Customs Tariff Act, 1975 – Dispute regarding classification of dried pomegranate seeds/‘anardana’ in tariff entries under Heading 0813 as claimed by the Customs Authorities or under Heading 1209 as claimed by the Respondents/importers – Respondents imported two consignments of ‘anardana’ from Pakistan and they classified the goods under the tariff sub-heading 1209.99.90 which attracts basic custom duty at the rate of 5% plus education cess at the rate of 2% – However, according to Customs Authorities the goods falls under sub- heading 0813.40.90 which attracts basic customs duty at the rate of 30% plus education cess at the rate of 2% – Adjudicating authority confirmed the differential duty and imposed a personal penalty on the Respondent along with interest – First appeal preferred by the Respondents were allowed by the Commissioner (Appeals) opining that the Heading 0810 applies to the type of pomegranate which is consumed as a fruit and on the other hand, goods/‘anardana’ were the dried form of a type of pomegranate which, when fresh, is not consumed as a fruit, therefore heading 0810 would have no relevance to the type of pomegranate from which the goods are obtained – Aggrieved, the Revenue preferred appeals before the CESTAT – Appeal was dismissed observing that in Explanatory Notes to the Heading 1209, the goods did not fall in the list of items expressly excluded from sub-heading 1209.99.09, they very well stood included in the subheading 1209.99.90 and therefore, sub-heading 0813.40.90 was not applicable – Further, words in a taxing statute must be construed in the same sense as understood in common or trade parlance, and the Revenue had failed to lead any evidence to support its contention that in trade parlance, the goods are understood as dried fruits – On appeal, held: Once the finding of fact recorded by the CESTAT is accepted that ‘anardana’ is a dried product of local ‘daru’ or wild pomegranate, which grows in mid hill conditions and which fruit in its fresh form is different from the pomegranate included in clause 7 to Heading 08.10, as this wild pomegranate is not consumed as a fresh fruit, the contention of the Revenue must fail – Classification arrived by CESTAT upheld.
Interpretation of Statutes – Principle of Common Parlance/Common Parlance test – When a word is not explicitly defined, or there is ambiguity as to its meaning, it must be interpreted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with – It is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker – However, the above rule is subject to certain exceptions, for example, when there is an artificial definition or special meaning attached to the word in a statute, then the ordinary sense approach would not be applicable.
Words and Phrases – Meaning of the word ‘edible’ – Derived from the latin word ‘edibilis’ which means eatable - must be construed using the principle of common parlance test
Words and Phrases – Meaning of the word ‘seed’ – In common parlance and in commercial sense means the grains or ripened ovules of plants using for sowing- ‘anardana’ is prepared by dehydrating the arils of wild pomegranates and not from the pomegranate which is eaten as a fresh fruit. Dismissing the appeals, the Court
HELD: 1.1. The word ‘seed’ in common parlance and in commercial sense means the grains or ripened ovules of plants used for sowing. The normal function of a seed is to germinate and produce a new plant. Broadly, a seed includes a propagative structure such as a spore, or a small dry fruit. Some fruit and vegetable seeds are edible and are used by human beings as food or even as condiments.[Para 24][170-D-E] 1.2.The Court observed that once the finding of fact recorded by the CESTAT is accepted that ‘anardana’ is a dried product of local ‘daru’ or wild pomegranate, which grows in mid hill conditions and which fruit in its fresh form is different from the pomegranate included in clause 7 to Heading 08.10, as this wild pomegranate is not consumed as a fresh fruit, the contention of the Revenue must fail. The contention of the Revenue that the Import Policy is in the nature of delegated legislation albeit correct, would not make any difference in the context of the present case as the policy condition in the Export/Import Policy specifically includes pomegranate seeds – as ‘anardana’ under sub-heading 1209.99.00, whereas the Schedule to the Customs Tariff Act, 1975 merely reproduces the Heading and the subheading of the HSN, without specifically including or excluding pomegranate seeds under the sub-heading 1209.99. [Para 25][170-F-G; 171-B-D]
1.3. The submission of the Respondent is correct that when the Revenue challenges the classification made by the assessees, the onus is on the Revenue to establish that the item in question falls intaxing category as claimed by them.The burden is on the Revenue to adduce proper evidence to show that the goods are classifiable under a different heading than that claimed by the assessee. The finding of fact as recorded by CESTAT gets reinforced by the policy condition attached to the sub-heading 1209.99.00 of the Import Policy which specifically states - ‘import of pomegranate seeds will be free’. Without any doubt, sub-heading 1209.99.00 in the Import Policy correlates to sub-heading 1209.99 to Chapter 12 of the HSN. [Para 25][170-H; 171-A-B]
1.4. As a postscript, it is also worth mentioning that pomegranate seeds are one of the items notified and recognised as a ‘spice’ under the schedule of the Spices Board Act, 1986. Section 2(n) of this Act states that a ‘spice’ means any of the items specified in the schedule. [Para 27][171-F; 172-A]
1.5. The Revenue, it may be advisable, should take a considered policy decision after examining the data and ascertaining the views of the trade associations on classification of ‘anardana’ or by fixing a specific customs duty. Till the said exercise is undertaken, the classification as determined by the CESTAT may be continued to avoid confusion and litigation. [Para 27][172-C]
Dunlop India Ltd. v. Union of Indian and Ors. (1976) 2 SCC 241 : [1976] 2 SCR 98, Commissioner of Central Excise, New Delhi v. Connaught Plaza Restaurant Private Ltd., New Delhi (2012) 13 SCC 639 : [2012] 11 SCR 365, Collector of Central Excise, Kanpur v. Krishna Carbon Paper Company, (1989) 1 SCC 150: [1988] 3 Suppl. SCR 12, HPL Chemicals Ltd. v. Commissioner of Central Excise, Chandigarh (2006) 5 SCC 208 : [2006] 1 Suppl. SCR 125, Parle Agro Pvt. Ltd. v. Commissioner of Commercial Taxes, Trivandrum (2017) 7 SCC 540 : [2017] 5 SCR 30, Union of India & Ors. v. Garware Nylons Ltd. & Ors. (1996) 10 SCC
413 : [1996]5 Suppl. SCR 629- referred to.
Ben Baumgartner. “Chewing it Over: Determining the Meaning of Edible In the Harmonized Tariff Schedule of the United States”, Kansas Law Review, Kansas Law Review Inc. November, 2015: vol. 64(1), J. S. Pruthi and A. K. Saxena. “Studies on Anardana”, Journal of Food Science and Technology, September/October, 1984 : vol. 21, Amit Prashar, S. K. Gupta and Ashok Kumar. “Studies on separation techniques of
pomegranate seeds and their effect on quality of Anardana”, African Journal of Biochemistry Research, October,, Abhimanyu Thakur, N. S. Thakur, Hamid, Pradeep Kumar and Sunakshi Gautam. “Studies on Storage Quality Evaluation of Dried Wild Pomegranate Arils (Anardana) Prepared in Mechanical Cabinet Drier”. International Research Journal of Pure & Applied Chemistry, August, 2020 : vol. 21 (11) - referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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