UNITED OFFSET PROCESS PVT. LTD.versusASSTT. COLLECTOR OF CUSTOMS, BOMBAY AND ORS.

              UNITED OFFSET PROCESS PVT. LTD.                                     A
                             v.
      ASSTT. COLLECTOR OF CUSTOMS, BOMBAY AND ORS.

                              OCTOBER 14, 1988

          (SABYASACHI MUKHARJI AND K. JAGANNATHA                                  B
                        SHETTY, JJ.)

           Customs Tariff Act: Schedule Entries 90. JO, 90.2.'i and 84.35-
     Colour Scanner Chromagraph C-299-Assessability to customs duty-
     Whether printing machinery-No specific technical definition-Mean-
     ing attributed to the expression used by those dealing in it.
                                                                                  c
            The appellant imported Colour Scanner Chromagraph C-299
     under the Import Trade Control Policy for the year 1981-82, under the
     caption "printing machinery" and filed the papers for clearance under

-·   Tariff Item No. 84.35. The Assistant Collector assessed the goods under
     Tariff heading 90.25(1) and levied customs duty at the rate of 40% plus
     5% auxiliary duty plus 8% c.v.d. After payment.of duty as assessed the
                                                                                  D

     goods were cleared by the appellant, Later, on the Assistant Collector
     Issued a notice to the appellant for recovery of Less Char11es Demand
     amounting to Rs. 7,60,032. 72 on the ground that the Colour Scanner Is
     assessable under the heading 90.10 at the rate of 100% plus 20% plus 8%
     c.v.d. The contentions of the appellant that It was used only In printing    E
     Industry and definitely not In photography or cinematagraphy
     lnboratorles and that It was capable of being used as ancillary equip·
     mcnt In the printing Industry only, failed before the Assessing Autho·
     rlty. In an appeal filed by the appellant before the Tribunal, It observed
     tllat the goods In question could not be considered such goods as to
     attract duty under any of the Entries 84.35, 90.07 or 90.25, and held        F
     tilat the only posslblllty left was that of Entry 90. lO under which the
     goods would attract duty. In an appeal before this Court the question
     involved In the matter was as to what was the proper tariff entry under
     which the goods In question fell and were as such. classifiable.

           Allowing the appeal and remanding the matter to the Tribunal,          G
     this Court,

           HELD: There is no specific technical definition as such provided
     in the Customs Tariff Act or In the notification. If there is no meaning
     attributed to the expressions used in the particular enacted statute then
     the items in the customs entries should be judged and analysed on the H
                                       531
    532         SUPREME COURT REPORTS                 [ 1988) Supp. J S._<::.R.

A   basis of how these expressions are used in the trade or industry or in the
    market or, in other words, how these are dealt with by the people who
    deal in them, provided that there is a market for these types of goods.
    This principle is well-known as classification on the basis of trade
    parlance. It is a well-known principle that if the definition of a particu-
    lar expression is not given, it must be understood in its popular or
B   common Sense, viz., in the sense how that expression is used everyday
    bY. those who use or deal with those goods. [535C-E]

           In incorporating items in the statutes like Excise, Customs or
    Sales-tax whose primary object is to raise revenue and for which to
    classify diverse products, articles and substance, resort should he had
C   not to the scientific and technical meaning of substance but to their
    popular meaning, viz., the meaning attached to these expressions by
    those dealing in them. [535E-F)

          In the instant case, there is no evidence as to how these goods are
                                                                                  •
    dealt with in the trade or industry. There is no technical definition of
O   the expressions used. In that view of the matter, the true approach of
    the Tribunal should have been to find out to the correct meaning of the
    items, i.e., the meaning attributed to the expression used by those deal-
    ing with it in the trade. [536A-B)

          C.I. T. Andhra Pradesh v. Mis Taj Mahal Hotel, Secunderabad,
E   [1972) l SCR 168; King v. Planter's Company, [1951) CLR (EX.) 122;
    Two Hundred Chests of Tea, [1824) 6 L.ed. 128; State of West Bengal &
    Ors. v. Washi Ahmed etc., [1977) 3 SCR 149; Union of India v. Delhi
    Cloth & Gen. Mills, [1963) Suppl 1SCR586; Ramavatar B_udhaiprasad
    v. Assistant S. T.O. Ako/a, [1962) l SCR 279; South Bihar Sugar Mills
    Ltd. v. Union of India, [1968) 3 SCR 21 and Porritts & Spencer (Asia)
F   Ltd. v. State of Haryana, [1979) l SCC 82, referred to.

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2129
    of 1984.

