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Thursday, November 29, 2012

whether ‘soft serve’ served at the restaurants/outlets commonly and popularly known as McDonalds, is classifiable under heading 21.05 (as claimed by the revenue) or under heading 04.04 or 2108.91 (as claimed by the assessee) of the Central Excise and Tariff Act, 1985 (for short “the Tariff Act”).=Upon a reading of the notification it is clear that the exemption in the notification is granted for the whole of excise duty which was payable on such softy ice cream and non alcoholic beverages dispensed through vending machines, but was not being levied during the relevant period, which is not the case here. In the present case, as aforenoted, three show cause notices had been issued to the assessee alleging that ‘soft serve’ was classifiable under heading 21.05 and attracted duty @ 16%. The show cause notices issued by the revenue also indicated that the assessee was liable to pay additional duty under Section 11A of the Act. This clearly shows that the excise duty was payable by the assessee and was being levied by the revenue. Therefore, the assessee’s case does not fall within the ambit of the said notification and is not eligible for the exemption granted to “softy ice- cream”, dispensed through a vending machine for the relevant period. 49. For the view we have taken, it is unnecessary to examine the issue whether the product in question bears a brand name. 50. Resultantly, the appeals are allowed and the impugned orders of the Tribunal are set aside, leaving the parties to bear their own costs.


                                                                  REPORTABLE
|IN THE SUPREME COURT OF INDIA                                      |
|CIVIL APPELLATE JURISDICTION                                       |
|CIVIL APPEAL  NOS. 5307-5308 0F 2003                               |
|                                                                   |
|COMMISSIONER OF CENTRAL EXCISE,   |—         |      APPELLANT       |
|NEW DELHI                         |          |                      |
|                                                                   |
|VERSUS                                                             |
|M/S CONNAUGHT PLAZA RESTAURANT (P)|—         |RESPONDENT            |
|LTD., NEW DELHI                   |          |                      |


                               J U D G M E N T


D.K. JAIN, J.

1. The short question of law for consideration in these  appeals,  filed  by
   the revenue, under Section 35L of the Central Excise Act, 1944 (for short
   “the Act”) is whether ‘soft  serve’  served  at  the  restaurants/outlets
   commonly and popularly known as McDonalds, is classifiable under  heading
   21.05 (as claimed by the revenue) or under heading 04.04 or  2108.91  (as
   claimed by the assessee) of the Central Excise and Tariff Act, 1985  (for
   short “the Tariff Act”).

2. During the relevant period, the respondent-assessee was  engaged  in  the
   business of selling burgers, nuggets, shakes, soft-serve etc. through its
   fast food chain of restaurants, named above. In so far as the manufacture
   and service of ‘soft serve’ is concerned, the assessee  used  to  procure
   soft serve mix in liquid form from one M/s  Amrit  Foods,  Ghaziabad;  at
   Amrit Foods, raw milk was pasteurised, skimmed milk powder was added (the
   milk fat content in the said mixture is stated to be 4.9%, not  exceeding
   6% at any stage); sweetening agent in the form of sugar or glucose  syrup
   and permitted stabilizers were added; the mixture, in  liquid  form,  was
   then homogenized, packed in polyethylene pouches and  stored  at    0  to
   40C.  This material was then transported to the outlets  under  the  same
   temperature control, where the liquid mix was pumped into a ‘Taylor-make’
   vending machine; further cooled along  with  the  infusion  of  air,  and
   finally, the end product, ‘soft serve’, was drawn through the nozzle into
   a wafer cone or in a plastic cup and  served  to  the  customers  at  the
   outlet.

3. For the periods from April 1997 to March 2000, three show  cause  notices
   came to be issued to the assessee. These alleged that  the  ‘soft  serve’
   ice-cream was classifiable under Chapter 21, relating  to  “Miscellaneous
   Edible Preparations” of the Tariff Act, attracting 16% duty under heading
   21.05, sub-heading 2105.00 -“Ice-cream and other edible ice,  whether  or
   not containing cocoa”.   Invoking  the  proviso  to  sub-section  (1)  of
   Section 11A of the Act, additional duty was also demanded. A proposal for
   imposing penalty on the assessee and on their Managing Director was  also
   initiated.

4. While adjudicating on the first show cause notice, vide order dated  31st
   May, 2000, the adjudicating  authority  held  that  :  ‘soft  serve’  was
   classifiable under heading 04.04.  Describing the goods as  “other  dairy
   produce; edible products of animal origin,  not  elsewhere  specified  or
   included”, it held that the process undertaken by the  assessee  amounted
   to manufacture and the extended period of limitation was not  applicable.
   However, while adjudicating on the second show cause notice,  vide  order
   dated 28th September, 2001, the adjudicating  authority  concluded  that:
   soft serve was classifiable under heading 21.05; the  process  undertaken
   by the assessee for conversion of soft serve mix to ‘soft serve’ amounted
   to manufacture and that the assessee was  not  entitled  to  small  scale
   exemption  because  of  use  of  the  brand   name   “McDonalds”.   While
   adjudicating on the third show cause notice, the  adjudicating  authority
   reiterated that : ‘soft serve’ was classifiable under heading 21.05;  the
   process undertaken by the assessee for conversion of soft  serve  mix  to
   ‘soft serve’ amounted to manufacture and small scale  exemption  was  not
   available to the assessee because of use of the brand  name  “McDonalds”.
   In an appeal filed by the assessee, the Commissioner  of  Central  Excise
   (Appeals) reversed the above finding and classified  ‘soft  serve’  under
   the sub-heading 2108.91.

5. Being aggrieved, cross appeals were filed, both by the  revenue  as  also
   the assessee, before the Customs, Excise  and  Gold  (Control)  Appellate
   Tribunal, New Delhi, as it then existed, (for short “the Tribunal”).  The
   appeals arising from the first two show cause notices were disposed of by
   the main order, dated 29th January, 2003. The  appeal  arising  from  the
   third show cause notice was disposed of by the Tribunal vide order  dated
   3rd August, 2004, following its earlier decision  in   order  dated  29th
   January, 2003. The Tribunal came  to  the  conclusion  that  the  process
   undertaken by the assessee, namely, conversion of soft serve mix to ‘soft
   serve’ amounted to manufacture and that  ‘soft  serve’  was  classifiable
   under sub-heading 2108.91, describing the goods as “Edible  preparations,
   not elsewhere specified or  included”  –  “not  bearing  a  brand  name”,
   attracting nil rate of duty.  The  Tribunal held thus :-


