2006 (10) TMI 2 - SC - Central Excise

Storage cabinets, kitchen counters, and conference tables classification as fixtures versus furniture remanded for fresh determination

The SC set aside the impugned order in a Central Excise case where petitioners argued that storage cabinets, kitchen counters, and conference tables ... Furniture - classification under Subheading 9403 - movability - fixtures - excisability of immovable or cannibalisable items - popular meaning in statutory interpretationFurniture - movability - classification under Subheading 9403 - Whether storage cabinets, kitchen counters, running counters, large reception/conference tables and similar erections are excisable as furniture under Subheading 9403. - HELD THAT: - The Court examined ordinary and dictionary meanings of 'furniture' and held that the term in common parlance denotes movable articles such as tables, chairs and desks. Items which are ordinarily immovable or which cannot be removed without 'cannibalizing' into broken pieces do not fall within that ordinary meaning and are therefore not furniture. Applying this principle, the Court found that kitchen overhead and below counters, storage units, running counters, wall units, pantry and similar built-in erections are fixtures/immovable in character and not excisable under Subheading 9403. The Court also recognised that some items commonly called furniture (for example, tables, desks, chairs) remain furniture even if affixed, because popular usage controls the meaning in context. [Paras 6, 7, 8]Storage units, running counters, kitchen units and other items ordinarily immovable or removable only by cannibalizing are not furniture and not excisable; chairs, tables and desks remain furniture and are excisable.Remand for fresh consideration - hearing of parties - Disposition of the appeals and further procedure to be followed by the Tribunal. - HELD THAT: - The Court allowed the appeals, set aside the impugned orders, and remitted the matter to the Tribunal for fresh adjudication. The Tribunal was directed to hear the parties and pass a fresh order in accordance with law and the observations of the Court, preferably within three months from receipt of the order. [Paras 9]Impugned orders set aside and matter remitted to the Tribunal to pass fresh order after hearing the parties within the time specified.Final Conclusion: Appeals allowed: builtin storage and counter units that are ordinarily immovable or removable only by cannibalization are not furniture and not excisable under Subheading 9403; ordinary movable furniture remains excisable. Impugned orders set aside and matter remitted to the Tribunal for fresh decision after hearing the parties. 1. ISSUES PRESENTED and CONSIDEREDThe core legal question considered by the Court was whether certain items such as storage cabinets, kitchen counters, running counters, large reception/conference tables, and similar units erected by the appellant on customer premises are excisable as furniture under Chapter Sub-heading 9403 of the Central Excise Tariff Act, 1985. Specifically, the Court examined whether these items constitute movable furniture liable to excise duty or fixtures/immovable property exempt from such duty.2. ISSUE-WISE DETAILED ANALYSISIssue: Whether the items erected by the appellant-storage units, kitchen counters, reception tables, etc.-are excisable as furniture under Chapter 9403 of the Central Excise Tariff Act, 1985.Relevant Legal Framework and Precedents: The applicable legal provision was Section 35L(b) of the Central Excise Act, 1944, and Chapter Sub-heading 9403 of the Central Excise Tariff Act, 1985, which covers 'Other furniture and parts thereof.' The Court also relied on dictionary definitions of 'furniture' from the Concise Oxford English Dictionary, Chambers English Dictionary, and New Webster's Dictionary to interpret the term in the statute.Court's Interpretation and Reasoning: The Court emphasized that 'furniture' ordinarily denotes movable articles used for living or working, such as tables, chairs, and desks. The Court noted that the items in question were erected piece by piece and fixed to walls or floors, making them immovable or removable only by 'cannibalizing' (i.e., reducing them to broken pieces). Such items, including storage units, kitchen counters, and running counters, were thus classified as fixtures rather than furniture.The Court observed that the popular meaning of 'furniture' in common parlance should prevail over purely etymological or dictionary meanings. It cited the principle stated by K.L. Sarkar in 'Mimansa Rules of Interpretation' that 'the popular meaning overpowers the etymological meaning.' The Court illustrated this with the example of the word 'pankaja,' which literally means 'born in mud' but popularly means 'lotus.' Similarly, the word 'furniture' is commonly understood to mean movable items like chairs, desks, and tables.Key Evidence and Findings: The appellant's activities involved manufacturing and erecting various units on customer premises, including partitions, storage units, counters, and large tables. The units were fixed to walls or floors and could not be removed intact but only by destruction. The Commissioner and the Tribunal had earlier held these items liable to excise duty as furniture under Chapter 9403, but the Court disagreed based on the immovability and fixture nature of the items.Application of Law to Facts: Applying the dictionary definitions and the principle of popular usage, the Court concluded that only movable articles such as tables, desks, and chairs fall within the scope of 'furniture' under the tariff heading. Items that are immovable or removable only by cannibalizing are fixtures and not furniture, and hence not excisable under Chapter 9403.Treatment of Competing Arguments: The appellant argued that the items in question were fixtures, not furniture, and thus not subject to excise duty. The authorities contended that these items were excisable furniture. The Court sided with the appellant, distinguishing between movable furniture and immovable fixtures, and rejecting the authorities' classification of the items as excisable furniture.Conclusions: The Court held that storage units, kitchen counters, running counters, overhead units, rear and side units, wall units, pantry units, and similar immovable or destructively removable items are not furniture within the meaning of Chapter 9403 and hence not excisable. However, movable items such as tables, desks, and chairs remain excisable as furniture.3. SIGNIFICANT HOLDINGSThe Court's crucial legal reasoning is encapsulated in the following verbatim excerpts:'... 'furniture' refers to movable items such as desks, tables, chairs, required for use or ornamentation in a house or office. Thus, ordinarily furniture is not something immovable or something which is fixed in a position which can be removed only by cannibalizing. We agree with learned Counsel for the appellants that the latter are fixtures and not furniture.''We hold that items which are ordinarily immovable or which ordinarily cannot be removed without cannibalizing e.g. storage units, running counters, overhead unit, rear and side unit, wall unit, pantry unit, kitchen unit and other items which are ordinarily immovable or cannot be removed without cannibalizing are not furniture.''... when we interpret a word we should not only see the dictionary meaning but even more the popular meaning which the word has acquired in common parlance. As stated by K.L. Sarkar in his book 'Mimansa Rules of Interpretation' ... 'the popular meaning overpowers the etymological meaning.''Core principles established include the distinction between movable furniture and immovable fixtures for the purpose of excise duty classification under Chapter 9403. The Court underscored that excise duty applies only to movable furniture, and fixtures affixed to immovable property and removable only by destruction do not qualify as excisable goods.Final determinations on the issue were that the impugned orders holding the items excisable as furniture were set aside, and the matter was remitted to the Tribunal for fresh consideration consistent with these observations. The appeals were allowed without costs.