine, ecaussine and any other calcareous
monumental or building stone of an apparent specific gra-
vity of 2.5 or more and Alabaster, whether or not roughly D
trimmed or merely cut by sawing or otherwise, into blocks
of slabs of a rectangular (including square) shape."

In the said Appendix 1-B, Schedule I states that each heading
number in Column (1) corresponds to the respective Chapter and
heading number of the first Schedule to the Customs, Tariff Amend- E
ment Act, 1985 as amended on 24.1.1986 and each entry in Column (2)
has the same scope and meaning as the corresponding Chapter and
heading of the said first Schedule.

It is appropriate to refer to Appendix 6 of the Import and Export
Policy for April 1988 to March, 1991 which mentions import of items F
under Open General Licence. The categories of importers, the items
allowed to be imported by them under Open General Licence and the
conditions gover:ning their importation have been set out therein:

Items Category of eligible
importers G

l. Raw materials components and consumables Actual Users
(Non-iron and steel items) other than (Industrial)
those included in the Appendices 2, 3
Part A, 5 and 8
H
380 SUPREME COURT REPORTS [1990] 1 S.C.R.

In Appendix II-B, in the List of Restricted Items, Entry 62, of
A
Import and Export Policy for March 1988 to April 1991 refers to
marble/ grani te1on yx.

Mr. Diwan, learned counsel appearing on behalf of the appellant
has submitted that for the purpose of understanding the meaning of
B 'marble' occurring in Appendix 1-B, Schedule I of the Imports
(Control) Order, 1955 it is necessary to refer to Mineral Products, in
Chapter 25, Tariff Entry No. 25.15 which refers to Marble, Travertine,
Ecaussine and other calcareous monumental and building stone of an
apparent specific gravity of 2.5 or more and Alabaster, whether or not
roughly trimmed or merely cut by sawing or otherwise into blocks or
slabs of a rectangular (including square) shape. The term 'marble
c does not occur by itself or in isolation but as a inseverable part of a
Tariff Entry which deals with five items referred to herein below:

(a) Marble
(b) Travertine
D ( c) Ecaussine
( d) Other calcareous stone
(e) Alabaster

Each of these five items is a monumental or building stone whiCh is
' /
hard and can be cut and sawed into the required sizes and can take
E polish. The Tariff Entry draws a clear line of distinction between each
of these five items and regards them as five distinct products. The basic
scheme of the Tariff Entry is important for the purposes of the present
appeal. The term 'marble' has to be given a meaning which fits in and
harmonises in the above mentioned statutory context, so that 'marble'
continues to remain distinct and different from the said other four
F items. Thus whatever principle of interpretation or canon of construc-
tion is applied it cannot be said that the term 'marble' include and
takes within its fold any or more distinct items or goods mentioned in
the said Tariff Entry, thereby rendering a part of the said Entry mean-
ingless. It has, therefore, been submitted on behalf of the appellant
that the term 'marble' has to be interpreted in a manner which is in
G consonance with the context and which does not militate against it. It
is appropriate to refer in this connection the following passage from
Maxwell on Interpretation of Statutes, 12th Edition. Page 294 set out
hereunder:

"The word 'land' is generally understood as including
H building. but if, after imposing a rate on houses, buildings,
AKBAR v. COLLECTOR OF CUSTOMS !RAY, J.l 381

works, tenements and hereditaments, an Act exempted
'land', this word would be restricted to land unburdened A
with houses, buildings, or works which would otherwise
have been unnecessarily enumerated'."

It has been secondly submitted on behalf of the appellant that
the general principle of interpretation of tariff entries occurring in a B
tax statute is that of commercial nomenclature or understanding in the
_) trade. It is also a settled legal position that the said doctrine of com·
mercial nomenclature or trade understanding can and should be
departed from in a case where the statutory context in which the tariff
item appears, requires such a departure. If the application of the com·
mercial meaning or trade nomenclature runs counter to the statutory
context then the said principle of interpretation cannot and should not C
be applied. Commercial nomenclature or trade understanding is ,
merely a general principle of interpretation. It is well settled that the
principles of interpretation are never embodied rules and the same
must always yield to the context of the particular statute which comes
up for interpretation. It has also been submitted in this connection that o
the trade meaning or commercial nomenclature would be applicable if
a particular product description occurs by itself in a Tariff Entry, and
there is no competition between that Tariff Entry and any other tariff
entry, nor is there any need to reconcile and harmonise that tariff
entry with any other. It has been submitted in this respect that the
reading of the Tariff Entry No. 25.15 in Appendix I·B of Imports E
(Control) Order, 1955 which refers to Marble, Ecaussine, Travertine
and other calcareous monumental or building stones as well as Entry
No. 62 in Appendix 2-B of Import and Export Policy, April 1988-
March 1991 refer only to marble/granite/onyx as restricted items of
import in such a way that such interpretation does not exclude or
render redundant any of the items included in Tariff Entry No. 25.15. F
It has next been contended that the end-use of the particular product is
irrelevant and of no consequence for determining its classification. In
support of this proposition several decisions have been cited. It has
· been further submitted that each of the five distinct items referred to
in Chapter Heading 25.15 of Appendix l·B of Imports (Control)
Order, 1955 is a hard stone capable of being cut into the required size G
and of taking polish. If, therefore, the term marble is to be given the
said commercial meaning as relied upon by the Customs Authorities
then the inevitable consequence would be that the term 'marble' in
Chapter Heading 25.15 would automatically include within it the other
four items thereby rendering the rest of the Tariff Entry, otiose,
redundant and meaningless. On this ground alone, it has been submit· H
382 SUPREME COURT REPORTS [1990] 1 S.C.R.

ted that the test of commercial meaning or trade understanding neces-
A
sarily has to be rejected and the same cannot be applied in the present
case. It has also been contended on behalf of the appellant that from
the language of the Tariff Entry itself it is only the technical' meaning
which can be applied for interpreting Chapter Heading 25.15. The
expressions calcareous, travertine, ecaussine, and alabaster are all
B technical expressions known to the science of Geology which are found
defined in dictionaries of Geology. These are not terms of trade or
expressions which businessmen use in the ordinary use to describe a
product they deal in. Moreover, the reference to the requirement of
specific gravity of 2.5 or more is also more or less a .technical require-
ment which evinces that the principle of trade nomenclature or
commercial understanding is not applicable to the Tariff Item. Valu-
c able guidance can also be obtained from the notes which are part of the
, Harmonised System of Nomenclature (HSN) with which the present
Customs Tariff as amended in 1986, has been fully aligned. The HSN
Explanatory Notes specifically state that ecaussine, on being frac-
tured, shows a granular surface, similar to granite and is, therefore,
D known sometimes as Belgian granite, Flanders Granite and Petiti
granite. It needs to be understood that, therefore, even though ecaus-
sine may be known in the market as a species of granite and may be
dealt with and treated as a type of granite, the same is, nevertheless
not classified as granite under Chapter Heading 25.16. This is only
because the technical nature of ecaussine has been taken into consi-
E deration and applied by HSN as opposed to the trade nomenclature or
commercial understanding.

