Holding

PVC resin powder and synthetic hydrocarbon resin are to be classified under the "plastic and plastic goods, plastic powder" entries for octroi duty, not under the "chemicals of all sorts" entry.

Summary

The Municipal Corporation of Thane sought to levy octroi duty on PVC resin in powder form and synthetic hydrocarbon resin manufactured by Asmaco Plastic Industries. The respondents argued that these products should be classified under Entry 40(b) "chemicals of all sorts" of the Maharashtra Municipality (Octroi Duty) Rules, 1968, while the corporation contended they fall under Entry 53(c) (or Entry 32(c) of the 1965 Rules) covering "plastic and plastic goods, plastic powder". The High Court held in favour of the respondents, treating the goods as chemicals. The Supreme Court reversed this decision, holding that the commercial meaning of "plastic" and "plastic powder" includes PVC resin powder and synthetic hydrocarbon resin, and that tax statutes must be interpreted using commercial parlance rather than technical literature. Consequently, the Court declared the goods taxable under the plastic entries and set aside the High Court order. The appeals were allowed and each party was ordered to bear its own costs.

Issues considered

Whether PVC resin in powder form falls under the "plastic and plastic goods, plastic powder" entry (Entry 53(c) of the 1968 Rules / Entry 32(c) of the 1965 Rules) for octroi duty purposes.
Whether synthetic hydrocarbon resin is to be treated as "plastic and plastic goods, plastic powder" under the same entries for octroi duty.

Legislation cited

Subjects

octroi dutyclassification of goodsPVC resinsynthetic hydrocarbon resintax statutescommercial parlancestatutory interpretationmunicipal corporation

Judgment

A MUNICIPAL CORPORATION FOR THE CITY OF
THANE AND ORS.
v.
ASMACO PLASTIC INDUSTRIES AND ORS.

JULY 17, 1998
B
[S.C. AGRAWAL, G.B. PATTANA!K
ANDS. RAJENDRA BABU, JJ.]
,,- .

Municipalities :
c
Maharashtra Municipality (Octroi Duty) Rules, 1968 :

Schedule I-Entry 53(c) or 40(b)-PVC Resin in powder form-
Classification of-Held: Classifiable under Entry 53(c) "plastic and plastic
goods, plastic powder etc." and not under Entry 40(b) "Chemicals of all
D sorts"-Bombay Provisional Municipal Corporation Act, 1949. Bombay
Municipal Corporation (Levy of) Octroi Rules, 1965;

Schedule H-Entry 32(c)-PVC Resin in Powder form and Synthetic
Hydrocarbon Resin-Classification of-Held: Classifiable under Entry 32(c)
E "plastic and plastic goods, plastic powder"-Bombay Municipal Corporation
Act, 1888.

Interpretation of Statutes :

Taxing Statutes-Commodities brought to taxation-Held : Meaning
F attributed to commodities will be with reference to their commercial parlance
and not with reference to technical literature.

Internal aids-Heading-Classification of goods-In different headings
in 1965 and 1968 Octroi Rules-Held : Goods are classified in the Rules not

G
on any scientific basis unlike in Chapter 39 of the Customs Tariff Act-Hence,
Heading itself does not control the meaning attached to goods-Customs
[
Tariff Act, 1975, Chapter 39.

Words and Phrases:

"Plastic powder"-Meaning of-Jn the context ofEntry 53(c) ofSchedule
H 1 to Maharashtra Municipality (Octroi Duty) Rules, 1968.
774
M.C. CITY OF THANE v. ASMACO PLASTIC INDUSTRIES 775
"Plastic powder"-Meaning of-In the context ofEnergy 32(c) Schedule A
., H to Bombay Municipal Corporation (Levy of) Octroi Rules, 1965.

The respondent manufactured PVC Resins in powder form and Synthetic
Hydrocarbon Resin, which were liable for octroi duty. The respondent filed
a writ petition before the High Court contending that the aforesaid products
fell under Entry 40(b) "Chemicals of all sorts" of Schedule I to the B
Maharashtra (Octroi Duty) Rules, 1968 whereas the appellant contended
that the said products fell under Entry 53(c) of the 1968 Rules and Entry
32(c) of Schedule H to the Bombay Municipal Corporation (Levy ot) Octroi
Rules, 1965 relating to "plastic and plastic goods, plastic powder etc."
respectively. The High Court allowed the petition. Hence this appeal.
c
The following questions arose before this Court :-

(a) Whether for the purpose of levy of Octroi duty PVC Resins in
powder form would fall under 'plastic and plastic goods, plastic
powder' in Entry 53(c) of Schedule I to Maharashtra Municipality
(Octroi Duty) Rules, 1968 framed under the Bombay Provincial
D
Municipal Corporation Act, 1949 or under Entry 32(c) of
Schedule H to the Municipal Corporation (Levy ot) Octroi Rules,
1965 framed under the Bombay Municipal Corporation Act,
1888.
(b) Whether for the purpose of levy of Octroi duty Synthetic E
Hydrocarbon resin is to be treated as 'plastic and plastic goods,
plastic powder' in Entry 32(c) of Schedule H to the Municipal
Corporation (Levy ot) Octroi Rules, 1965 framed under the
Bombay Municipal Corporation Act, 1888.

