Holding

Plastic name plates are parts and accessories of motor vehicles and are not excluded by Note 2(b) to Section XVII, so they must be classified under headings 87.08 and 87.14.

Summary

Pragati Silicones Pvt. Ltd., a manufacturer of plastic name plates for motor vehicles, sought classification of its products under headings 87.08 and 87.14 of the Central Excise Tariff Act, 1985 as "parts and accessories" of vehicles. The revenue department re‑classified the plates under heading 39.26 (other articles of plastics), a decision upheld by the Commissioner (Appeals) and the Custom, Excise & Gold (Control) Appellate Tribunal. The company appealed to the Supreme Court under section 35L(b) of the Central Excise Act, 1944. The Court examined whether plastic name plates qualify as parts or accessories of motor vehicles and whether Note 2(b) to Section XVII of the HSN Explanatory Notes excludes them, directing them to Chapter 39. The Court held that the plates are indeed accessories, add identity and convenience to vehicles, and are not excluded by the Explanatory Notes, so they fall under headings 87.08 and 87.14. Consequently, the appeal was allowed and the classification was changed back to Chapter 87.

Issues considered

Whether plastic name plates are classifiable as 'parts and accessories' of motor vehicles under headings 87.08 and 87.14 of the Central Excise Tariff Act, 1985.
Whether Note 2(b) to Section XVII of the HSN Explanatory Notes excludes plastic name plates, thereby requiring classification under Chapter 39.

Legislation cited

Central Excise Act, 1944s. 35E, s. 35L(b)
Central Excise Tariff Act, 1985s. 39.26, s. 87.08, s. 87.14

Subjects

central exciseclassificationplastic name platesparts and accessoriesHSNheading 87heading 39Note 2(b)Supreme Courtappeal

Judgment

MIS PRAGATI SILICONS PVT. LTD. !'
A
v.
COMMISSIONER OF CENTRAL EXCISE, DELHI

APRIL 26, 2007

B [ASHOK BHAN AND DAL VEER BHANDARI, JJ.]

Central Excise Tariff Act, 1985 t
Headings 87.08 and 87.14-Parts and accessories of motor vehicles-
c Plastic name plates-Held-They added to convenient use of motor vehicle
and served useful purpose of giving an identity to them-They were covered
by broader term 'accessory'.

Harmonized Commodity Description and Coding System (HSN)-
Explanatory Notes-Note 2(b) to Section XVII, with Chapter 87 as part-
D Scope of-Exclusion from definition of parts and accessories of '... similar
goods of plastics (Chapter 39)'-Plastic name plates-Held-As reference
has been made to Chapter 39, its provisions controlled scope of 'similar ~ -
goods of plastics: and it would mean goods similarly defined in Chapter
39-In absence of specific headings in Chapter 39 regarding name plates,
they could not be excluded from Chapter 87 and included within a residuary
E
provision in Chapter 39.

Central Excise Act, 1944-Section 35L (b)-Appeal to Supreme Court-
Issue neither raised before nor decided hf Custom, Excise & Gold (Control)
Appellate Tribunal, though argued before original authority as well as
F Commissioner of Appeals, and decided by both against assessee-
Consideration by Supreme Court-Held-Though the Court had option to
remit case to Tribunal, but to avoid unnecessary delay and expense to
parties, it was appropriate for itself to decide the issue-It was 111ore so as
the issue had been decided by authorities below.

G Words and phrases- 'Accessory'-In context of Headings 39.26, 87.08
and 87.14 of Central Excise Tariff Act, 1985, and Note 2(b) to Section XVII
,., -
to Explanatory Notes of Harmonized Commodity Description and Coding
System (HSN).

