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Judgment
Rajes Kumar, J.—The present revision u/s 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, "the Act") is directed against the order of the Tribunal dated August 25, 2003, for the assessment year 1998-99 under the U.P. Trade Tax Act. The applicant was the manufacturer of PP caps made of aluminum and iron. The aluminum caps are mainly used in the beer bottles and the iron caps are used in the cold drink bottles. According to the applicant, the iron caps are also known as crown cork. The case of the applicant is that such aluminum caps and iron caps are liable to tax at the point of sale by manufacturer or importer under the Notification No. 5785, dated September 7, 1981, which has been subsequently modified by Notification No. 2376, dated November 23, 1998 enhancing the rate of tax to five per cent with effect from December 1, 1998. The aforesaid notification has been further modified by Notification No. 101, dated January 15, 2000. However, the rate of tax on corks was remain five per cent. The case of the Department is that the aluminum caps and iron caps are not corks. They are not classified in any of the entries and, therefore, liable to tax at 10 per cent as an unclassified item.
The assessing authority levied the tax on aluminum caps and iron caps at 10 per cent as an unclassified items. This view of the assessing authority has been confirmed in the first appeal and in the second appeal also by the Tribunal. The Tribunal held that in common parlance, aluminum caps and iron caps are not known as corks. In the commercial word, on the demand of cork, the shopkeeper gives the item manufactured out of chhilka of cork tree, which are specifically found in South Europe and in North Africa. The Tribunal held that the dictionary meaning is not relevant for classification.
Heard Sri Piyush Agrawal, learned counsel for the applicant and Sri B. K. Pandey, learned standing counsel.
The learned counsel for the applicant submitted that iron caps are also known as crown corks. The Commissioner in its circular dated March 24, 1979, vide Government Letter No. ST-2-2368/10-79, dated March 9, 1979, has informed that under the entry "cork", all kinds of corks which includes crown cork, are covered. He placed reliance upon the dictionary meaning of the word "cork" as defined in the Webster''s Dictionary at page No. 266, New Oxford Thesaurus of English at page 192 and the meaning of word "caps and tops" as defined in the New Oxford Thesaurus of English, respectively. He submitted that the cork is a device, which is used for closing the containers. It may be made of aluminum, iron, rubber, plastic, wood, etc., and it should not be confined to the wood alone. He submitted that in the ancient times, the cork might be made of wood but now due to the shortage of wood and for various other reasons, it is made of plastic, rubber, aluminum, iron, etc. Therefore, the meaning of word cork should be given with reference to the advancement of the technology.
Sri B. K. Pandey, learned standing counsel, submitted that the dictionary meaning is irrelevant for the classification of the goods. He placed reliance on the various decisions of the apex court and the High Court. He further submitted that the apex court in various cases has held that for the classification of the goods, common parlance theory is the best method. Reliance is placed on the various decisions of the apex court and the High Court. He submitted that the Tribunal has held that in common parlance, aluminum caps and iron caps are not known as corks. The finding of the Tribunal is finding of fact, which may not be interfered. He submitted that, in fact, the cork is a device by which containers are being closed from inside and not from outside and this is the distinction between the caps and corks. The corks are used like a stopper. The wooden corks are being normally used as stoppers in the packing of homoeopathic medicines. The stoppers are also known as cork but it always known as stoppers, which are being used to close the containers from inside. The caps, which are used to close the containers or bottles from inside are never considered as corks in commercial sense. The shuttle cork, which is being used to play badminton is known as shuttle cork because it is made of a small rounded piece of cork with crown of feathers. Therefore, under the entry of "cork" only those items are covered, which are made of cork wood. The Tribunal has rightly held that if anybody asks for cork from the shop-keepers, he will give the item made of cork wood.
Heard learned counsel for the parties and perused the impugned orders.
It would be appropriate to refer the relevant entry of the "corks" of the Notification No. KA.NI-2-101/XI-9(231)/94- U.P. Act-15-48-Order-2000, dated Lucknow : January 15, 2000.
In exercise of the powers under clause (e) of sub-section (1) of section 3A of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904) and in supersession of all previous notifications issued in this behalf, the Governor is pleased to declare that with effect from January 17, 2000, the turnover in respect of the goods mentioned in column 2 of the List below shall be liable to tax at the point of sale specified in column 3 of said List at the rate specified against each in column 4 thereof.
LIST
M stands for sale by the manufacturer in Uttar Pradesh
I stands for sale by the importer in Uttar Pradesh.
Serial number
Description of goods
Point of tax
Rate of tax percentage
1
2
3
4
1 to 9 ...
