# AKBAR BADRUDIN JIWANI v. COLLECTOR OF CUSTOMS, BOMBAY FEBRUARY 14, 1990

- **Citation:** [1990] 1 S.C.R. 369
- **Court:** Supreme Court of India
- **Decided:** 1990-02-14
- **Case number:** Civil Appeal No. 3655 of 1989
- **Bench:** B.C. Ray, S. Ratnavel Pandian
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/akbar-badrudin-jiwani-v-collector-of-customs-bombay-february-14-1990-10602
- **Pages:** 33

## Headnote

B
Customs Act, 1962: Sections lll(d), 112 and 125-Calcareous
stone imported by appellant-Whether 'marble' under Import & Export
Policy April 1988-March 1991 Entry 62, Appendix 2, Part BWhether can be confiscated on that ground-Whether option to clear
goods for home consumption on payment of fine valid: the term .'marC
ble' to be interpreted in a manner which is in consonance with the
statutory context and not as u.•derstood in commercial parlance.
The appellant on behalf of his firm, which is engaged in processing of stone slabs, placed an order for calcareous stone (other than
marble) with the exporter in Italy, and asked the exporter to certify that D
the said goods were not marble. The appellant further obtained from
the foreign exporter a sample tile and had the same tested by a reputed
geologist who confirmed that the sample was not marble. The goods
were imported under OGL Appendix 6, Item I of Import and Export
Policy for April 1988-March 1991.
E
The Customs Department sent sealed samples of the imported
goods for testing to various technical authorities, and on the basis of
some of these reports/opinions/visual observations issued a show cause
notice to the appellant alleging that the calcareous stone were nothing .
but marble only as per the commercial definition of marble and therefore governed by Entry 62, Appendix 2, Part B of the Import & Export
F
Policy for March 1988-1991. In reply the appellant's contention was
that the said goods could not be regarded as 'marble' in terms of the
expression 'marble' appearing in heading 25.15 in Schedule l,
Appendix 1-B, Customs Tariff Amendment Act, 1985.
The Collector of Customs however passed an order that the goods
G
imported were marble requiring a specific import licence. The
Collector further ordered confiscation of the goods and imposition of
fine and penalty. The Customs, Excise and Gold (Control) Appellate
Tribunal dismissed the appellant's appeal but reduced the penalty
amount.
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369
A
B
c
370
SUPREME COURT REPORTS
[1990] I S.C.R.
Before this Court it was contended on behalf of the appellant that:
(1) for the purpose of understanding the meaning of 'marble'
occurring in Appendix 1-B, Schedule I of the Imports (Control) Order,
1955 it is necessary to refer to Mineral Products, in Chapter 25, Tariff
Entry No. 25.15.
(2) the term 'marble' therein dues nut occur by itself or in isolation but as an inseverable part of a Tariff Entry which deals with five
.>....
items (a) Marble (b) Travertine (c) Ecaussine (d) Other calcareous stone
and ( e) Alabaster;
( 3) the Tariff Entry draws a clear line of distinction between each
of these five items and regards them as five distinct products;
(4) the term 'marble' has to be given a meaning which fits in and
harmonises in the above mentioned statutory context, so that 'marble'
-r
continues to remain distinct and different from the said other four
D
items;
(5) though the general principle of interpretation of tariff entries
occurring in a tax statute is th•t of commercial nomenclature or understanding in the trade, the said doctrine or commercial nomenclature or
A
trade understanding can and should be departed from in a case where
E
the statutory context in which the tariff item appears, requires such a
departure;
F
(6) the principles of interpretation are never embodied rules and
~
the same must always yield to the context of the particular statute;
J
(7) as the word 'marble' has not been defined and the tariff item
refers to calcareous stone of an apparent specific gravity of 2.5 or more,
it has to be taken to be used in a technical and scientific sense and as
such the sa1ne cannot be interpreted in the popular commercial sense;
(8) the end-use of the particular product is irrelevant and of no
G
consequen~e for determining its classification; and
H
(9) if the term 'marble' is to be given the commercial meaning as
relied upon by the Customs Authorities then the inevitable consequence
would be that the term 'marble' in Chapter Headi

## Text

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AKBAR BADRUDIN JIWANI
A
v.
COLLECTOR OF CUSTOMS, BOMBAY
FEBRUARY 14, 1990.
[B.C. RAY AND S. RATNAVEL PANDIAN, JJ.]
B
Customs Act, 1962: Sections lll(d), 112 and 125-Calcareous
stone imported by appellant-Whether 'marble' under Import & Export
Policy April 1988-March 1991 Entry 62, Appendix 2, Part BWhether can be confiscated on that ground-Whether option to clear
goods for home consumption on payment of fine valid: the term .'marC
ble' to be interpreted in a manner which is in consonance with the
statutory context and not as u.•derstood in commercial parlance.
