COMMISSIONER OF COMMERCIAL TAX, U.P.versusM/S. A.R. THERMOSETS (PVT.) LTD.

                            [2016] 4 S.C.R. 724



A           COMMISSIONER OF COMMERCIAL TAX, U.P.
                                      v.
                  MIS. A.R. THERMOSETS (PVT.) LTD.
                       (Civil Appeal No. 2650 of2016)
B                          SEPTEMBER 06, 2016
           [DIPAK MISRA AND PRAFULLA C. PANT, JJ.)
         VAT Act, 2008:
          Schedule II; Part A Serial no.22 - Bitumen emulsion - Whether
c   ··bitumen emulsion" is covered within Entry 22 of Schedule II which
    only refers to "bitumen" - Held: Bitumen emulsion comes into
    existence when bitumen is treated with emulsifiers and other
    chemicals to attain a liquid form - Bitumen consi~ts offour forms
    of variants, namely, solid bitumen, polymer bitumen, crumbier rubber
    modified bitumen and bitumen emulsion - Entry 22 does not exclude
D
    or specifY that it would not include bitumen of all types and varieties
    - Entry in question uses the word •'bitumen" without any further
    stipulation or qualification - Therefore, it would include any product
    which shares the composition identity, and in common and
    commercial parlance is treated as bitumen and can be used as
E   bitumen - When applying the three tests, namely, identity, common
    parlance and end use to the goods and the Entry in question, bitumen
    emulsion would be covered by the Entry bitumen - U.P. Trade Tax
    Act, 1948 - s.11.
          Classification of goods - Matching of the goods with the Entry
F   or Entries in the Schedules is tested on the basis of identity of the
    goods in question with the Entry or the contesting entries and by
    applying the common parlance test, i.e., whether the goods as
    understood in commercial or business parlance are identical or
    similar to the description of the Entry.
G        Dismissing the appeal, the Court
         HELD: 1.1 Bitumen emulsion, as per Indian standards ICS
    293.08.0.20 published by the Bureau of Indian Standards is a
    destruction of very fine particles in an aqueous medium.
    According to report dated 11.4.2008 of Harcourt Butler
H   Technological Institute, Kanpur, when a state of liquefaction is
                                   724
  COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R.                     725
             THERMOSETS (PVT.) LTD.

achieved and the same is constant for a longer period, it can be        A
used under diverse moisturic conditions and has a very wide range
of applications such as surface dressing of low volume roads,
curing purposes base for high volume roads, surface dressing,
tack coat, premix carpets, soil stabilization, etc. [Paras 13, 17]
[732-C-D; 733-D-E]
                                                                         B
      1.2 A reading of the definitions and the scientific text of
bitumen and bitumen emulsion clearly reveal that bitumen in its
original form is solid but melts when heated, for it is used in
molten stage. Bitumen emulsion comes into existence when
bitumen is treated with emulsifiers and other chemicals to attain
a liquid form. It has a huge advantage and add benefit because it        c
is not to be heated and detained in its liquid form and has better
stability and thus, saves time and cost components. That apart,
it ensures its use at the stage of application. It is comparatively
less hazardous. Bitumen consists of four forms of variants, namely,
solid bitumen, polymer bitumen, crumbier rubber modified                 D
bitumen and .bitumen emulsion. Entry 22 does not exclude or
specify that it would not include bitumen of all types and varieties.
 [Para 18] [734-A-D]
      2. Matching of the good with the Entry or Entries in the
Schedules is tested on the basis of identity of the goods in
question with the Entry or the contesting entries and by applying        E
the common parlance test, i.e., whether the goods as understood
in commercial or business parlance are identical or similar to the
description of the Entry. Where such similarity in popular sense
of meaning exists, the generic entity would be construed as
 including the goods .in question. Sometimes on certain                  F
circumstances the end use test, i.e., use of the good and its
comparison with the Entry is applied. The Entry in question uses
 the word "bitumen" without any further stipulation or qualification.
Therefore, it would include any product which shares the
 composition identity, and in common and commercial parlance is
 treated as bitumen and can be used as bitumen. When applying            G
 the three tests, namely, identity, common parlance and end use
 to the goods and the Entry in question, bitumen emulsion would
 be covered by the Entry bitumen. Bitumen emulsion matches
 the Entry as it is only one of the varieties of bitumen. Bitumen
 emulsion is processed bitumen, but the process has not changed          H
726            SUPREME COURT REPORTS                      [2016] 4 S.C.R.



