Holding

Egg trays are not "containers" within the meaning of the excise tariff entries, as the term denotes enclosed packing receptacles analogous to boxes and cartons.

Summary

G. Claridge & Co. Ltd., a manufacturer of molded pulp egg trays, sought exemption from central excise duty by classifying its products as "containers" under Item 17 of the Central Excises and Salt Act, 1944 and Heading 48.18 of the Central Excise Tariff Act, 1985. The tax authorities classified the trays as "articles of pulp" and levied duty, leading to a series of appeals before the Collector, the Appellate Tribunal, and finally the Supreme Court. The Court examined the meaning of "container" in the tariff entries, considering dictionary definitions and the context in which the term appears alongside "boxes, cartons, bags". It concluded that "container" in the tariff context refers to an enclosed packing receptacle analogous to boxes and cartons, which egg trays are not, as they are open and not suitable for transport on their own. Consequently, the egg trays could not be classified as containers and the exemption claim failed. The Supreme Court dismissed the appeals, upholding the tax demand.

Issues considered

Whether egg trays and similar molded pulp products manufactured by the appellant qualify as "containers" under Item 17(3)/(4) of the First Schedule to the Central Excises and Salt Act, 1944 and Heading 48.18 of the Central Excise Tariff Act, 1985.
How the term "container" should be interpreted in the tariff provisions – in its broad, narrow, or limited sense.

Legislation cited

Central Excise Rules, 1944s. Rule 8(1)
Central Excises and Salt Act, 1944s. Section 11-A(1)
Central Excise Tariff Act, 1985

Subjects

excise dutytariff classificationcontainer definitionstatutory interpretationpackagingegg trays

Judgment

G. CLARIDGE AND COMPANY LIMITED
v .. A
COLLECTOR OF CENTRAL EXCISE, PUNE

FEBRUARY 12, 1991

[K. JAGANNATHA SHETTY AND S.C. AGRAWAL, JJ.] B

Central Excises and Salt Act, 1944/Central Excise Rules, 1944/
-y ,Central Excise Tariff Act, 1985: First Schedule, Item No. 17 & Notifi- ,
cation dated 28.2.1982/Rule 8(1)/Chapter 48, Heading 48.18: 'Egg
trays'-Whether regarded as 'containers'.

Statutory Interpretation: Two or more words-.Coupled together · C
-Susceptible of analogous meaning-Interpretation of. .

Words and Phrases: 'Containers'-Meaning of.

The appellant was a manufacturer of egg trays and other similar D
items. Before the introduction of Central Excise Tariff Act, 1985 (new 1

Tariff) effective from 1.3.1986, Central Excise and Salt Act, 1944 (old
Tariff) was applicable to the relevant products. The appellant, classify-
ing its product under Item 68 of the old Tariff, was paying duty accord-
ingly. By Notification dated February 28, 1982, issued under Rule 8(1) '
~_...._, of the Central Excise Rules, 1944, the Central Government exempted E
·articles of paper and paper-board falling under Item 17(4) of the old
Tariff. The appellant f°Iled a revised classification list for its products
seeking classification under Item 17(4). The Asstt. Collector, Central 1

Excise held the products classifiable as 'articles of pulp' under Item 68
of the old Tariff, and the appellant was required to pay excise duty
accordingly. F
I

~--,.--.,, On. appeal, the Collector (Appe~ls)reversed the· order of the
_., . Asstt. Collector, and held that the products were made out of waste
paper and were classifiable under Item 17(4) as 'articles of paper and
paper-board'. The Revenue filed appeals before the Customs, Excise
and Gold (Control) Appellate Tribunal. G
On introduction of the new Tariff, the appellant classified the
relevant products as 'containers' under sub-heading 4818.19 and
claimed exemption. The Asstt. Collector held that the products were
not 'containers' but were 'articles of pulp' falling under sub-heading
· 4819.90 and.accordingly chargeable to duty. Setting aside the order in H

317
318 SUPREME COURT REPORTS [1991) 1 S.C.R.