654
H
PRAGATI SILICONS PVT. LTD. v. COMMNR. OF CENTRAL EXCISE, DELHI 655
\ The assessee-appellant is a manufacturer of plastic name plates for A
motor vehicles. They claimed their classification under headings 87.08 (Parts
and accessories of the motor vehicles of heading Nos.87.01to87.05] and 87.14
[Parts and accessories of vehicles of heading Nos.87.11 to 87.13] of Central
Excise Tariff Act, 1985. This was approved by the respondent, revenue
department. However, a show cause notice was issued to them to re-classify
the name plates under heading 39.26 [Other articles of plastics] of the Act of B
1985. But this notice was dropped and an order-in-original was passed stating
that the appropriate classification of the name plates was under Chapter 87

"' of the Act of 1985. Subsequently, the Commissioner of Central Excise
exercising powers under section 35E of the Central Excise Act, 1944 reviewed
the above order and an appeal was filed before the Commissioner (Appeals), c
which was allowed, classifying the plastic name plates under heading 39.26
of the Mt of 1985. Aggrieved by this, the appellant filed an appeal before the
Custom, Excise & Gold (Control) Appellate Tribunal, but it was rejected. Hence
the present appeal under Section 35L(b) of the Act of 1944.

Appellant contended that the headings under Chapter 87 of the Act of D
1985 should gain primacy as they are more specific while the heading under
- .::,._ Chapter 39 of the Act of 1985 is residuary and more general in nature.

Respondent relied on Note 2(b) to Section XVII of the Explanatory Notes
in the Harmoni7.ed Commodity Description and Coding System [HSN], which
stated that 'parts and accessories' did not include parts of general use, as E
defined in Note 2 to Section XV, of base metal (section XV), or similar goods
of plastics (Chapter 39), and contended that since Note 2 to Section XV, defined
'parts of general use' as including name plates, sign plates, number plates,
etc., their plastic equivalents will also get excluded from the scope of Chapter
87 of the Act of 1985 and ought to be classified under Chapter 39 thereof. F
'I
Allowing the appeal, the Court

HELD: 1. Plastic name plates are 'parts and accessories' of motor
vehicles and since they are not excluded from Section XVII, the appropriate
classification is under headings 87.08 and 87.14. [Para 32] (668-G] G
.. - ,I
2.1. The Tribunal has only examined whether the name plates can be
considered "parts' of motor vehicles. It has not at all considered whether these
name plates can be considered accessories' of motor vehicles.
[Para 11) (660-8)
H
656 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 2.2. An accessory' by its very definition is something supplementary
or subordinate in nature and need not be essential for the actual functioning
of the product. [Para 201 [664-F)

Annapurna Carbon Industries Co. v. State of Andhra Pradesh, [19761
2 sec 273, relied on.
B
The New Collins Concise Dictionary of the English Language, (1982),
Advanced Law Lexicon (3rd edition, 2005) referred to.

2.3. Name plates add to the convenient use of the motor vehicle. They
serve a very useful purpose inasmuch as it gives an identity to the vehicle.
C Each vehicle comes with different brand name and in different models having
distinct features. The manufacturers of different type of models of vehicles
market them under a name and !he vehicles are recognized and referred to
by the name plate affixed on them. Name plates convey to the consumers the
distinct features it carries. Undoubtedly they add effectiveness and value to
D the vehicle and are at the very least accessories of the vehicle. Thus, even if
there was any difficulty in the inclusion of the plastic name plates as 'parts'
of the motor vehicles, they would most certainly have been covered by the
broader term 'accessory'. In this view of the matter, the Tribunal has
erroneously come to the conclusion that· plastic name plates' are not ·parts
and accessories' of motor vehicles for the purposes of headings 87.08 and
E 87.14. [Para 20) (664-G-H; 665-A-B]

Mehra Bros. v. The Joint Commercial Officer, Madras, [1991[ 1 SCC
514, Union Carbide India Ltd. v. State of AP, [19951 Supp 2 SCC 267,
Commissioner of Central Excise, Delhi v. Allied Air-conditioners Corp.
(Regd.), [2006] 7 [CC 735 and Central Excise, Calcutta v. Jay Engineering
F Works Ltd., Calcutta (1989) Supp 1SCC128, reiterated.