         From the Judgment and Order dated 13.3.1984 of the Customs
G   Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal
    No. CD (SB) 153/8JB (Order No. 196/84-B).

        Harish Salve, Mrs. H. Wahi and Rajiv Shakdhar for the
    Appellant.

H        V.C. Mahajan C.V. Subba Rao and Arun Madan for the
    Respondents.
 UNITED OFFSET v. ASSTT. COLLECTOR OF cu.sTOMS. IMUKHARJI,        u 533
       The Judgment of the Court was delivered by
                                                                             A
          SABYASACHI MUKHARJI, J. This is an appeal under section
  130E(b) of the Customs Act, 1962 (hereinafter called 'the Act') which
  arises from the judgment and order dated 13th March, 1984 passed by
  the Customs Excise and Gold (Control) Appellate Tribunal (herein-
  after called 'the Tribunal'). The appellant imported Colour Scanner        B
  Chromagraph C-299 by air on 20.4.1980. The same is allowed to be
  imported under Appendix 2 of the Import Policy for the year 1981-82
  (under the caption "printing machinery" at 12(3) of Appendix 2 of the
 Import Trade Control Policy for the year 1981-82). The appellant filed
  the Bill of Entry for clearance under Tariff Item 84.35. The Assistant
  Collector divided the imported chromograph C-299 under 4 sub-heads
  in the Bill of Entry and assessed the same under Tariff heading 90.25      c
  (i) and levied customs duty thereon at the rate of 40% plus 5%
  auxiliary duty plus 8% c.v.d. The appellant cleared the cargo after
  payment of duty as assessed on 13.5.1980. The Assistant Collector of
  Customs, thereafter, on 26th July, 1980 sent a Less Charge Demand
  for a sum of Rs.7,60,032.72 on the ground that Colour Scanner is           D
  assessable under the heading 90. 10 at the rate of 100% plu.; 20% plus
  c. v .d at the rate of 8% as against the origir.al assessment under the
  heading 90.25 (i) and issued the said notice under Section 28 of the
  Customs Act to show cause why. the amount should not be recovered.
  In reply forwarded by the appellant on 28.8.1980, it was stated that the
  imported scanner is used only in printing industry and definitely not      E
  used in photography or cinematagraphy laboratories. It never
  produces copies of any document either by photography or by
  thermocopyit.g process. The appellant's contention was that this
  colour scanner being intended to analyse the colour of a composite
  transparency or colour bromide and finally produce four different
  positives and negatives on graphic art films and that the colour scanner   F
  also analyses any transparency into four basic colours viz., yellow,
  magenta, black and blue. The appellant further contended that the
  colour scanner imported was capable of being used as ancillary equip-
  ment in the printing industry only. The assessing authorities, however,
  as mentioned hereinbefore, did not accept this contention and had
  inserted heading 90.25 (i) of the Customs Tariff Act. The appellant-       G
  dealer was contending that the said goods would only be classified
  either under Entry 84.35. The Tribunal held that the said goods could
  not be classified under Entry 84.35. The Tribunal found that the clas-
. sification of the goods by the appellant under Entry 84.35 could not be
  sustained if the catalogue submitted was analysed which provides as
·follows:                                                                    H
    534         SUPREME COURT REPORTS               [1988] Supp. 3 S.C.R.

               "We present the new Chromograph 299 for all scanner and
A
               process camera operators, and hope to help in snaping the
               future of your process operations. Let us state at the outset
               that the Chromograph 299 does not replace the expert
               operator. But with this modern high-performance "tool"
               he can more effectively and more economically apply his
B              know-how to production".

          The Tribunal also found in another portion of the catalogue that:

               "The Chromograph 299 produce colour separations rapidly
               and reliably without accessory equipment and without
               intermediate negatives or colour duplicates. This means
c              reduced material costs and at the same time increased
               productivity".