It has also been submitted that the said HSN also contains
specific note regarding serpentine rocks to the effect that the same are
sometimes called 'Marble', but the same is excluded from Chapter
F Heading 25.15. This clearly shows that according to HSN, Chapter
Heading 25.15 must be construed according to its technical meaning.
Technically, serpentine does not fall under Heading 25.15 and the
same is accordingly excluded therefrom by the HSN. If, on the other
hand, the commercial meaning is to be applied, then, serpentine would
definitely have to be classified under Chapter Heading 25.15 in as
G much as it is sometimes called marble. The HSN Explanatory notes,
therefore, clearly and conclusively establish that Chapter Heading
25.15 must necessarily be construed by its technical meaning and not
by applying the commercial nomenclature test. If the commercial
nomenclature test is applied, then, as explained hereinabove, two
fundamental principles of interpretation are infringed: (a) the princi-
H ple that no part of a statute may be construed as to render it redundant
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 383

. and otiose, and ( b) that a tariff item is not to be classified on the basis A
of its end-use-in other words an item cannot be considered to be
marble ,merely because it is a hard rock which is capable of being cut
and polished and being put to same use as marble. It has, therefore,
been submitted that the findings arrived at by the Customs, Excise and
Gold (Control) Appellate Tribunal that the calcareous stone slab
imported by the appellant is marble as understood in the commercial B
) or trade nomenclature and as such the import of the said slab being
without a licence, is subject to the liability of confiscation and imposi-
tion of penalty and wholly unwarranted.

Mr. Ganguli, learned counsel appearing on behalf of the
Revenue has submitted that in interpreting the word 'marble' as
mentioned in Tariff Item No.25.15 in Appendix 1-B, Schedule 1 to the c
Import (Control) Order, 1955, the test in commercial and trade par-
lance has to be applied i.e. how the said product came to be commer-
cially known by the trading people. It is further submitted that it is not
a scientific or technical word and as such it does not require to be
interpreted in its scientific and technical sense. He further submitted D
that the general principle of expression of Tariff Entries in a text
statute is that of commercial nomenclature or understanding in the
trade. The word 'marble' if so interpreted will include calcareous stone
of 2.5 or more specific gravity. He has cited certain decisions in sup-
port of his above contention. Mr. Ganguli also submitted referring to
the said Tariff Entry 25.15 that it includes calcareous stones of specific E
gravity of 2.5 or more which are capable of polish. Marble is the genus
and all other four items of stone mentioned in the said Entry which are
of apparent specific gravity of 2.5 are included within marble as they
are commercially and in trade parlance known as marble. He further
submitted that the ISI specification for marble as referred to in IS:
1130-1969, item No. 0.2 which defines marble as metamorphic rocks F
can not be applied in the instant case especially in view of the note to
the said item that sometimes rocks, such as serpentine are also
polished and used in trade as marble. Mr. Ganguli further submits that
taking into consideration this note, calcareous stone imported by the
appellant falls within marble which is one of the restricted ·items in the
list of restricted items as mentioned in Appendix 2, Part B of the G
Import and Export Policy, April 1988-March 1991. Mr. Ganguli
further submitted that the word marble cannot be taken in its Geologi-
cal or Petrological sense in as much as the whole purpose of putting the
marble stone slabs in the list of restricted items for import is to restrict
the outflow of foreign exchange from the country. Mr. Ganguli next
submitted that the end-use of the product i.e. marble and calcareous H
384 SUPREME COURT REPORTS [1990] 1 S.C.R.

stone mentioned in Item No. 25.15 of Appendix 1-B of the Import and
A
Export Policy April 1988-March 1991 has to be taken into considera-
tion in the determination of the other items of stones mentioned in
that Entry. Viewed from this angle, the said calcareous stone being
capable of polish and used for monumental or building purposes has to
be taken to be marble as has been done by the Revenue and it being
B one of the restricted items, a licence for import of the same is manda-
tory. It has also been submitted in this connection by Mr. Ganguli that
the word 'marble' has not been defined in the Tariff Act and as such
the meaning of the said word has to be given as undecstood by the
trading communities as is known in trade parlance. Mr. Ganguli,
therefore submitted that there is no infirmity in the findings and con-
clusions of the Appellate Tribunal and as such the calcareous stone
c slabs imported by the appellant being marble, one of the restricted
items, the order of confiscation of the said stone slabs and in lieu
thereof the imposition of the customs duty and the penalty is quite in
accordance with law.

D The sole question to be considered in this appeal is whether the
word calcareous monumental or building stones of more than 2.5 or
more specific gravity as mentioned in Tariff Item No. 25. 15 in
Appendix 1-B, Schedule I, commonly known as ITC Schedule to the
Imports (Control) Order, 1955 comes within the purview of the
restricted items mentioned in Item 62, Appendix 2, Part B of the
B Import and Export Policy April 1988-March 1991. In Entry No. 62,
the restricted item is described as 'Marble/granite/onyx'. Marble has
not been defined either in the ITC Schedule or in Appendix 2, Part B
of Import and Export Policy dealing with the list of restricted items. It
is convenient to refer in this connection to para 64 of the Hand Book of
Procedures, April 1988-March 1991 which is in the following terms:
F
"Classification of Items

64. (1) The Schedule I to the Imports (Control) Order,
1955, reproduced in Appendix 1-B to this Book, commonly
known as the I.T.C. Schedule, contains the classification of
G all the articles that enter into the import trade.

