2008 (7) TMI 117 - HC - Customs

Prawns and shrimps not included under 'fish' in Agricultural Produce Cess Act 1940 per common parlance test

The Madras HC held that prawns/shrimps are not included under the term 'fish' in the Agricultural Produce Cess Act, 1940. The court applied common ... Maintainability of the appeal u/s 130 - Classification of prawns/shrimps under the term 'fish' in the Agricultural Produce Cess Act - determine the scope of the various entries under the schedule to the Agricultural Produce Cess Act, 1940 - provision of the customs Tariff Act or the explanatory notes on the HSN - Whether the expression 'fish' includes prawns/shrimps - distinction between 'fish' and 'prawn/shrimp' - HELD THAT:- The Supreme Court in the case of Naveen Chemicals Mfg. And Trading Co. Ltd. v. Collector of Customs [1993 (9) TMI 107 - SUPREME COURT], observed that the order of the Additional Collector under appeal before CEGAT in that case did not have any direct or proximate relation, for the purposes of assessment, either to the rate of duty applicable to the said goods or to the value thereof. All that the Additional Collector's order did was to confiscate the said goods allowing to the appellant the option of redeeming them upon payment of a fine of Rs. 10,000. That the appellant might avail of the option, pay the fine and clear the said goods, when questions as to the rate of duty and value for purposes of assessment might possibly arise, is far too remote a contingency to satisfy the test that is laid down. The principle laid down in that case squarely applies to the facts of the case. Hence, the first question as to the maintainability of the appeal is answered in the affirmative, in the sense, the appeal is maintainable. It is an admitted fact that the word 'fish' has not been defined in the Act itself, in the absence of the definition, rule of interpretation is that particular words used by the legislature in the denomination of articles or goods should be understood according to the common or commercial understanding of the term used, for the Legislature does not suppose our merchants to be naturalists or geologists or biologists and thus resort should be made to understand the popular meaning or the meaning attached to them by finding out as to how those goods were understood by those dealing with them, that is to say, to their commercial sense. The fish and prawns are delicacies in the South India. If the common parlance test is applied. It cannot be contended that fish and prawn are one and the same commodity. If a man were to ask for fish in the market and if prawn is provided or in the vice versa, he would not accept the same. However, it is an admitted fact that no evidence to that effect is available in this case. It is well settled that if there is some difficulty, as in this case, there is no evidence to show that the term concerned does not have a particular popular connotation, the Courts have to resort to dictionaries and lexicons. It is also well settled that all aquatic creatures cannot be grouped into a category of 'fish' for there are several kinds of such creatures. The common parlance distinction between 'fish' and 'prawn/shrimp' supported by the dictionary meaning and the Biological differences stated above make it clear that though fish and prawn/shrimp are aquatic animals, they are different from each other. The commercial parlance as well as biological classification, as extracted above, show that fish (vertebrata) is conspicuously different from prawn/shrimp (crustaceans). We can also take support from the decision of the Orissa High Court in the case of State of Orissa v. CI Foods Limited, [1981 (10) TMI 159 - ORISSA HIGH COURT], wherein a Division Bench has found that biologically, 'fish' and 'prawn' are two different classifications, and qualitatively, 'fish' and 'prawn' are two different commodities and on the evidence placed, even in the common parlance, they were under stood as two different items. There was no scope for one item to pass for the other. The said decision of the Orissa High Court was followed by another Division Bench of the same High Court in the case of the same assessee, reported in 68 STC 284. Hence, the second substantial question of law is answered in favour of the assessee by holding that the expression 'fish' contained in. Schedule 7 to the Agricultural Produce Cess Act, 1940 would not include within itself prawns and shrimps. Thus, the appeals are dismissed. Issues Involved:1. Maintainability of the appeal under Section 130 of the Customs Act.2. Whether the term 'fish' in Item No. 7 of the Schedule to the Agricultural Produce Cess Act, 1940 includes prawns/shrimps.Issue-wise Detailed Analysis:1. Maintainability of the Appeal under Section 130 of the Customs Act:The court first addressed the maintainability of the appeal under Section 130 of the Customs Act. The respondent/exporters argued that the appeal was not maintainable as it related to the classification of goods for assessment purposes, which is excluded from appeals under Section 130. However, the court disagreed, referencing the Supreme Court's decision in Naveen Chemicals Mfg. And Trading Co. Ltd. v. Collector of Customs, which established a test for determining the maintainability of such appeals. The test is whether the question has a direct and proximate relation to the rate of duty or value of the goods for assessment purposes. The court concluded that the appeal was maintainable as the issue did not directly relate to the rate of duty or value of the goods but rather to the classification of prawns/shrimps under the term 'fish' in the Agricultural Produce Cess Act.2. Interpretation of the Term 'Fish' in Item No. 7 of the Schedule to the Agricultural Produce Cess Act, 1940:The primary issue was whether prawns/shrimps fall under the term 'fish' as per Item No. 7 in the Schedule to the Agricultural Produce Cess Act, 1940. The court examined various definitions and interpretations from different statutes and dictionaries. The Additional Solicitor General argued that 'fish' should include all marine products, including prawns/shrimps, citing definitions from the Indian Fisheries Act, Marine Zones of India Act, FAO Yearbook, and other sources.Conversely, the respondents contended that in the absence of a specific definition in the Agricultural Produce Cess Act, the term 'fish' should be interpreted using the common parlance theory. They argued that in common and commercial usage, 'fish' and 'prawns/shrimps' are distinct. The court agreed with this view, noting that if the legislature intended to include all marine products, it would have used a broader term like 'all aquatic animals' instead of 'fish.'The court also referenced various judicial precedents, including decisions from the Orissa High Court, Kerala High Court, and Andhra Pradesh High Court, which supported the distinction between 'fish' and 'prawns/shrimps' in common parlance and commercial usage. Additionally, the court emphasized the importance of interpreting fiscal statutes based on the plain and unambiguous language of the law, without adding or substituting words to extend the statute's scope.The court concluded that the term 'fish' in Item No. 7 of the Schedule to the Agricultural Produce Cess Act, 1940 does not include prawns/shrimps. This interpretation aligns with the common parlance, commercial understanding, and biological classification, which distinguish fish (vertebrates) from prawns/shrimps (crustaceans).Conclusion:The court dismissed the appeals, affirming that the term 'fish' in the Agricultural Produce Cess Act, 1940 does not encompass prawns/shrimps. The appeal was deemed maintainable, but the substantive issue was resolved in favor of the respondents, confirming that prawns/shrimps are not subject to cess under the term 'fish' in the Act.