    “In view of the technical literature, ISI Specification and  provisions
    made in Prevention of  Food  Adulteration  Act,  1955  and  Rules  made
    thereunder, the impugned product  cannot  be  classified  as  ice-cream
    merely on the ground that the consumer understood the same as ice-cream
    or the ingredients of both the products are same. The  statement  given
    by the Managing Director also cannot be a  basis  for  determining  the
    exact classification of the product in the Central Excise  Tariff.  The
    ratio of the decision in the case of Shree  Baidyanath  Ayurved  Bhavan
    Limited case is not applicable to the facts of the present matter.  The
    dispute in the said case was as to whether the  ‘Dant  Manjan  Lal’  is
    Ayurvedic medicine or ‘Tooth Powder’.  In  that  context,  the  Supreme
    Court observed that resort should not be  had  to  the  scientific  and
    technical meaning of the  terms  and  expressions  used  but  to  their
    popular meaning, which does not mean that if a  particular  product  is
    not ice-cream it can be classified as ice-cream because some  consumers
    treated it as ice-cream. Accordingly, the product in  question  is  not
    classifiable under Heading 21.05 of the Central Excise Tariff.”



6. It is manifest that the Tribunal based its conclusion  on  the  technical
   meaning and specifications of the product “ice-cream”, stipulated in  the
   Prevention of Food Adulteration Act,  1955  (for  short  “the  PFA”)  and
   rejected the common parlance test, viz. the consumers’  understanding  of
   the product.  Being aggrieved by the said approach, the revenue is before
   us in these appeals.

7. Mr. Arijit Prasad, learned counsel appearing for the  revenue,  submitted
   that the enquiries conducted by the revenue revealed that in common trade
   parlance, ‘soft serve’ is known as “ice-cream”; all the ingredients  used
   and the process of manufacture adopted for preparation of ‘soft serve’ is
   essentially the same as is adopted for manufacture of an “ice-cream”; and
   therefore, manufacture of ‘soft serve’ cannot be said to be distinct from
   the manufacture of “ice-cream”. It was urged that the specifications  for
   manufacture of “ice-cream” under the PFA are irrelevant in so far as  the
   question of classification of goods under the Tariff  Act  is  concerned.
   It was asserted that the identity of ‘soft serve’ is associated with  how
   the public  at  large  identifies  it,  and  not  by  the  parameters  or
   specifications indicated in other statutes including the PFA in  relation
   to “ice-cream”. According to the learned counsel ‘soft serve  ice-cream’,
   ‘soft ice-cream’ and ‘Softies’ are commonly taken as different  kinds  of
   “ice-cream”. Finally, it was submitted that since  the  product  is  sold
   from the outlets of “McDonalds”, the brand is in the customer’s mind when
   he/she enters the outlet and therefore, it cannot be covered  under  sub-
   heading 2108.91, as erroneously held by the Tribunal.

8. Mr. V. Lakshmi Kumaran, learned counsel appearing for  the  assessee,  on
   the other hand, asserted that but for heading 21.05,  “ice-cream”  itself
   was a dairy product and would have been classified under  heading  04.04.
   Therefore, ‘soft serve’ would also be classifiable under  heading  04.04.
   It was argued that ‘soft serve’ cannot be referred to as “ice-cream” even
   by applying the common parlance test, in as much as ‘soft serve’ is  sold
   throughout the world not as “ice-cream” but only as ‘soft  serve’.  “Ice-
   cream”, the world over, is commonly understood to have milk  fat  content
   around 10%  whereas  ‘soft serve’ does not contain milk fat of more  than
   5%.

9. Referring to the technical meaning of “ice-cream”, given  in  Kirk-Othmer
   Encyclopedia of Chemical  Technology,  Third  Edition  –  Volume  15  and
   “Outlines of Dairy Technology” by Sukumar De, learned counsel  vehemently
   submitted that all these books describe “ice-cream” as a  dessert,  which
   is frozen to a hard stage, whereas,  soft  serve  dispensed  through  the
   Taylor machine is served in a semi-solid state, by processing the pre-mix
   by blowing air into it.  ‘Soft serve’ is not as hard as an ice-cream  is,
   and thus, cannot  be  called  as  “ice  cream”  even  if  tested  on  the
   touchstone of  the   common  parlance  test.   The  main  thrust  of  the
   submission of the learned counsel was that if the assessee markets  ‘soft
   serve’ as “ice-cream”, they will be liable to prosecution under the  PFA,
   because the milk fat  content  in  ‘soft  serve’  is  less  than  10%,  a
   statutory requirement for manufacture of “ice-cream”. In support  of  the
   submission, learned counsel commended us to the decision of this Court in
   State of Maharashtra Vs. Baburao Ravaji Mharulkar & Ors.[1],  wherein  it
   was held that a person selling ice-cream with 5% milk fat content instead
   of minimum 10% milk fat, was selling adulterated ice-cream and was liable
   to prosecution.  Reliance was also placed on the decision of  this  Court
   in Akbar Badrudin Giwani Vs. Collector of Customs, Bombay[2], to  contend
   that in matters pertaining to classification of  a  commodity,  technical
   and scientific meaning of the product is to prevail over  the  commercial
   parlance meaning.

10. Lastly, Mr.  V. Lakshmi Kumaran urged that even if we were to hold  that
   ‘soft serve’ is an “ice-cream”,  under  notification  No.16/2003-CE  (NT)
   dated 12th March, 2003, granting exemption to “softy ice-cream” dispensed
   through a vending machine, issued under  Section  11C  of  the  Act,  the
   assessee will not be liable to pay any Excise duty in respect  of  “softy
   ice-cream” during the relevant period.

11. In short, the case of the assessee is that “soft  serve”  is  a  product
   distinct and separate from “ice-cream” since the world  over  “ice-cream”
   is commonly understood to have milk fat content above  8%  whereas  ‘soft
   serve’ does not contain more than 5% of milk fat; it cannot be considered
   as “ice-cream” by common parlance understanding since it is  marketed  by
   the assessee the world  over  as  ‘soft  serve’;  “ice-cream”  should  be
   understood in its scientific and technical sense; and  hence,  for  these
   reasons, ‘soft serve’ is to be classified under heading 04.04  as  “other
   dairy produce” and not under heading 21.05. On the  other  hand,  Revenue
   claims that “ice-cream” has not been defined under heading  21.05  or  in
   any of the chapter notes of Chapter 21; upon conducting enquiries it  was
   found that ‘soft serve’ is known as “ice-cream” in common  parlance;  and
   hence, it must be classified in the category of “ice-cream” under heading
   21.05 of the Tariff Act.