A     its composition, commercial identity or its use. Bitumen emulsion
      is regarded and performs the same function as bitumen. As a
      result of processing, neither the primary character nor the
      composition is lost. Emulsification only eases and provides
      proficiency to the use of application of bitumen. Hence, in popular
      and commercial sense, bitumen emulsion is nothing but bitumen,
B
      which is in liquid form and is user friendly. In the present context,
      when the word "bitumen" has been used as a generic expression,
      it would be erroneous not to cover a product that is only a type or
      form of bitumen and retains all its essential characteristics, and
      treat it as covered by the residuary Entry by some kind of
c     ingenuous reasoning. Taking it outside the purview of the specific
      Entry is incorrect. (Paras 19, 20, 24) (734-F-H; 735-A-B; 736-E)
            State of Maharashtra v. Bradma of India Limited (2005)
            2 SCC 669; Collector of Central Excise, Shillong v.
            Wood Craft Products Ltd. 1995 (2) SCR 797 : (1995) 3
D           SCC 454; Hindustan Poles Corpn. v. Commissioner of
            Central Excise, Calcutta 2006 (3) SCR 461 : (2006) 4
            SCC 85; Commercial Taxes Officer v. Jalani Enterprises
            2011 (3) SCR 951 : (2011) 4 SCC 386; Collector of
            Customs and others v. Kumudam Publications (P)
            Limited and others (1998) 9 SCC 339; Indian Tool
 E          Manufacturers v. Asstt. Collector of Central Excise,
            Nasik and others 1994 (4) Suppl. SCR 1: (1994) Supp
            (3) SCC 632; Commissioner of Ce11tral Excise, Cochin
            v. Mannampalakkal Rubber Latex Works (2007) 217
            ELT 161 (SC) - relied on.
 F          Hindustan Aluminium Corporation Ltd. v. State of Uttar
            Pradesh and another 1982 (1) SCR 129 : (1981) 3
            sec 578 - held inapplicable.
            CST v. Ashok Grah Udyog Kendra Private Ltd. (2004)
            UPTC 1827; CST v. Bechu Ram Kishori Lal (1976) 36
 G          STC 236; Mis lndodan Milk Products v. Commissioner
            Sales Tax (1974) 33 STC 381; Commissioner of Central
            Excise, Bangalore v. Osnar Chemical Private Limited
            2012 (2) SCR 1035 : (2012) 2 SCC 282; Sonebhadra
            Fuels v. Commissioner, Trade Tax, U.P., Lucknow 2006
 H          (4) Suppl. SCR 213 : (2006) 7 SCC 322; N. Eswari v.
 COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R.                     727
            THERMOSETS (PVT.) LTD.

        K. Swarajya Lakshmi 2009 (14) SCR 500 : (2009) 9               A
        SCC 678; Allied Bitumen Complex (India) Private
        Limited v. Collector of Central Excise, Calcutta - 1
        (1997) 90 ELT 374 (Tri); SR Projects Limited v.
        Commissioner of Commercial Taxes (2013) 63 VST 49
        (Kar); MP. Agencies v. State of Kera/a 2015 (2)
                                                                        B
        SCR1061: (2015) 7 SCC 102 - referred to.
                       Case Law Reference
        (2004) UPTC 1827               referred to         Para 4
        (1976) 36 STC 236              relied on           Para 4
        (1974) 33 STC 381              referred to         Para 4
                                                                        c
        2012 (2) SCR 1035              referred to         Para 6
        2006 (4) Suppl. SCR 213        referred to         Para 8
        2009 (14) SCR 500              referred to         Para 8
        (2005) 2 sec 669               relied on           Para 22      D
        1995 (2) SCR 797               relied on           Para 22
        2006 (3) SCR 461               relied on           Para 22
        2011 (3) SCR 951               relied on           Para 23
        (1998) 9 sec 339               relied on           Para 25      E
        1994 (4) Suppl. SCR 1          relied on           Para 25
        (2007) 217 ELT 161 (SC)        relied on           Para 25
        1982 (1) SCR 129               held inapplicable Para 26
        (1997) 90 ELT 374 (Tribunal)   referred to         Para 27      F
        (2013) 63 VST 49 (Kar)         referred to         Para 27
        2015 (2 ) SCR 1061             referred to         Para 27
        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2650 of
2016.
                                                                        G
      From the Judgment and Order dated 30.08.2012 of the High Court
of Judicature at Allahabad in Commercial Tax Revision No. 1156 of
2009.
     Pawan Shree Agarwal, Abhinav Malik, Ravi Prakash Mehrotra,
Advs. for the Appellant.
                                                                        H
728            SUPREME COURT REPORTS                            [2016] 4 S.C.R.