3.1. Tile language in Note 2(b) of the HSN Explanatory Notes to Section
XVII cannot be intP.rpreted to exclude plastic name plates from the scope of
Section XVII. [Para 31] [668-F]

G 3.2. Undoubtediy, name !Jlates of base metal stand excluded from the
·scope of Section XVII by virtue of being "parts of general use" as defined
and specifically mentioned in Chapter XV. Now, with respect to plastic name
plates, if the reference to Chapter 39 had not been made, then there would be
no controversy at all. Jn such a case, all plastic products similar to those defined
H in Chapter XV would be excluded, regardless of an omission to sprcifically
PRAGATI SILICONS rvr. LTD.''· COMMNR. OF CENTRAL EXCISE, DELHI [BHAN, J.] 657

'\ mention them within Chapter 39. (Para 291 (668-B-C)
A
3.3. However, the minute a reference is made to Chapter 39, it is the
provisions in Chapter 39 that control the scope of "similar goods of plastics".
Thus, when Note 2(b) refers to similar goods of plastics as in Chapter 39, it
must be interpreted to mean similarly defined goods in Chapter 39. And since
no definition or reference exists in Chapter 39 regarding name plates, etc., B
one canuot find any exclusion with respect to these goods from Chapter 87.
In the absence of specific headings in Chapter 39, it is not possible to accept
the exclusion of the plastic name plates from Chapter 87 and include it within
a residuary provision in Chapter 39. [Para 301 [668-D-E]

4. The issue whether, despite the inclusion of the plastic name plates c
within the scope of the 'parts and accessories', certain other provisions
operate to remove or exclude plastic name plates from Chapter 87, was neither
raised before nor decided by the Tribunal although this point had been argued
before the authority in original as well as the Commissioner of appeals. Both
of them decided this point against the appellant. Option before the Court was
D
either to remit the case to the Tribunal for a decision on this point or decide
- .... the same itself as this point had been decided by the authorities below.
However, to avoid the unnecessary delay and expense to the parties, the Court
thought it appropriate to decide the point itself. [Para 21 and 2211665-C-EI

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5345 of2001. E
From the Final Order No. 239/2001-B dated 30.4.2001 of the Customs,
Excise & Gold (Control) Appellate Tribunal, West Block, R.K. Puram, New
Delhi in Appeal No. E-3322/2000-B.

B.L. Narasimhan, Alok Yadav and M.P. Devanath for the Appellant. F
K. Radhakrishnan, B. Sunita Rao, Shanti Bhushan Chaubey and B.
Krishna Prasad for the Respondent.

The Judgment of the Court was delivered by
G
- Ji BHAN, J. The asscssee-appellant (hereinafter referred to as "the
appellant"), being aggrieved by the Final Order No.::!39/2001-B dated 17-04-
2001 passed by the Custom, Excise & Gold (Control) Appellate Tribunal
(hereinafter referred to as "the Tribunal") in Appea! No.E/3322/2000-B, has
filed the present appeal under section 35L(b) of the Central Excise Act, 1944
(hereinafter referred to as "the Act"). The Tribunal by the impugned order has H
658 SUPREME COURT REPORTS [2007] 5 S.C.R.

A rejected the appeal filep by the appellant seeking the classification of "plastic /"
name plates" under Chapter 87 as 'parts and accessories' of motor vehicles
and instead classified it as 'other plastic products' under Chapter 39.

FACTS

B I. The appellant is a small-scale unit, manufacturing plastic name plates
for motor vehicles in accordance with the specifications and designs supplied
by the customers, who are the vehicle manufacturers. The entire production
of the appellant is sold to the vehicle manufacturers alone.

2. Between 1986 and 1994, the classification lists filed by the appellant
C claimed the classification ofname plates under headings 87.08 and 87.14 and
the same were approved by the Department from time to time. On 02-08-1994,
a show cause notice was issued by the Assistant Collector of Central Excise,
Ambala proposing to re-classify the name plates under heading 39.26 as
articles of plastics. The notice was however subsequently dropped and an
D order-in-original dated 08-11-1994 was passed stating that the appropriate
classification of the name plates was under Chapter 87.

3. Subsequently, the Commissioner of Central Excise, New Delhi
exercising powers under section 35E of the Act reviewed the above order and
filed an appeal before the Commissioner (Appeals). The CommiSsioner
E (Appeals) by the order dated 31-10-2000 allowed the appeal of the Revenue
and classified the plastic name plates under heading 39.26. Aggrieved by the
order of the Commissioner (Appeals), the appellant filed an appeal before the
Tribunal, which was rejected by the impugned order.