The appellant on behalf of his firm, which is engaged in processing of stone slabs, placed an order for calcareous stone (other than
marble) with the exporter in Italy, and asked the exporter to certify that D
the said goods were not marble. The appellant further obtained from
the foreign exporter a sample tile and had the same tested by a reputed
geologist who confirmed that the sample was not marble. The goods
were imported under OGL Appendix 6, Item I of Import and Export
Policy for April 1988-March 1991.
E
The Customs Department sent sealed samples of the imported
goods for testing to various technical authorities, and on the basis of
some of these reports/opinions/visual observations issued a show cause
notice to the appellant alleging that the calcareous stone were nothing .
but marble only as per the commercial definition of marble and therefore governed by Entry 62, Appendix 2, Part B of the Import & Export
F
Policy for March 1988-1991. In reply the appellant's contention was
that the said goods could not be regarded as 'marble' in terms of the
expression 'marble' appearing in heading 25.15 in Schedule l,
Appendix 1-B, Customs Tariff Amendment Act, 1985.
The Collector of Customs however passed an order that the goods
G
imported were marble requiring a specific import licence. The
Collector further ordered confiscation of the goods and imposition of
fine and penalty. The Customs, Excise and Gold (Control) Appellate
Tribunal dismissed the appellant's appeal but reduced the penalty
amount.
H
369
A
B
c
370
SUPREME COURT REPORTS
[1990] I S.C.R.
Before this Court it was contended on behalf of the appellant that:
(1) for the purpose of understanding the meaning of 'marble'
occurring in Appendix 1-B, Schedule I of the Imports (Control) Order,
1955 it is necessary to refer to Mineral Products, in Chapter 25, Tariff
Entry No. 25.15.
(2) the term 'marble' therein dues nut occur by itself or in isolation but as an inseverable part of a Tariff Entry which deals with five
.>....
items (a) Marble (b) Travertine (c) Ecaussine (d) Other calcareous stone
and ( e) Alabaster;
( 3) the Tariff Entry draws a clear line of distinction between each
of these five items and regards them as five distinct products;
(4) the term 'marble' has to be given a meaning which fits in and
harmonises in the above mentioned statutory context, so that 'marble'
-r
continues to remain distinct and different from the said other four
D
items;
(5) though the general principle of interpretation of tariff entries
occurring in a tax statute is th•t of commercial nomenclature or understanding in the trade, the said doctrine or commercial nomenclature or
A
trade understanding can and should be departed from in a case where
E
the statutory context in which the tariff item appears, requires such a
departure;
F
(6) the principles of interpretation are never embodied rules and
~
the same must always yield to the context of the particular statute;
J
(7) as the word 'marble' has not been defined and the tariff item
refers to calcareous stone of an apparent specific gravity of 2.5 or more,
it has to be taken to be used in a technical and scientific sense and as
such the sa1ne cannot be interpreted in the popular commercial sense;
(8) the end-use of the particular product is irrelevant and of no
G
consequen~e for determining its classification; and
H
(9) if the term 'marble' is to be given the commercial meaning as
relied upon by the Customs Authorities then the inevitable consequence
would be that the term 'marble' in Chapter Heading 25.15 would automatically include within it the other four items thereby rendering the
rest of the Tariff Entry otiose, redundant and meaningless.
r
1
AKBAR v. COLLECTOR OF CUSTOMS
371
On behalf of the Revenne it was contended that:
A
(1) the word 'marble' has not been defined in the Tariff Act and
as snch in interpreting the word 'marble' as mentioned in Tariff Item
No. 25.15 in Appendix 1-B, Schedule 1 to the Import (Control) Order,
1955, the test in commercial and trade parlance has to be applied i.e.
how the said product came to be commercially known by the trading
B
people;
(2) it is not a scientific or technical word and as such it does not
require to be interpreted in its scientific and technical sense;
(3) the word 'marble' if so interpreted will include calcareous
stone of 2.5 or more specific gravity;
C
( 4) marble is the genus and all other four items of stone
mentioned in Tariff Entry 25.15 which are of apparent specific gravity
of 2.5 are included within marble as they are commercially and in trade
parlance known as marble; and
D
(5) the end-use of the product i.e. marble and calcareous stone
has to be taken into consideration in the determination of the other
l..
items of stone mentioned in that Entry.
Allowing the appeal, this Court,
HELD: (1) According to a number of reports as well as the ISi
specification the slabs of rocks that have been imported by the appellant
and claimed to be calcareous stones are not 'marble' in the scientific
and technical sense of the term 'marble'. [387F-G]
(2) Calcareous stone as mentioned in ITC Schedule has to be
taken in scientific and technical sense as therein the said stone has been
described as of an apparent specific gravity of 2.5 or more. Therefore,
the word 'marble' has to be interpreted in the scientific or technical
sense and not in the sense as commercially understood or as meant in
E
F
the trade parlance. [388D-E]
G
4. The general principle of interpretation of tariff entries occurring in a tax statute is lhat of commercial nomenclature or understand~
ing in the trade. The said doctrine of commercial nomenclature or
understanding can and should be departed from in a case where the
statutory content in which the tariff item appears requires such a deH
A
B
c
D
E
F
G
372
SUPREME COURT REPORTS
[1990J 1 S.C.R.