12. Before we proceed to evaluate the rival stands, it  would  be  necessary
   to notice the length and breadth of the relevant tariff entries that have
   been referred to by both the learned counsel.
|“Chapter 4           |Dairy Produce, etc.              |312           |
|                     |                                 |              |
|04.04                |Other dairy produce; Edible      |              |
|                     |products of animal origin, not   |              |
|                     |elsewhere specified or included  |              |
|                     |-Ghee :                          |              |
|0404.11              |--Put up in unit containers and  |Nil           |
|                     |bearing a brand name             |              |
|0404.19              |--Other                          |Nil           |
|0404.90              |--Other                          |Nil           |

|Heading No.   |Sub-heading  |Description of goods      |Rate of duty  |
|              |No.          |                          |              |
|(1)           |(2)          |(3)                       |(4)           |
|21.05         |2105.00      |Ice cream and other edible|16%           |
|              |             |ice, whether or not       |              |
|              |             |containing cocoa          |              |
|21.08         |             |Edible preparations, not  |              |
|              |             |elsewhere specified or    |              |
|              |             |included                  |              |
|              |2108.91      |-Not bearing a brand name |Nil”          |


13. Chapter 4 of the Tariff Act reads “dairy  produce;  edible  products  of
   animal origin, not elsewhere specified or  included.”  Heading  04.04  is
   applicable to “other dairy produce; or edible products of  animal  origin
   which are not specified  or  included  elsewhere.”  As  is  evident  from
   Chapter note 4, the terms of heading 04.04 have been couched  in  general
   terms with wide amplitude. Chapter note 4 reads:
      “4. Heading No. 04.04 applies, inter  alia,  to  butter-milk,  curdled
      milk, cream, yogurt, whey, curd, and products  consisting  of  natural
      milk constituents, whether or not  containing  added  sugar  or  other
      sweetening matter or flavoured or containing added fruit or cocoa  and
      includes fats and oils derived from milk (e.g. milkfat, butterfat  and
      butteroil), dehydrated butter and ghee.”



14.  On  the  other  hand,  Chapter  21  of  the  Act   is   applicable   to
   “Miscellaneous Edible Preparations”. Heading 21.05 refers  to  “ice-cream
   and other edible ice”. It is significant to note that none of  the  terms
   have been defined in the chapter. Further heading 2108.91 is a  residuary
   entry of wide amplitude applicable to “edible preparations, not elsewhere
   specified or included” and “not bearing a brand name”.

15. According to the rules of interpretation for the First Schedule  to  the
   Tariff Act, mentioned in Section 2 of the Tariff Act,  classification  of
   an excisable good shall be determined  according  to  the  terms  of  the
   headings and any corresponding chapter or section notes. Where these  are
   not clearly determinative of classification, the same shall  be  effected
   according to Rules 3, 4 and 5 of the  general  rules  of  interpretation.
   However, it is also a well known principle that in  the  absence  of  any
   statutory definitions, excisable goods mentioned in  tariff  entries  are
   construed according to the common parlance understanding of such goods.

16. The general rules of interpretation of taxing statutes  were  succinctly
   summarized by this Court in Oswal Agro Mills Ltd. & Ors. Vs. Collector of
   Central Excise & Ors.[3]; as follows :
       “4. The provisions of the  tariff  do  not  determine  the  relevant
       entity of the goods. They deal whether and  under  what  entry,  the
       identified entity attracts duty. The goods are to be identified  and
       then to find the appropriate heading, sub-heading  under  which  the
       identified  goods/products  would  be  classified.   To   find   the
       appropriate  classification  description  employed  in  the   tariff
       nomenclature should be appreciated having regard to the terms of the
       headings read with the relevant provisions  or  statutory  rules  or
       interpretation put up thereon. For exigibility to  excise  duty  the
       entity must be specified in positive terms under a particular tariff
       entry. In its absence it must be deduced from a proper  construction
       of the tariff entry. There is neither intendment  nor  equity  in  a
       taxing statute. Nothing is implied. Neither can we insert nor can we
       delete anything but it should be interpreted and  construed  as  per
       the words the legislature has chosen to employ in the Act or  rules.
       There is no room for assumption or presumptions. The object  of  the
       Parliament has  to  be  gathered  from  the  language  used  in  the
       statute.……….. ..
           ***                    ***                           ***
       …Therefore, one has to gather its meaning in the  legal  setting  to
       discover the object which the Act seeks to serve and the purpose  of
       the amendment brought about.
       The task of interpretation of the statute is not a  mechanical  one.
       It is more than mere reading  of  mathematical  formula.  It  is  an
       attempt to discover  the  intention  of  the  legislature  from  the
       language used by it, keeping always in mind, that the language is at
       best an imperfect instrument for  the  expression  of  actual  human
       thoughts. It is also idle to expect that the  draftsman  drafted  it
       with  divine  prescience  and  perfect  and   unequivocal   clarity.
       Therefore, court would endeavour to eschew literal  construction  if
       it produces manifest absurdity or unjust  result.  In  Manmohan  Das
       v. Bishun Das : (1967) 1 SCR  836,  a  Constitution  Bench  held  as
       follows:


          “…The ordinary rule of construction  is  that  a  provision  of  a
          statute must be construed in accordance  with  the  language  used
          therein unless there are compelling  reasons,  such  as,  where  a
          literal construction would reduce the provision  to  absurdity  or
          prevent manifest intention of the legislature from  being  carried
          out.”


17. Therefore, in order to find an appropriate entry for the  classification
   of ‘soft serve’, it would be necessary to first construe the  true  scope
   of the relevant headings. As noted above, none of the  terms  in  heading
   04.04 and heading 21.05 have been defined and no technical or  scientific
   meanings have been given in the chapter notes. Evidently, ‘soft serve’ is
   not defined in any of the chapters aforesaid. Under these  circumstances,
   it becomes imperative to examine if the subject good could come under the
   purview of any of the classification descriptions employed in the  Tariff
   Act.  Having regard to the nature of the pleadings, the issue is  whether
   the term “ice-cream” in heading  21.05  includes  within  its  ambit  the
   product ‘soft serve’.  That leads us to the pivotal question, whether, in
   the absence of a statutory definition, the term “ice-cream” under heading
   21.05 is to be  construed  in  light  of  its  scientific  and  technical
   meaning, or, whether we are to consider this term in its common  parlance
   understanding to determine  whether  its  amplitude  is  wide  enough  to
   include ‘soft serve’ within its purview.