(2) With effect from 1st April, (988 the Schedule I to
the Imports (Control) Order, 1955 reproduced in Appendix
I-B to this Book has been revised in alignment with the
First Schedule of the Customs Tariff (Amendment) Act,
H 1985. The Revised ITC Schedule contains 21 Sections sub-
divided into 99 Chapters."
AKBAR v. COLLECTOR OF CUSTOMS IRAY, J.) 385

It is also convenient to refer to the note to the Appendix 1-B, A
Schedule I to the Imports (Control) Order, 1955 which is to the follow-
ing effect:

Note:- Each heading number in Column (1) corres-
ponds to the respective Chapter and heading B
number of this first Schedule to the Customs
Tariff Amendment Act, 1985 as amended on
24.1.1986 and each entry in Column (2) has. the
same scope and meaning as the corr.esponding
Chapter and heading of the said first Schedule.

-
/

1991:

Items
It is also appropriate to set out hereunder the relevant portion of C
Appendix 6 of the Import and Export Policy for April 1988-March

Categories of eligible
Importers
D
Raw materials, components and Actual Users
consumables (Non-iron and steel items) (Industrial)
other than those included in the
Appendices 2, 3 Part A, 5 and 8.

Section 3( 1) of the Imports and Exports (Control) Act, 1947 as E
amended upto 30th April, 1979 provides that:

"The Central Government may, by order published in the
Official Gazette, make provisions for prohibiting, restrict-
ing or otherwise controlling in all cases or in specified clas.- F
ses of cases and subject to such exceptions if any, as may be
made by or under the order ....................... "

Chapter 25 of Schedule I, Appendix 1-B of the ITC Schedule
mentions mineral. products which can be imported under O.G.L.
Entry No. 25.15 refers to1narble which is as under:
G
"Marble, travertine, ecaussine and other calcareous monu-
mental or building stone of an apparent specific gravity of
2.5 or more and Alabaster, whether or not roughly trim-
med or merely cut, b.y sawing or otherwise, into blocks or
slabs of a rectangular (including square) shape."
R
386 SUPREME COURT REPORTS [1990] I S.C.R.

Appendix 2, Part B of the Import and Export Policy for April
A 1988-March 1991 enumerates the restrictea items. Item No. 62 deals
with marble which is to the following effect 'Marble/granite/onyx'.

In the instant case, admittedly the appellant on behalf of his firm
which is a small scale industry engaged in processing of stone slabs
B placed an order for calcareous stone (other than marble) with the
exporter Elle Marmi of Italy asking the exporter to certify that the said
goods were not marble. The exporter, ·Elle Marmi of !tally issued a
certificate dated December 6, 1988 certifying that all the goods in ·""'-··
question were calcareous stone slabs other than marble. The appellant

-
also obtained from the foreign exporter a sample tile of 'Botticino' the
calcareous rock proposed to be imported and had th_e same tested by a
c reputed Geologist, Dr. S.F. Sethna who submitted his report dated
October 13, 1988 confirming that the same sample was not marble. It
has been stated in the said report that the sample is a limestone and
thus differs from the marble in being of sedimentary origin and has not
undergone any metamorphism to be considered under metamorphic
D rocks to be described as a marhle. If the rock would have shown any
slightest amount of metamorphism the recrystallization of carbonate
crystals would make the individual crystals distinctly visible under the
microscopic examination. ·

The appellant also referred to an Italian Book MARMI
E IT AL TA wherein the index evidenced the fact that "Botticino"
varieties were covered under "Polishable Calcareous Rocks" and not
under 'True Marbles' (Re-crystallised Calcareous Rocks). The appellant
also while placing order asked the exporter to send a certificate about
the calcareous stones for which order was placed for importation. The
exporter, Elle Marmi of Italy issued a certificate dated December 6,
F 1988 certifying that all thi' rough slabs loaded are 'calcareous stone
slabs other than marble'. The appellant also obtained a certificate
from one Gianni C. Baigini, a surveyor registered with the Chamber of
Commerce, Carrara and a specialist for control of marble. calcareous
stones (other than Marble) and Granite. The said expert after check-
ing the said consignment loaded in the containers for import by the
G appellant in Italy certified that all rough slabs are calcareous stone
slabs of good quality. He also certified that these are calcareous stones
other than marble because they are not recrystallized calcareous rocks
and that the calcareous stone slabs in the above consignment are not
marble.

H In Indian Standard Specification for Maqble, IS: 1130-1969,
AKBAR v. COLLECTOR OF CUSTOMS (RAY, J.] 387

Entry No. 0.2 marbles have been described as metamorphic rocks A
capable of taking polish, formed from the re-crystallization of
limestones or dolomitic limestones and are distinguished from lime-
stone by even visible crystallined nature and non-flaggy stratification.
Note to the said Entry states that sometimes rocks, such as serpentine
are also polished and used in trade as marble.
B
The Director, Regional Petrology Laboratory where the appel-
lant sent a sample of the rocks ordered of importation, for examina-
tion has alsu forwarded a technical report on study of sample by Dr.
H.M. Ramachandra, a Geologist, which states: "The rock is an

- allochemic (Pelmicriti~) limestone, ,it cannot be termed as a marble."

The Indian Bureau of Mines in its letter dated March 3, 1982 has
mentioned that:
c

"Technical Definition:

Geologically (petrologically) marble is recrystallised D
(metamorphosed) limestone. Ordinary limestone is a
sedimentary rock but once it is metamorphosed i.e. once it
has undergone recrystallisation, it is turned to marble. So
marble is metamorphosed limestone which consist essen-
tially the minerals calcite, dolomite or a combination of the
two." ·E

"The specimen has been examined and it is observed that
the rock. fs cryptocrystalline, fine grained, milclfy metamor-
phosed with few bigger grains of calcite. The specimen is
hard and compact and is capable of being cut into slabs/
blocks of desired size and can take a good polish," F

Thus, according to all these reports as well as the ISI specifica-
tion the slabs of rocks that have been imported by the appellant and
claimed to be calcareous stones are not 'marble' in the scientific and
technical sense of the term marble. As we have already stated
hereinbefore that Tariff Item No. 25.15 mentions five kinds of rocks G
such as Marble, Travertine, Ecaussine, Alabaster and other calcareous
monumental or building stone of a specific gravity of 2.5 or more
whereas In the List of Restricted Items--Item No. 6i only mentions Marble/
granite/onyx are mentioned. In the absence of any definition. of the
term 'marole' it is to be decided what is the scope and meaning of the
word marble a119 whether it includes within it, the other kinds of H
388 SUPREME COURT REPORTS [1990] 1 S.C.R.

calcareous stones such as travertine, ecaussine, alabaster and other
A
calcareous monumental or building stone of a specific gravity of 2.5 or
more in order to saddle the importer with the burden of obtaining a
licence for importing the said restricted item. It has been submitted on
behalf of the appellant that as the word marble has not been defined
and the tariff item refers to calcareous stone of an apparent specific
B gravity of 2.5 or more, it has to be taken to be used in a technical and
scientific sense and as such the same cannot be interpreted in the
popular commercial sense or as understood in trade parlance by
persons dealing with the· said stones.