A          Kavin Gulati, Sr. Adv., Avi Tandon, Rohit Sthalekar, Santosh K.
      Gupta, T. Mahipal, Advs. for the Respondent.
           The Judgment of the Court was delivered by
            DIPAK MISRA, J. I. In this appeal, by special leave, the
      Revenue has called in question the legal sustainability of the judgment
B     and order passed by the High Court of Judicature at Allahabad in
      Commercial Tax Revision no. 1156 of2009 preferred by the assessee-
      respondent under Section 11 of the U.P. Trade Tax Act, 1948 (for brevity,
      'the 1948 Act') read with Sections 81 and 58 of the VAT Act, 2008 (for
      short, 'the VAT Act') whereby the learned Single Judge has allowed the
c     revision negativing the stand put forth in opposition by the State to the
      stance highlighted by the assessee.
            2. The facts on which the controversy rests is in a narrow compass.
      The respondent manufactures "bitumen emulsion". It filed an application
      before the Commissioner, Commercial Taxes, Lucknow, U.P. under
D     Section 59 of the VAT Act seeking a clarification about the rate of tax
      applicable to the sales of bitumen emulsion. The Commissioner of
      Commercial Taxes, vi de order dated 23 .1.1999 opined that bitumen
      emulsion is an unclassified commodity and, therefore, is excisable to tax
      at the rate of 12.5% as it would fall under the residuary Entry.

 E          3. Being aggrieved by the order dated 23.1.1999, the respondent
      preferred Appeal No. 6 of2009 under the VAT Act before the Tribunal
      Commercial Taxes, U.P., Lucknow (for short 'the tribunal') which was
      heard by the Full Bench. It was contended before the tribunal by the
      assessee-appellant therein that bitumen as a commodity is taxed at 4%
      under Serial no. 22 Part A of Schedule II to the VAT Act and bitumen is
 F    found in solid state and to bring it in the liquid form, water is added to it
      and very little quantity is used in the process. Elaborating the said
      submission, it was urged that when bitumen is available in the liquid
      form, it is known as bitumen emulsion and is commonly known as bitumen
      when it is available in the solid form; and both the commodities are
 G    understood in the same manner in the commercial world and the end use
      is the same and, therefore, the rate of tax to be determined has to be the
      same as prescribed for bitumen.
           4. Be it stated, as per Notification No, ).00 dated 15.1.2000 issued
      under the erstwhile U.P. Trade Tax Act, 1948, bitumen was taxed at
      20%. Under the VAT Act, bitumen has been classified under Part A of
 H
    COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R.                        729
       THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.]

Schedule II and the tax leviable is 4%. Before the tribunal, the assessee- A
appellant produced reports from Harcourt Butler Technical Institute,
Kanpur to bolster the stand that there is no difference between the two
commodities and they are to be categorised as one item, if common
parlance test is applied. To buttress the submissions, the assessee relied
upon CST v. As/wk Gra/1 Udyog Kendra Private Ltd. 1, CST v. Bec/1u B
Ram Kislwri Lal', and Mis Indodan Milk Products v. Commissioner ·
Sales Tax3. The tribunal referred to one of its earlier decisions in appeal
no. 17 of2000 decided on 3.4.2009 and on the basis ofreasons ascribed
therein dismissed the revision.
    · 5. The dissatisfaction caused by the said adjudication, constrained
the assessee to approach the High Court in Commercial Tax Revision
                                                                              c
no. 1156 of2009. The High Court formulated the point in issue which
reads as follows:-
        "Whether the Bitumen and Bitumen Emulsion are one and the
        same commodity for the purposes of interpretation of Entry No.
        22 Schedule II Part A of the U.P. Value Added Tax Act, 2002 as        D
        was originaly enacted i.e. upto enforcement of notification no.
        2758 dated 29.9.2008?
      6. The learned Single Judge took note of the various technical
materials from the Government approved laboratory which had been
brought before the tribunal, and opined that the controversy had not          E
been appositely appreciated by the tribunal, for the materials clearly
establish that bitumen and bitumen emulsion is the same thing. The
High Court analysed the concept of end use, i.e. the end result of bitumen
emulsion and came to hold that bitumen emulsion makes the bitumen
easily usable in its emulsified form and both the items are used in the       F
construction of road, etc. It further opined that the identity, commercial
character and use of both the things are the same, though the tribunal,
despite having the material before it, proceeded to record findings
otherwise. That apart, the High Court took note of the decision of this
Court in Commissioner of Central Excise, Bangalore v. Osnar
Cllemical Private Limited 4 and ultimately ruled that it could not be         a·
said that mixing of some material would amount to manufacture unless it