. F
,.( Allowing the appeal, this Court

HELD: 1.1. In the present case, when the expression "plastic, plastic
goods and plastic powder" is used along with bakelite and bakelite goods and
the manner in which the Legislature used these expressions will clearly
indicate that the intention is to cover all kinds of plastic material whether G
in primary form or in any otht:r secondary form. [779-F)

1.2. Therefore, the appropriate manner in which the commodity in the
... present case, nam~Iy, plastic powder, has been treated as a separate entry,
it is brought to tax under Entry 32(c) or 53(c) to Schedule H under the
Bombay Municipal Corporation (Levy ot) Octroi Rules, 1968. Similar would H
·~·

776 SUPREME COURT REPORTS [I 998] 3 S.C.R.

A be the position with reference to Hydrocarbon resins. Even Hydrocarbon
resin is treated on the same footing as a synthetic plastic and, therefore, the
goods in question cannot be treated as plastic goods or plastic powder _but
as separate goods and, therefore, one cannot accept the contention of the
respondent that the said goods are neither plastic in nature nor powder in
B form and it is not possible to accept the contention that Hydrocarbon resin
is distinct from plastic. (780-H; 781-A)

2.1. It wou~d not be appropriate to rely upon technical literature to
interpret the Entry in question in one manner or the other because in tax r .
enactment when particular commodities are brought to taxation the meaning
C attributed to the commodities will be with reference to their commercial
parlance, that is, if those who deal with the goods understand the said goods
in one manner or the other. [779-G-H)

,)..2. Under each heading of the Rules several goods are mentioned but
no scientific basis in bringing these goods under one heading or the other
D can be discerned unlike in Chapter 39 of the Customs Tariff Act, 1975
where the goods are more scientifically categorised. Hence, heading as such
in any one group does not by itself control the meaning to be attached to each
of such goods. (778-H; 779-C)

Chemicals and Fibres India Ltd. v. Union of India, (1982) ELT 917
E Born., referred to

Brussels Tari.ff Nomenclature (January [1978} Edn.), referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3491 of 1992
F Etc.

From the Judgment and Order dated 26.3.92 of the Bombay High Court
in W.P. No. 940of1984.

V.A. Bobde and D.N. Mishra for Mis. JBD & Co., B.N. Singhvi and Anil
G Kumar Gupta for the Appellants.

R.F. Nariman, Vivek Gambhir, D.P. Chaturvedi, Ms. Charu Bhargava, U.A.
Rana, Sudhanshu Tripathi, Ms. Manju Mishra and K.J. John for the
Respondents.

H The Judgment of the Court was delivered by
tC. CITY OF THANE v. ASMACO PLASTIC INDUSTRIES [RAJENDRA BABU, J.] 777
RAJENDRA BABU, J. In these appeals, the questions that arise for A
consideration are as follows:-

(I) Whether for the purpose of levy of Octroi duty P.V.C. Resins
in Powder form would fall under 'plastic and plastic goods, plastic
powder' in Item 53( c) of Schedule I to Maharashtra Municipality
(Octroi duty) Rules, 1968 framed under the Bombay Provincial B
Municipal Corporation Act, 1949 or under Item 32(c) of Schedule H
to the Municipal Corporation (Levy of) Octori Rules, 1965 framed
under the Bombay Municipal Corporation Act, 1888.

(ii) Whether for the purpose of levy of Octroi duty Synthetic
Hydrocarbon resin is to be treated as 'plastic and plastic goods, C
plastic powder' in Item 32(c) of Schedule H to the Municipal
Corporation (Levy of) Octroi Rules 1965 framed under the Bombay
Municipal Corporation Act, 1888.

