LexCOMMISSIONER OF CENTRAL EXCISE, NEW DELHI versus M/S. CONNAUGHT PLAZA RESTAURANT (P) LTD., NEW DELHI
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[2012) 11 S.C.R. 365 COMMISSIONER OF CENTRAL EXCISE, NEW DELHI v. MIS. CONNAUGHT PLAZA RESTAURANT (P) LTD., NEW DELHI (Civil Appeal Nos.5307-5308 of 2003) NOVEMBER 27, 2012 [D.K. JAIN AND JAGDISH SINGH KHEHAR, JJ.] A B Central Excise and Tariff Act, 1985 - Chapter 21, Heading 21.05 - "Soft serve" - Classification - Term "ice- C cream" under heading 21.05 - Common parlance test - Applicability of- Whether 'soft serve' served at the restaurants/ outlets commonly and popularly known as McDonalds, is classifiable under heading 21.05 (as claimed by the revenue) or under heading 04.04 or 2108.91 (as claimed by the D assesseeJ - Held: Headings 04.04 and 21.05 are couched in non-technical terms - Neither the headings nor the chapter notes/section notes explicitly define the entries in a scientific or technical sense - Further, there is no mention of any specifications in respect of either of the entries - In absence E of any statutory definition or technical description, no reason to deviate from application of the common parlance principle in construing the term "ice-cream" under heading 21.05 - The common parlance test operates on the standard of an average reasonable person who is not expected to be aware F of technical details relating to the goods - Such a person would enter the "McDonalds" outlet with the intention of simply having an "ice-cream" or a 'softy ice-cream', oblivious of its technical composition - Mere semantics cannot change the nature of a product in terms of how it is perceived by persons G in the market, when the issue at hand is one of excise classification - Fiscal statutes are framed at a point of time and meant to apply for significant periods of time thereafter; they cannot be expected to keep up with nuances and niceties 365 H 366 SUPREME COURT REPORTS [2012] 11 S.C.R. A of the gastronomical world - Plea of assessee that the term"ice-cream" under heading 21.05 ought to be understood in light of the standards provided in the PFA cannot be accepted - The provisions of PFA are for ensuring quality control and are not a standard for interpreting goods B mentioned in the Tariff Act, the purpose and object of which is completely different - Besides, trade Notice of Mumbai Commissionerate a/so indicated the commercial understanding of 'soft-serve' as 'softy ice-cream' - Tribunal, thus, erred in classifying 'soft-serve' under tariff sub-heading c 2108.91 - The 'soft serve' marketed by the assessee, during the relevant period, is to be classified under tariff sub-heading 2105.00 as "ice-cream" - Interpretation of statutes - Taxing statutes. The question for consideration in the instant appeals, D filed by the revenue, under Section 35L of the Central Excise Act, 1944 was whether 'soft serve' served at the restaurants/outlets commonly and popularly known as McDonalds, is classifiable under heading 21.05 (as claimed by the revenue) or under heading 04.04 or E 2108.91 (as claimed by the assessee) of the Central Excise and Tariff Act, 1985. Whereas heading 21.05 refers to "ice-cream and other edible ice", heading 04.04 is applicable to "other F dairy produce; or edible products of animal origin which are not specified or included elsewhere" and heading 2108.91 is a residuary entry applicable to "edible preparations, not elsewhere specified or included" and "not bearing a brand name". G The case of the assessee is that "soft serve" is a H product distinct and separate from "ice-cream" since the world over "ice-cream" is commonly understood to have milk fat content above 8% whereas 'soft serve' does not contain more than 5% of milk fat; it cannot be considered COMMNR. OF CENTRAL EXCISE, NEW DELHI v. 367 CONNAUGHT PLAZA REST. (P) LTD., N.D. as "ice-cream" by common parlance understanding A since it is marketed by the assessee the world over as 'soft serve'; "ice-cream" should be understood in its scientific and technical sense; and hence, for these reasons, 'soft serve' is to be classified under heading 04.04 as "other dairy produce" and not under heading B 21.05. On the other hand, the Revenue claims that "ice- cream" has not been defined under heading 21.05 or in any of the chapter notes of Chapter 21; that 'soft serve' C is known as "ice-cream" in common parlance; and hence, it must be classified in the category of "ice-cream" under heading 21.05 of the Tariff Act. Allowing the appeals, the Court HELD: 1.1. Ac
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