I   (2004) UPTC I 827
2 (1976) 36 STC 236
3
  ( 1974) 33 STC 381
• (2012) 2 sec 282                                                            H
730                SUPREME COURT REPORTS                        [2016) 4 S.C.R.


A     results in a change when the commodity concerned cannot be recognised
      as an original commodity but rather new and distinct article emerges
      having different commercial use and identity. On the basis of the
      aforesaid analysis, the High Court allowed the revision and set aside the
      orders of the forums below.
B           7. We have heard Mr. Pawan Shree Agarwal, learned counsel for
      the appellant and Mr. Kavin Gulati, learned senior counsel along with
      Mr. Avi Tandon, learned counsel for the respondents.
            8. Criticising the view of the High Court, it is submitted by Mr.
      Agarwal that it has erred in opining that bitumen in its emulsified form
c     also remains bitume;:n. He has drawn inspiration from the language used
      in Section 2(t) of the VAT Act to structure the submission that in the
      process of conversion, manufacturing takes place. It is his further
      argument that the decision in Osnar Cllemical Private Limited (supra)
      is not applicable to the present controversy as the said decision was
      rendered in the context of the Central Excise Act, 1944 whereas the lis
D     herein hinges on the definition of manufacturing. For the said purpose,
      he has relied upon the authority in Sonebltadra Fuels v. Commissioner,
      Trade Tax, U.P., Lucknow>. Learned counsel for the Revenue contends
      that when the view expressed by the lower authorities is neither perverse
      nor arbitrary, the High Court in exercise ofits revisionaljurisdiction should
 E    not have interfered with the findings and for the said purpose he has
      commended us to the authority in N. Eswari v. K. Swarajya Laks/1m1'6.
      Mr. Agarwal has canvassed that the intention of the legislature, as is
      manifest, is to charge a particular rate of tax on bitumen and it remotely
      does not conceive of bitumen emulsion and the Court should not enlarge
      the scope oflegislation or the intention ofit by adding a word to the term
 F    in the statute, which is not permissible, for a taxing statute has to be
      understood what is clearly stated therein and not what is intended to be
      said.
            9. Mr. Gulati, learned senior counsel appearing forthe assessee in
      support of the view expressed by the High Court would contend that
G     four principles relating to interpretation of entries and taxing statute are
      required to be considered in the present case. According to Mr. Gulati,
      they are(a) plain meaning to be given to the taxing provision; (b) burden
      to prove classification in a particular Entry is always on the Revenue;
      s (2006) 1   sec 322
H     • (2009) 9   sec 678
  COMMISSIONER OF COMMERCIAL TAX, U.P. v. M/S. A.R.                           731
     THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.]

