ASSOCIATED CEMENT CO. LTD. versus STATE OF M.P. AND ORS.

Citation: [2004] SUPP. 2 S.C.R. 176 · Decided: 05-05-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU
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Judgment (excerpt)

A 
ASSOCIATED CEMENT CO. LTD. 
v. 
ST ATE OF M.P. AND ORS. 
MAY 5, 2004 
B 
[RAJENDRA BABU, CJ. AND G.P. MATHUR, J.) 
Municipal Corporations : 
Export tax levied by Municipal Corporation-Levy on 'all types of 
C cement '-Held : Refractory cement is different from cement and is used 
for entirely dijjerent purpose-It is not known as cement in cammon 
parlance and hence not exigible to export tax-Taxation. 
Interpretation of statutes-Fiscal statutes-While interpreting items 
D In statutes like Sales Tax Acts, popular or commercial meaning of the term 
to be resorted to and not the scientific or technical meaning. 
The question which arose for consideration in this appeal· is 
whether refractory cement manufactured by appellant is cement so as 
E to attract liability of export tax levied by the Municipal Corporation. 
Allowing the appeal, the Court 
HELD : 1. Refractory cement manufactured by the appellant.is 
F l)ot cement and hence not liable to export tax. 
2.1. It is well settled that while interpreting items in statutes like 
Sales Tax Acts, resort should be had not to be scientific or the technical 
meaning of such terms but to their popular meaning or the meaning 
attached to them by those dealing in them, that is to say, to their 
G commercial sense. Cement is exclusively used as a building material and 
is a commodity of everyday use. Therefore, it has to be construed only 
by the popular or commercial meaning of the term. (184-A, B; 185-A) 
2.2. The main property of refractory cement is that it can 
H withstand very high temperature, corrosion and abrasion. Anyone 
176 
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ASSOCIATED-CEMENT CO. LTD. v. STATE [G.P. MATHUR, J.] 
177 
buying cement for building purpose would under no circumstance buy A 
refractory. Similarly a mason or a supervisor would under no 
circumstance us~ refractory material in making a normal construction. 
The refractory material is used for entirely different purpose namely 
for furnaces, linings and for insulation. A dealer would not supply 
refractory to anyone wanting to buy cement. Therefore, refractory B 
material produced by the appellant does not fall within the Entry 'all 
types of cement' and consequently it is not exigible to levy of export 
tax. (185-B-D) 
Commissioner of Sales Tax v. Mis. Jaswant Singh, AIR (1967) SC C 
1454; Minerals and Metals Trading Corporation of India v. Union of India 
& Ors., (1972) 2 SCC 620; Royal Hatcheries Pvt. Ltd. v. State of A.P. & 
Ors., (1994) Supp. 1SCC429; Dunlop India Ltd. v. Union of India, (1976) 
2 SCC 241 and Indian Company Ltd. v. Collector of Central Excise, 
(1994) 6 sec 610, relied on. 
Cementa Corporation Ltd. v. Collector of Central Excise, (2002) 8 
sec 139, referred to. 
CIVIL APPELLATE JURISDICTION. Civil Appeal No. 7188 of 
D 
1997. 
E: 
From the Judgment and Order dated 21.4.1997 of the Madhya 
Pradesh High Court in L.P.A. No. 205 of 1996. 
WITH 
C.A. No. 2992 of 2004. 
T.R. Andhyarujina, Anoop, G. Choudhry, Rajiv Shakdher, U.A. 
F 
Rana, Sadeep Khare!, Ashok Kumar Gupta, Faruukh Rasheed, Sakesh 
Kumar and Satish K. Agnihotri for the appearing parties. 
G 
The Judgment of the Court was delivered by 
G.P. MATHUR, J.: I. Leave granted in SLP (c) No. 1186 of2000 
(Municipal Corporation Katni v. Mis. Associated Cement Co. Ltd.). 
H 
178 
SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R. 
A 
2. Civil appeal no. 7188 of 1997 has been preferred against the 
judgment and order dated 21.4.1997 of a Division Bench of Madhya 
Pradesh High Court deciding the issue relating to levy of export tax on 
certain products manufactured by M/s. Associated Cement Co. Ltd. 
B 
3. By a resolution published in M.P. Gazette dated 25.10.1991, the 
c 
D 
E 
F 
Municipal Corporation, Katni levied tax on export of goods from within 
the area of Municipal Corporation. Entry Nos. i and 2 in the Schedule 
appended to the Notification read as under:-
SCHEDULE 
S. No. 
Name of Article 
Tax Proposed 
(I) 
(2) 
(3) 
I. 
All types of Cement 
Y,% of the cost of the 
consignment 
2. 
Materials made of cement 
I% of the cost of article 
4. The appellants Associated Cement Co. Ltd. filed writ petition 
challenging the levy of export tax on refractory cement and Acco Proof 
basiClally on the ground that they were not covered by the Schedule as they 
were not cement. The writ petition was dismissed by a learned Single Judge 
but the Letters Patent Appeal was party allowed by a Division Bench and 
it was held that refractory cement is a1 cement so as to attract liabi
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