Common Parlance Test :
18. Time and again, the principle of common parlance  as  the  standard  for
   interpreting terms in the taxing  statutes,  albeit  subject  to  certain
   exceptions, where the statutory context runs to the  contrary,  has  been
   reiterated. The  application  of  the  common   parlance   test   is   an
   extension of the general principle  of  interpretation  of  statutes  for
   deciphering the mind of the law maker;  “it  is  an attempt  to  discover
    the  intention of  the  legislature   from  the  language  used  by  it,
   keeping always in mind,  that  the  language  is  at  best  an  imperfect
   instrument for the expression of actual  human  thoughts.”  [(See  :Oswal
   Agro Mills Ltd (supra)].


19. A classic example on the concept of common parlance is the  decision  of
   the Exchequer Court of Canada in The King Vs. Planter Nut  and  Chocolate
   Company Ltd.[4]. The question involved in the said decision  was  whether
   salted peanuts and cashew nuts could  be  considered  to  be  "fruit"  or
   "vegetable" within the  meaning  of  the  Excise  Tax  Act.  Cameron  J.,
   delivering the judgment, posed the question as follows:

      “...would a householder when asked to bring home fruit  or  vegetables
      for the evening meal bring home salted peanuts, cashew or nuts of  any
      sort? The answer is obviously `no'.”


Applying the test, the Court held that the  words  “fruit”  and  “vegetable”
are not defined in the Act or any of the Acts  in  pari  materia.  They  are
ordinary  words  in  every-day  use  and  are  therefore,  to  be  construed
according to their popular sense.

20.  In  Ramavatar  Budhaiprasad  Etc.  Vs.  Assistant  Sales  Tax  Officer,
   Akola[5], the issue before this Court was whether betel leaves  could  be
   considered as “vegetables” in the Schedule of the C.P. & Berar Sales  Tax
   Act, 1947 for availing the benefit of  exemption.  While  construing  the
   import of the word “vegetables” and holding that betel leaves  could  not
   be held to be “vegetables”, the Court observed thus :

        “…But this word must be construed not in any  technical  sense  nor
        from the botanical point  of  view  but  as  understood  in  common
        parlance. It has not been defined in the Act and being  a  word  of
        every day use it must be construed in  its  popular  sense  meaning
        “that sense which people conversant with the  subject  matter  with
        which the statute is dealing would attribute to it.”





21. In Commissioner of Sales Tax, Madhya Pradesh  Vs. Jaswant  Singh  Charan
   Singh[6], the Court had to decide whether “charcoal” could be  classified
   as “coal” under Entry I of Part III of Schedule II of the Madhya  Pradesh
   General Sales Tax Act, 1958. Answering the question in  the  affirmative,
   it was observed as follows :

         “3. Now, there can be no dispute that while  coal  is  technically
        understood as a mineral product, charcoal is manufactured by  human
        agency from products like wood and other things. But it is now well-
        settled that while interpreting items in statutes  like  the  Sales
        Tax Acts, resort should  be  had  not  to  the  scientific  or  the
        technical meaning of such terms but to their popular meaning or the
        meaning attached to them by those dealing in them, that is to  say,
        to their commercial sense……”


        XXX            XXX             XXX              XXXX


        “5.  The  result  emerging  from  these  decisions  is  that  while
        construing the word ‘coal’ in Entry I of Part III of  Schedule  II,
        the test that would be applied is what would be the  meaning  which
        persons dealing with coal and consumers 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  term  or  a  term  of
        science or art, be presumed to have used an ordinary term  as  coal
        according to the meaning ascribed to it in common parlance.  Viewed
        from that angle both a merchant dealing  in  coal  and  a  consumer
        wanting to purchase it would regard  coal  not  in  its  geological
        sense but in the sense as ordinarily understood and  would  include
        ‘charcoal’ in the term ‘coal’. It is only when the question of  the
        kind or variety of coal would arise that  a  distinction  would  be
        made between coal and charcoal; otherwise, both of  them  would  in
        ordinary parlance as also in their commercial sense  be  spoken  as
        coal.”





22. In Dunlop India Ltd. Vs. Union of India & Ors.[7], at  page  251,  while
   holding that VP Latex was to be classified as “raw rubber” under Item  39
   of the Indian Tariff Act, 1934, this Court observed:
          “29. It is well established that in interpreting  the  meaning  of
          words in a taxing statute, the acceptation of a particular word by
          the trade and its popular meaning should  commend  itself  to  the
          authority.”


          “34. We are, however, unable to accept the submission. It is clear
          that meanings given to articles in a fiscal  statute  must  be  as
          people  in  trade  and  commerce,  conversant  with  the  subject,
          generally treat and understand them in the usual course. But  once
          an article is classified and put under a distinct entry, the basis
          of the classification is  not  open  to  question.  Technical  and
          scientific tests offer  guidance  only  within  limits.  Once  the
          articles are in circulation and come to be described and known  in
          common  parlance,  we  then  see  no  difficulty   for   statutory
          classification under a particular entry.”

23. In Shri Bharuch Coconut Trading Co. and Ors.  Vs. Municipal  Corporation
   of the City of Ahmedabad & Ors.[8], this Court applied the test as "would
   a householder when asked to bring some fresh fruits or some vegetable for
   the evening meal, bring coconut too as vegetable (sic)?” The  Court  held
   that when a person goes to a commercial market to ask for  coconuts,  "no
   one will consider brown coconut to be vegetable or fresh fruit much  less
   a green fruit. No householder would purchase it as a  fruit.”  Therefore,
   the meaning of the word ‘brown coconut’,  and  whether  it  was  a  green
   fruit, had to  be  “understood  in  its  ordinary  commercial  parlance.”
   Accordingly it was held that brown coconut would  not  be  considered  as
   green fruit.

24. In Indian Aluminium Cables Ltd. Vs.  Union  of  India  &  Ors.[9],  this
   Court observed the following:
      “…This Court has consistently taken the view that, in determining  the
      meaning or connotation of words and expressions describing an  article
      in a tariff schedule, one principle which is  fairly  well-settled  is
      that those words and expressions should be construed in the  sense  in
      which they are  understood  in  the  trade,  by  the  dealer  and  the
      consumer. The reason is that it is they who are concerned with it and,
      it is the sense in which they  understand  it  which  constitutes  the
      definitive index of the legislative intention”.


25. In  Collector  of  Central  Excise,  Kanpur  Vs.  Krishna  Carbon  Paper
   Co.[10], this Court has opined thus :
        “12. It is a well settled principle of construction,  as  mentioned
       before, that where the word has a scientific  or  technical  meaning
       and also an 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…..
       …But there is a word of caution that has to be borne in mind in this
       connection, the words must be understood in popular sense,  that  is
       to say, these must be confined to the words  used  in  a  particular
       statute and  then  if  in  respect  of  that  particular  items,  as
       artificial definition is given in the sense that a  special  meaning
       is attached to particular words in the  statute  then  the  ordinary
       sense or dictionary meaning would not be applicable but the  meaning
       of that type of goods dealt with by that type of goods in that  type
       of market, should be searched.”