(c) any ambiguity has to be resolved in favour of the assessee; and (d)        A
resort to residuary Entry is to be taken as a last measure. He would put
forth that in the instant case, the Revenue, prior to taxing the respondent
under the residuary Entry, did not place any evidence before the
Commissioner or the tribunal to show that the emulsified bitumen is not
covered by the expression bitumen as found in Entry 22 of Part A of
                                                                               B
Schedule II to the VAT Act. It is urged by him, whether the activity of
mixing water with bitumen amounts to manufacture under Section 2(t)
of the VAT Act is wholly irrelevant for deciding the issue at hand. It is,
according to Mr. Gulati, where goods are purchased on paying tax and
process thereafter is undertaken, a question often arises as to whether
such process amounts to manufacture or not, and if it amounts to               c
manufacture, then it would enable the department to levy tax again as
the commodity in different, a new one, for the purposes of this Act and ·
the tax can be imposed as a single point levy again, but in the case at
hand, that is not the situation. Learned senior counsel further submits
that every process involved in the manufacture of a commodity does not
                                                                               D
relate to manufacture of a new product as the end product continues to
retain the character of the original product. According to him, solely
because some process has been carried out, it cannot be held that a new
product has come into existence. Expatriating the said submission, it is
put forth that the process of heating on high degree temperature and
then adding water to it to obtain emulsified bitumen does not alter the        E
basic nature of bitumen but only brings a change in physical appearance
of the product. He has heavily relied on Osnar Chemical Private
Limited (supra) to highlight that bitumen would include bitumen emulsion.
      10. The principal controversy, as we perceive, is "whether "bitumen
emulsion" is covered within Entry 22 of Schedule II of the VAT Act             F
which only refers to "bitumen"". According to Academic Press
Dictionary of Science and Technology, "bitumen" means:-
      "Bitumen Geol.ogy and naturally occurring flammable substance
      mainly of a mixture of hydrocarbons such as petroleum or asphalt.
      Materials I. Originally, a type of asphalt occurring naturally in        G
      Asia Minor. 2. Any similar black, sticky mixture of hydrocarbons
      occurring naturally or pyrolytically in the atmosphere and
      completely soluble in carbon disulfide: obtained mainly from natural
      oxidized petroleum products or from a petroleum distillation
      process."
                                                                               H
732            SUPREME COURT REPORTS                             [2016) 4 S.C.R.


 A         11. The McGraw-Hill Concise Encyclopedia of Science &
      Technology (Third Edition) defines "bitumen" as under:-
            " Bitumen A term used to designate naturally occurring or
            pyrolytically obtained substances of dark to black color consisting
            almost entirely of carbon and hydrogen with very little oxygen,
 B          nitrogen, and sulphur. Bitumen may be of variable hardness and
            volatility, ranging from crude oil to asphaltites and is largely soluble
            in carbon disulfifde."
            12. The above definitions when appreciated clearly show that
      they expressively define the word "bitumen" as a commodity and explain
 c    its chemical composition, colour or appearance and qualities and the
      process by which it comes into existence.
            13. Bitumen emulsion, as per Indian standards JCS 293.08.0.20
      published by the Bureau oflndian Standards is a destruction of very fine
      particles in an aqueous medium. Harcourt Butler Technological Institute,
 D    Kanpur, in its report dated 11.4.2008 states that:-
            "The components derived from fractional distillation of petroleum,
            at various temperature levies, are (I) Gas (II) Naphtha, (III)
            Kerosene, (IV) Diesel and lubricating oil, (V) Bitumen and furnace
            oil, and (VI) residue. This bitumen is known as penetration grade
 E          bitumen because, the specification, by which it is designated, is
            obtained from the penetration test. There could be two other
            forms of Bitumen: Namely (I) Emulsion and (II) Cutback. In the
            emulsion, bitumen is in the suspension from as small globules in
            water, whereas in cutback, the bitumen is dissolved in suitable
            solvent. In bituminous construction, the choice between penetration
' F         grade bitumen and the bitumen emulsion is made depending upon
            the factors like, weather conditions, availability, economy and
            available construction time."
            14. The said report discussing about its composition explicates:-
            "Bitumen is basically a hydrocarbon with I0% by weight of atoms
 G
            of sulphur, nitrogen and oxygen, attached to hydrocarbon
            molecules. The carbon content in bitumen is 80-87%. Three
            basic components of bitumen are (I) asphaltene, (II) maltene and
            (III) carbine. The chemical bonds in bitumen are weak and break
            when heat is applied. When it is cooled, it comes back to its
 H          original structure, but not necessarily the same as before."
      COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R.                       733
         THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.]

