Holding

Toilet soap is to be classified as "household" soap under tariff item 15(1) of the First Schedule of the Central Excise and Salt Act, 1944.

Summary

Oswal Agro Mills Ltd. appealed against the classification of its "toilet soaps" as "other sorts" under tariff item 15(2) of the First Schedule of the Central Excise and Salt Act, 1944, which attracted a higher excise duty. The Assistant Collector had placed the soaps in the higher rate category, the Collector re‑classified them as "household" under item 15(1), but the Excise Tribunal reversed that order. The Supreme Court examined the meaning of "household" and "other sorts" in the tariff, emphasizing that statutory language must be given its plain meaning and that commercial/common parlance governs classification. It held that "toilet soap" is a household soap and must fall under tariff item 15(1). The Court allowed the appeals and remitted the matter to the primary authority for refund proceedings.

Issues considered

Whether "toilet soap" falls within the definition of "household" soap under tariff item 15(1) of the First Schedule of the Central Excise and Salt Act, 1944
Whether the classification should be based on the literal wording of the statute or on the ordinary commercial meaning of the terms
Whether legislative history, the doctrine of contemporanea expositio, or other interpretative aids are applicable in construing the tariff entry

Legislation cited

Central Excise and Salt Act, 1944s. First Schedule Item 15(1), s. First Schedule Item 15(2), s. Section 8
Finance Act, 1964

Subjects

Central ExciseTariff classificationStatutory interpretationToilet soapHousehold soapExcise dutyFirst ScheduleLegislative intentDoctrine of contemporanea expositioCommercial parlance

Judgment

A OSWAL AGRO MILLS LTD. ETC. ETC.

V.

COLLECTOR OF CENTRAL EXCISE AND ORS.

APRIL 27, 1993
B
[K. RAMASWAMY AND R.M. SAHAI, JJ.]

Central F..xcises and Salt Act, 1944:
First Schedule, Item 15-Soap-Toilet Soap-"Household" and "other
sorts"--Interpretation of "Toilet Soap"-Whether household soap within the
C meaning of Tariff item 15 (1).

Interpretation of statutes;
In interpreting a provision nothing 10 be added or deleted-Object of
Leglsla1ttre 10 be gathered from the language used.

D The appellant-Mills claimed that the"toilet soaps" produced by them
were bath soaps falling under tariffitem 15 (1) of the First Schedule (House·
hold) to the Central Excises and Salt Act, 1944, but the Assistant Collector
cJassified the same as "other sorts" under tariff item 15(2) of the schedule
attracting higher levy of excise duty. On appeal, the Collector held that they
fell under tariff item No. 15 (1) "household".
E
On second appeal, the Tribunal reversed the appellate order, against
which the appellant-Mills preferred the instant appeals.

The appellants contended that in 1954 toilet soap was treated as an
F independent tariff sub-item and household and laundry soaps were treated as
separate entity and separately subjected to varied rates of tariff; that on
amendment in 1964 toilet soap was omitted as a separate entity and brought
toilet soap as part of genus, namely, soap "household'', as toilet soap has
always been a household soap.

G
The respondents contended that statute always kept distinction between
soap "household and laundry" and "other sorts" and that toilet soap was kept
in the packet of other sorts; that household and laundry soaps were being used
for cleaning household articles and utensils and washing the clothes, while
toilet soaps are for bathing purpose. The latter, composed of diverse varieties
H based on personal liking and taste, are being used; and that they are
commercially known as other sorts but not household.
378
OSWAL AGRO MILLS v. C.C.E. 379

Allowing the appeals, and remitting the matter to primary authority, A
this Court,

HELD: 1.1 The provisions of the Tariff do not determine the relevant
entity of the goods. They deal whether and under what entry, the identified
entity attracts duty. The goods are to be identified and then to find the
B
appropriate heading, sub-heading under which the identified goods/prod-
ucts would be classified. To find the appropriate classification the description
employed in the tariff nomenclature should be appreciated having regard to
the terms of the headings read with the relevant provisions or statutory rules
or interpretation put up thereon. For exigibility to excis;·duty the entity must
be specified in positive terms under a particular tariff entry. In its absence c
ithas to be deducted from a proper construction of the tariff entry. There is
neither intendment nor equity in a taxing statute. Nothing is implied. It
should be interpreted and construed as per the words the legislature has
chosen to employ in the Act or Rules. There is no room for assumptions or
presumptions. The object of Parliament has to be gathered from the language
used in the statute. (383-H, 384-A-B) D