26. In Reliance Cellulose Products Ltd., Hyderabad Vs. Collector of  Central
   Excise, Hyderabad-I Division, Hyderabad[11], it was observed:
      “20. In other  words,  if  the  word  used  in  a  fiscal  statute  is
      understood in  common  parlance  or  in  the  commercial  world  in  a
      particular sense, it must be taken that the Excise Act has  used  that
      word in the commonly understood sense. That sense cannot be taken away
      by attributing a technical meaning to the word. But if the legislature
      itself has adopted a technical term, then that technical term  has  to
      be understood in the technical sense. In other words, if in the fiscal
      statute, the article in question falls within the ambit of a technical
      term used under a particular entry, then that article cannot be  taken
      away from that entry and placed  under  the  residuary  entry  on  the
      pretext that the article, even though it comes within the ambit of the
      technical term used in a particular entry,  has  acquired  some  other
      meaning in market parlance. For example, if a type of explosive  (RDX)
      is known in the market as Kala Sabun by a section of  the  people  who
      uses  these  explosives,  the  manufacturer  or  importer   of   these
      explosives cannot claim that the explosives must be classified as soap
      and not as explosive.”




27. There is a catena of decisions that has dealt  with  the  classification
   of Ayurvedic products between the categories of medicaments and cosmetics
   and in the process made significant pronouncements on the common parlance
   test.

28. In Shree  Baidyanath  Ayurved  Bhavan  Ltd.  Vs.  Collector  of  Central
   Excise, Nagpur[12],  at page 404 this Court  while  applying  the  common
   parlance test held that the appellant’s product “Dant Lal  Manjan”  could
   not qualify as a medicament and held as follows:

      “The Tribunal rightly points out that in  interpreting  statutes  like
      the Excise Act the primary object of which is to raise revenue and for
      which purpose various  products  are  differently  classified,  resort
      should not be had to the scientific and technical meaning of the terms
      and expressions used but to their popular meaning, that is to say  the
      meaning attached to them by those using the product. It  is  for  this
      reason that the Tribunal came to the conclusion  that  scientific  and
      technical meanings would not advance the case of the appellants if the
      same runs  counter  to  how  the  product  is  understood  in  popular
      parlance.”

29. In Naturalle Health Products (P) Ltd. Vs.  Collector of Central  Excise,
   Hyderabad[13], two appeals were under consideration. One was with respect
   to Vicks Vapo Rub and Vicks Cough Drops while the other was with  respect
   to Sloan's Balm and Sloan's Rub. It was observed that when  there  is  no
   definition of any kind in  the  relevant  taxing  statute,  the  articles
   enumerated in the tariff schedules must be construed as far  as  possible
   in their ordinary or popular sense,  that  is,  how  the  common man  and
   persons dealing with it understand it. The Court held that  in  both  the
   cases the customers, the practitioners in Ayurvedic medicine, the dealers
   and the licensing officials treated the products in question as Ayurvedic
   medicines and not as Allopathic medicines, which gave an indication  that
   they were exclusively Ayurvedic medicines or that they were used  in  the
   Ayurvedic system  of  medicine,  though  they  were  patented  medicines.
   Consequently, it was held that the said products  had  to  be  classified
   under the Chapter dealing with medicaments.

30.  B.P.L.  Pharmaceuticals  Ltd.  Vs.   Collector   of   Central   Excise,
   Vadodara[14] was a case in  which  product  "Selsun  Shampoo"  was  under
   consideration for the purpose of classification  under  the  Tariff  Act.
   According to the manufacturers this shampoo was a medicated shampoo meant
   to treat dandruff which is a disease of the hair. This  Court  held  that
   having  regard  to  the  preparation,   label,   literature,   character,
   common and commercial parlance, the product was liable to  be  classified
   as a medicament. It was  not  an  ordinary  shampoo  which  could  be  of
   common use by common people. The shampoo was meant to cure  a  particular
   disease of hair and after the cure it was not meant to  be  used  in  the
   ordinary course.

31.  Therefore, what flows from a reading of the  afore-mentioned  decisions
   is that in the absence of a statutory definition in precise terms; words,
   entries and items in taxing statutes must be construed in terms of  their
   commercial or trade understanding, or according to their popular meaning.
   In other words they have to be constructed in the sense that  the  people
   conversant with the subject-matter of the statute, would attribute to it.
   Resort to rigid interpretation  in  terms  of  scientific  and  technical
   meanings should be avoided in such circumstances. This, however, is by no
   means an absolute rule. When the legislature  has  expressed  a  contrary
   intention, such as by providing a statutory definition of the  particular
   entry, word or item in specific, scientific  or  technical  terms,  then,
   interpretation  ought  to  be  in  accordance  with  the  scientific  and
   technical meaning and not according to common parlance understanding.



Classification of ‘Soft-Serve’

32. In light of these principles, we may  now  advert  to  the  question  at
   hand, viz. classification of ‘soft serve’ under the appropriate  heading.
   As aforesaid, the Tribunal  has  held  that  in  view  of  the  technical
   literature and stringent provisions of the PFA, ‘soft  serve’  cannot  be
   classified as “ice-cream” under Entry 21.05 of the Tariff Act. We are  of
   the opinion, that in the absence of a technical or scientific meaning  or
   definition of the term “ice-cream” or ‘soft serve’, the  Tribunal  should
   have examined the issue at hand on the touchstone of the common  parlance
   test.

33. As noted before, headings 04.04 and 21.05  have  been  couched  in  non-
   technical  terms.  Heading  04.04  reads  “other  dairy  produce;  edible
   products of animal origin, not elsewhere specified or  included”  whereas
   heading 21.05  reads  “ice-cream  and  other  edible  ice”.  Neither  the
   headings nor  the  chapter  notes/section  notes  explicitly  define  the
   entries in a scientific or technical sense.  Further, there is no mention
   of any specifications in respect of either of the entries. Hence, we  are
   unable to accept the argument that since ‘soft serve’  is  distinct  from
   “ice-cream” due to a difference in its milk fat content, the same must be
   construed in the scientific sense for the purpose of classification.  The
   statutory context of these  entries  is  clear  and  does  not  demand  a
   scientific interpretation of any  of  the  headings.  Therefore,  in  the
   absence of any statutory definition or technical description, we  see  no
   reason to deviate from the application of the common  parlance  principle
   in construing whether the term “ice-cream” under heading 21.05  is  broad
   enough to include ‘soft serve’ within its import.