          15. The said report has further proceeded to state that emulsion is A
    a two phase system consisting of two immiscible liquids, one being _ -       _...~_




    dispersed as finite globules in the other. In bitumen emulsion, bitumen
    globules are suspended as emulsion in water with the help of emulsifiers,
    which are used to stabilize the emulsion. Emulsifiers break into ions and
    charge the bitumen particles. Charged particles repel each other and
                                                                                    B
    the suspension remains stable and this stability remains as long as water
    does not evaporate, freeze or emulsifier does not break.
          16. About the characterization of the bitumen, report states:-
           "Bitumen materials have certain characteristics such as (I)
           waterproofing (II) durability, (III) resistance to strong acids and
           (IV) cementing properties. At normal temperature, bitumen is c
           semi-solid and takes time to flow. At higher temperatures, it .
            behaves like a viscous liquid, whereas at very low temperature, is
            brittle as glass. Bitumen is believed to behave 'viscoelastically' at
           the standard operating temperature at highways."
           17. According to the report when a state ofliquefaction is achieved D
    and the same is constant for a longer period, it can be used under diverse
    moisturic conditions and has a very wide range of applications such as
    surface dressing of low volume roads, curing purposes base for high
    volume roads, surface dressing, tack coat, premix carpets, soil stabilization,
    etc. The report has clearly stated that the use of bitumen is because of
    its characteristics which includes cementing properties. Be it noted, the E
    use of both bitumen and bitumen emulsion is similar, that is, surface
    dressing, tack coat, premix carpets, soil stabilization, etc. The concluding
    remarks of the report is extracted below:-
            "Bitumen and Emulsion are two forms of bituminous binders which
            serve some common purposes in road construction and F
            maintenance. Bitumen and emulsion are selected for various
            applications depending upon some parameters like weather
            conditions, availability of material, economic aspects and availability
            of construction time. Bitumen needs preheating whereas emulsion
            is ready to use. It has been observed from previous studies that
                                                                                    G
            the physical properties of the emulsion after natural sun drying
            are almost similar to that of bitumen as the water present. In the
            binder evaporates and makes the matrix harder as obtained with
            the bitumen. It may, therefore, be concluded that bitumen and
            emulsion may be treated at par as far as their significance for
            application. In their respective area is concerned."                    H


!
734             SUPREME COURT REPORTS                           [2016] 4 S.C.R.


A            18. A reading of the aforesaid definitions and the scientific text
      clearly reveal that bitumen in its original form is solid but melts when
      heated, for it is used in molten stage. There is no difficulty to appreciate
      that bitumen emulsion comes into existence when bitumen is treated
      with emulsifiers and other chemicals to attain a liquid form. It has a
      huge advantage and add benefit because it is not to be heated and detained
B
      in its liquid form and has better stability and thus, saves time and cost
      components. That apart, it ensures its use at the stage of application.
      Needless to say it is comparatively less hazardous. Bitumen consists of
      four forms of variants, namely, solid bitumen, polymer bitumen, crumbier
      rubber modified bitumen and bitumen emulsion. The stand of the Revenue
c     is that the word "bitumen" must be conferred a narrow meaning for the
      reason that the legislature has not thought it appropriate to use the prefix
      or suffix like "all", in all forms or of all kinds. It may be immediately
      clarified that bitumen is a generic expression which would include
      different types of bitumen. Revenue, however, as stated earlier, intends
      to apply it restrictively. The said submission has a fundamental fallacy.
D
      Entry 22 does not exclude or specify that it would not include bitumen of
      all types and varieties. This is not the principle or precept applied to
      interpret the entries under the Schedule of the Act. We will be deliberating.
      in detail on the said aspect at a later stage. Prior to that, we would like
      to advert to certain other aspects.
E            19. At the very inception, we think it absolutely seemly to state
      that the nature and composition of the product or the good and the
      particular entity in the classification table is important. Matching of the
      good with the Entry or Entries in the Schedules is tested on the basis of
      identity of the goods in question with the Entry or the contesting entries
F     and by applying the common parlance test, i.e., whether the goods as
      understood in commercial or business parlance are identical or similar to
      the description of the Entry. Where such similarity in popular sense of
      meaning exists, the generic entity would be construed as including the
      goods in question. Sometimes on certain circumstances the end use
      test, i.e., use of the good and its comparison with the Entry is applied.
 G
            20. The Entry in question uses the word "bitumen" without any
      further stipulation or qualification. Therefore, it would, in our opinion,
      include any product which shares the composition identity, and in common
      and commercial parlance is treated as bitumen and can be used as
        COMMISSIONER OF COMMERCIAL TAX, U.P. v. MIS. A.R.                   735
           THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.]