4. The Tribwi.al rejected the appeal of the appellant primarily by recording
F the following findings: (

a. It held that "a motor vehicle is a complete vehicle without affixation
of emblems or name plates" and that "it cannot be treated as a
part without which the motor vehicle is not complete";
b. It distinguished the case of Collector of Central Excise, Calcutta
G
v. Jay Engineering Works Ltd., Calcutta, [1989] Supp I SCC 128
\( - .
stating that it examined name plates as inputs and not as parts
of the fan;
c. The fact that a name plate can be used only in respect of the
product whose name it carries does not make it a part of the
H
PRAGATl SILICONS PVT. LTD. v. COMMNR. OF CENTRAL EXCISE, DELHI [BHAN, J.] 659

motor vehicle; A
d. That Heading 39.26 specifically covered articles of plastics and
since it was not in dispute that the impugned goods were made
of plastics, they were classifiable only under heading 39 .26.

5. Thus, the essential question for consideration is: Whether these
'plastic name plates' are to be classified under headings 87.08 and 87.14 as B
'parts and accessories' of motor vehicles or under heading 39.26 as other
articles of plastics?

6. Before adverting to the submissions made by the opposing Counsels
for the parties in respect of the above question, it is worthwhile to mention C
the competing headings relevant to the present discussion.

COMPETING HEADINGS:

7. The relevant portions of heading 87.08 and 87.14 are reproduced
below for reference:
D
"87.08 Parts and accessories of the motor vehicles of heading Nos.87.01
to 87.05

87.14 Parts and accessories of vehicles of heading Nos.87.11 to 87.13''

8. The relevant portions of heading 39.26 are reproduced below for E
reference:

39.26 Other articles of plastics

ISSUES FOR DETERMINATION
)
F
9. Having laid out the facts and the relevant headings in the present
matter, we can now proceed to the legal issues that we are required to decide
upon. Based on the arguments of the Counsels for the parties, the following
issues arise for determination:

a. Whether 'plastic name plates' are classifiable under headings G
87 .08 and 87.14 by falling within the scope of term 'parts and
accessories' of motor vehicles;
b. Alternatively, even if they do fall within the scope of'parts and
accessories' of motor vehicles, whether there is any provision in
the Explanatory Notes that specifically excludes 'plastic name H
660 SUPREME COURT REPORTS [2007] 5 S.C.R.

A plates' from headings 87.08 and 87.14? /
ISSUE NO.I

IO. The first issue that we are required to examine is whether 'plastic
name plates' can be considered 'parts and accessories' of motor vehicles.
B 11. The Tribunal has answered the above question in the negative.
Significantly, the Tribunal has only examined whether the name plates can be
considered 'parts' of motor vehicles. It has not at all considered whether these
name plates can be considered 'accessories' of motor vehicles. The relevant
portion of the judgment of the Tribunal is reproduced below:
c According to Sarka'r's 'Words and Phrases of Excise & Customs',
Second Edition, part is "an element of a sub-assembly, not normally
useful by itself and not amenable to further disassembly for
maintenance purpose". In common parlance parts are used in the
manufacture of the final product and without which the final product
D cannot be conceived of. A motor vehicle is a complete vehicle without
a/fixation of emblems or name plates and we agree with the
submissions of the learned DR that it cannot be treated as a part
without which the motor vehicle is not complete .... A name plate can
certainly be used only in respect of the product whose name it carries
but it does not make it a part of the motor vehicle on this ground.
E
Heading 39.26 specifically covers articles of plastics 'and as it is not
in dispute that the impugned goods have been made of plastics they
would be classifiable under heading 39.26 only.

[Emphasis supplied]
F 12. The submissions made by Mr. Radhakrishnan, Counsel for the
Revenue echo the position taken by the Tribunal above.