In. deciding this question the first thing that requires to be noteo
is that Entry No. 25.15 refers specifically not only to marble but also to
c other calcareous stones whereas Entry No. 62 refers to the restricted
item marble only. lt does not reter to any other stones such .as ecaus-
sine, travertine or other calcareous monumental or t>uilding stone of a
certain specific gravity. Therefore. on a plain reading of these two
Entrie; it is appar~nt that travertine, ecaussine and other calcareous
D monumental or building stones are not intended to be included in
'marble' as referred to in Entry No. 62 of Appendix 2 as a restricted
item. Moreover, the calcareous stone as mentioned in ITC Schedule
has to be taken in scientific and technical sense as therein the said
stone has been described as of an apparent specific gravity of 2.5 or
more. Therefore, the word 'marble' has to be interpreted, in our con-
E sidered opinion, in the scientific or technical sense and not in the sense
as commercially understood or as meant in the trade parlance. There is
no doubt that the general principle of interpretation of Tariff Entries
occurring in a text statute is of a commercial nomenclature and under-
standing between persons in the trade but it is also a settled legal
position that the said doctrine of commercial nomenclature or trade
F understanding should be departed from in a case where the statutory
content in which the Tariff Entry appears, requires such a departure.
In other words, in cases where the application of commercial meaning
or trade nomenclature runs counter to the statutory context in which
the said word was used then the said principle of interpretation should
not be applied. Trade meaning or commercial nomenclature would be
G applicable if a particular product description occurs by itself in a Tariff
Entry and there is no conflict between the Tariff Entry and any other
Entry requiring to reconcile and harmonise that Tariff Entry with any
other Entry,

In Union of India v. Delhi Cloth & General Mills, [1963] Supp.
H ( 1) SCR_ 586 the question arose as to how the term "refined oil"
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 389

occurring in the Tariff was to be construed. There was no competition A
between that Tariff Entry with any other, nor was there any need to
reconcile and harmonise the said entry with any other provision of the
tariff. This Court, therefore, considered the term "refined oil" by
applying the commercial meaning or trade nomenclature test and held
that only deodorised oil can be considered to be refined oil. This Court
also referred to the specification of "refind oil" by the Indian B
Standards Institution and held that:

"This specification by the Indian Standards Institution
furnishes very strong and indeed almost incontrovertible
support for Dr. Nanji's (respondent's) view and the
respondent's contention that without deodorisation the oil
is not "refined oil" as is known to the consumers and the C
commercial community."

In Dunlop India Ltd. v. Union of India and Ors., [1963] Supp. 1
SCR 586 the question arose whether the product known as V.P. Latex
which was imported by the appellant can be considered to be 'rubber o
raw' within the meaning of Tariff Entry No. 87 of the Indian Tariff
Act, 1934. The choice was between classifyihg V .P. Latex as 'rubber
raw' and the general residuary entry at the end of the Tariff (a general
catch) all entry which was described as "the orphanage of the residuary
clause". In these circumstances, this Court applied the commercial
meaning or nomenclature test. E

In the case of Commissioner of Sales Tax, M.P. v. Jaswant Singh
Charan Singh, [1967] 2 SCR 720 the respondent was a dealer In
firewood and charcoal. In a proceeding for assessment of sales tax
under the M.P. General Sales Tax Act, the respondent claimed that
charcoal was ·coal' within the meaning of Entry I of Part III of the F
Schedule II to the Act and therefore was taxable at the rate of 2%. The
Sales Tax Authorities however," held that charcoal was not 'coal' and
was taxable at 4% as it fell under the residuary Entry I of Part VI of
Schedule II. The Board of Revenue and the High Court held in favour
of the respondent relvin_g on the dictionary meaning of the word 'coal'.
The Commissioner of Sales-tax appealed. It was held by this Court G
·that in interpreting items in statutes like the Sales Tax Acts resort
should be had not to the scientific or technical meaning of the terms
i used but to their popular meaning or the meaning attached to them by
' those dealing in them, that is to say, in their commercial sense. Viewed
from this angle, both a merchant dealing in coal and a consumer want-
ing to purehase it would regard coal not in its_ geological sense but in H
390 SUPREME COURT REPORTS [1990] 1 S.C.R.

A the sense as ordinarily understood and would mclude "charcoal' in the
term 'coal'

It may be pointed out that this Court has clearly and unequi-
vocally laid down that it is not permissible but in fact it is absolutely
necessary to depart from the trade meaning or commercial nomencla-
B ture test where the trade or commercial meaning does not fit into the
scheme of the commercial statements. This Court referring to the
observations of Pullock B. in Grenfell v. Inland Revenue Commis-
sioner, [ 1876] l ,Ex. D. 242, 248, observed:

"that if a statute contains language which is capable of
being construed in a popular sense such statute is not to be
c construed according to the strict or technical meaning of
the language contained in it, but is to be construed in its
popular sense, meaning of course, by the words 'pupular-
sense', that sense which people conversant with the
subject-matter with which the statute is dealing would attri-
D bute to it." But "if a word in its popular sense and read in
an ordinary way is capable of two constructions, it is wise to
adopt such a construction as is based on the assumption
that Parliament merely intended to give so much power as
was necessary for carrying out the objects of the Act and
not to give any unnecessary powers. In other ,;ords, the
E construction of the words is to be adapted to th·~ fitness of

t
the matter of the statute."