34. The assessee has averred that ‘soft serve’ cannot be regarded  as  “ice-
   cream” since the former is marketed and sold around the  world  as  ‘soft
   serve’. We do not see any merit in this averment. The manner in  which  a
   product may be marketed by a manufacturer, does not  necessarily  play  a
   decisive role  in  affecting  the  commercial  understanding  of  such  a
   product. What matters is the way in  which  the  consumer  perceives  the
   product at the end  of  the  day  notwithstanding  marketing  strategies.
   Needless to say the common parlance test operates on the standard  of  an
   average reasonable person who is not expected to be  aware  of  technical
   details relating to the goods. It is highly unlikely that such  a  person
   who walks into a “McDonalds” outlet with the  intention  of  enjoying  an
   “ice-cream”, ‘softy’ or ‘soft serve’, if at all these are to be construed
   as distinct products, in the first place,  will  be  aware  of  intricate
   details such as the percentage of milk fat content, milk non-solid  fats,
   stabilisers, emulsifiers or the  manufacturing  process,  much  less  its
   technical distinction from “ice-cream”. On the contrary,  such  a  person
   would enter the outlet with the intention of simply having an “ice-cream”
   or a ‘softy ice-cream’, oblivious of its technical composition.  The true
   character of a product cannot be veiled behind a charade  of  terminology
   which is used to market a product. In other words, mere semantics  cannot
   change the nature of a product in terms of how it is perceived by persons
   in the market, when the issue at hand is one of excise classification.

35. Besides, as noted above,  learned  senior  counsel,  appearing  for  the
   assessee quoted some culinary authorities for  the  submission  that  ice
   cream must necessarily contain more than 10%  milk  fat  content  and  be
   served only in a frozen to hard stage for it to qualify as  “ice  cream”.
   It was argued that classifying  ‘soft  serve’,  containing  5%  milk  fat
   content,  as  “ice  cream”,  would  make  their  product  stand  foul  of
   requirements of the PFA which demands that an “ice-cream”  must  have  at
   least 10% milk fat content.

36. Such a hard and fast definition of a culinary product like “ice-  cream”
   that has seen constant evolution and  transformation,  in  our  view,  is
   untenable. Food experts suggest that the earliest form of ice  cream  may
   have been  frozen  syrup.  According  to  Maguelonne  Toussaint-Samat  in
   her History of Food, “They poured a mixture of snow  and  saltpeter  over
   the exteriors of containers filled with syrup, for, in the  same  way  as
   salt raises the boiling-point of water, it lowers the  freezing-point  to
   below zero.” The author charters the evolution  of  “ice  cream”  in  the
   landmark work from its primitive syrupy form to its  contemporary  status
   with more than hundred different forms, and categorizes ‘soft  serve’  as
   one such form.

37. Noted author C. Clarke states the  following  in  “The  Science  of  Ice
   Cream”:
        “The legal definition of ice cream varies from country to  country.
        In the  UK  ‘ice  cream’  is  defined  as  a  frozen  food  product
        containing a minimum of 5% fat and 7.5% milk solids other than  fat
        (i.e. protein, sugars and minerals), which  is  obtained  by  heat-
        treating and subsequently freezing an emulsion of fat, milk  solids
        and sugar (or sweetener), with or without other substances.  ‘Dairy
        ice cream’ must in addition contain no fat  other  than  milk  fat,
        with the exception of fat that is present  in  another  ingredient,
        for example egg, flavouring, or emulsifier.’ In the USA, ice  cream
        must contain at least 10% milk fat and 20% total milk  solids,  and
        must weigh a  minimum  of  0.54  kg  I-’.Until  1997,  it  was  not
        permitted to call a product ‘ice cream’ in the USA if it  contained
        vegetable fat.


        Ice cream is often categorized as  premium,  standard  or  economy.
        Premium ice cream is generally made from best  quality  ingredients
        and has a relatively high amount of dairy fat and a low  amount  of
        air (hence it is relatively expensive), whereas economy  ice  cream
        is made from cheaper ingredients (e.g. vegetable fat) and  contains
        more air. However, these terms have no legal standing within the UK
        market, and one manufacturer’s economy ice cream may be similar  to
        a standard ice cream from another.”


Therefore, while some authorities are  strict  in  their  classification  of
products as “ice cream” and base it on milk fat  content,  others  are  more
liberal and identify it by other characteristics. There is, thus,  no  clear
or unanimous view regarding the true technical meaning of  “ice  cream”.  In
fact, there are different forms of “ice cream” in  different  parts  of  the
world that have varying characteristics.

38. On the basis of the authorities cited on  behalf  of  the  assessee,  it
   cannot be said that “ice cream” ought to contain more than 10%  milk  fat
   content and must be served only frozen and hard. Besides, even if we were
   to assume for the sake of argument that there is one standard  scientific
   definition of “ice cream” that distinguishes it from other products  like
   ‘soft serve’, we do not see why such a definition must be resorted to  in
   construing excise statutes. Fiscal statutes are framed at a point of time
   and meant to apply for  significant  periods  of  time  thereafter;  they
   cannot  be  expected  to  keep  up  with  nuances  and  niceties  of  the
   gastronomical world. The  terms  of  the  statutes  must  be  adapted  to
   developments of  contemporary  times  rather  than  being  held  entirely
   inapplicable. It is  for  precisely  this  reason  that  this  Court  has
   repeatedly applied the “common parlance test”  every  time  parties  have
   attempted to differentiate their products on  the  basis  of  subtle  and
   finer characteristics; it has tried understanding a good in  the  way  in
   which it is understood in common parlance.

39. Learned counsel for the assessee had strongly relied on  Akbar  Badrudin
   Giwani (supra) to buttress his  claim,  that  in  matters  pertaining  to
   classification of commodity taxation, technical and scientific meaning of
   the product will prevail rather than the commercial parlance,  and  hence
   on this basis, headings 04.04 and 21.05 were to be harmoniously construed
   so that ‘soft serve’ would be classified  under  heading  04.04.  We  are
   afraid, reliance on this judgment is misplaced and  out  of  context.  It
   would be useful to draw a  distinction  between  the  contexts  of  Akbar
   Badrudin Giwani (supra) and the present factual matrix.