13. Counsel for the appellant however submits that the. test to determine
whether the name plates are 'parts and accessories' of the test according to
G Note 3 to Section XVII of the Explanatory Notes in the Harmonized Commodity
Description and Coding System [hereinafter referred to as "Explanatory Notes"], x ~ -
is the 'sole and exclusive' use. Counsel for the appellant submits that the name
plates are solely and excll'sively used for motor vehicles, since all the name
J)lates are sold to manufacturers of vehicles and nothing enters the spare
parts market for use elsewhere. He further submits that the name plates are
H pennanently affixed to the vehicle from the assembly line itself. He also drew
PRAGATI SILICONS PVT. LTD. r. COMMNR. OF CENTRAL EXCISE, DELHI [BHAN, J.j 661

' · our attention to two circulars of tile Department [Chandigarh Collectorate
Trade Notice No.94-CE/90 dated 30-0-1990 and Calcutta II Collectorate Trade
Notice No. I 0/87 dated 19-02-1987] where 'plastic boxes' and 'helmet-locking
A

devices', items which are according to him less necessary, are directed to .be
considered 'parts and accessories' of motor vehicles. Finally, he subn,its that
the headings under Chapter 87 should gain primacy as they are more specific
while the heading under Chapter 39 is residuary and more general in nature. B
Thus, Counsel for the appellant has challenged the decision of the Tribunal.

lt1. In the light of the rival submissions made by the counsel for the
parties before us, we are required to determine whether the Tribunal has
correctly held that 'plastic name plates' do not fall within the purview of
headings 87.08 and 87.14. As far as these two headings are concerned, it is c
possible to include two kinds of goods therein - those which are either 'parts'
of motor vehicles or those which are 'accessories' of motor vehicles. While
a case can be made for the inclusion of name plates in Chapter 87 as 'part'
as well as 'accessories' of motor vehicles, we are not examining the form.r
category. Without going into the question of whether name plates fall within D
the definition of 'parts' of motor vehicles, for the present purpose, we are
- . -'* restricting ourselves only to the interpretation of the broader term, 'accessories'.
Thus, regardless of whether name plates can be considered 'parts' of motor
vehicles, we are determining whether at the very least, name plates can be
considered 'accessories' of motor vehicles.
E
15. The term 'accessory' is defined in The New Collins Concise
Dictionary of the English Language (1982) as "a supplementary part or
object, as of a car, appliance, etc". Other definitions for the accessory are
found in the Advanced Law Lexicon (3rd edition, 2005) and include the
following:
1- F
"Something of secondary or subordinate importance;

Something contributing in subordinate degree to a general result or
effect; an adjunct or accompaniment; G

Accessory is an article or device that adds to convenience or
effectiveness of, but is not essential to, main machinery."

H
662 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 16. This Court has considered and decided as to what the meaning of
the term 'accessory' is in a few earlier cases. In Annapurna Carbon Industries
Co. v. State ofAndhra Pradesh, [1976] 2 SCC 273, the Ccurt was required to
examine whether "arc carbon" was an 'accessory' to cinema projectors or
other cinematographic equipment under item 4 of Ist Schedule to Andhra
Pradesh General Sales Tax Act, 1957. Answering in the affirmative, the Court
B opined that:

We find that the term "accessories" is used in the schedule to describe
goods which may have been manufactured for use as an aid or
addition. A sense in which the words accessory is used given in
Webster's Third New International Dictionary as follows:
c
"An object or device that is not essential in itself but that adds
to the beauty, convenience, or effectiveness of some-thing else".

Other meanings given there are: "supplementary or secondary to
something of greater or primary importance": "additional": "any of
D several mechanical devices that assist in operating or controlling the
tone resources of an organ". "Accessories" are not necessarily confined
to particular machines for which they may serve as aids. The same
item may be an accessory or more than one kind of instrument.
(Para IO)
E It will be noticed that the entry we have to interpret includes "parts"
as well as "accessories"'which are required for use in projectors or
other cinematographic equipment. We think that the Andhra Pradesh
High Court correctly held that the main use of the arc carbons Under
consideration was duly proved to be that of production of powerful
F light used in projectors in cinemas. The fact that they can also be ·f
used for search lights, signalling, stage lighting, or where powerful
lighting for photography or other purposes may be required, could
not detract from the classification to which the carbon arcs belong.
That is determined by their ordinary or commonly known purpose
or user. This, as already observed by us, is evident from the fact that
G they are known as cinema arc carbons" in the market. This finding was
enough, in our opinion, to justify the view taken by the Andhra
Pradesh High Court that the goods under consideration are covered
by the relevant entry No. 4. (Para! I)