The Court has also referred to the observations of Fry, J in Holt
& Co. v. Collyer, [1881] 16 Ch. D. 718,720. The observation is: "If it
is a word which is of a technical or scientic character then it must be
F construed according to that which is its primary meaning, namely, its
technical or scientific meaning."

Referring to the above decisions this Court held that:

"While construing the word 'coal' in Entry I of Part III of
G Schedule II, the test that would be applied is what would be
the meaning which persons dealing with coal and con-
sumers purchasing it as fuel would give to that word. A
sales tax statute is being one levying a tax on goods must in
the absence of a technical tertn or a term of science or art,
be presumed to have used an ordinary tertn as coal accord-
H ing to the meaning ascribed to it in common parlance."
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 391

Tl!is Court in K. V. Varkey v. Agricultural Income Tax and Rural
Sales Tax Officer, [ 1954] 5 STC 384 specifically declined to apply the A
popular or commercial meaning of 'Tea' occurring in the sales tax
statute holding that the context of the statute required that the techni-
cal meaning of 'a product of plant life' required to be applied and
therefore green tea leaves were tea even though they might not be tea
was known in the market. B

In Cannanore Spinning and Weaving Mills Ltd. v. Collector of
Customs and Central Excise Cochin and Ors., [1970] 2 SCR 830 this
Court held that the word 'hank' occurring in a Central Excise Notifica-
tion could not be interpreted according to the well-settled commercial
meaning of that term which was accepted by all persons in the trade, in
as much as the said commercial meaning would militate against the c
statutory context of the said exemption Notification issued in June,
1962. The word 'hank' as used in the Notification meant a 'coil of yarn'
and nothing more.

In Collector of Central Excise, Kanpur v. Krishna Carbon Paper D
Co., [ 1989] 1 SCC 150 it has been observed by this Court that it is a
well settled principle of construction that where the word has a scien-
tific or technical meaning and also in ordinary meaning according to
common parlance, it is in the latter sense that in a taxing statute the
word must be held to have been used, unless contrary intention is
clearly expressed by the legislature. It has also been observed that E
whether tile general principle of interpretation was applicable or not
depended on the statutory context. If special type of goods is subject
matter of a fiscal entry then that entry must be understood in the
context of that particular trade, bearing in mind and particular word.
The trade meaning is one which is prevalent in that particular trade
where that goods is known or traded. Where, however, there is no F
evidence either way then the definition given and the meaning flowing
from particular statute at particular time would be the decisive test. It
has further been observed by this Court in this case that:

"Where no definition is provided in the statute itself,
as in this case, for ascertaining the correct meaning of a G
fiscal entry reference to a dictionary is .not always safe. The
correct guide, it appears in such a case, is the context and
the trade meaning. In this connection reference ·has been
made to the observations of this Court in CST v. Mis. S.N.
Brothers, Kanpur, [ 1973 I 3 SCC 496."
H
392 SUPREME COURT REPORTS (1990] 1 S.C.R.

A 1rt Collector of Customs, Bombay v. Hargovindas & Co., (1987]
29 ELT 975 the import policy restricted the import of milk powder.
The importer had imported skimmed milk powder and relied upon the
principle of commercial nomenclature or trade understanding in order
to contend that there was a settled and accepted distinction between
milk powder and skimmed milk powder which was specifically recog-
B nised and accepted by this Court in Healthways Dairy v. State of
Haryana. The Special Bench of the Tribunal negatived that contention
and held that: \.,

"unlike the central excise tariff the import schedule itself
provided a statutory basis of interpretation. The con-
troversy before us relates to a period during which the
c Imports (Control) Order, 1955, issued under the Imports
and Exports (Control) Act, 1947, had a separate import
schedule annexed to it. This import schedule was aligned
with the import schedule of the Customs Tariff Act, 1975.
The import schedule under the Import (Control) Order
D itself did n<Jt contain any rules of interpretation, section
notes and chapter notes. However, a statutory Note at the
beginning of the import schedule stated that the scope of
various terms and headings in it was to be the same as in the
import tariff schedule in the Customs Tariff Act, 1975.
Thus the elaborate statutory scheme of the customs tariff
E import schedule got applied to the import schedule as well.
• It is by now well known that the customs tariff import
schedule hardly left any s'cope to go in for trade parlance or
common parlance because it statutorily defined almost
everything with the help of rules of interpretation and
explanatory notes. In such a scheme, the statutory defini-
F tions must prevail over the trade parlance or any other
aides to interpretation."

In Collector of Customs, Bombay v. Swastic Woollens (P) Ltd.
and Ors., [1988] Supp. SCC 796 this Court has observed that the
. expression 'wool wastes' which has not been defined in the Customs
o Tariff Act, 1975 or in the relevant Notification is not an expression of
art. It may be understood, as in most of financial measures where the
expressions are not defined not in a technical or pre-conceived basis
but on the basis of trade understanding of those who deal with these
goods. When no statutory definition is provided in respect of an item
in the Customs Act or the Central Excises Act, the trade understand-
H ing, meaning thereby the understanding in the opinion of those who
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 393

deal with the goods in question, is the safest guide. It has also been
observed therein that the Tribunal has not ignored the Technical Com- A
mittee's observation nor the Board's Tariff Adviee.

On a conspectus of all these decisions mentioned hereinbefore
the position thus emerges is that when the expression 'marble' has not
been defined in the Customs Tariff Act as well as in the Customs Act B
, ot in the relevant Notification regarding the restriction on import of