Civil Appeals Nos. 3491-93 of 1992 relate to Octroi duty levied by the D
Municipal Corporation of Thane which is governed by the Bombay Provincial
Municipal Corporation Act, 1949. Octroi duty is levied by the said Corporation
under the Maharashtra Municipality (Octroi duty) Rules, 1968 and the relevant
entries which were considered by the High Court were Entry 40, (b) relating
to "chemicals of all sorts" and Entry 53(c) relating to "plastic and plastic
goods, plastic powder, etc." In the impugned judgment the Division Bench E
of the High Court has held that P.V.C. Resins Powder form does not fall under
"plastic" in Entry 53(c) but falls under "chemicals" in Entry 40(b).

Civil Appeals Nos. 7087-88 of 1993 relate to Municipal Corporation of
Greater Bombay which is governed by Bombay Municipal Corporation Act,
1888 and the Municipal Corporation (levy of) Octroi Rules 1965. In that case, F
relevant Entry is Entry 32(c) which, with slight difference, is similar to Entry
53(c) and in the said entry also the words "plastic and plastic goods, plastic
powder" have been used.

The respondents filed writ petitions to contend that the said goods are G
only ingredients used in the manufacture of plastic goods and, therefore, are
neither plastic in nature nor powder in fonn; that it is not a resin and all resin
must be regarded as polymers and not plastics; that unless other ingredients
like stabilizer and lubricants are used; that there cannot be solidarity in its
finished state and shaping by flow at some stages of its manufacture; that
the said product is neither a perfume nor a toilet requisite, a colour or a H
778 SUPREME COURT REPORTS [ 1998] 3 S. C.R.

A household good and does not answer the description of goods listed under
the particular class and, therefore, they contended that they do not constitute
plastic. They also set out before the High Court in challenging the action of
the respondent certain technical details as to the nature of the commodity in
question and contended that the levy of Octroi duty on the said product
B under Item No. 32(c) of schedule Hor Entry 53(c) of Schedule I under relevant
Rules is not appropriate. The substance of the contentions put forth on
behalf of the respondents is that plastic is a material that contains a high
polymer usually synthetic, combined with other ingredients such as curatives,
r .
fillers, reinforcing agents, colorants, plasticisers etc. While synthetic resin of
which the said product is but one type is a polymer synthesized, in this
C particular case, for adhesive use. Secondly it was stated that synthetic resin
is a polymer itself while plastic is polymer plus the additives ;nentioned as
aforesaid. Therefore, they contended that the product in the form of pellets
and not in the form of powder could be covered by Item No. 32(c) of the
Schedule to the said Act. They further pointed out that hydrocarbon resin
is distinct from plastic. Entry 40(b) relates to chemical of all sorts, while Entry
D 53(c) relates to plastic and plastic goods, plastic powder, etc. The.Bombay
High Court held that the P.V.C. resin in powder form does not fall under plastic
and plastic goods under Entry 53( c) or Entry 32(c) of the relevant rules and
falls under head chemical under Entry 40(b) Schedule of relevant Rules. Hence
these appeals.
E
The Octroi Schedule framed in accordance with the Maharashtra
Municipality (Octroi duty) Rules, 1968, Class II refers to articles set out in the
schedule giving the serial number, description of the goods and their rate at
which the octroi is levied. The goods are classified under Class II as Articles
used for food and drink for men and animals and drugs and under serial No.
F 14 all chemicals, chemical insecticides, surgical goods of all kinds are included.
Class III refers to articles used for fuel lighting, washing and industrial use
and under Item 40 (b) chemicals of all sorts are included.

We may firstly refer to the Scheme of bringing several commodities to
tax the several goods under the Octroi Schedules. In either rules several
G classes of goods are mentioned in various headings like articles of good,
animals, artic!es used for fuel, lighting, washing and industrial use, articles
used in the construction of building, roads, and other structures and articles
made of wood or cane, perfumes, toilet requisites, colours and household
goods, tobacco requisites and so on. Under each "heading several goods are
H mentioned but we cannot discern any scientific basis in bringing these goods
· . CITY OF THANE v. AS MACO PLASTIC INDUSTRIES [RAJENDRA BABU, J l 779

under one heading or the other. For example in class III Articles used for fuel, A
lighting, washing and industrial use, it is not clear whether charcoal which is
at Item No. 14 when brought into a local area which is to be used to industrial
use could be subjected to octroi duty. Similarly, when soap of all kinds is used
in Item No. 17, boot and metal polish are lugged in. While detailing the rates
of duty what is stated is 2 per cent ad valorem for washing soap and bath
soap costing not more than Rs. 1.25 per cake. It obviously would indicate that B
these goods need not necessarily be used for industrial purpose or as fuel
for lighting or washing. While soap is used as a washing material, boot and
metal polish cannot be stated to be a washing material. Again various
detergents used in washing clothes, floor and utensils are referred to Item No.
18. It is not clear whether it is related only to such goods which are meant C
for the purpose of industrial use. Viewed from this angle, we do not think the
classification of goods made in these entries are on any scientific basis and
heading as such in any one group does not by itself control the meaning to
be attached to each of such goods.