parture. If the application of the commercial meaning of trade nomenclature runs counter to the statutory context then the said principle of
interpretation cannot and should not be applied. [388E-F]
( 5) Trade meaning or commercial nomenclature would be applicable if a particular product description occurs by itself in a Tariff Entry
and there is no conflict l>etween the Tariff Entry and any other Entry
requiring to reconcile and harmonise that Tariff Entry with any other
Entry. [388G]
Union of India v. Delhi Cloth & General Mills, [1963] Supp. 1
SCR 586; Dunlop India Ltd. v. Union of India & Ors., [1976] 2 SCR
98; Commissioner of Sales Tax, M.P. v. Jaswant Singh Charan Singh,
[ 1967] 2 SCR 720; Grenfell v. Inland Revenue Commissioner, [1876] I
EX. D. 242, 248; Holt & Co. v. Collyer, [1881] 16 Ch. D. 718, 720;
K. V. Varkey v. Agricultural Income Tax and Rural Sales Tax Officer,
[1954] 5 SIC 384; Cannanore Spinning and Weaving Mills Ltd. v.
Collector of Customs and Central Excise Cochin, [1970] 2 SCR 830;
Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co.,
[1989] 1 SCC 150; Collector of Customs, Bombay v. Hargovindas &
Co., [1987] 29 LET 975 and Collector of Customs, Bombay v. Swastic
Woollens (P) Ltd. and Ors., [1988] Supp SCC 796, referred to.
(6) The commercial nomenclature or trade meaning cannot be
given to marble in as much as such a meaning if given will render
otiose and redundant the terms travertine, ecaussine, alabaster and
other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more whether or not roughly trimmed or merely
cut by sawing. [397F-G]
(7) In interpreting a product its end-use is of no relevance in determining the classification because in interpreting a term appearing in
the Tariff Item which has not been defined either in the Tariff Schedule
or in the Import Control Order, the same is to be interpreted in such a
way which is in consonance with the Items specified in the ITC Schedule
without leaving out any part of the Items mentioned therein. [399A-B]
(8) Considering all the reports, and since the term 'marble' has
not been defined in the Imports Control Order as well as in the ITC
Schedule it has to be taken in a scientific and technical sense as well as
in the context the word has been used, and the slabs of calcareous stones
imported by the appellant from Italy cannot be held to be marble as
H
they have not been recrystallised and metamorphosed in the geological
and petrological sense of the term. [398F]
'r
)
i.
AKBAR v. COLLECTOR OF CUSTOMS
373
(9) The slabs of calcareous stone imported by the appellant are
not marble as mentioned in Entry No. 62 of Appendix 2 of the Import
and Export Policy for April 1988-March 1991 and so it is covered by
Open General Licence. [399G I
(!OJ The imported goods cannot be confiscated by the Government under Section 11 l(d) of the Customs Act, 1961 nor the appellant
can be given the option to clear the said goods for home consumption on
payment of fine in lieu of confiscation under Section 125 of the Customs
Act, 1962. [399H; 400A)
A
B
(ll) The appellant cannot be said to have imported calcareous
stones without an import licence and as such there being no violation of
the Import Control Policy the imposition of penalty under Section 112
C
of the Customs Act, 1962 is unwarranted and not sustainable. [400A)
( 12) Even if it is taken for arguments sake that the imported
article is marble falling within Entry 62 of Appendix 2, the burden lies
on the Customs Department to show that the appellant has acted dis·
D
honestly or contumaciously or with the deliberate or distinct object of
breaching the law. In the instant case, in view of the finding arrived at
by the Appellate Tribunal that the said product was imported on a bono
fide belief that it was not marble, the imposition of such a heavy fine is
not at all warranted and justified. [400B-C; 401A-.B)
Merck Spares v. Collector of Central Excise & Customs, Ne><
Delhi, [1983] ELT 1261; Shama Engine Valves Ltd. Bombay v. Cullector of Customs, Bombay, [1984] 18 ELT 533; Madhusudu11
Gordhandas & Co. v. Collector of Customs, Bombay, [1987] 29 ELT
904 and Hindustan Steel Ltd. v. State of Orissa, [1970] I SCR 753.
referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3655
of 1989.
E
F
From the Judgment and Order dated 14.8.1989 of the Customs,
Excise and Gold (Control) Appellate Tribunal, West Regional Bench,
G
Bombay in Appeal No. CD(BOM)A. No 322 of 1989 in Order No. 704
of 1989.
Anil B. Diwan, S. Ganesh, R.K. Krishnamurthy, S.R. Narain
and Sandeep Narain for the Appellant.
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A
B
c
D
E
F
G
H
374
SUPREME COURT REPORTS
[1990] 1 S.C.R.
A.K. Ganguli, B. Parthasarthy, K. Swami and P. Parmeshwaran
for the Respondent.