-~ Marble in the List of Restricted Articles, it is necessary to decide the
significance and true meaning of the word 'marble' as used in the ITC
Schedule as well as in the List of Restricted Items, Customs Tariff Act
and the Customs Act not in its popular sense i.e. people who are
dealing with this trade meant the same or what that term is commer-
cially known in trade parlance but it has to be given a meaning in the c
context in which this word has been used in the ITC Schedule as well as
in the List of Restricted items of Import. It is also necessary to decide
whether the word 'marble' as stated in the ITC Schedule refers to only
marble or includes travertine, ecaussine, alabaster and other cal-
careous monumental or building stones and can be termed as marble in D
the commercial sense or in trade nomenclature so as to bring the same
within the restricted Item No. 62 of Appendix-2 of the Import and
Export Policy for April 1988-March 1991. We have already stated
hereinbefore that in the List of Restricted Items under item No. 62
only marble has been mentioned and not the other stones including
calcareous stone used for building or monumental purposes which E
have been left out. Therefore, per se it may be difficult to say that
marble includes the other calcareous stones mentioned in the ITC
Schedule. It is pertinent to mention in this connection to the Report of
Dr. S.F. Sethna of the Department of Geology, St. Xaviers Co'lege,
Bombay to whom a sample of the said calcareous slab of stone
intended to be. imported has been sent. Dr. Sethna, a noted Geologist F
after examination of the sample specifically stated that the sample
under investigation is a sedimentary rock which does not show any sign
of metamorphic recrystallization and thus cannot be considered as a
marble. The report sent by the exporters of Italy, Elle Mani:ti and
Audree Muciani dated December 6, 1988 also states that all the rough
slabs loaded are calcereous stone slabs other than marble. Further- G
more, Gianni C. Baigini, a Surveyor registered with the Chamber of
Commerce of Carrara and a Specialist for control of Marble, Calcare-
ous Stones (other than marble) and Granite sent a certificate on
inspection of the sample that all rough slabs stuffed are calcareous
stone slabs of good quality. These are calcareous stones other than
marble because they are not recrystallized ·calcareous rocks .. He H
394 SUPREME COURT REPORTS • 11990] 1 S.C.R.

further certified that the calcareous stone slabs in above consignment
A
are not marble. One.Shri S.V. Chaudhary, Director, Regional Petro·
logy Laboratory, Geological Survey of India after examination of the
sample sent a report dated March 13, 1989 under the signatures of Dr.
H.M. Ramachandra, Geologist to the appellant. The said report states
that, 'the rock is a allochemic (Palmicritic) lim~stone, it cannot be
B termed as a marble'. In Invoice No. 126-88 a certificate has been given
by the exporter to the following effect:_

"We certify that merchandise is of Italian origin. Contents
,_
are true and authentic, prices corr.ect anll current and that
it is the only invoice for the goods described therein."
c In the said invoice the goods has been described as slabs of
calcareous stone of 2 Cms thick quantity. ThWI i\ appolU's from all the
aforesaid reports and certificates that the slab11 of 111one which have
been imported from Italy are nothing but calcareous stones and the
same cannot be termed as marble. Even according to item No. 0.2 of
D Indian Standard Sepcification for Marble (Blocks, Slabs and Tiles) the
stone slabs imported by the appellant being not re-crystallized and
even being not metamorphosed cannot be considered as marble. Of
course, tJ!e Revenue has tried to contend relying on the Note to the
same wherein it has been stated that sometimes rocks, such as
serpentine are also polished and used in trade as marble that the slabs
E of calcareous stone imported are. used as marble in trade.

In Harmonised System of Nomenclature (H.S.N.) marble has
been defined as a hard calcareous stone, homogeneous and fine-
grained, often crystallie and either opaque or tran11lucent. Marble is
usually variously tinted by the presence of mineral oxides (coloured
F veined marble, onyx marble, etc.), but there are pure white varieties.

The Revenue Authorities sent the sample of the calcareous stone
imported by the appellant to the Department of Mines, Indian Bureau
of Mines. A report has been sent by them to the Superintendent,
Central Ei<cise and Customs Division, Udaipur after testing of the
G sample of March 3, 1989. The said report gives the· Technical and
Commercial definition ol marble as:

Technical definition:

"(Geologically (Petrologically) marble is recrystallised
H (Metamorphosed) limestone. Ordinary limestone is a sedi-
AKBAR v. COLLECTOR OF CUSTOMS (RAY, J.] 395

mentary rock but once it is metamorphosed i.e. once it has
undergone recrystallisation, it Is turned tp marble. So mar- A
ble is metamorphosed limest<Jne which consist essentially
tjie minerals calcite, d<Ji'omite or a combinati<Jn pf the
two."

Commercial Definition:- B

"The usage of the term 'marble' has a much vider applica-
tion. In the commercial circle, any liB!estone which is suffi-
ciently hard and coherent to take a good polish and which
can be cut into desired sizes (into blocks) free of cracks can
be called marble."
c
It has also been stated therein that commercial marble refer to a
crystalline rock composed ofpredominantly of one or more pf follow-
ing minerals; calcjte, dolomite or serpentine and capable of taking a
polish. It has been further stated under the said report that the speci-
men has been examined and it is observed that the rock is cryptocrys- D
talline, fine grained, mildly metamorphosed with few bigger grains of
calcite. The specimen is hard and compact and is capable of being cut
into slabs/blocks of desired size and can take a good polish. Keeping
above visual observations into view, it has been concluded that the
specimen under reference is marble as per commercial definition. The
Director of Mines, and Geology Department, Udaipur also sent a E
report to che Assistant Collector of Customs. It has been stated in the
said report that the sample is of a fine grained off-white rock. It. gives
very good effervescence with dilute hydrochloric add and its hardness
indicates that it is a fine grained carbnonate rock. It takes good polish
.and can be used as marble. Regarding the microscopic characters it
states that the rock is mainly composed of very fine grained cherty F
calcitic mass and iron mddes. No polygonal crystals are, present.
Recrystallization has n<Jt taken place. The rock sample has been·
identified as 'fine grained cherty limestone'. It has also been stated
that technically marble is a product of thermal metamorphism of
limestone (impure limestone) in which recrystallisation takes place
and silicate minerals are also produced. C<Jmmercially the term 'mar- G
ble' has been applied to any stone, other than th<Jse known in trade as
granite, that has a pleasing appearance and will take a pPlish. Thus,
the term 'marble' adopted in the trade is based <Jn the general proper-
ties and use of the st<Jne. It has been further stated that the definiti<Jn
of marble given in IBM publication 'Marble in India' 1983, G<Jvem-
ment of India is.as under: H
396 SUPREME COURT REPORTS [1990] 1 S.C.R.

"Marble:-- Petrologically marble is recrystallised
(Metamorphosed) limestone. But in commercial parlance
the term marble has a much wider application. Commercial
marble is any crystalline rock composed predominantly of
calcite, dolomite or serpentine that is capable of taking
polish."
i3
In Webster Comprehensive Dictionary, International Edition,
the word 'Marble' has been defined as "A compact, granular, partly
crystallized limestone, occurring in many colours, valuable for buifcling
or ornamental purposes."