In Entry 32 (c) of the Rules framed under Corporation Act or under D
Entry 53 (c) of the Octroi Schedule framed under Municipalities Act, we are
-4 concerned with the expression "plastic, plastic goods and plastic powder".
We may contradistinguish this Entry with a relatable Entry in the Customs
Tariff Act where the goods are more scientifically categorised. Under Chapter
39 of the Customs Tariff Act, expression "plastic and articles thereof' is used E
to bring within that heading the "Primary Forms, polymers of ethylene, polymers
of propylene or of other olefins, polymers of styrene, vinylacetate or other
vinyl esters". Polymers of vinyl chloride or of other halogenated olefins in
primary forms and vinyl chloride polymers are also brought in under this
heading. In the present enactment when the expression "plastic, plastic goods
and plastic powder" is used along with bakelite and bakelite goods and the F
manner in which the Legislature uses these expressions will clearly indicate
that the intention is to cover all kinds of plastic material whether in primary
form or in any other secondary form. ·

Learned counsel on either side relied on technical literature on the
matter to impress upon us the strength of their respective cases. We do not G
think it would be appropriate to rely upon such data to interpret the Entry
in question in one manner or the other because in tax enactments when
particular commodities are brought to taxation the meaning attributed to the
commodities will be with reference to their commercial parlance, that is, if
those who deal with the goods understand the said goods in one manner or H
780 SUPREME COURT REPORTS [1998] 3 S.C.R.

A the other. The technical material though of course may be useful on certain
aspects, the same will not be decisive of the matter.

It is necessary to advert to a few decisions relied upon by the learned
counsel. In chemicals and Fibres India Ltd. v. Union of India and Others,
B (1982) E.L.T. 917 (Born), a distinction was sought to be drawn about between
resins, polymers, polymer plus additives and plastics. The question that fell
for consideration in that case was whether polyester chips of textile grade was
assessable to excise duty under Item No. I SA of Schedule I of Central Excise
and Salt Act, 1944. The goods were classified in a different manner and
C polymer terene was specifically added therein. In the manufacture polythene
films, lay-flat tubings and P.V.C. sheets and Polyvinyl Chloride sheets were
specifically mentioned. In that context the Court had to examine the various
meanings given to the expression thereunder and adopted the nomenclature
of the January 1978 Edition of Brussels Tariff Nomenclature. It was not
disputed in that case that the polymer chips fibre grade is a saturated linear
D polyester. Considering the nature of the product on the material placed before
the Court, it was held that it fell within clause (I) of Item No. 51 A of the First
Schedule to the Excise Act. On that basis the resins polymers and polymer
additives were separately considered.

E In Industrial Plastic Corporation Private Limited and Others v. Union
ofIndia and another, (1983) E.L.T. 425 (Born.), distinction between plastic and
resin was noted. The expression "plastic" was held to be broader than the
expression "resin" but it was also noticed that both these terms are used
indiscriminately. Though etymologically and scientifically, the products such
F as clay, glass or rubber could be considered to be plastic, they were never
regarded as such. Again the entry that fell for consideration was item No. 51
A of the First Schedule to the Central Excise and Salt Act. It was on that basis
the Court held that the various items such as wood floor, phenolic moulding
powder could fall in the various goods items mentioned in Item No. 5 IA of
G the First Schedule to the Central Excise and Salt Act.

We think that the appropriate manner in which the commodity in the
present case, namely, plastic powder, has been treated as a separate entry it
is brought to tax under Item No. 32(c) or 53(c) to Schedule H under the
Relevant Rules. Similar would be the position with reference to Hydrocarbon
H resins. Even Hydrocarbon resin is treated on the same footing as a synthetic
M.C. CITY OF THANE v. ASMACO PLASTIC INDUSTRIES [RAJENDRA BABU, J.] 781

plastic and, therefore, the goods in question cannot be treated as plastic A
goods or plastic powder but as separate goods and therefore, we cannot
accept the contention put forth on behalf of the respondents that the said
goods are neither plastic in nature nor powder in fonn and we do not accept
the contention that Hydrocarbon resin is distinct from plastic.
B
In view of the above discussion, we allow the appeals filed by the
Municipal Corporation and Municipal Council, Thane and set aside the order
made by the High Court by declaring the goods as falling within the Entry
as stated earlier. In the circumstances of the case, the parties on either side
shall bear their respective costs.
c
v.s.s. Appeals allowed.