The Judgment of the Court was deliYered by
RAY, J. This appeal under Section 130-E(b) of the Customs Act,
1962 is directed against the judgment and order dated August 14, 1989
passed by the Customs, Excise & Gold (Control) Appellate Tribunal,
Bombay in CD(Bom) A. No. 322 of 1989.
The most vital question that comes up for consideration in this
appeal is whether marble as mentioned in Tariff Item No. 25. 15 in
Appendix 1-B, Schedule I to the Import (Control) Order, 1955 mentioning "Marble, travertine, ecaussine and other calcareous monumental or building stone of an apparent specific gravity of 2.5 or more
and Alabaster, whether or not roughly trimmed or merely cut, by
sawing or otherwise, into blocks or slabs of a rectangular (including
square) shape" is genus within which all other kinds of calcareous
stones are included or whether marble is a distinct or different item
which is one of the restricted item in the List of Restricted Items
described in Appendix 2, Part B of Import and Export Policy for April
1988-March 1991.
The matrix of the case is that the Appellant has been carrying on
business as sole proprietor under the name and style of M/s Interior
Manufacturers at A-12, Yuwan Apartments, 413/414. Mount Mary
Road, Bandra, Bombay which is a small scale industry engaged in
processing of stone slabs. Jn the course of his manufacturing activity
the Appellant utilises and requires as raw material polishable calcareous stones viz. marble, travertine, ecaussine, alabaster and other
calcareous stones. All these different types of stones are hard and
capable of taking polish. Marble is distinguished from other calcareous
rocks, by the fact that it is a metamorphic rock formed from recrystallization of limestones and has a visibly crystallined nature. In
order to import calcareous stones covered by the Open General Licence
and with a view to ensuring that the same was not marble, the Appellant took the following precautions:
( 1) The appellant referred to the Indian Standards Specification
for Marble viz. IS: 1130-1969 which defines marble as follows:
)
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.l
375
Para 0.2:
"Marbles are metamorphic rocks capable of taking polish,
formed from the re-crystallization of limestones or dolomitic limestones and are distinguised from limestone by
even visibly crystallined nature and non.flaggy stratification.''
Para 0. 7 of the said Specification provides that:
"The Sectii:mal Committee responsible for the preparation
of this standard has taken into consideration the views of
producers, consumers and technologists and has related the
standard to the manufacturing and trade practices followed
A
B
in the country in this field."
C
(2) The Appellant obtained from the foreign exporters a sample
tile of 'Botticino', the calcareous rock proposed to be imported
and had the same tested by a reputed Geologist, Dr. S.F. Sethna
who tested the sample and by his report dated October 13, 1988
confirmed that the .same was not marble. His letter dated
D
October 14, 1988 explains now the sample tested was limestone,
different from marble. The sample tile tested and attested by Dr.
Sethna was submitted to the Customs Department vide their
letter dated February 20, 1989.
(3) The appellant then referred to an Italian Book MARHI
E
ITALTA wherein the index evidenced the fact that 'Botticino'
varieties were covered under 'polishable calcareous rocks' and
not under true marbles (re-crystallised calcareous rocks).
( 4) The appellant specifically placed an order for calcareous
stones (other than marble) and asked the Exporter to certify that
F
the said goods were not marble. The exporter Elle Marmi of Italy
by a certificate dated December 6, 1988 certified that all the
goods were calcareous stone slabs other than marble.
(5) The appellant also obtained the certificate dated December
6, 1988 from one Gianni C. Baigini, a Surveyor registered with
G
the Chamber of Commerce, Carrara and a Specialist for stones.
Gianni C. Baigini after checking the said consignment loaded in
the containers for import by the Appellant in Italy certified that
the slabs loaded in Container Nos. LMCU 051315/8, 0500t>2/3,
051519/2, 051520/6 were calcareous stones other than marble
since the~ame were not re-crystallised calcareous rocks.
H
A
376
SUPREME COURT REPORTS
[ 1990] 1 S.C.R.
The appellant alter taking the aforesaid precautions placed an
order wth Elle Marmi of Italy for import of 3120.50 sq. mtrs. of slabs
of calcareous stones having a thickness of 2 ems. at a price of Italian
Lira 4.22.56.000 i.e. Rs.4,93,000 approximately. The said Elle Marmi
issued an invoice dated December 2, 1988 for the said purpose.
B
The goods arrived in Bombay by the vessel 'Orient Triumph' on
or about 19th January, 1989. The appellant filed a Bill of Entry No.
007569 dated 19. I. 1989 for clearance of the goqds for home consump-
·'.,,
tion. The goods were declared as slabs of calcareous stones (other than
·
c
D
E
F
d
marble) and were imported under OGL Appendix 6, Item I of Import
and Export Policy for April 1988-March 1991.
The goods were inspected by the Assistant Collector (Docks)
who observed as follows:
"These goods under import do not appear to be marble or
granite and are not polished, they are roughly squared and
are having smooth edges on all four sides but are having
smooth edges on 2 or 3 sides due to sawing."
