Commercial parlance governs tariff classification of processed peanuts, which were held distinct from groundnut kernel.

Tariff classification of blanched and roasted peanuts was determined by their commercial identity in trade and commerce, not by dictionary meaning. The court held that groundnut kernel and processed edible peanuts are commercially distinct: the former is associated with oil extraction and industrial use, while the latter is meant for direct consumption. On that basis, blanched and roasted peanuts were not classifiable as groundnut kernel under Heading 20(i) of the Second Schedule to the Export Tariff, and the Revenue's classification was rejected.

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Issues: Whether blanched and roasted peanuts are classifiable as "groundnut kernel" under Heading No. 20(i) of the Second Schedule to the Export Tariff.

Analysis: Classification of goods in a fiscal enactment turns on how the article is understood in trade and commerce in its ordinary commercial sense, and not on a dictionary meaning. Applying that approach, groundnut kernel and blanched roasted peanuts are commercially distinct: the former is associated primarily with extraction of oil and other industrial uses, while the latter is an edible preparation meant for direct human consumption. The functional character and common parlance of the article therefore do not support treating the processed product as identical to the raw kernel.

Conclusion: Blanched and roasted peanuts do not fall within Heading No. 20(i) as groundnut kernel, and the classification adopted by the Revenue was not sustainable.

Final Conclusion: The common order of the single Judge was affirmed and the revenue appeals were rejected.

Ratio Decidendi: In tariff classification, the commercial or common parlance understanding of an article and its functional identity govern, and a processed edible product is not to be treated as the raw commodity from which it is derived unless it is so understood in trade.

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