A appeal, the Collector held that the products were 'packing containers' r~ - : - -
and classifiable under sub-heading 4818.19. · \.

The Revenue appealed before the Appellate Tribunal, which
allowed all the appeals by a common judgment, but remanded the
B matter to the Collector (Appeals) with regard to the recovery for a certain
period.·

In the assessee's appeal to this Court it was contended that the ~ -
'egg trays' manufactured by the appellant were 'containers' under Item
17 and Heading 48.18 of the respective Tariffs; that merely because the
egg tray was described as a tray does not mean that it was not a con- f
c tainer; and that it was not required that a container should be closed
from all sides.

On the question whether: egg trays and other similar products
manufactured by the appellant are 'containers' falling under Item No. >--
D 17 (4) or 17(3) of the First Schedule to the Central Excises and Salt Act,
1944 and Heading 48.18 of the Central Excise Tariff Act, 1985.

Dismissing the appeals, this Court,

HELD: 1.1 'Egg trays' being receptacles which are not covered or
E
enclosed cannot be used for transportation of articles and cannot be
regarded as 'containers' under Item 17 of the First Schedule to Central
Excise and Salt Act, 1944 and Heading 48.18 of the Schedule to
Central Excise Tariff Act, 1985. (326B]

1.2 Moulded pulp egg trays containing the eggs are put in a
F standard case for the purpose of transport. The case in which the egg
trays are put, are 'containers' and not the 'egg trays' itself. [326E-F]

1.3 The expression 'container' is used in three different senses: in
a broad sense, it means a receptacle which contains; in a narrower
sense, it means a receptacle in which articles are covered or enclosed
G and transported; and in a more limited sense, it means enclosures used
in shipping or railway for transport of goods. If used in a broad sense,
'container' would include a tray because it is a receptacle which con·
tains articles and, therefore, an egg tray would be a 'container'. But an
egg tray would not be a 'container' in a narrower sense because articles
placed in it are not covered or enclosed and they cannot be transported
H as such. [3250-F)
CLARIDGE & CO. v. COLLECTOR 319

1.4 In item 17 of the First Schedule to Central Excises and Salt A
~- Act, 1944 the word 'containers' is preceded by the words 'boxes,
cartons, bags and other packing' and in Heading 48.18 of the Schedule
to Central Excise Tariff Act, 1985, the word 'containers' is preceded by
the words 'cartons, boxes' and is followed by the words 'and cases'.
Considering tlie expression 'containers' in the context in which it is used B
in the relevant tariff items, the said expression has to be construed to
mean 'packing containers' which are analogous to boxes and cartons,
- ---{./ that is, an enclosed receptacle which can be used for storage and trans-
. portation of articles. (325G, 326A-B i

Webster's New Collegiate Dictionary, 1975 Chambers' 20th

--~ }
Century Dictionary Indian Standard-Glossary of Terms Glossary of C:
Packaging Terms (USA) Glossary of Packaging Terms (Australia) New
Encyclopaedia Britannica, referred to.
!

2. It is a well-accepted canon of statutory construction that when
two or more words which are susceptible of analgous meaning are
coupled together they are understood to be used in their cognate sense. D
It is based on the principle that words take as it were their colour from
each other, that is, more generai is restricted to a sense analogous to a
less general. (325G-H, 326A]

Dr. Devendra M. Surti v. State of Gujarat, [1969) 1 SCR 235,
relied on. E:

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 160-
63 of 1990.

From the Order dated 25.9.89 of the Customs Excise and Gold
--) (Control) Appellate Tribunal, New Delhi in Appeal No. E/1883/85- F
, -~C, E/2031/85-C, E/1468/88-C and E/1986/88-C (Order No. 543-546 of
1989-C).