The sample of the goods was sent by the Assistant Collector (Docks)
to the Assistant Collector of Customs (Group I). The Assistant
Collector of Customs (Group I) issued a query memo dated February
6, 1989 on the alleged basis that 'calcareous stones are nothing but
marble only' and therefore, governed by Entry 62, Appendix 2, Part B
of Import and Export Policy for March 1988 to April 1991. The query
was allegedly based upon explanatory notes contained in the
"Harmonised Commodity Description and Coding System" (HSN)
evolved by the International Customs Cooperation Council.
The appellant set out the correct position and informed the
Department by several letters dated 7th February, 1989, 13th
February, 1989, 16th February, 1989 and 20th February, 1989 that the
said goods could not be regarded as 'marble' in terms of the expression
'marble' appearing in heading 25.15 in Schedule I, Appendix I-B
Customs Tariff Amendment Act, 1985. The appellant also requested
for release of part of the goods pending the technical test of the sample
from imported goods.
Pending the technical test report, by a letter dated February 17,
1989 the appellant was permitted to cleat 50% of the goods upon the
H
appellant submitted 100% ITC bond for the whole backed by a bank
)
l I
AKBAR v. COLLECTOR OF CUSTOMS !RAY, J.)
377
guarantee.· The balance 50% ot the imported consignment was
detained. The appellant accordingly cleared 50% of the imported consignment. The appellant, however, paid import duty on the full
consignment.
A
The Assistant Collector of Customs (Group I) sent the sealed
samples of the imported goods for testing to the Deputy Director
B
General Petrology Department, Geological Survey of India, Central
Region, Nagpur. The sealed cover containing the samples was sent
through the appellant's representative. The appellant also by a letter
dated February 25, 1989 sent a sample of the same consignment for
testing to the Geological Survey of India.
The appellant addressed further letters dated March 7, 1989,
March 8, 1989 to the Customs Department. By a letter dated March
13, 1989 the appellant forwarded to the Customs Department a sealed
envelope containing a test report given by the Geological Survey of
India, Nagpur on the sample or the imported goods.
The appellant on March 17, 1989 received a letter dated March
13, 1989 from the Geological Survey of India enclosing the test report
on the sample of the imported goods submitted by the appellant to the
Geological Survey of India. This test report categorically stated that
c
D
the sample was "allochemic (Pelmicritic) limestone. It cannot be
termed as a marble." It is pertinent to mention that the Geological
E
Survey of India had tested two samples from the materials imported by
the appellant, one sample forwarded by the Customs Department and
the other by the appellant. The report of the Geological Survey of
India on the sample forwarded by the Customs Department was set
out earlier and sent in a sealed cover to the Customs Department.
'
The Customs Department, however, did not release the goods
inspite of the categorical report of the Geological Survey of India and
instead issued a show cause notice dated March 17, 1989. The Customs
Department inter alia relied upon the opinion based on visual observation received from the Indian Bureau of Mines, Government of India,
Udaipur and test reports based on technical test received from the
G
Director of Mines & Geology Department, Udaipur and Geological
Survey of India, Nagpur. The test report received by the respondent
from the Geological Survey of India, Nagpur was kept back and not
disclosed to the appellant. None of the three reports/opinions were
disclosed to the appellant at the time of issue of show-cause notice. On
the basis of these reports/opinions it was alleged in the show-cause
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378
SUPREME COURT REPORTS
[ 1990] 1 S.C.R.
notice that the imported goods were marble allegedly as per the commercial definition of marble enunciated in the show-cause notice. The
Department threatened to confiscate the goods and initiate the penal
action against the appellant pursuant to Section 112 of the Customs
Act. The appellant by a letter dated March 20, 1989 called upon the
Customs Department to set aside the show-cause notice.
The Collector of Customs, New Customs House, Ballard Estate,
Bombay passed an order that the goods imported are marble and thus
require a specific import licence. He also held that these goods are
liable for classification as marble and the import of these goods under
OGL is not admissible and therefore in exercise of the powers conferred under Section lll(d) of the Customs Act, 1962, the Collector of
Customs ordered the confiscation of the imported goods and further
ordered that the Bond be enforced towards a fine of Rs.4,93, 199
imposed on the said goods in lieu of confiscation. The Assistant Collector of Customs was directed to enforce the said Bond and the Bank
Guarantee for realisation of this amount of fine. However, the imporD
ter was given option to clear the said goods for home consumption on
payment of fine of Rs.5,00,000 in lieu of confiscation under Section
125 of the Customs Act, 1962, the option to be exercised within 60
days from the date of receipt of the said order. He further held that
since the importer contravened the provisions of section lll(d) of the
Customs Act, 1962 read with Section 3 of the Import and Export
E
(Control) Act, 1947 rendering the said goods for confiscation, the
importer is liable for penal action under provisions of Section 112 of
the Customs Act. Accordingly, the penalty of Rs.10,00,000 under Section 112 of the said Act was directed to be paid forthwith.