40. In Akbar Badrudin Giwani (supra) the issue  was  whether  the  slabs  of
   calcareous stones (which were in commercial  parlance  known  as  marble)
   being imported by the Appellant were to be   regarded as  “marble”  under
   Item No. 62 of the List of Restricted Items, Appendix 2, Part 8 of Import
   and Export Policy given that Item No. 25.15 (Appendix 1-B, Schedule I  to
   the  Import  (Control)  Order,  1955  referred  to  “marble,  travertine,
   ecaussine and  other  calcareous  monumental  or  building  stone  of  an
   apparent specific gravity of 2.5 or  more  and  Alabaster…”.  Hence,  the
   controversy revolved around whether “marble” should be construed  in  its
   scientific  and  technical  meaning,  or  according  to  its   commercial
   understanding, in order to determine whether the appellant’s goods  would
   come within the ambit of Entry No. 62 of List of  Restricted  Items.  The
   Court examined both the entries and opined that Item No.  25.15  referred
   specifically not only to marble  but  also  to  other  calcareous  stones
   having specific gravity of 2.5, whereas, Entry No.  62  referred  to  the
   restricted item “marble” only. The content of Item  No.  25.15  had  been
   couched in scientific and technical terms and therefore, “marble” had  to
   be construed according to its scientific meaning and not in the sense  as
   commercially understood or  meant  in  trade  parlance.  Hence,  in  this
   context this Court held that the general principle of  interpretation  of
   tariff entries is of a commercial nomenclature but the said  doctrine  of
   commercial nomenclature or trade 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,  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. Thus, these observations  of  the
   Court were made in a context where one of the tariff entries was  couched
   in a scientific and technical sense and had to  be  harmonized  with  the
   other entry. It would have run counter to the statutory  content  of  the
   legislation, to construe the term “marble” in its commercial sense.

41. It is significant to note that the question of classification  of  ‘soft
   serve’ is based on a different set  of  facts  in  a  different  context.
   Heading 21.05 which refers to “ice cream and other  edible  ice”  is  not
   defined in a technical or scientific manner, and  hence,  this  does  not
   occasion the need to construe the term  “ice-cream”  other  than  in  its
   commercial or trade understanding. Since, the first condition itself  has
   not been fulfilled; the question of harmonizing heading 21.05 with  04.04
   by resort to the scientific and technical meaning of the entries does not
   arise at all. Hence, we are of  the  opinion  that  the  ratio  of  Akbar
   Badrudin Giwani (supra) does not apply to the facts of the present case.

42. Learned counsel for the assessee had  vociferously  submitted  that  the
   common parlance understanding of  “ice-cream”  can  be  inferred  by  its
   definition as appearing under the PFA.  According to Rule A 11.20.08  the
   milk fat content of “ice-cream” and “softy ice-cream” shall not  be  less
   than 8% by weight. Hence, according, to the  learned  counsel,  the  term
   “ice-cream” under heading 21.05 had to be  understood  in  light  of  the
   standards provided in the PFA, more so when selling “Ice-cream” with  fat
   content of less than 10%  would  attract  criminal  action,  as  held  in
   Baburao Ravaji Mharulkar (supra).

43. We are unable to persuade ourselves to agree with the submission. It  is
   a settled principle in excise classification that the definition  of  one
   statute having a different object, purpose and scheme cannot  be  applied
   mechanically to another statute. As aforesaid, the object of  the  Excise
   Act  is  to  raise  revenue  for  which  various  goods  are  differently
   classified in the Act. The conditions or restrictions contemplated by one
   statute having a different object and purpose should not be  lightly  and
   mechanically imported and applied to a fiscal  statute  for  non-levy  of
   excise  duty,  thereby  causing  a  loss   of   revenue.   [See:   Medley
   Pharmaceuticals Limited Vs. Commissioner of Central Excise  and  Customs,
   Daman[15] and Commissioner of Central Excise, Nagpur Vs. Shree Baidyanath
   Ayurved Bhavan Limited[16]]. The provisions of  PFA,  dedicated  to  food
   adulteration, would require a technical and scientific  understanding  of
   “Ice-cream” and thus, may require different standards for a  good  to  be
   marketed as “ice-cream”.   These  provisions  are  for  ensuring  quality
   control and have nothing to do with the class of goods which are  subject
   to excise duty under a particular tariff  entry  under  the  Tariff  Act.
   These provisions are not a standard for interpreting goods  mentioned  in
   the Tariff Act, the purpose and object of which is completely different.

44.  Learned counsel for the assessee also contended  that   based  on  Rule
   3(a) of the General Rules of Interpretation which states that a  specific
   entry shall prevail over a general entry, ‘soft serve’  will  fall  under
   heading 04.04 since it is a specific entry. We do not see  any  merit  in
   this contention.  The  learned  counsel  for  the  assessee  had  himself
   contended that “ice-cream” was  a  dairy  product  and  would  have  been
   classified under heading 04.04 if heading 21.05  had  not  been  inserted
   into the Tariff Act. However, in the presence  of  heading  21.05,  “ice-
   cream” cannot be classified as  a  dairy  product  under  heading  04.04.
   Hence, it is obvious that in relation to heading 04.04, heading 21.05  is
   clearly a specific entry. Therefore, we cannot  subscribe  to  the  claim
   that heading 04.04 is to be regarded as a specific entry under Rule  3(a)
   of the General Rules of  Interpretation,  since  such  an  interpretation
   would be  contrary  to  the  statutory  context  of  heading  21.05.   In
   conclusion, we reject the view taken by the Tribunal and hold that  ‘soft
   serve’ is to be classified as “ice-cream” under heading 21.05 of the Act.

45. At this stage it may be relevant to refer to  Trade  Notice          No.
   45/2001 dated 11th June, 2001 of Mumbai Commissionerate IV which came  to
   our notice. According to the  said  notification,  “softy  ice-cream/soft
   serve” dispensed by vending machines, sold and consumed  as  “ice-cream”,
   is classifiable under Entry 21.05 of the  Act.  The  same  is  reproduced
   below:
      “Classification of Softy Ice  Cream  being  sold  in  restaurant  etc.
      dispensed by vending machine —
      [Mumbai Commissionerate IV Trade Notice No.45/2001, dt. 11.6.2001]


            Ice Cream dispensed by vending machine falling under chapter  21
      has been made liable to nil rate of duty vide Sl. No.8 of Notification
      No.3/2001-CE dated 1.3.2001.


            Doubts have been raised as  regards  to  the  classification  of
      softy ice cream/soft serve dispensed by vending machine and soft serve
      mix used for its manufacture prior to 1.3.2001.   A  manufacturer  was
      obtaining soft serve mix and  processing  it  in  his  restaurant  for
      manufacture of softy ice cream.   The  process  involved  lowering  of
      temperature so that it changes its  form  from  liquid  to  semi-solid
      state and  incorporation  of  air,  which  results  in  production  of
      overrun, in Tylor Vending Machine.