1.2 '"foUetsoap" being of everyday household use for the purpose of the
bath and having removed its sperate identity which it enjoyed preceding
amendment and having been not specifically included in 'other sorts', it took
its shelter in commercial parlance under 'household'. If any body goes to the
market and asked for toilet soap, he must asked any for household bathing
purpose and not for industrial or other sorts. Even the people dealing with
it would supply it only for household purpose. It may be true that household
consists of soap used for cleaning utensils, laundry used for cleaning soiled
clothes and soap toilet iS used for bathing but house-hold is compendiously
used, toilet soap is used only by the family for bathing purpose. Individual F
preference or choice or taste of a particular soap for bath is not relevant. The
soap "toilet" would, therefore, fall within the meaning the word of "house-
hold" in sub-item (1) of item 15 of the Schedule. (384-8-C,)

Ajoy kumar Bannerjee and-Ors. v. Union of India and Ors., [1984]
G
3 SCC 127; altd Utka!Cqntractors and Joinery Pvt. Ltd. and Ors. v.
State of Orissa and Ors.: [1987] 3 SCC 279, distinguished

Manmohan Das v. Visltnti Das, AIR 1967 SC 643; Ramavatar
Budhaipasad etc. v. Asstt. Sales Tax Officer, Akola and Anr, [1962]
i SCC 279; Motipur Zamindari Co. (Pvt. ) Ltd. v. State of Bihar: H
380 SUPREME COURT REPORTS [1993) 3 S.C.R.

A [1962] Supp. 1 SCR 498; State of West Bengal and Ors. v. Washi Ahmed
etc., [1977] 3 SCR 149; Porritts & Spencer (Asia) Ltd. v. State of Haryana,
[1979] 1 SCR .54.~; Jndo fntemational Industries v. Commissioner of Sales
Tax, .U.P., [1981] 3 SCR 294 at 297 C; P.A. Chi(lai Chidambara Nadar v.
Addi. Appellate Asstt. Commissioner, Madurai and Anr., [1985] 4 SCC 30;
B Khandelwal Metal Works v. Union of India; [1985] Supp. l SCR 750 at 774
B-C; ShrtBharuch Coconut Trading Co. and Ors. v. Municipal Corporation
of the city of Ahmedabad and Ors., [1992] Supp. 1 SCC 298; Hansraj Gordhan
Das v. H.H. Dave Asstt. Collector of Central Excise & Customs and Ors.,
[1969] 2 SCR 253; Dunlop India Ltd. v. Union of India & Ors. [1976] 2 SCR
c 98; Anant B. Timbodia v. Union of India, [1992] l Scale 527; Superintendent
of Central Excise, .surai v. Vac Metal Corporation Ltd., AIR 1986 SC 1167;
Spaco Carburettors (India) Ltd. v. Collector of Customs, Bombay, (1988) 3
SCR 37; Shashikant Laxman Kale and Anr. v. Union of India and Anr., [1990]
4 SCC 366 at 376 para 17; Mitra Prakashan Pvt. Ltd. v. Collector of Cus-
D
toms, (1991) 51 E.L.T. 115 para 15; Desh Bandhu Gupta and Ors. v. Delhi
Stock Exchange: [1979] 3 SCR 373; J.K. Cotom Spinning and Weaving Mils
Lt.d. and Anr. v. Union of India and Ors., [1987] Supp. SCC 350; Dovack
Systems Pvt. Ltd. etc. v. Union of India & Ors. etc.[1988] 2 SCR 962 at 1000
E F to Hand State of Madhya Pradesh v. Mis G.S. Dall and Flour Mills:, [1992]
Supp. 1 SCC 150 at 153 para 18, referred to,

Craises on Statute Law (7th Edition) at Page 164, referred to.

CIVIL APPELLATE JURISDICTION: Civil Ap~al No. 2702 Of 1984.

From the Judgment and Order dated 20.6.1984._ of the Customs Excise and
Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED (SB) 2714/83 C.

Harish N. Salve, Ashok H. Desai, Miss Meenakshi Grover, Rajiv Dutta,
G Ravinder Narain, Miss Amrit and Miss Punita Singh for JBD & Co. for the
Appellants.