M.L. Lahoty, Mrs. Meeta Sharma and P.S. Jha (NP) for the
Appellant.
q
M. Chander Sekaran, Additional Solicitor General (N.P.).
-~ M. Gouri Shankar Murthy, G. Venkatesh Rao and P. Parameshwaran
for the Respondent.

The Judgment of the Court was delivered by
320 SUPREME COURT REPORTS [1991] 1 S.C.R.

A S.C. AGRAWAL, J. These appeals raise for consideration tlie
question as to whether egg trays and other similar products manufac-
tured by the appellant can be regarded as 'containers' under the relev-
ant entries in the Central Excise Tariff.

Till February 28, 1986 the excise tariff was contained in the First
B
Schedule to the Central Excises and Salt Act, 1944 (hereinafter refer-
red to as 'the old Tariff') and with effect from March l, 1986, the
excise tariff is contained in the Schedule to the Central Excise Tariff
Act, 1985 (hereinafter referred to as 'the new Tariff'). The relevant
entry in the old Tariff was Item 17. During the period March 1, 1982 to

c
February, 1983, the said Item 17 read thus: r'
"Paper and paper board, all sorts (including paste-board,
mill board, straw board, cardboard and corrugated board)
and articles thereof specified below, in or in relation to the
manufacture of which any process is ordinarily carried on
with the aid of power-
D
(1) Uncoated and coated printing and writfo.g paper (other

-
than poster paper)

(2) Paper board and all other kinds of paper (including
E
paper or paper boards which have been subjected to vari-
. ous treatments such as coating, impregnating, corrugation,
/ ...
creping and design printing), not elsewhere specified.

(a) All sorts of paper commonly known as Kraft
paper, including paper and paper board of the type known
as Kraft liner or corrugating medium, of a substance equal
f
to ot exceedings 65 gram per square metre ~n each case.

(b) Others.

(3) Carbon and other copying pap~rs (including duplicator
stencils) and transfer papers, whether or not cut to size
G
and whether or not put up in boxes.

(4) Boxes, cartons, bags and other packing containers (inc- r---
. luding flattened or folded cartons, whether or not printed
and whether in cartons), whether or not printed and
H whether in assembled or unassembled conditions."
CLARIDGE & CO. v. COLLECTOR [AGRAWAL. J.] 321

Item 68 of the old Tariff was in the nature of residuary entry.
A
By notification No. 66/82-CE dated February 28, 1982, the Cent- •
ral Government, in exercise of the powers conferred by sub-rule (1) of
rule 8 of the Central Excise Rules, 1944, exempted articles of paper or
paper-board falling under sub-item (4) of item 17 of the old Tariff from
the whole of the duty of excise leviable thereon. The said exemption B
was, however, not applicable to printed boxes and printed cartons
(including flattened or folded printed boxes and flattened or folded
printed cartons) wheth~r in assembled or unassembled condition.

With effect from March 1, 1983, Item 17 was substituted and
during the period March 1, 1983 to February 28, 1986, it read as under:
c
"Paper and Paper board, all sorts (including pasteboard,
mill board, strawboard, cardboard and corrugated board),
and articles thereof specified below, in or in relation to the
manufacture of which any proce~s is ordinarily carried on
with the aid of power- D

, (1) Paper board and all other kinds of paper (including
paper or paper boards which have been subjected to vari-
ous treatments such as coating, impregnating, corrugation,
creping and design printing), not elsewhere specified.
E
(2) Carbon and other copying papers (including duplicator
stencils) and transfer papers, whether or not put up in
boxes.

(3) Boxes, cartons, bags and other packing containers
(including flattened or folded boxes and flattened or folded p
cartons), whether or not printed and whether in assembled
or unassembled conditions."

In the new Tariff, the relevant entry under Heading 48.18 in
Chapter 48 is as follows:
G
"48.18 OTHER ARTICLES OF PAPER PULP, PAPER.
PAPERBOARD, CELLULOSE WADDIJ\G OR WEES
OF CELLULOSE FIBRES:
Cartons, boxes, containers and cases (including falttened
or folded boxes and flattened or folded cartons), whether
in assembled or unassembled condition: H
322 SUPREME COURT REPORTS [1991] 1 S.C.R.

