TaxTMI 
TaxTMI 
2014 (11) TMI 204
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....ortion of the bark which protects the tree is found to be incidental. However, counsel for the respondent-assessee has relied on an unreported decision of this court in T.R.C. No. 448 of 2002, wherein this court has held that the item is a plant protection chemical. We find from the judgment that the later decision does not refer to earlier judgment Moreover, this court just followed the certificates issued by two authorities to hold that the item is a plant protection chemical. None of the experts who issued the certificates had stated that the item is plant protection chemical and what they have stated is that the item is chemical. We do not know what is the basis to hold that the chemical has plant-protection property. In fact, the other words used in the entry are pesticides and fungicides. It is common knowledge that polystik compound is essentially derived from bitumen, which is a petroleum product and it in no way is used as a chemical to protect plants. We are of the view that persons, who issued the certificates, based on which judgment is rendered by this court, are not competent to talk about chemicals protecting plants. We therefore do not approve the later decision of ....
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....runk can occur during the rainy season, therefore, the rain guarding is done and this rain guard compound is one of the items of the entire process of rain guarding, so as to see it acts as a water proof element above the trunk of the rubber plant. 5. The learned Government Pleader brings to our notice various decisions, including the literature on rain guarding process, explained by the rubber Board. According to him, even if a product has more than one quality or purpose, the predominant use of the material, in other words/how it is marketed, is the criterion to decide what is the classification of the product rather than the actual use, a particular purchaser makes use of it. 6. As against this learned counsel for the respondents contends, the product how in common parlance is understood is nothing but how a common man understands, therefore, the certificate issued by the farmer/ common man is the criterion to decide what is the predominant use of the product and not based on the technical terms or technical analysis of a particular product. Hence, the certificates relied upon by the assessees would indicate how the material is used as a protection chemical on ....
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....ess involved is; clear the round surface of the tree, apply to it potystik adhesive, over which cloth is stitched, which is attached to the rain guard either in the form of a paper or a shade with the help of a stapler and over and above, a binding material may also be used to prevent water leakage. Therefore, the item polystik compound is essentially an adhesive, going by its use and purpose but other purpose of preventing leakage of water is only an additional feature. Therefore, the assessing authority, was justified in giving a finding, that the manufacturer and dealer knew well for what purpose it was purchased while transporting the classified item as "adhesive" in the transport document namely delivery note and Form 27B. In other words, their lordships held that, item 3 of the First Schedule to the Act provides a general item as "adhesive" and the item in question "polystik compound" falls under the said general items. 9. In the latter decision of the Division Bench of this court, there were, two items, which came up for consideration of the Bench, one is rubber coat and rain guarding compound. The contention of the State before the Bench was that the rubber coat is....
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....enable the Tribunal to/ give a fact finding opinion. Later the matter came to be adjourned on two or three occasions, awaiting report from the Tribunal. 12. By order dated November 26, 2010, the Tribunal ultimately opined that, the polystik compound is used essentially as a sealant for the purpose of preventing water from leaking through the plastic rain guard into the tapping panel. With this fact finding the matter was placed before us. 13. Though direction was to identify the product in question, whether a chemical or an adhesive, the Tribunal opined that, it was mainly used for preventing water from leaking through the plastic rain guard into the tapping panel. There is no definite opinion, whether it is a chemical or an adhesive. We note from paragraph 3 of the orders of Tribunal; that the letter dated March 5, 2007 of the Chairman, Rubber Board addressed to the Secretary (Taxes), Government of Kerala, was one of the base for the opinion of the Tribunal, wherein it is noted that, the, Chairman in the said letter has stated that rain guarding is a compound used not for its adhesive properties on the trees, but to act as a protectant fungicide. It acts as seala....