A.K. Ganguli, k.Swami, Dilip Tandon and P. Parameshwaran for the
H Responde~ts.
OSW AL AGRO MILLS v. C.C.E. [RAMASWAMY,J] 38i

The Judgment of the Court was delivered by A

K. RAMASWAMY. J.: Common questions of law arose for decision in
these 8 appeals need disposal by this judgment. The question relates to classifica-
tion of "toilet soap" in Excise item 15 of the First Schedule to the Central Excise
and Salt Act 1 of 1944 as amended in 1964 for short 'the Act'. In addition, in C.A. B
Nos. 813/86, 363 2-34/88 and 1102/89 sequal to its finding, they claim refund of
excess excise duty. The facts in C.A. Nos. 2702/84 and 2785/84 are sufficient for
disposal. The appellants laid before Assiatant Collector classification list claiming
.. toilet soaps" Kalpa and Oasis, in other appeals Jai, O.K. Moti, Rain drop, Gold
and Ria as bath soaps under Tariff item 15 (1) of the First Schedule (Household).
c
By notice dated August 31, 1982, the Assistant Collector called upon the
appellants to show cause as to why they cannot be classified under tariffitem 15(2)
'other sorts' and to levy excise duty at 15 per cent ad valorem (as then stood). The
appellants after filing their reply thereto and having had personal hearing, by
proceeding dated November 27, 1982, the Asstt. Collector classified toilet soaps
as "'other sorts" under tariff item 15(2) of the Schedule. On appeal the Collector D
by Order dated January 21, 1983 classified them under tariff item No. 15(1)
.. household" On second appeal, the CEGA T by its order dated June 20, 1984
reversed the appllate order and upheld the Asstt. Collector's order, Same is the
case with regardto all other appeals except resultant claim for refund. In 1954 tariff
item No. ISA was introduced in the First Schedule of the Act thus: E

.. 15(A) 'Soap' all varieties of the product known commercially as soap-

l. Soap, in or in relation to the manufacture of which any process is ordinarily
carried on with the aid of power or of steam for heating:- F

( 1) Soap, household and laundry:-
(a) Plain bars of not less than Rupees
one pound in weight fives &
annas G
four
per
cwt.
(b )t! ther sorts Rupees
six &
H
annas
382 SUPREME COURT REPORTS (1993] 3 S.C.R.

A two per
cwt.
(2) Soap toilet Rupees

founeen
B per cwt. \
(3) Soap, other then household Rupees (
and laundry or toilet. founeen
per cwt.

This entry as amended in 1964 reads thus :
c
"15 'Soap' means all varieties of product known commercially as
soap-:

(l)Soap, household and 20 per cent
Laundary advalorem
D (2) Other sons 20 per_cent
adva/orem •

(Ad va/orem rate of tarrif varies from time to time as per amendments).
\,

Later it was amended in the year 1979 empowering the Govt. to grant exemption
E under section 8 of the Act. The details thereof are not material for the purpose of '
these cases. It is seen that in 1954 in Tariff entry ISA "soap"' means all varieties
of the product known .commercially as soap. Item I provided that soap in relation
to its manufacture with the aid of power or of steam for heating. they were
classified as Plain bars, other sorts, toilet soaps and soap, other then husehold.or
laundry or toilet. While amending the entry in 1964 the language couched therein
F as seen earliar is thus: 'soap' means all varities of products known commercially
as soap. . •

1) Soap, household and Laundry
,./
~
2) ..Other sorts'' and graded ad valorem tariff has been prescribed. It is seen
G that household and laundry soap was subjected to levy of tariff at a lesser rate than
"other sons" ad valorem. The contention of Sri Ganguli, the learned Senior
counsel for the union is that statute always kept distinction between soap
''household and laundry.. and "other sorts"'. Toilet soap was kept in the packet of
other sorts. Household and laundry soaps are being used for cleaning household
articles and utensils and washing the clothes while toilet soaps are for bathing
H purpose. The latter compose of diverse varieties, based on personal liking and
OSWAL AGRO MILLS v. C.C.E, [K. RAMASWAMY. J.) 383