parlance and end use to the goods and the Entry in question, bitumen A
emulsion would be covered by the Entry bitumen. It is worthy to note
that bitumen emulsion matches the Entry as it is only one of the varieties
of bitumen. Bitumen emulsion is processed bitumen, but the process
has not changed its composition, commercial identity or its use. Bitumen
emulsion is regarded and performs the same function as bitumen. As a
                                                                               B
result of processing, neither the primary character nor the composition
is lost. Emulsification only eases and provides proficiency to the use of
application ofbitumen. Hence, in popular and commercial sense, bitumen
emulsion is nothing but bitumen, which is in liquid form and is user friendly.
        21. It is perceivable that the legislature has used the word
"bitumen" and treated it as a separate entity. As we notice, it has not c
indicated that this was done with the intention and purpose to exclude
some type or variety of bitumen. All bitumen products, which share and
have common composition and commercial entity, and meet the popular
parlance test, is, therefore, meant to be covered by the said Entry. In the
instant case, even the end use test is satisfied. There is nothing in the D
Entry to suggest and show that the Entry is required to be given a
restrictive and a narrow meaning.
        22. In this regard, another aspect needs to be noted. The Revenue
does not rely upon another Entry under which bitumen emulsion can be
taxed. The Revenue relies upon the residuary Entry which would only
include goods, which cannot be covered under any other Entry in the E
schedule on application of the three-fold criteria. In the State of
Maharashtra v. Bradma of India Limitetl', the Court had observed
that the general principle is that specific Entry would override a general
Entry. Referring to the decisions in the case of Collector of Central
Excise, Shillong v. Wood Craft Products Ltd. 8, it has been ruled that F
resort can be made to a residuary heading only when by liberal construction
the specific Entry cannot cover the goods in question. Referring to
Entry No. 90 in the said case, which covered tabulating, calculating,
cash registering, indexing and data processing, etc, other than computer
machines, it was held that the words did not contain words off imitation
and would cover every species of cash registering machines, irrespective G
 oftheir mode of operation. In the absence of any limitation or qualification
 as to the different kind of cash registering machines, there was no reason
 for such qualification and limit the Entry to a particular kind of cash
1
    ,   2005) 2 sec 669
736             SUPREME COURT REPORTS                          (2016] 4 S.C.R.



A     registering machine. However, computers had been specifically excluded
      and were separately dealt with in Entry 97(a). The assessee, who was
      manufacturing electronic cash registers would, therefore, be covered by
      Entry 90 and not by the Entry relating to computers. A similar opinion
      has been expressed in Hindustan Poles Corpn. v. Commissioner of
      Central Excise, Calcutta 9 stating that residuary Entry is made to cover
B
      only those category of goods which clearly fall outside the ambit of the
      main Entry. The opinion proceeds further to state that unless the Revenue
      can establish that the goods in question can by no conceivable process
      of reasoning be brought under any of the tariff items, resort cannot be
      made to the residuary Entry.
c           23. In this context, reference to the authority in Commercial Taxes
      Officer v. Jalani Enterprises 10 would be profitable. While dealing with
      the question of sales tax/VAT under the Rajasthan Sales Tax Act, it was
      held that if from records it was established that the product in question
      could be brought under a specific Entry, then there was no reason to
D     take resot1 to the residuary Entry. Revenue cannot be permitted to
      travel to the residuary Entry when a product can be covered under a
      specific Entry.
            24. In the present context, when the word "bitumen" has been
      used as a generic expression, it would be erroneous not to cover a product
      that is only a type or form of bitumen and retains all its essential
E
      characteristics, and treat it as covered by the residuary Entry by some
      kind ofingenuous reasoning. Taking it outside the purview of the specific
      Entry is incorrect.
          25. At this juncture, we may refer to certain pronouncements
      commended to us by the learned counsel for the appellant. In Collector
 F    of Customs and others v. Kumudam Publications (P) Limited and
      otlters 11 , while adverting to the issue of classification it has been held
      that it would not be correct to say that in no case can the end use or
      function of the goods be relevant in the question of classification, as was
      held in Indian Tool Manufacturers v. Asstt. Collector of Central
 G    Excise, Nasik and otlters 1 ~. The decision in Commissioner of Central
      Excise, Cochin v. Mannampa/akkal Rubber Latex Works 13
       • (2006) 4 sec 85
      10
         (2011) 4 sec 386
         ( 1998) 9 sec 339
      11
      12 (1994) Supp (3) sec 632