4818.11 Intended for packing of match sticks
A
4818.12 Printed cartons, boxes, containers and cases, made wholly
out of paper or paper-board of heading No. or sub-heading
No. 48.04, 4805.11, 4806.19, 4807.91, 4807.92, 48.08 or
4811.10, as the case may be
B 4818.13 Other printed cartons, boxes and cases
4818.19 Other
4818 .20 - Toilet tissues, handkerchiefs and cleans in~ tissues of paper
4818.90 - Other.".

C .On products falling under sub-Heading 4818.19, the excise duty was
nill whereas on products falling under sub-Heading 4818.90, the excise
duty was payable at the rate of 12%.
-
Mis. G. Claridge & Company Ltd. the appellant herein manufac-
D tures (i) egg filler flats, (ii) egg cartons, (iii) tube light packing trays,
(iv) duck egg trays and (v) apple trays. It filed a classification list for
the above goods effective from April I, 1981 classifying the products
under Item 68 of the old Tariff and it was paying duty at the,..prevailing
rate under Item 68. After the introduction of the revised Item 17 with
eff~ctdfro m ~fe.bru.ary ~8, 1ff982/~arfch l,M1982h, the sa idfappellanft filed.da
1 1
• revise c ass1 1cation 1st e ective rom arc 1, 1982 or the a oresa1
,.,1 -0
E five products seeking classification under Item 17(4) and claiming full
exemption from central excise duty under notification dated February
28, 1982. This classification list was approved by the Assistant Col-
lector of Central Excise, Pune Division on March 11, 1982, but on
re-examination Department felt that the said products did not merit
classification under Item 17(4) but under Item 68 of the old Tariff and
F a show cause notice dated May 4, 1984 was issued. After considering ---,....:1--
the reply of the appellant to the said show cause notice, the Assistant ·
Collector of Central Excise, Pune Division passed an order dated
January 28, 1985 whereby he held that 'egg trays' manufactured by the
appellant were correctly classifiable under Item 68 of the old Tariff
and not under Item 17(4) and the appellant was required to pay central
G excise duty at the appropriate rate leviable on an· types of egg trays
manufactured and cleared from its unit during the period of six months '~
prior to the notice dated May 4, 1984. The Assistant Collector was of I
the view that the articles manufactured by the appellant were articles
manufactured directly from the pulp and were, therefore, classifiable
as 'articles of pulp' under Item 68. The said order of the Assistant
H
Collector was reversed in appeal by the Collector of Central Excise
CLARIDGE & CO. v. COLLECTOR [AGRAWAL, J.] 323

(Appeals) by his order dated April 30; 1985 on the view that the
products manufactured by the appellant were made out of waste paper
and they were classifiable under Item 17(4) as 'articles of paper arid
paper-board'. Feeling aggrieved by the said order of the Collector
(Appeals), the Department filed appeals Nos. E/1883/85-C and
E/2031/85-C before the Customs, Excise and Gold (Control) Appel-
late Tribunal (hereinafter referred to as 'the Appellate Tribunal'). B