taste, are being used. They are commercially known as other sorts but not A
household. The legislative history furnishes unimpeachable evidence that soaps
used for household and laundry are compendiously treated as a class and are
subjected to imposition of lesser tariff. They receive their colour from each other
as compendiously known in the commercial parlance that the former are meant for
use for household purposes while toilet soap are for use for bath and are subject
to higher rate of taiiff at par with soap for commercial and industrial purposes. B
They bear higher rate of tariff. The explanatory note appended to the Finance Bill
196.4 would furnish the legislative intendment to amend the tariffitem and the
treatment meted out to toilet soap for tariff purpose. It is accordingly understood
by the department and also by the trade circles. The appellants too intially treated
toilet soap as other sorts but later, on legal opinion, they claimed them as household
c
soaps. The construction adopted by the tribunal is consistent with the standard
works on soaps. Mis Harish Salve and Ashok Desai, contended that in 1954 toilet
soap was u·eated as an independent tariff sub-item and household and laundry
soaps were treated as separate entity and separately subjected to varied rates of
tariff. On amendment in 1964 toiiet soap was omitted as a separate entity and
brought toi1et soap as part of genus, namely, soap "house hold", as a toilet soap is D
always a household soap. Therefore, the reliance by revenue on varied rates of duty
or departmental contemporenia expositio have no bearing. The object of clasSijfi-
cation does not show that toilet soap is not part of the genus, "soap household"
unless it is established otherwise.

The question, therefore, emerges whether "toilet soap" would be household E
soap within the meaning of _Tariff item 15( l) of the Schedule. Undoubtedly true,
as contended by Sri Ganguli, that preceding amendment toilet soap was classified
separately under sub item 2 and assessed to duty accordingly. But by amendment
the distinction was wiped out and toilet soap was brought into common hotchpoch.
So the contention that the variety of products known commercially as soaps have F
been enumerated or included compendiously, retaining their original colour even
after the amendment made in the Finance Act, l ?.o4 and falls into ·•other sorts"
same genus,primafacie, though attractive, on consideration from pro per perspec-
tive and in its setting in common commercial parlance, soap "toilet" appears to fall
in household in sub-item 1 of tariff item 15 of the Schedule. It is true that the
heading "soaps" are commercially known to be of diverse variety. G

The provisions of the Tariff do not determine the relevant entity of the goods.
They deal whether and under what entry, the indentified entity attracts duty. The
goods are to be identified and then to find the appropriate heading, sub-heading
under which the identified goods/products would be classified. To find the
H
appropriate classification description employed in the tariff nomenclature shouid
384 SUPREME COURT REPORTS (1993] 3 S.C.R.

A be appreciated having regard to the terms of the headings read with the relevant
provisions or statutory rules or interpretation put up thereon. For exigibility to
excise duty the entity must be specified in positive terms under a particular tariff
entry. In its_absence be deduced from a proper construction of the tariff entry.
There is neither intendment nor equity in a taxing statute. Nothing is implied.
Neither can we insert nor anything can we delete but it should be interpreted and
B constreued as per the words the legislature has chosen to empoly_ in the Act or
Rules. There is no room for assumption or presumptions. The object of the
parliament has to be gathered from the language used in the statute. The contention
that toilet soap is commercially different from household and laundry soaps, as
could be seen from the opening words ofentry 15, needs careful analysis. It is well,
C at the.outset, to guard against confusion between the meaning and the legal effect
of an expression used in a statute. Where the words of the statute are plain and
clear, there is no room for applying any of the principles of interpretation which
are merely presumpti01-i" in cases of ambiguity in the statute. The court would
interpret them as they stand. The object and purpose has to be gathered from such
>
word themeselves. Words should not be regarded as _being surplus nor be rendered
D o_tiose. Strictly speaking there is no place in such cases for interpretation or
construction except where the words of statute admit Of two meanings. The safer
and more correct course to deal with a question of construction of statute is to take
the words themselves and arrive, if possible, at their meaning, without, in the first
place, reference to cases for theories of construction. Let us. therefore, c-onsider the
meaning of the word.soap "household". The word household signifies a family
E living together. In the simplistic language toilet soap being used by the family as
household soap is too simplification to reach a conclusion. Therefore, one has to
gather its meaning in the legal setting to discover the object which the Act seeks
to serve and the purpose of the amendment brought about. The task of interpreta-
-tion of the statute is not a mechanical one. It is more than mere reading of
mathametical formula. It is an attempt to discover the intention of the legislature
F
from the language used by it, keeping always in Tnlnd, that the language is at best
an imperfect instrument for the expression of actual human thoughts. It is also idle
to expect that the draftman drafted it w'i-th divine prescience and perfect and
unequivocal clarity. Therefore, court would endeavour to eschew literal construc-
tion if it produces manifest absurdity or unjust result. In Mamnohad Das v. Vishnu
G Das, AIR 1967 SC 643 a Constitutfon bench held as follows:

"The ordinary rule of construc_tion is the provision of a statute must
be construed in accordance with the language used therein unless
there are compelling reasons, such as, where a leteral construction
would reduce the provision to absurdity or prevent manifest inten-
H tion of the legislature from being carried out"_
OSWALAGROMILLS\'.C.CE. IK. RAMASWAMY,J) 385

In Ramavatar Budhaiprasad etc. v. Ass tr. Sales Tax Officer, Akola and Anr. A
[ 1962) 1 SCR 279, another Constitution Bench was' to consider.whether "betal
leaves" are "vegetable" within t_he meaning of item 6 of the II Schedule to the M.P.
Sales Tax Act. It was contended that beta! leaves are vegetable and, therefore, they
are exempted from the payment of sales tax. While construing item 6, this court
held that the words must be construed not in any teachnical sense nor from the
botanical point of view but as_ understood in common parlance. It has not been B
defined in the Act and being a word of every day use it must be construed in its
popular sense meaning "that sense which people conversant with the subject
matter with which the statute is dealing would attribute to it". It is to be construed
as understood in common language. Therefore, beta! leaves were held to be not
vegetable. The term ·vegetables' is to be understood as commonly understood
denoting those classes of vegetable matter which are grown in kitchen gardens and
c
arc used for the table. The same view was reiterated in Motipur Zamindari Co.
(P\'t.) Lllf. v. Stateq_f Bilzar (1962] Supp. 1SCR498 and State of West Bengal and
Ors_ i:. "-'as hi Ahmed etc. [ 1977] 3 SCR 149. In Was hi Ahmed's case _green ginger
was held to be vegetable within the meaning of the word used in cori-1mon parlance.
' .
In Motipur Zaminadari 's case it was held that sugarcane was not vegetable. In D

- l'urrim & Spencer (Asia) Ltd. v. State of Haryana, [1979] l SCR 545 this Court
held that ·Dryer felts· are not textiles. In that context the principle ofunderstanding
the mi.:aning of the word in common parlance was adopted. In lndo lnt~marional
lnd11srries v. Commissioner of Sales Tax. U.P., [I 981] 3 SCR 294 at 297C this
(\iurt held that "it is well settled that in interpreating items in statutes like the
Excise Tax Acts or Sales Tax Acts. whose primary object is to raise revenue and E
t\ir which purpose they classify diverse products, articles and substances resort
should be had not tu "the scientific and rechinicaf' meaning of the terms or
expression used but to their popular meaning, that is to say, the meaning attached
to them by those dealing in them.If any termorexpressoion has been defined in the
(emphasis supplied)
F
enactment then it must be understood in the sense in which it is defined but in the
ahsence of any definition being given in the enactment the_ meaning of the term in
common parlance or commercial parlance has to be adopted. In that case the
clinical syringes manufactured and sold by the assessee were not considered as
'glassware' falling within entry 39 of the First Schedule of the Act. In commercial
sense glassware would never comprise of articles like clinical syringes etc., or G
specialised significance and utility. Same view was reiterate~- in P.A. Chillai
Chidambara Nadar v. Addi. Appel/are Asst. _Commissioner. Madurai and Anr.
[1985]4SCC 30thatcoconut is neither a fresh fruit nor a vegetable. In
khatlde/wal Metal Works v. Union of India, [ 1985] Supp. I SCR
750 at 774 B-C this Court held that court cannot decide classification H
_,
386 SUPREME COURT REPORTS 11993) 3 S.C.R.

A of goods under Import Tariff by implication. If rules of interpretation are
made in the Act, they should be applied and interpretation would be made with
their aid for classification. The court held that brass scrap is not m~tal alloy.
Craises on Statllte Law (7th Edition) at page 164 specified one of the Rules of
Interpretation of Statutes as extracted below:
"Ttie second Ru le is that if the statute is passed with reference
B to a particular trade, business or transaction and, words are used
therein which everybody conversent with. that trade, business or
transaction knows and understands to have a particular meaning in
it, then the words are to be construed as having that particular
meaning''.