In Shorter Oxford English Dictionary, the word 'Marble' has
c been defined as "Limestone in a crystalline (or, less strictly, also a
granular) state and capable of taking a polish, occurring in many
varieties; much used in sculpture and architecture."

The Appellak Tribunal after considering various reports refer-
D red to hereinbefore observed that the term 'marble' cannot be con-
strued on geological and petrological consideration, but has to be con-
strued in commercial parlance. It has also been observed that the
Tribunal is unable to place reliance on these reports. In Commercial
circle any limestone which is sufficiently hard and coherent to take
good polish and which can be cut into desired sizes free of cracks A
E can be called as marble as per the opinion given by the Indian Bureau
of Mines. The Tribunal also observed that the Tribunal has found that
the specimen could be terrncd as 'marble' as per the commercial defini-
ti on but not technically referring to the report of the Director, Mines

~
and Geology Department, Udaipur. It has also been observed by the
Tribunal that in the sample re-crystallization has not taken place. The
F Tribunal has also held that it was not necessary to go into any other
• aspects in terms of the ISI or technical and scientific definition and }
held that the impugned goods do fall under marble in trade under-
standing and as such the same comes within the List of Restricted
Items in Item No. 62, of Appendix 2. This finding cannot be sustained
in as much as all the above reports referred to hereinbefore clearly lay
G down that any stone to be terrned as marble falling within Entry No. 62
of the List of restricted Items in Appendix 2, has to be recrystallised.
The Indian Standards Institution has also given a similar definition of
marble as recrystallization of limestones or dolomitic limestones. 'r
Furthermore, Petrologically and Geologically th.e slabs of stones which
have been imported are allochemic (pelmicritic) limestone and it can-
H not be termed as marble. The Indian Bureau of Mines also observed
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.] 397

on testing the sample of rock that it is cryptocrystalline, fine grained,
A
mildly metamorphosed with few bigger grains of calcite and identified
~
the same as very fine grained cherty calcitic limestone.

It is apparent from all these reports that the calcareous stone of
specific gravity of 2.5% is not marble technically and scientifically.
The finding of the Appellate Tribunal is, therefore, not sustainable. It B
is, of course, well settled that in Taxing Statute the words used are to
) be understood in the common parlance or commercial parlance but
such a trade understanding or commercial nomenclature can be given
only in cases where the word in the Tariff Entry has not been used in a
scientific or technical sense and where there is no conflict between the
words used in the Tariff Entry and any other Entry in the Tariff
Schedule. In the instant case, in the Tariff Entry No. 25.15 in the ITC c
Schedule, Appendix 1-B, Marble, Travertine, Ecaussine, Alabaster
and other calcareous stones of an apparent specific gravity of 2.5 or
-"( more have been mentioned whereas in Entry No. 62 only the word
marble has been mentioned as a restricted item for import, the other
calcareous stones such as travertine, ecaussine, alabaster etc. have not D
been mentioned in Entry No. 62. In these circumstances, some signifi-
cance has to be attached to the omission of the words travertine,
ecaussine and other calcareous monumental or building stones of an
~. apparent specific gravity of 2.5 or more and Alabaster from the ITC
Schedule in Entry No. 62 of Part B, Appendix 2 of Import and Export
Policy for April 1988-March 1991. The only natural meaning that E
follows from this is that Entry 62 is confined only to marble as it is
understood in a petrological or geological sense and as defined by the
Indian Standard Institute and not as mentioned in the opinion given by
the Indian Bureau of Mines on visual observation and it does not
extend to or apply to other calcareous stones mentioned in the ITC
Schedule. Moreover, the commercial nomenclature or trade meaning F
1 cannot be given to marble in as much as such a meaning if given will
render otiose, redundant the terms travertine, ecaussine, alabaster
and other calcareous monumental or building stone of an apparent
specific gravity of 2.5% or more whether or not roughly trimmed or
merely cut by sawing. Moreover, in Appendix 6 i.e. Import of items
under Open General Licence, Item No. 1 refers to Raw Materials, G
components, and consumables (Non-iron and steel items other than
those in Appendices 2, 3, Part A, 5 and so the other calcareous stones
i excluding marble which is a restricted item of import fall within import
items under Open General Licence. Although much streS& has been
laid on the note to Item No. 0.2 of Indian Standards Specification for
Marble (Blocks, Slabs and Tiles) wherein it has been stated that some- H
398 SUPREME COURT REPORTS [1990] 1 S.C.R.

times rocks, such as serpentine are also polished and used in trade as
A
marble but it cannot be taken into consideration in coming to the
finding that marble is the genus and all the other calcareous stones
referred to in Tariff Entry No. 25.15 in ITC Schedule, Appendix 1-B
are included in it. Moreover, the onus heavily lays upon the Revenue
Authorities to prove by adducing cogent evidence that limestone with-
B out Metamorphism and recrystallisation not being opaque or translu-
cent will fall within the category of·stone called 'marble' in Entry No.
62 of Appendix 2 as one of the restricted items. The appellant before
placing the order took considerable precaution in ascertaining from
the exporter that the calcareous stone to be imported from Italy is
calcareous stone and not marble. Moreover, he referred the sample of
the calcareous stone to be imported to the Department of Geology,
c Bombay and to the Regional Petrology Laboratory of the Geological
Survey of India to ascertain whether calcareous stone in question is
marble or not in order to enable him to import the same under open
general licence. He also asked his exporter to send a certificate
whether the calcareous stone for which order is placed is marble or
D not. The exporter sent a certificate alongwith the report of the expert
stating that the slabs of calcareous stones contained in the containers
sent by the exporter are calcareous stones and not marble. No tangible
evidence has been produced nor even affidavits of persons attached to
this trade to the effect that the slabs of calcareous stone imported by.
the appellant are marble as defined within Entry No. 62 of the List of
E Restricted Items have been filed. The Revenue has not taken any steps
to ascertain whether the calcareous stones imported are marble not by
any scientific, geological or petrological test.