Against this order, the appellant filed a writ petition being Writ
I
p
Petition No. 1398 of 1989 which was dismissed at the admission stage
on the ground that it involves disputed questions of fact which were
)
difficult to be decided in a writ jurisdiction. However, the appellant
was permitted to clear the goods on payment of redemption fine and
furnishing full bank guarantee for the penalty amount.
G
Aggrieved by this order, an appeal being Appeal No. 618 of 1989
was filed in the High Court of Bombay. The said appeal was dismissed
with liberty to file a departmental appeal by Order dated June 15, 1989.
The appellant thereafter filed the said appeal before the Customs,
)-
Excise and Gold (Control) Appellate Tribunal, West Regional Bench,
Bombay. The said Appellate Tribunal after hearing the appellant as
H
well as the Revenue dismissed the appeal and confirmed the order of
\ I
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.]
379
the Collector of Customs but reduced the penalty amount from
Rs.10,00,000 to Rs.5,00,000.
Feeling aggrieved by the said order the appellant filed the instant
appeal under Section 130-E(b) of the Customs Act, 1962. The entire
controversy relates to the question whether the calcareous stone which
has been imported by the appellant falling within the Tariff Item No.
25.15 of Schedule I, Appendix 1-B commonly known as LT. Schedule
is marble as mentioned in Entry No. 62 of the List of Restricted Items,
Annexure 2, Part B of the Import and Export Policy for April 1988 to
March 1991 and as such the import of calcareous stone made by the
appellant being not covered under OGL, is liable for confiscation and
penalty for illegal import without the specific import licence obtained
from the respondent. In Appendix 1-B, Schedule I of ITC Schedule,
Entry No. 25 .15 of Chapter 25 (Mineral Products) mentions:
' I
"Marble travertine, ecaussine and any other calcareous
monumental or building stone of an apparent specific graA
B
c
vity of 2.5 or more and Alabaster, whether or not roughly
D
trimmed or merely cut by sawing or otherwise, into blocks
of slabs of a rectangular (including square) shape."
In the said Appendix 1-B, Schedule I states that each heading
number in Column (1) corresponds to the respective Chapter and
heading number of the first Schedule to the Customs, Tariff AmendE
ment Act, 1985 as amended on 24.1.1986 and each entry in Column (2)
has the same scope and meaning as the corresponding Chapter and
heading of the said first Schedule.
It is appropriate to refer to Appendix 6 of the Import and Export
Policy for April 1988 to March, 1991 which mentions import of items
F
under Open General Licence. The categories of importers, the items
allowed to be imported by them under Open General Licence and the
conditions gover:ning their importation have been set out therein:
Items
l. Raw materials components and consumables
(Non-iron and steel items) other than
those included in the Appendices 2, 3
Part A, 5 and 8
Category of eligible
importers
G
Actual Users
(Industrial)
H
A
B
c
D
380
SUPREME COURT REPORTS
[1990] 1 S.C.R.
In Appendix II-B, in the List of Restricted Items, Entry 62, of
Import and Export Policy for March 1988 to April 1991 refers to
marble/ grani te1on yx.
Mr. Diwan, learned counsel appearing on behalf of the appellant
has submitted that for the purpose of understanding the meaning of
'marble' occurring in Appendix 1-B, Schedule I of the Imports
(Control) Order, 1955 it is necessary to refer to Mineral Products, in
Chapter 25, Tariff Entry No. 25.15 which refers to Marble, Travertine,
Ecaussine and other calcareous monumental and building stone of an
apparent specific gravity of 2.5 or more and Alabaster, whether or not
roughly trimmed or merely cut by sawing or otherwise into blocks or
slabs of a rectangular (including square) shape. The term 'marble
does not occur by itself or in isolation but as a inseverable part of a
Tariff Entry which deals with five items referred to herein below:
(a) Marble
(b) Travertine
( c) Ecaussine
( d) Other calcareous stone
(e) Alabaster
Each of these five items is a monumental or building stone whiCh is
hard and can be cut and sawed into the required sizes and can take
E
polish. The Tariff Entry draws a clear line of distinction between each
of these five items and regards them as five distinct products. The basic
scheme of the Tariff Entry is important for the purposes of the present
appeal. The term 'marble' has to be given a meaning which fits in and
harmonises in the above mentioned statutory context, so that 'marble'
continues to remain distinct and different from the said other four
F
items. Thus whatever principle of interpretation or canon of construction is applied it cannot be said that the term 'marble' include and
takes within its fold any or more distinct items or goods mentioned in
the said Tariff Entry, thereby rendering a part of the said Entry meaningless. It has, therefore, been submitted on behalf of the appellant
that the term 'marble' has to be interpreted in a manner which is in
G
consonance with the context and which does not militate against it. It
is appropriate to refer in this connection the following passage from
Maxwell on Interpretation of Statutes, 12th Edition. Page 294 set out
hereunder:
"The word 'land' is generally understood as including
H
building. but if, after imposing a rate on houses, buildings,
'
/
_)
AKBAR v. COLLECTOR OF CUSTOMS !RAY, J.l
381
works, tenements and hereditaments, an Act exempted
'land', this word would be restricted to land unburdened A
with houses, buildings, or works which would otherwise
have been unnecessarily enumerated'."