c In Shri Bhamch Coconut Trading Co. and Ors. v. Municipal Corporation
<!{the City of Ahemdabad and Ors., [ 1.992) Suppl. l SCC 298 this Court applied
the test as "would a householder when asked to bring some fresh fruits or some
vegetable for the evening meal bring Coconut too as vegitable? Obviously the
answer is in the negative". Again when a person gees to a commercial market ask
D for coconuts, "no one will consider brown coconut to be vegetable or fresh fruit,
no householder would purchase it as a fruit. Therefore, the meaning of the word
brown coconut, whether it is a green fruit has to be understood in its..ordinary
commercial parlance". Accordingly it was held that brown coconut was not green
fruit. In interpreting the statute the individual appraisal of the wisdomorunwisdom
of a particular course consciously selected by the Legislature is to be put aisde. In
Hans raj Gordhan Das v. H.H. Dave. Asstt. CollectorofCentral£tcise & Customs
E
and Ors., [ 1969) 2 SCR 253 this court held that the operation of the statutory
notification had to be judged not by the object which authority had in mind but by
the words it had employed to effectuate the legislative interest. The question
whether the cotton textiles manufactured by handlooms are entitled to exemption,
this court held to be positive. It may be noted that marketability of the product is
an essential facet to attract dutiability of the goods under the Act. The general
F
purpose or common use of the product though may not be conclusive but may be
relevant to classify it in a tariff entry when it was not specifically enumerated in
a particular entry or sub-entry. The construction of the word must yield in favour
of promoting and effectuating the object and purpose of the Act. In Dunlop India
Ltd. v. Union of India & Ors. [1976) 2 SCR 98 this Court found the entry not in
G residuary but placed in the parantage and relieved it from orphanage: in Anant B.
Timbodia v. Union oflndia, (1992] l Scale 527, this Court was to consider whether
imported cloves fell with item 169 in List 8 of Appendix 6 or para 167 of chapter
8 of import and export policy 1990-93. Para 167 of Chapter 8 of import policy
clearly provided the heading-Import of Spices includes cloves, cinnamon/
cassia, nupneg and Mace. Therefore, it was held that import pennit is necessary.
ff The doctrine of popl)lar sense or trade or its use in making medicine as crude drug
OSWAL AGRO MILLS v. C.C.E. {K. RAMASWAMY, J.) 387.

was not accep_ted. Dictionary meaning or meaning given in Indian Pharmaceutica: A
Codex was not accepted as given in in view of specffic enumeration. In Superin-
tendent ofCentral facise, Surat v. Vac Metal Co,.Poraion Ltd. AIR I 986 SC 1167
when the revenue contended that metalised yarn fell within general Tariff entry 18
"yarn and synthetic fibres", this court held that entry ISA (2) first schedule of
Central Excise & Salt Act's spect_fic entry relating to articles made of plastics of
"all sorts" and metalised yarn wax exigible to lessor tariff duty. In Spaco B
Carburettors (India) Ltd. v. Collector of Customs. Bombay [1988] 3 SCR 37
whether special purpose complex machine tool fell in entry 84-89 or 84, 45/48, this
court held, after taking into account the purpose and use of it, that it is a multi-
purpose machine tool and fell in item 84, 45/48 of lst Schedule.
c
The contention of the Revenue which finds favour with the tribunal that the
legislative history and mamorandum appended to the Finance Bill would furnish
aid to the c011struCTion of the word "household" soap is not apposite to the fact
situation. When there is ambiguity in the word, statement and objects the
legislative history, the memorandum appended to the Bill and the speech _of the
mover of the Bill are relevant material to discover the intention intention of the D
legislature. In Shashikant La.xman Kale and Anr. v. Union of India and Anr.,
[ 1990) 4 SCC 366 at 376 para 17 this Court held that "for determining the
purpose or object of the legislation, it is permissible to look into the circum-
stances which prevailed at the time when).be law was made, the Statement of
Objects and.Reasons of the Bill which-actuated the step to provide a remedy for
the then existing malady can be used for the limited purpose of appreciating the E
background and the antecedant state of affairs leading to the legislation. The
memorandum explaining the provisions in the Finance Bill ~hich were not part
of the 'Notes on Cfauses' appended to the Statement of Objects and Reasons of
the Bill cannot be used to draw support therefrom as it is not an accurate guide of
the final Act. In that behalf this Court relied on the statement of law profounded F