Considering all these reports we are of the opinion that since the
term marble-has not been defined in the Imports Control Order as well
F as ill th~ ITC Schedule, it has to be taken in a scientific and technical
sense as well as in the context the word has been used and the slabs of
calcareous stones imported by the appellant from Italy cannot be held
to be marble as they have not been recrystallised and metamorphosed
in the geological and petrological sense of the term. It is pertinent to
refer in this connection the following passage of Maxwell on the
G Interpretation of Statutes, Twelfth Edition by P.St ..J. Langan:

"The word "land" is generally understood as including )'
buildings, but if, after imposing a rate of houses, buildings, ,
works, tenements and hereditaments, an Act exempted
"land", this word would be restricted to land unburdened
H with houses, buildings or works which would otherwise
have been unnecessarily enumerated."
AKBAR v. COLLECTOR OF CUSTOMS (RAY, J.] 399

As regards the submission that !Ire end-use of a particular item
A
has to be taken into consideration in interpreting· a produd is of no
relevance in determining its classification as we have stated hereinbe-
fore that in interpreting a term appearing in the Tariff Item which has
not been defined either in the Tariff Schedule or in the Import Control
Order, the same is to be interpreted in such a way which is in con-
sonance with the Items specified it! the ITC Schedule without leaving B
out any part of the Items mentioned therein. In other words, a
) harmonised interpretation has to be given to each of the. calcareous
stones mentioned in the said Tariff Item in ITC Schedule and nothing
should be left out or .made redundant in giving the interpretation. The
commercial nomenclature or understanding in the trade which is
generally given in tax statute can not be taken recourse to in the
instant case in as much as the statutory context in which the Tariff Item c
appears requires departure in the instant case. In· the Tariff. Item the
calcareous stones used for monumental or building purposes and of a
specific gravity of 2.5% or more is used in the scientific or technical
sense l!nd as such the COl!llllercial nomenclature or understanding in
the .trade should not be taken recourse to in irltetjJreting the word D
'marble'. The reference to the requirement of gravity of.2.5% or more
is also a purely technical criteria or requirement which shows that the
principle of trade nomenclature or commercial unders.tanding is not
applicable to that Tariff Item. Moreover, the said Harmonised System
of Nomenclature (HSN) contains a specific note regarding serpentine
rocks to the effect that the same are some times called marble, butthe E
same is excluded from Chapter Heading 25 .15. This again dearly
sJ:iows that according to HSN, Chapter Heading 25.15 has· to be con-
strued according to its technical meaning. Technically, serpentine does
not fall under Heading 25.15 and the same is accordingly excluded
therefrom by the HSN. If commercial meaning is to be applied then
serpentine would have to be classified under Item 25.15 iii as much as F
i. it is sometimes called marble in the trade. The HSN Explanatory
Notes, therefore, establish that. Chapier Heading 25.15% must be
construed by its technical sense and not by applying a commercial
nomenclature test.

Considering all these aspects, there is no o'ther alternative but to G
conclude that the slabs of calcareous stone imported by the appellant
are not marble as mentioned in Entry No. 62 of Appendix 2 of the
1 Import and Export Policy for April 1988-March 1991 .and so it is
covered by open general licence. The imported goods cannot be con-
fiscated by the Government under section 111(d) of the Customs Act,
1961 nor the appellant can be given the option to dear the said goods H

,•
400 SUPREME COURT REPORTS [ 1990] 1 S.C.R.

for home consumption on payment of fine of Rs. Five lakhs in lieu of
A
confiscation under Section 125 of the Customs Act, 1962. The appel-
!ant cannot be said to have imported calcareous stones without an )!.
import licence and as such there being no violation of the Import
Control Policy the imposition of penalty of Rs.Ten lakhs under section
112 of the Customs Act, 1962 is also unwarranted and not sustainable.
B
Before we conclude it is relevant to mention in this connection (
that even if it is taken for arguments sake that the imported article is
marble falling within Entry 62 of Appendix 2, the burden lies on the
Customs Department to show that the appellant has acted dishonestly
""
or contumaciously or with the deliberate or distinct object of breach-
ing the law.
c
In the present case, the Tribunal has itself specifically stated rhat
the appellant has acted on the basis of bona fide behalf that the goods
were importable under OGL and that, therefore, the Appellant )-
deserves lenient treatment. It is, therefore, to be considered whether
D in the light of this specific finding of the Customs, Excise & Gold
(Control) Appellate Tribunal, the penalty and fine in lieu of confisca-
tion require to be set aside and quashed. Moreover, the quantum of
penalty and fine in lieu of confiscation are extremely harsh, excessive
and unreasonable bearing in mind the bona /ides of the Appellant, as
specifically found by the Appellate Tribunal.
)..
E
We refer in this connection the decision in Merck Spares v. Col-
lector of Central Excise & Customs, New Delhi, I 1983] ELT 126 l;
Shama Engine Valves Ltd. Bombay v. Collector of Customs, Bombay,
[ 1984] 18 ELT 533 and Madhusudan Gordhandas & Co. v. Collector of
Customs, Bombay, I 1987) 29 ELT 904 wherein it has been held that in
F imposing penalty the requisite mens rea has to be established. It has
also been observed in Hindustan Steel Ltd. v. State ofOrissa, [1970) 1 ~·
SCR 753 by this Court that:

.. The discretion to impose a penalty must be exercised judi-
cially. A penalty will ordinarily be imposed in cases where
G the party acts deliberately in defiance of law, or is guilty of
contumacious or dishonest conduct, or acts in conscious
disregard of its obligation; but not, in cases where there is a
technical or venial breach of the provisions of the Act or
where the breach flows from a bona fide belief that the
offender is not liable to act in the manner prescribed by the
H statute.··
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.l 401

In the instant case, even if it is assumed for arguments sake that A
,.. . the stone slabs imported for home consumption are marble still in view
of the binding arrived at by the Appellate Tribunal that the said pro-
duct was imported on a bona fide belief that it was not marble, the
imposition of such a heavy fine is not at all warranted and justifiable.

In the premises aforesaid, we allow the appeal and set aside the B
judgment and order passed by the Appellate Tribunaland direct the
Tribunal to release the goods to the appellant forthwith. We also
direct the Tribunal to release the personal bond given by" the Appel-
lant for a sum of Rs.2,50,000 on the basis of which one container was
released as per order of this Court dated October 25, 1989 and also to
release the appellant from payment of detention charges and demur- c
rage for retaining the goods. In the facts and circumstances of the case
there will be no order as to costs.

R.S.S. Appeal allowed.