1993 (2) TMI 293

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....sp; The Revenue contended that "lime" is a chemical under entry 79 of the Second Schedule which refers to chemicals of all kinds. This contention was accepted in the order made by the Commissioner of Commercial Taxes in the proceedings initiated by him under section 22-A of the Act. The assessing authority has accepted the contention of the assessee that the article in question was sold by the assessee to coffee estate who purchased the same as pesticide. Sri Ramabhadran, learned counsel for the assessee, contended that the meaning attributable to a word or phrase in an entry of this sort is the meaning attributed to the same by the persons involved in the trade. The learned counsel contended that those who dealt with the lime in ques....

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....have to be found as to what is the purpose for which they were meant to be used and since the said question was not considered by the authorities, the matter was remanded back. In Atul Glass Industries (P.) Ltd. v. Collector of Central Excise [1986] 63 STC 322; (1986) 25 ELT 473, the Supreme Court applied the said test of functional character of the product in question. That was a case where the court had to consider whether mirror was treated as "glass and glassware". The Supreme Court held thus: "It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for hi....

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.... question was "timber" and not "firewood". The High Court stated that the dealers in the said goods offered to purchase the said goods for manufacture of woodware, furniture, etc., as well as manufacture of pulp and that they were dealing in timber. Therefore, the article in question was treated as timber. This reasoning was found to be faulty by the Supreme Court. At page 566 of AIR (at page 329 of STC) the Supreme Court held thus: "Here again, pushed to its logical conclusions, the reasoning incurs the criticism of proceeding to determine the nature of the 'goods' by the test of the use to which they are capable of being put. The 'user-test' is logical; but is, again inconclusive. The particular use to which an article can be applied in t....