[Emphasis supplied]
H
PRAGATI SILICONS PVT. LTD."· COMMNR. OF CENTRAL EXCISE, DELHI [BHAN,J.] 663

17. The above decision was relied upon in the case of Mehra Bros. v. A
Tfle Joint Commercial Officer, Madras [1991] l SCC 514. The primary issue
before the Court in this case was whether 'car seat covers' could be considered
'articles adapted to use generally as parts and accessories of motor vehicles'.
The Court, holding that car seat covers and upholstery were in fact accessories
to motor vehicles, observed as follows:
B
"In Black's Law Dictionary, Fifth Edition at p. 13 'accessory' has been
defined as "anything which is joined to another thing as an ornament,
or to render it more perfect, or which accompanies it, or is connected
with it as an incident, or as subordinate to it, or which belongs to or
with it, adjunct or accompaniment, a thing of subordinate importance.
Aiding or contributing in secondary way of assisting in or contributing C
to as a subordinate". (Para 3)

Jn our view the correct test would be whether the article or articles
in question would be an adjunct or an accompaniment or an addition D
for the convenient use of another part of the vehicle or adds to the
beauty, elegance or comfort for the use of t~e motor vehicle or a
supplementary or secondary to the main or primary importance.
Whether an article or part is an accessory cannot be decided with
reference to its necessity to its effective use of the vehicle as a whole. E
General adaptability may be relevant but may not by itself be
conclusive. Take for instance Stereo or Air-conditioner designed and
manufactured for fitrnent in a motor car. It would not be absolutely
necessary or generally adapted. But when they are fitted to the vehicle,
undoubtedly it would add comfort or enjoyment in the use of the
vehicle. Another test may be whether a particular article or articles or F
parts, can be said to be available for sale in an automobile market or
shops or places of manufacture; if the dealer says it is to be available
certainly such an article or part would be manufactured or kept for
sale only as an accessory for the use in the motor vehicle. Of course,
this may not also be a conclusive test but it is given only by way of
illustration. Undoubtedly some of the parts like axle, steering, tyres, G
battery etc. are absolutely necessary accessories for the effective use
of the motor vehicle. If the test that each accessory must add to the
convenience or effectiveness of the use of the car as a whole is given
acceptance many a part in the motor car by this process would fall
outside the ambit of accessories to the motor car. That would not H
664 SUPREME COURT REPORTS [2007] 5 S.C.R.
/

,A appear to be the intention of the legislature ......... (Para 5) !

[Emphasis supplied]

18. The view taken regarding the term 'accessory' in the above two
cases has been reiterated in the cases of Union Carbide India Ltd. v. State
B ofAP, [1995] Supp 2 SCC 267 and Commissioner of Central Excise, Delhi v.
Allied Air-conditioners Corp. (Regd), [2006] 7 SCC 735.

~ ...
19. The Court was also faced with similar circumstances in the case of
Jay Engineering (supra). In this case, the Respondent was the manufacturer
of electric fans, and brought into its factory name plates under tariff item 68
c of the erstwhile Central Excise Tariff. The name plates were affixed to the fans
before marketing them. Here, the Court emphasized on the necessity of name
plates for the marketing of the product. The Court observed:

"In those circumstances, in our opinion, the Tribunal was right in
arriving at the conclusion that the nameplate was not a piece of
D decoration. Without the nameplate, the electric fans as such, could
not be marketed; and that the dealer was entitled to the benefit of the
notification No. 201/79-CE for the purpose of obtaining pro forma ~ -
credit. Fans with name plates, have certain value which th,e fans
without the name plates, did not have. If that be so, then the value
adder! for the accretion of nameplate was entitled to pro forma credit
E
in terms of the said notificat•1n. It is true that an electric fan may
perform its essential functions without ajfixation of the nameplate.
but that is not enough. Electric fans do not become marketable
products without affuation of name plates. (Para 9)