-~~ After the introduction of the new Tariff with effect from March
, 1, 1986, the appellants filed a classification list classifying their pro-
J ducts as 'containers' falling under sub-heading 4818.19 of the new
~ Tariff and since no duty was payable under the said sub-heading, the
_ ? appellants claimed exemption from payment of excise duty on their
products. The said classification list was approved provisionally but c
subsequently the Assistant Collector, Central Excise issued a show
·cause notice dated October 16, 1986 proposing to classify the goods
---..r under sub-heading 4818.90 chargeable to duty @ 12% ad valorem.
After considering the reply to the said show cause notice, the Asstt.
Collector, Central Excise, by his orders dated April 15, 1987 and July D
1, 1987 held that the products manufactured by the appellant were not
'containers' but were 'articles of pulp" falling under sub-heading
4818.90. The said orders were set aside by the Collector of Central
Excise (Appeals) by his orders dated March 22, 1988 and June 6, 1988.
z • The Collector (Appeals) held that the products manufactured by the
appellant were 'packing containers' and classifiable under sub-heading E
4818.19. Feeling aggrieved by the orders of the Collector {Appeals),
the Department filed appeals before the Appellate Tribunal which
were registered as Appeals Nos. E/1468/88-C and E/1986/88-C. All
the above four appeals were disposed by the Appellate Tribunal by a
common order whereby the said appeals were allwed. The Appellate
Tribunal held that the products manufactured by the appellant cannot F
--:;t_ ..,- ~come within the sub-classification below containers and were not clas-
sifiable under sub-heading 4818.19 but were classifiable under sub-head-
ing 4818.90 of the new Tariff and similarly they were not classifiable
under item 17(4) or .17(3) of the old Tariff. The Appellate Tribunal was
also of the view that the products manufactured by the appellant are
articles of paper because starting raw materials is waste paper. The Ap- G
pellate Tribunal has held that the duty demanded by the Assistant
-~ Collector for six months prior to the issue of show cause notice dated
May 4, 1984, i.e., from November 4, 1983 is legally sustainable and
with regard to recovery of the duty for the earlier period with effect
from March 1, 1982 by invoking the proviso to Section 11-A( 1) of the
Central Excises and Salt Act, 1944, the Appellate Tribunal remanded H
the matter to the Collector (Appeals) for considering the said question.
324 SUPREME COURT REPOR~'S fl991] I S.C.R.

The question which arises for consideration in these appeals is .
A whether the egg trays and other similar products manufactured by the ~
appellants are 'containers' falling under Item 17(4) of 17(3) of the old
Tariff and sub-heading 4818.19 of the new Tariff.

The learned counsel for the appellant has urged that the products
B manufactured by it are 'containers' and in support of this submission
the learned counsel has invited our attention to the meaning of the
term 'container' as contained in the Dictionaries and the Indian"·~
Standard Glossary of Terms relating to paper or paper-board, packag- ·
ing materials, Glossary of Packaging Terms (USA) and Glossary of
Packaging Terms (Australia). The submission of the learned counsel is --f/
that a 'container' is a receptacle which holds, restrains or encloses the \ _
c item to be stored or transported and that the egg tray and other similar
products manufactured by the appellant are 'containers' because they
are receptacle~ for holding, storing and transporting the things kept in
them. It has been urged that a 'tray' is a shallow lidless container and ~
merely because an egg tray is described as a tray does not mean that it
D is not a 'container'. It is contended that egg trays are so designed as to
protect the eggs from breakage· and that egg trays provide the best
mode for storage and transport of eggs. The learned counsel has sub-
mitted that the Appellate Tribunal was in error in proceeding on the
basis that egg tray and other similar products manufactured by the

E
appellant cannot be regarded as 'containers' because when a single egg ,..l
tray is reversed or turned upside down or tilted sideways vertically at ·
•

90% angle, the contents would fall down. The submission of the
•
learned counsel is that it is not required that a container should be
closed from all sides and that a container can also be open. -
The expression 'container' has been thus defined in the dictiona- ·•
ries and Glossaries of Packaging Terms:
F
"Container: One that contains; a receptacle or flexible T
t-
covering for shipment of goods."

(Abstract from Webster's New Collegiate Dictionary, 1975)
G
"Container: that which contains that in which goods are
enclosed for transport."

(Abstract from Chambers' 20th Century Dictionary)

H "Containers-Any receptacle which holds, restrains or
CLARIDGE & CO. v. COLLECTOR [AGRAWAL, J.] 325

encloses any article or commodity or articles or commo- A
dities to be stored or transported."