10
Corks
Mori
5%"
It is also relevant to mention one more entry of Notification No. KA.NI-2-101/XI-9(231)/94-U.P. Act-15-48-Order-2000, dated January 15, 2000.
Mineral water, tonic water, distilled water, scented water and manufactured or processed water, sold in container sealed with a cork or otherwise or in capsule."
It may also be relevant to refer the dictionary meaning of the corks, caps and stoppers as referred by learned counsel for the applicant.
(a) ''Cork'' defined as per Webster''s Dictionary page No. 266
''Used for making stopper for bottles; insulation or floats; the tree itself; something made of cork; a piece of cork or of other material as rubber used as a stopper for a bottle.''
(b) ''Cork'' as defined as per New Oxford Thesaurus of English page 192 :
noun kate pulled the cork from the bottle, stopper, stop, plug, bung, peg, spigot, spile, seal; cap, top, lid, cover, covering.''
(c) CAP as defined as per New Oxford Thesaurus of English page 127:
a small bottle with a white plastic cap; lid; top; stopper; cork; bung; spile; ferrule; cover; covering.''
(d) Stopper, as defined as per New Oxford Thesaurus of English page 929 :
A cologne bottle with a cork and chrome stopper cork, lid, cap, top, plug, bung, spigot, spile.''
(e) TOP, as defined as per New Oxford Thesaurus of English page 985:
she could not screw the top of the coffee jar on straight lid, cap, cover, stopper, cork, bung, plug''.
Tribunal held that the dictionary meaning and technical meaning are not relevant for the classification of goods. It is common parlance and how the commodity is known in a commercial sense is relevant. The Tribunal held that in common parlance, aluminum caps and iron caps are not known as corks. In the commercial word, on the demand of cork, the shopkeeper gives the item manufactured out of chhilka of cork tree, which is specifically found in South Europe and in North Africa. The Tribunal placed reliance on various decisions of the apex court.
It is settled principle of law that for the classification of the goods scientific and technical meaning are not relevant and the principle of common parlance and how the commodity is known in commercial sense are to be considered. (See Collector of Customs & Central Excise v. Lekhraj Jessumal & Sons reported in [1996] 101 STC 480 (SC), Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, Akola reported in [1961] 12 STC 286 (SC), Collector of Customs, Bombay Vs. Swastic Woollens (P) Ltd. and Others, and Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. reported in [ 1989] 72 STC 280 (SC); [1989] UPTC, 188 (SC).
In the notification, the word "corks" has alone been notified. It has not been notified along with any other word. It is not used with reference to its uses. It is classified as an independent item/product. It is a kind of material which may be used as raw material for the manufacturing of different items including the stopper for the closure of the bottles or it may be used in the manufacturing of shuttle cork or any other item. Its use is not confined as a stopper. The Tribunal has rightly held that it is a product of chhilka of cork tree. Previously, it is mainly used as stopper to avoid pilferage of homoeopathic medicines in glass containers and in the shuttle cork. Its use may be many which may not be commonly known. As stopper also it is used after providing a particular shape and is put inside the containers. It is never used as a cap. It cannot be used as cap also. The applicant manufactures PP caps made of aluminum caps and iron caps which are mainly used to close the beer bottles and cold drink bottles to avoid pilferage. These are used outside the bottles.
In view of the above, the PP caps made of aluminum caps and iron caps cannot be said to be "cork" by any stretch of imagination. The Tribunal rightly held so.
A perusal of the entry of the notification dated January 15, 2000, referred hereinabove, also reveals that under the notification mineral water, etc., sold in sealed containers with cork or otherwise or in capsule are notified. The container sealed with cork has been considered differently with the containers sealed with other items. The word "otherwise" includes sealing of containers by other items, namely, PP caps, etc. This shows that a distinction has been drawn between the cork and the other item and "cork" has been considered differently.
The contention of the learned counsel for the applicant that PP caps manufactured by the applicant is known as crown cork and the Commissioner in its circular has held that crown cork falls under the cork has no substance. The court does not know whether PP caps made of aluminum and iron are known as crown cork. Neither any finding has been recorded by the Tribunal nor any material has been placed in this regard. Moreover in the case of Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries reported in [2008] AIR SCW 7963, the Constitution Bench of the apex court has held that the circular cannot be followed as against the law declared by the High Court or Supreme Court. The circulars are mere opinion of the Government and not binding upon the courts. The circulars contrary to the statutory provisions have really not in existence in law.
In view of the above, I do not find any error in the order of the Tribunal in arriving to the conclusion that the PP caps, which are made of aluminum and iron, are not covered under the entry "cork" referred hereinabove. It has not been classified elsewhere, therefore, it is liable to tax as unclassified item. In the result, the revision fails and is accordingly, dismissed.