F [Emphasis supplied] -f

20. It is evident therefore, that an 'accessory' by its very definition is
something supplementary or subordinate in nature and need not be essential
for the actual functioning of the product. Applying the test laid down in
Mehra Bros. case (supra), it cannot be denied that name plates add to the
G convenient use of the motor vehicle. Name plates serve a very useful purpose
inasmuch as it gives an identity to the vehicle. Each vehicle comes with _>; -
different brand name and in different models having distinct features. The
manufacturers of different type of models of vehicles market them under a
name and the vehicles are recognized and referred to by the name plate affixed
on them. Name plates convey to the consumers the distinct features it carries.
H
PRAGATl SILICONS PVT. LTD. v. COMMNR OF CENTRAL EXCISE, DEL!Il [BHAN, JJ 665

Undoubtedly they add effectiv~ness and value to the vehicle and are at the A
very least accessories of the vehicle. Thus, even if there was any difficulty ·
in the inclusion of the plastic name plates as 'parts' of the motor vehicles, they
would most certainly have been covered by the broader term 'accessory'. In
this view of the matter, we are of the opinion that the Tribunal has erroneously
come to the conclusion that 'plastic name plates' are not 'parts and accessories'
of motor vehicles for the purposes of headings 87 .08 and 87 .14. B
ISSUE N0.2

21. The second issue before consideration is whether, despite the
inclusion of the plastic name plates within ·the scope of the 'parts and
accessories', certain other provisions operate to remove or exclude plastic C
name plates from Chapter 87.

22. This point was neither raised before nor decided by the Tribunal
although this point had been argued before the authority in original as well
as the Commissioner of appeals. Both of them decided this point against the D
appellant. Option with us is either to remit the case to the Tribunal for a
decision on this point or decide the same ourselves as this point had been
decided by the authorities below. After hearing the Learned Counsel for the
parties and after applying our mind on this point we have formed the opinion
that to avoid the unnecessary delay and expense to the parties it would be
appropriate for us to decide the point ourselves. E
23. In this regard, it has been submitted by Counsel for the Revenue
that the Explanatory Notes in the Harmonized Commodity Description and
Coding System [hereinafter referred to as "HSN"] to Section XVII (which
includes Chapter 87) make it clear that plastic name plates are excluded from
the scope of Chapter 87 and are therefore required to be classified under the F
residuary provision in Chapter 39.

24. Since the submission of the Revenue is based purely on the HSN
Explanatory Notes, it is essential to reproduce the relevant parts of the HSN
Explanatory Notes. The notes below relevant headings, heading 87 .08 and
87.14, state as follows: G
"This heading covers parts and accessories of the motor vehicles of
headings 87.01 to 87.05, provided the parts and accessories fulfil both
the following conditions:

(i) They must be identifiable as being suitable for use solely or H
666 SUPREME COURT REPORTS (2007] 5 S.C.R.
/

A principally with the above-mentioned vehicles; and /
(Ii) They must not be excluded by the provisions of the Notes to
Section XVII (see the corresponding General Explanatory Note)."

[Emphasis supplied]

B An almost identical explanation exists under the Notes to heading 87 .14.
25. The effect of the above HSN Explanatory Notes is to specifically
exclude from the scope of these headings what is excluded in the general ~ •
notes to the entire Section (Section XVII), of which Chapter 87 is a part. The
General Explanatory Note to Section XVII states as follows:
c
Section Notes.

2. - The expressions "parts" and "parts and accessories" do not apply
to the following articles, whether or not they are identifiable as for the
D
goods of this section:-

(b) Parts. of general use, as defined in Note 2 to Section XV, of base
metal (section Xf-!, or similar goods of plastics (Chapter 39)
E
3.- References in Chapters 86 to 88 to "parts" or "accessories" do not
apply to parts or accessories which are not suitable for use solely or
principally with the articles of those Chapters. A part or accessory
which answers to a description in two or more of the headings of
those Chapters is to be classified under that heading which
F ·corresponds to the principal use of that part or accessory.

[Emphasis supplied]

"" Further explanation regarding Note 2 reads as follows:

G (A) Parts and accessories excluded by Note 2 to Section XVII

(2) Parts of general use as defined in Note 2 to Section XV, for
example, ... number plates, nationality plates, etc. (such goods of
base metals fall in Chapter 83, and similar goods of plastics fall
H
PRAGATI SILICONS PVT. LTD. v. COMMNR. OF CENTRAL EXCISE, DELHI (BHAN, J.J 667

\ in Chapter 39).
A
26. Referring to Note 2 of Chapter XV,

Section Notes.