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....e clinical syringes, thermometers, lactometers, etc., which articles though made of glass are normally available in medical stores or with the manufacturers thereof like the assessee in that case. Ultimately, their lordships held that, the clinical syringes, which the assessee manufactured and sold cannot be considered as "glassware" falling under entry 39 of the First Schedule to the Act. 17. He relies on Mukesh Kumar Aggarwal and Co. v. State of Madhya Pradesh [1988] 68 STC 324 (SC) ; CDJ 1987 SC 372, to contend that in a taxing statute words which are not technical expressions or words of art, but are words of everyday use, must be understood and given a meaning, not in their technical or scientific sense, but in a sense as understood in common parlance, i.e., "that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it". In other words, their lordships opined, the words must be used in popular sense and not in a technical or scientific sense. In the above case, timber was the article, which came up for consideration. While referring to the timber, though the timber has two meanings, ultimately, their lordships hel....
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.... that different commodities are classified on the basis of their use and denomination. Generally, a tariff entry is construed by applying common parlance test by considering what sense is to be attributed to an entry in its popular sense by people conversant with the subject-matter. 23. Among these arguments and decisions, we also have Rubber Board literature on rain guarding. As per rain guarding literature, rain guarding is essential for regular tapping and during rainy season tapping can be carried out by fixing polythene rain guard to the trunk above the tapping cut. It says this process is undertaken to prevent the loss of tapping days during the rainy season. A detailed method of rain guarding as stated in the literature reads as under:- Method of rainguarding The different steps involved in polythene skirt rainguarding are (Plate 34.b) given below:- * Frill the polythene at equal distance using a sewing machine, ensuring 40 per cent reduction in length. * Using a scraper, lightly scrape the dry bark 10 cm above the tapping cut and parallel to it (Plate 35.a). The scraped brand should extend a minimum of 15 cm from fr....
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....property is that of a very strong and durable adhesive that binds together a very wide variety of other materials without affecting their properties. Its durability is essential to major engineering projects such as roads and waterways where it must do its job for 20 years or more. 25. We are not concerned with how many types of bitumen are in existence. We are only concerned with the property of the bitumen which is the main chemical used in rain guarding compound. The very process of rain guarding, as mentioned above, shows that a thin coating of a bitumen-based adhesive is smeared on the scraped portion of the trunk of the rubber tree. Then a frilled polythene skirt like material is put, which is covered with a kora cloth and then both kora cloth and polythene cover are stapled to keep it in the proper place and again another coating of adhesive is applied so as to keep the rain guard leak proof. As we understand from this literature, bitumen based compound is mainly used for the rain guarding of rubber trees, because of its high quality of adhesive nature. No doubt, water proofing quality is also one of the properties of the product, but, the fact that, it is used belo....
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....s not used, where actually rubber is tapped, but it is used at a place, normally 15 cms. above the place where the rubber is tapped. It is used only at the place where the rain guard, i.e., polythene and kora material is affixed by scrapping a portion of the trunk. If the property has to be used as a water proof to prevent fungicide or infection, essentially it has to be used at the place where the rubber is tapped, because that place is exposed to the atmosphere and moisture in the atmosphere can definitely attract not only the fungus but also other insects. If this has to be used as a water proof, then there is no use of polythene and kora cl to affix the polythene material to the rubber plant as such. Therefore, the entire process, what we understand from the literature and also how the product is marketed, would only indicate, that it is marketed as a strong adhesive compound rather than anything else. Therefore, the predominant use of the product would come into play and one has to go by the predominant use of the product rather than other incidental uses of the product in question. In none of the literature, it refers the user of the product as a plant protector, though, at s....
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....e in which they are understood in the trade by the dealer and the consumer. Reason is that it is they who are concerned with it, and it is the sense in which they understand it which constitutes the definitive index of legislative intention. Similar test is applied for determining when manufacture takes place or in other words whether an article after subjecting it to processing becomes a different article or remains the same. Question to be asked in such cases is : 'How is the product identified by the class or section of people dealing with or using the product? It is generally by its functional character that the product is so identified'. If a word has acquired a particular meaning in the trade or commercial circles that meaning becomes the popular meaning in the context and should normally be accepted." We also refer to Deputy Commissioner v. Western India Plywoods (P) Ltd. [1980] 46 STC 331 (Ker) ; [1980] KLT 592 (paragraph 5) what exactly the predominant user of a product means and how it has to be understood, which reads as under (page 334 in 46 STC):- "Once it is found that the commodity which forms the subject-matter of the transaction of sal....