(Abstract from Indian Standard-Glossary of Terms: 1.8. 4261-1967)

"Container. (1) In general, any receptacle or enclosure
used in packaging and shipping. (2) Relatively large, reus- B
able enclosures to be filled with smaller packages and dis-
crete objects, to consolidate shipments and allow transport
on railway flat cars, flatbed trailers, aircraft, in ships' holds
or as deckloads, etc. (See CARGO TRANSPORTER;
CONTAINERIZATION). (3) Any receptacle for holding
a product."
c
[Abstract from Glossary of Packaging Terms (USA)]
."Container. A large box for intermodal transport, contain-
-~
ing many smaller boxes of different shapes and sizes as well
as individual articles."
D
[Abstract from Glossary of Packaging Terms (Australia)]

The above definitions would show that the expression 'con-
tainer' is used in three different senses: in a broad sense, it means a
_ _._,-....._ . receptacle which contains; in a narrower sense, it means a receptacle
in which articles are covered or enclosed and transported; and in a E

-
more limited sense, it means enclosure used in shipping or railway for
transport of goods. If used in a broad sense, 'container' would include
a tray because it is a receptacle which contains articles and, therefore,
an egg tray would be a 'container'. But an egg tray would not be a
'container' in a narrower sense because articles placed in it are not
--.( covered or enclosed and they cannot be transported as such. It is, F
-....,.. --therefore, necessary to ascertain whether the expression 'container' in
Item 17 of the old Tariff and Heading 48.18 of the new Tariff has been
used in the broad sense to include all receptacles or in a narrower
sense to mean those receptacles in which the articles are covered or
enclosed and transported. For this purpose, the context in which th-::
word 'container' has been used in these entries has to be examined. In G
Item 17 of the old Tariff, the word 'containers' in preceded by the
words 'boxes, cartons, bags and other packing' and in Heading 48.18
of the new Tariff, the word 'containers' is preceded by the words
'cartons, boxes' and is followed by the words 'and cases'. It is a well-
accepted canon of statutory construction that when two or more words
which are susceptible of analogous meaning are coupled together they H
326 SUPREME COURT REPORTS (1991] 1 S.C.R.

are understood to be used in their cognate sense. It is based on the
A
principle that words take as it were their colour from each other, that
is, the more general is restricted to a sense analogous to a less general.
[See: Dr. Davendra M Surti v. State of Gujarat, (1969] 1
SCR 235 at p. 240]. Considering the expression 'containers' in the
context in which it is used in the relevant tariff items, we are of the
B opinion that the said expression has to be construed to mean 'packing
containers' which are analogous to boxes and cartons, that is, an
enclosed receptacle which can be used for storage and transporation of
articles. Egg trays being receptacles which are not covered or enclosed
cannot be used for transportation of articles and, therefore, they can-
not be regarded as 'containers' under the abovementioned entries in
the Excise Tariff.
'-1' -
c
According to the New Encyclopaedia Britannica, the practice
followed in the various countries for the packaging of eggs for trans-
port is as follows:

"Packaging. For retail use in the United States, eggs are
repackaged in dozen and half-dbzen paperboard cartons.
In some other countries they are packed with straw or
excelsior in long wooden boxes. In many parts of the world,
they are marketed in baskets or boxes and the indivjdual
eggs are sold by weight. Several European countries stamp
E each egg with a date and number to meet the import restric-
tions of other nations."
[p. 444, Vol. 6, 1974 edition]

The Glossary of Packaging Terms (USA) also shows that moulded
pulp egg trays are put in a standard case which indicates that the egg
F trays containing the eggs are put in a case for the purpose of transport.
In other words, the case in which the egg trays are put are 'containers'
and not the 'egg tray' itself.

For the reasons aforesaid, we are of the opinion that the Appel-
late Tribunal was right in taking the view that the egg trays and other
G similar products manufactured by the appellant cannot be regarded as
'containers' under the relevant items of the Excise Tariff.

The appeals, therefore, fail and are accordingly dismissed. There
will be no orders as to costs.

R.P. Appeals dismissed.