It has been secondly submitted on behalf of the appellant that
the general principle of interpretation of tariff entries occurring in a
B
tax statute is that of commercial nomenclature or understanding in the
trade. It is also a settled legal position that the said doctrine of com·
mercial nomenclature or trade understanding can and should be
departed from in a case where the statutory context in which the tariff
item appears, requires such a departure. If the application of the com·
mercial meaning or trade nomenclature runs counter to the statutory
context then the said principle of interpretation cannot and should not
C
be applied. Commercial nomenclature or trade understanding is ,
merely a general principle of interpretation. It is well settled that the
principles of interpretation are never embodied rules and the same
must always yield to the context of the particular statute which comes
up for interpretation. It has also been submitted in this connection that o
the trade meaning or commercial nomenclature would be applicable if
a particular product description occurs by itself in a Tariff Entry, and
there is no competition between that Tariff Entry and any other tariff
entry, nor is there any need to reconcile and harmonise that tariff
entry with any other. It has been submitted in this respect that the
reading of the Tariff Entry No. 25.15 in Appendix I·B of Imports
E
(Control) Order, 1955 which refers to Marble, Ecaussine, Travertine
and other calcareous monumental or building stones as well as Entry
No. 62 in Appendix 2-B of Import and Export Policy, April 1988March 1991 refer only to marble/granite/onyx as restricted items of
import in such a way that such interpretation does not exclude or
render redundant any of the items included in Tariff Entry No. 25.15.
F
It has next been contended that the end-use of the particular product is
irrelevant and of no consequence for determining its classification. In
support of this proposition several decisions have been cited. It has
· been further submitted that each of the five distinct items referred to
in Chapter Heading 25.15 of Appendix l·B of Imports (Control)
Order, 1955 is a hard stone capable of being cut into the required size
G
and of taking polish. If, therefore, the term marble is to be given the
said commercial meaning as relied upon by the Customs Authorities
then the inevitable consequence would be that the term 'marble' in
Chapter Heading 25.15 would automatically include within it the other
four items thereby rendering the rest of the Tariff Entry, otiose,
redundant and meaningless. On this ground alone, it has been submit· H
A
B
c
382
SUPREME COURT REPORTS
[1990] 1 S.C.R.
ted that the test of commercial meaning or trade understanding necessarily has to be rejected and the same cannot be applied in the present
case. It has also been contended on behalf of the appellant that from
the language of the Tariff Entry itself it is only the technical' meaning
which can be applied for interpreting Chapter Heading 25.15. The
expressions calcareous, travertine, ecaussine, and alabaster are all
technical expressions known to the science of Geology which are found
defined in dictionaries of Geology. These are not terms of trade or
expressions which businessmen use in the ordinary use to describe a
product they deal in. Moreover, the reference to the requirement of
specific gravity of 2.5 or more is also more or less a .technical requirement which evinces that the principle of trade nomenclature or
commercial understanding is not applicable to the Tariff Item. Valuable guidance can also be obtained from the notes which are part of the
,
Harmonised System of Nomenclature (HSN) with which the present
D
E
Customs Tariff as amended in 1986, has been fully aligned. The HSN
Explanatory Notes specifically state that ecaussine, on being fractured, shows a granular surface, similar to granite and is, therefore,
known sometimes as Belgian granite, Flanders Granite and Petiti
granite. It needs to be understood that, therefore, even though ecaussine may be known in the market as a species of granite and may be
dealt with and treated as a type of granite, the same is, nevertheless
not classified as granite under Chapter Heading 25.16. This is only
because the technical nature of ecaussine has been taken into consideration and applied by HSN as opposed to the trade nomenclature or
commercial understanding.
It has also been submitted that the said HSN also contains
specific note regarding serpentine rocks to the effect that the same are
sometimes called 'Marble', but the same is excluded from Chapter
F
Heading 25.15. This clearly shows that according to HSN, Chapter
Heading 25.15 must be construed according to its technical meaning.
Technically, serpentine does not fall under Heading 25.15 and the
same is accordingly excluded therefrom by the HSN. If, on the other
hand, the commercial meaning is to be applied, then, serpentine would
definitely have to be classified under Chapter Heading 25.15 in as
G
much as it is sometimes called marble. The HSN Explanatory notes,
therefore, clearly and conclusively establish that Chapter Heading
25.15 must necessarily be construed by its technical meaning and not
by applying the commercial nomenclature test. If the commercial
nomenclature test is applied, then, as explained hereinabove, two
fundamental principles of interpretation are infringed: (a) the princiH
ple that no part of a statute may be construed as to render it redundant
)
AKBAR v. COLLECTOR OF CUSTOMS [RAY, J.]