            The product that emerges after  this  process  is  a  completely
      different product and is ready to be consumed immediately.  It has all
      the ingredients of an ice cream.  The product is sold and consumed  as
      ice cream.


            In the circumstances, it is clarified by the  Board  that  softy
      ice cream is correctly classifiable under  heading  21.05  of  Central
      Excise Tariff.  As per HSN Explanatory Notes, heading 19.01 also cover
      mix bases (e.g. powders) for making ice cream.  It  has  been  further
      clarified that soft serve mix will  be  correctly  classifiable  under
      heading 19.01.


            All the trade associations are requested to bring  the  contents
      of this trade notice to the attention of their member manufacturers in
      particular, and trade in general.


                                                                        Sd/-
                                                        (Neelam Rattan Negi)
                                                                Commissioner
                                                  Central Excise, Mumbai-IV”

While it is true that the trade notice is not binding upon  this  Court,  it
does indicate the commercial understanding of ‘soft-serve’  as  ‘softy  ice-
cream’.  Further, as this  trade  notice  is  in  no  way  contrary  to  the
statutory provisions of the Act, we see no reason to diverge  from  what  is
mentioned therein.

46. In view of the aforegoing discussion, we are of  the  opinion  that  the
   Tribunal erred in law  in  classifying  ‘soft-serve’  under  tariff  sub-
   heading 2108.91, as  “Edible  preparations  not  elsewhere  specified  or
   included”, “not bearing  a  brand  name”.   We  hold  that  ‘soft  serve’
   marketed by the assessee, during the relevant period, is to be classified
   under tariff sub-heading 2105.00 as “ice-cream”.

47. Lastly, learned counsel for the assessee had also contended that in  the
   event ‘soft serve’ was classifiable under heading 21.05, the assessee was
   entitled to the benefit under Notification No. 16/2003-CE (NT) dated 12th
   March 2003. The notification reads:

      “Notification: 16/2003-C.E. (N.T.) dated 12-Mar-2003

      Softy  ice cream and non-alcoholic beverage dispensed through  vending
           machine exempted during period 1-3-1997 to 28-2-2001

            Whereas the Central Government is satisfied that a practice that
      was generally prevalent regarding levy of duty  of  excise  (including
      non-levy thereof) under section 3 of the Central Excise Act,  1944  (1
      of 1944) (hereinafter referred to as the said Act), on softy ice cream
      and  non-alcoholic  beverages  dispensed  through  vending   machines,
      falling under Chapters 20, 21 or 22  of  the  First  Schedule  to  the
      Central Excise Tariff Act, 1985 (5 of 1986), and that such  softy  ice
      cream and non-alcoholic beverages dispensed through  vending  machines
      were liable to duty of excise which was not being levied according  to
      the said practice during the period commencing on and from the 1st day
      of March, 1997 and ending with 28th February, 2001.

            Now, therefore, in exercise of the powers conferred  by  section
      11C of the said Act, the Central Government hereby  directs  that  the
      whole of the duty of excise payable on such softy ice  cream  and  non
      alcoholic beverage dispensed through vending  machines,  but  for  the
      said practice, shall not be required to be paid  in  respect  of  such
      softy ice cream and non alcoholic beverages on which the said duty  of
      excise was not being levied during the aforesaid period in  accordance
      with the said practice.”




48. We are afraid we are unable to take this  argument  into  account  since
   such a plea was not urged before the Tribunal in the first  place.  Given
   that this is a statutory appeal  under Section 35L of the Act, it is  not
   open to either party, at this stage of the appeal, to raise a new  ground
   which was  never  argued  before  the  Tribunal.   Our  scrutiny  of  the
   arguments advanced has to be limited only to  those  grounds  which  were
   argued by the parties and addressed  by  the  Tribunal  in  its  impugned
   order.  Since, the impugned orders at hand do not  reflect  the  argument
   raised by the learned counsel for  the  assessee;  we  do  not  find  any
   justification to entertain this submission. Nonetheless, for the sake  of
   argument, even if we assume that this ground had been  urged  before  the
   Tribunal, in our view, learned counsel’s reliance on this notification is
   misplaced. Upon a reading of  the  notification  it  is  clear  that  the
   exemption in the notification is granted for the whole  of   excise  duty
   which was payable on such softy ice cream  and  non  alcoholic  beverages
   dispensed through vending machines, but was not being levied  during  the
   relevant period, which is not the case here.  In  the  present  case,  as
   aforenoted, three show cause notices had  been  issued  to  the  assessee
   alleging that ‘soft serve’  was  classifiable  under  heading  21.05  and
   attracted duty @ 16%. The show cause notices issued by the  revenue  also
   indicated that the assessee was  liable  to  pay  additional  duty  under
   Section 11A of the Act. This clearly  shows  that  the  excise  duty  was
   payable by the assessee and was being levied by the revenue.   Therefore,
   the  assessee’s  case  does  not  fall  within  the  ambit  of  the  said
   notification and is not eligible for the exemption granted to “softy ice-
   cream”, dispensed through a vending machine for the relevant period.

49. For the view we have taken, it  is  unnecessary  to  examine  the  issue
   whether the product in question bears a brand name.

50. Resultantly, the appeals are allowed and  the  impugned  orders  of  the
   Tribunal are set aside, leaving the parties to bear their own costs.


|                            |……..………………………………….                      |
|                            |(D.K. JAIN, J.)                         |
|                            |                                        |
|                            |                                        |
|                            |……..………………………………….                      |
|                            |(JAGDISH SINGH KHEHAR, J.)              |
|                                                                     |
|NEW DELHI,                  |                                        |
|NOVEMBER 27, 2012           |                                        |

RS


-----------------------
[1]    (1984) 4 SCC 540
[2]    (1990) 2 SCC 203
[3]    1993 Supp (3) SCC 716 at page 720
[4]    (1951) C.L.R. (Ex. Court) 122
[5]    (1962) 1 SCR 279
[6]    (1967) 2 SCR 720
[7]    (1976) 2 SCC 241
[8]    1992 Suppl.(1) SCC 298
[9]    (1985) 3 SCC 284
[10]   (1989) 1 SCC 150
[11]   (1997) 6 SCC 464
[12]   (1996) 9 SCC 402
[13]   (2004) 9 SCC 136
[14]   (1995) Suppl. 3 SCC 1
[15]   (2011) 2 SCC 601
[16]   (2009) 12 SCC 419