H     13 (2007) 217 ELT 161 (SC)
  COMMISSIONER OF COMMERCIAL TAX, U.P. v. M/S. A.R.                                 737
     THERMOSETS (PVT.) LTD. [DIPAK MISRA, J.]

emphasizes and holds that in the matters of classification, "composition            A
test" is important test and the "end user test" would only apply if the
Entry says so. We have referred to the aforesaid authorities for sake of
completeness only because we have applied the "composition test" as
well as the "commercial or common parlance" test in addition to the
"end use test".
                                                                                    B
      26. Reliance placed by the Revenue on the decision in the case of
Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh
and another'', is of no assistance, for in the context of the particular
notification it was held that aluminium ingots, billet, roll products, extrusion,
etc. would not be covered by the exemption, which was granted to all
kinds of minerals, ore, metals or alloys, including sheets and circles used          c
in the manufacture ofbrasswares and scraps. In this context, referring
to Section 3Aofthe U.P. Sales Tax Act and the notification as applicable,
it was held that the earlier notifications issued from time to time would
show that the expression "metal" had been employed with reference to
metal in its primary sense. The principle laid down in the said authority           D
is in the context in issue and is based upon the schematic arrangement
indicated and specified in the notification under consideration therein.
That apart, the said decision also emphasizes that a word describing a
commodity in a sales tax statute should be interpreted according to its
popular sense and words of everyday use must be construed not in their
scientific or technical sense, but as understood in common parlance.                 E

     27. We have also been commended to a judgment of the Customs,
Excise and Service Tax Appellate Tribunal in Allied Bitumen Complex
(India) Private Limited v. Collector of Central Excise, Calcutta -
1' 5, which holds that conversion of bitumen into bitumen aqueous emulsion
amounts to manufacture. Per contra, the respondent-assessee has relied               F
on judgment of the Kamataka High Court in SR Projects Limited v.
Commissioner of Commercial Taxes 16 • However, it is not necessary
to dilate on the said aspect for there is a distinction between what can be
regarded as manufacture under the Excise Act and what is the sale or
transfer of property    ingoods under the Sales Tax Act and the Value                G
Added Tax Act. In M.P. Agencies v. State of Kerala 17, it has been held
that the decisions under the Excise Act may have some play and relevance,
"(1981) 3 sec s1s
"(1997) 90 ELT 374 (Tribunal)
16
   (2013) 63 VST 49 (Kar)
17
   (2015)7SCC 102                                                                    H
738             SUPREME COURT REPORTS                          [2016] 4 S.C.R.



A     but the question of manufacture by itself would not be per se relevant
      under the Sales Tax or Value Added Tax Act. Thus, there is a distinction
      between what is exigible to tax under the excise law and the incidence
      of tax when the legislation relates to sales or value added tax. What is
      relevant is the classification. In this context, the verdict in Osnar
      Chemical Private Limited (supra) is significant. The said authority
B
      refers to two other variants of bitumen, namely, polymer modified bitumen
      and crumbled rubber modifietl bitumen which are created by the process
      of mixing of polymer and additive to bitumen. It has been held that the
      aforesaid processes result in improvement of the quality of bitumen and
      there is no change in the characteristics or identity of bitumen so as to
c     .transform bitumen into a new product having an identity, characteristic
      and use. It has been ruled therein that there is a fallacy in the argument'
      raised by the Revenue that bitumen per se would only include its solid
      hard form which melts at high temperature and not bitumen emulsion.
      The two varieties and types carry the same composition, do not differ in
      character and have the same commercial identity i.e. bitumen. That
D
      apart, the use or end use test is also satisfied.
            28. In view of the aforesaid analysis, we find the view expressed
      by the High Court to be absolutely flawless and, accordingly, we concur
      with it. Our concurrence with the view of the High Court entails dismissal
      of the appeal and, accordingly, it is so directed. There shall be no order
E     as to costs.
      Devika Gujral                                             Appeal dismissed.