383
. and otiose, and ( b) that a tariff item is not to be classified on the basis
A
of its end-use-in other words an item cannot be considered to be
marble ,merely because it is a hard rock which is capable of being cut
and polished and being put to same use as marble. It has, therefore,
been submitted that the findings arrived at by the Customs, Excise and
Gold (Control) Appellate Tribunal that the calcareous stone slab
imported by the appellant is marble as understood in the commercial
B
or trade nomenclature and as such the import of the said slab being
without a licence, is subject to the liability of confiscation and imposition of penalty and wholly unwarranted.
Mr. Ganguli, learned counsel appearing on behalf of the
Revenue has submitted that in interpreting the word 'marble' as
mentioned in Tariff Item No.25.15 in Appendix 1-B, Schedule 1 to the
Import (Control) Order, 1955, the test in commercial and trade parlance has to be applied i.e. how the said product came to be commercially known by the trading people. It is further submitted that it is not
a scientific or technical word and as such it does not require to be
interpreted in its scientific and technical sense. He further submitted
that the general principle of expression of Tariff Entries in a text
statute is that of commercial nomenclature or understanding in the
trade. The word 'marble' if so interpreted will include calcareous stone
of 2.5 or more specific gravity. He has cited certain decisions in support of his above contention. Mr. Ganguli also submitted referring to
the said Tariff Entry 25.15 that it includes calcareous stones of specific
gravity of 2.5 or more which are capable of polish. Marble is the genus
and all other four items of stone mentioned in the said Entry which are
of apparent specific gravity of 2.5 are included within marble as they
c
D
E
are commercially and in trade parlance known as marble. He further
submitted that the ISI specification for marble as referred to in IS:
1130-1969, item No. 0.2 which defines marble as metamorphic rocks
F
can not be applied in the instant case especially in view of the note to
the said item that sometimes rocks, such as serpentine are also
polished and used in trade as marble. Mr. Ganguli further submits that
taking into consideration this note, calcareous stone imported by the
appellant falls within marble which is one of the restricted ·items in the
list of restricted items as mentioned in Appendix 2, Part B of the G
Import and Export Policy, April 1988-March 1991. Mr. Ganguli
further submitted that the word marble cannot be taken in its Geological or Petrological sense in as much as the whole purpose of putting the
marble stone slabs in the list of restricted items for import is to restrict
the outflow of foreign exchange from the country. Mr. Ganguli next
submitted that the end-use of the product i.e. marble and calcareous H
A
B
c
D
B
F
G
H
384
SUPREME COURT REPORTS
[ 1990] 1 S.C.R.
stone mentioned in Item No. 25.15 of Appendix 1-B of the Import and
Export Policy April 1988-March 1991 has to be taken into consideration in the determination of the other items of stones mentioned in
that Entry. Viewed from this angle, the said calcareous stone being
capable of polish and used for monumental or building purposes has to
be taken to be marble as has been done by the Revenue and it being
one of the restricted items, a licence for import of the same is mandatory. It has also been submitted in this connection by Mr. Ganguli that
the word 'marble' has not been defined in the Tariff Act and as such
the meaning of the said word has to be given as undecstood by the
trading communities as is known in trade parlance. Mr. Ganguli,
therefore submitted that there is no infirmity in the findings and conclusions of the Appellate Tribunal and as such the calcareous stone
slabs imported by the appellant being marble, one of the restricted
items, the order of confiscation of the said stone slabs and in lieu
thereof the imposition of the customs duty and the penalty is quite in
accordance with law.
The sole question to be considered in this appeal is whether the
word calcareous monumental or building stones of more than 2.5 or
more specific gravity as mentioned in Tariff Item No. 25. 15 in
Appendix 1-B, Schedule I, commonly known as ITC Schedule to the
Imports (Control) Order, 1955 comes within the purview of the
restricted items mentioned in Item 62, Appendix 2, Part B of the
Import and Export Policy April 1988-March 1991. In Entry No. 62,
the restricted item is described as 'Marble/granite/onyx'. Marble has
not been defined either in the ITC Schedule or in Appendix 2, Part B
of Import and Export Policy dealing with the list of restricted items. It
is convenient to refer in this connection to para 64 of the Hand Book of
Procedures, April 1988-March 1991 which is in the following terms:
"Classification of Items
64. (1) The Schedule I to the Imports (Control) Order,
1955, reproduced in Appendix 1-B to this Book, commonly
known as the I.T.C. Schedule, contains the classification of
all the articles that enter into the import trade.
(2) With effect from 1st April, (988 the Schedule I to
the Imports (Control) Order, 1955 reproduced in Appendix
I-B to this Book has been revised in alignment with the
First Schedule of the Customs Tariff (Amendment) Act,
1985. The Revised ITC Schedule contains 21 Sections subdivided into 99 Chapters."
-
/
AKBAR v. COLLECTOR OF CUSTOMS IRAY, J.)
385
It is also convenient to refer to the note to the Appendix 1-B, A
Schedule I to the Imports (Control) Order, 1955 which is to the following effect:
Note:- Each heading number in Column (1) corresponds to the respective Chapter and heading B
number of this first Schedule to the Customs
Tariff Amendment Act, 1985 as amended on
24.1.1986 and each entry in Column (2) has.