          Entry 84.35 refers only to "other printing machinery". The
    Tribunal was right in holding that the particulars gathered from the
D   catalogue did not indicate that the machinery in question could be
    called as one ancillary to printing. It was urged by the appellant before
    the Tribunal that in trade and industry and in scientific and technolo-
    gical parlance that equipment is used in printing industry only. There
    is, however, no evidence or clear proof to that effect. As mentioned
    heteinbefore, the function of the scanner was only to prepare colour
E   separation s~ts which might be useful for printing. The Tribunal also
    considered Entry 19.07 and held that it did not apply in the instant case
    because it was not a camera; much less a photographic camera. The
    Tribunal also referred to the contention about Entry 19.25 and on
    analysis ·came to the conclusion that the said goods could not be con-
    sidered such goods as to attract duty under Entry 19.25. The Tribunal
F   on an analysis was of the opinion that the only possibility left was that
    of Entry 19 .10 under which the goods would attract duty. The Tribunal
    was of the opinion that if the scanner was an apparatus or equipment
    used in photographic and cinematographic laboratories then this head-
    ing would be appropriate. The Tribunal on an analysis of the evidence
    found that the scanner produces colour separation rapidly without
G   intermediate negative or colour duplicates. In that view of the matter
    the Tribunal was of the opinion that the machinery would come under
    Entry 19.10. In this connection, the Tribunal also referred to Notifica-
    tion No. 36/81. There, it has been stated that exemption has been
    granted for import of such machines when used in printing industry.
    The exemption was also sought on behalf of the appellant under
H   Notification No. 112/77. However, the Tribunal pointed out that that·
,~   i




         UNITED OFFSET v. ASSTT. COLLECTOR OF CUSTOMS (MUKHARJI, J .]      535

         notification would be applicable only to machines attracting duty        A
         under Entry 84.35. Further, this notification contemplated "process
         cameras wihin its ambit". It was conceded on behalf of the appellant
         that the colour scanner imported was not a process camera. In the
         premises, the Tribunal was of the opinion that it was assessable under
         Entry 19.10.
                                                                                  B
                The question involved in this matter is as to what is the proper
         tariff entry under which the goods in question fall and are as such
         classifiable. There is no specific technical definition as such provided
         in the Customs Tariff Act or in the notification. If there is no meaning
         attributed to the expressions used in the particular enacted statute
         then the items in the customs entries should be judged and analysed on
         the basis of how these expressions are used in the trade or industry or
                                                                                  c
         in the market or, in other words, how these are dealt with by the
         people who deal in them, provided that there is a market for these
         types of goods. This principle is well-known as classification on the
         basis of trade parlance. This is an accepted form of construction. It is
         well-known principle that if the definition of particular expression is D
         not given, it must be understood in its popular or common sense, viz.,
         in the sense how that expression is used everyday by those who use or
         deal with those goods. See, in this connection, the observations of this
         Court in C.I. T. Andhra Pradesh v. Mis. Taj Mahal Hotel,
         Secundera5ad, [ 1972] l SCR 168. In incorporating items in the statutes
         like Excise, Customs or Sales-tax whose primary object is to raise E
         revenue and for which to classify diverse products, articles and sub-
         stance, resort should be had not to the scientific and technical mean-
         ing of substance but to their popular meaning, viz., the meaning
         attached to these expressions by those dealing in them. See the obser-
         vations in King v. Planter's Company, [1951] CLR (Ex) 122 and Two
         Hundred Chests of Tea, [ 1824] 6 L.ed. 128. In the former case, Justice F
         Cameron referred to the rea,on for the adopting the test of commer-
         cial understanding in respect of the tariff items of an Excise Act and
         observed that the legislature did not suppose our merchants to be
         naturalists, oi geologists, or botanists. These principles were adopted
         by this Court in State of West Bengal & Ors. v. Washi Ahmed etc.,
         [1977] 3 SCR 149. See also Union of India v. Delhi Cloth & Gen. Mills, G
         [1963] Suppl 1 SCR 586 and Ramavatar Budhaiprasad v. Assistant
         S.T.O., Ako/a, [1962] 1 SCR 279. See also South Bihar Sugar Mills
         Ltd. v. Union of India, [1968] 3 SCR 21. This principle was reiterated
         by this Court by Bhagwati, J., as the learned Chief Justice then was, in
          Porritts & Spencer (Asia) Ltd. v. State of Haryana, [1979] 1SCC82.
                                                                                  H
    536         SUPREME COURT REPORTS               [1988] Supp. 3 S:C.R.

A         However, in the instant case, as noticed above, there is no evi·
    dence as to how these goods are dealt with in the trade or industry.
    There is no technical definition of the expressions used. In that view of
    the matter, in our opinion, the true approach of the Tribunal should
    have been to find ounhe correct meaning of the items, i.e., the mean·
    ing attributed to the expressions used by those dealing with it in the
B
    trade.

          The Tribunal should now find that out. In that view of the matter
    we allow the appeal, set aside the order of the Tribunal and remand
    the matter to the Tribunal with the direction to find out how .these
    goods are dealt with by the people who deal in them after giving both
C   sides due opportunity of adducing evidence and then decide the ques·
    tion according to this Judgment.

          The appeal is disposed of accordingly. There will be no order as
    to costs.
                                                                                .,
D   R.P.D.                                                  AppC)al auowed.