B
2.- Throughout the Nomenclature, the expression "parts of general
use" means:
~
~

(c) Articles ofheadings ... 83.10 ....
c
Finally, Heading 83.10 is entitled "SIGN PLATES, NAME PLATES, ADDRESS
PLATES AND SIMILAR PLATES .. ., OF BASE METAL ... " and includes various
kinds of name plates in further sub-headings.

27. Based on the submissions made by Counsel for the Revenue, the
central question before us is: whether the abovementioned Section Note 2(b) D
excludes plastic name plates from the scope of Section XVII? Thus, we are
> .-4-
required to looking into the meaning and interpretation of Section Note 2(b ).
The Counsel for the Revenue contends that since Note 2 to Section XV
defines "parts of general use" as including name plates, sign plates, number
plates, etc., their plastic equivalents (by virtue of Note 2(b)] will also get E
excluded from the scope of Chapter 87. Thus, he submits that they ought to
be classified under Chapter 39.

28. We however find it difficult to accept this submission in the light
of the language used in Note 2(b ). Note 2(b) excludes from the scope of
·t Section XVII "Parts of general use, as defined in Note 2 to Section XV, of base F
metal (section XV), or similar goods of plastics (Chapter 39) ". What we
have to examine is the scope of the last part of the Note. Admittedly, there
are two ways of interpreting this phrase. The interpretation suggested by the
Revenue is to read the exclusion of "similar goods of plastics", in synchrony
with the exclusion that applies to the goods of base metal. In this respect,
he drew our attention to the further explanation that is provided on Note 2(b ), G
- ·"'· where number plates are given as an example and it is further provided that
"such goods of base metals fall in Chapter 83, and similar goods of plastics
fall in Chapter 39". According to the Revenue, this makes it amply clear that
the "parts of general use" includes name plates of both, base metal and
plastic and therefore fall out of the scope of Section XVII. H
668 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 29. We are not impressed with this submission. It is true that on first ;'
blush, it appears that if the base metal name plates are excluded, so must
similar plastic goods be excluded. However, we do not think that this is the
correct position, primarily because of the reference made in Note 2(b) to
Chapter 39. Undoubtedly, name plates of base metal stand excluded from the
scope of Section XVII by virtue of being "parts of general use'" as defined
B and specifically mentioned in Chapter XV. Now, with respect to plastic name
plates, if the reference to Chapter 39 had not been made, then there would
be no controversy at all. In such a case, all plastic products similar to those \.
defined in Chapter XV would be excluded, regardless of an omission to
specifically mention them within Chapter 39. In other words, without any
C reference to Chapter 39 in Note 2(b ), the only control on the meaning of
"similar goods of plastics" would be the description of goods included within
Chapter XV.

30. However, the minute a reference is made to Chapter 39, it is the
provisions in Chapter 39 that control the scope of "similar goods of plastics".
D Thus, when Note 2(b) refers to similar goods of plastics as in Chapter 39, it
must be interpreted to mean similarly defined goods in Chapter 39. And since
no definition or reference exists in Cha;iter 39 regarding name plates, etc., we -'· •
cannot find any exclusion with respect to these goods from Chapter 87. For
example, when the exclusion regarding base metal name plates is made, it is
so because there exist specific and detailed headings in that Chapter. But in
E the absence of such specific headings in Chapter 39, we are unable to accept
the exclusion of the plastic name plates from Chapter 87 and include it within
a residuary provision in Chapter 39.

31. Thus, we are of the opinion that the language in Note 2(b) cannot
be interpreted to exclude plastic name plates from the scope of Section XVII.
F
CONCLUSION

32. In conclusion, since plastic name plates are 'parts and accessories'
of motor vehicles and since they are not excluded from the Section XVII, the
G appropriate classification is under headings 87.08 and 87.14.

33. For the reasons stated above, the appeal is allowed. There shall be
no order as to costs.

v.s. Appeal allowed.
H