- by Francis Bennion ih his Statutory Interpretation, Second Edition, 1984 at p.
529 relied on by the appellants in this case too. In Ajoy Kumar Bannerjee and
Or~.y_. Union of India and ors. [l 984] 3 SCC 127 relied on by Sri Ganguli in this
behalf renders no assistance to the Revenue. Therein the question was the object
of delegated legislation. Therein the memorandum appended to the Bill incorp·o-
rating s. 16 of the General Insurance Business (Nationalisation) Act, 1972 was G
considered in the context of fixation of the pay scales of the employees. The
doctrine of reading down, placing reliance on Utkal contranctors and Joinel)'

-- Pvt. Ltd. and Ors. v. State of Orissa and Ors. [1987] 3 SCC 279 also is of no
assistance to the Revenue. The doctrine of reading down_ has been applied only to s~stain
the constitutionality of the statute which question is not before us. There is no quarrel
with the proposition that in ascertainrng the meaning of the word or a clause or H
188 SUPREME COURT REPORTS (1993] 3 S.C.R.

A sentence in the statute in its interpretation, everything which is logically-relevant
should be admissible. It is no doubt true that the doctrine of Noscitur A Sociis,
meaning thereby, that it is a legitimate rule of construction to construe words in
an Act of Parliament with reference to words found in immediate connection with
them i.e. when two or more words which are susceptible of analogous meaning
are clubbed together, they are understood to be used in their cognate sense. They
B take, as it were, their colour from each other, the meaning of the more general is
restricted to a sense analogous to a less general. The philosophy behind it is that
the meaning of doubtful words may be ascertained by reference to the meaning of
words associated with it. This doctrine is broader than the doctrine of ejusdem
generis. This doctrine was accepted by this Court in catina of cases but its
C application is to be made to be context and the setting in which the words came to
be used or associated in the statute or the statutory rule. Equally the doctrine of
contemporanea exposltio is also being invoked to cull out the intendment by
removing ambiguity in its understanding of the statute by the executive. This
Court in a latest case Indian metals & Ferro Alloys Ltd. v. Collector of central
Excise (1991) 51 E.L.T 165 (S.C) cited all the decisions upto date and applied the
D doctrine to the understanding by the revenue of the provisions in income-tax Act.
In D,esh Bandhu Gupta and Ors. v. Delhi Stock Exchange [1979) 3 SCR 373 this
Court held that this principle can be invoked, though the same will not always be
decisive on the question of construction. But the contemporaneous construction
placed by administrative or executive officers charged with executing the statute,
although not controlling, is nevertheless entitled to considerable weight as highly
E pursuasi ve. We may also add that if the interpreatation is erroneous, court would
without hesitation refuse to follow such construction. This Court also equally

F
expressed the view that its application was in restricted sense to ancient legisla-
tion in J.K. Cotton Spinning and Weaving Mills Ltd. and Anr. v. Union of India
and Ors. [1987) Supp. SCC 350 and in Doypack Systems Pvt. Ltd. case [1988) 2
SCR 962 at 1000 F to H. In State ofMadhya Pradesh v. Mis. G.S. Dall and Flour
-
Mills, [1992) Supp. 1 SCC 150 at 153 para 18, this Court doubted the application
of the doctrine of contemporanea exposito as given to the construction or its
applicability to a recent statute that too in the first few years _of its enforce'ment. In
this case also the question whether toilet soap is a household soap had arisen
within a short period after the Amendment Act, 1964 came into force, Therefore
G • the understanding by the executive and its interpretation in bringing toilet soap
in sub~item (2) "other sorts" instead of item (1) "household" being of formative
period of statutory operation the doctrine became inapplicable.

The ratio in lndo Metal case, therefore, is inapplicable. As rightly contendec
by Sri Ganguli that the doctrine of placement ofa particular goods in a particular
H tariff item or residuary i.e: J}arentage or orphanage i.e. in placement of toilet soaps
OSWAL AGRO MILLS v. C.C.E. (K. RA~1ASWA~Y. J] 389

in either sub-items is not attracted to the facts as it is not a case of residuary items A
but of sub-classification within the same item.

Thus considered in the legal setting and commercial parlance we are of the
considered view that "toilet soap" being of everyday household use for the purpose
of the bath and having removetl its separate identity which it enjoyed preceding

- amendment and having been not specifically included in "other sorts", it took its
shelter in commercial parlance under "household". As stated if any· body goes to
the market and asks for toilet soap he must ask only for household bathing purpose
B

and not for industrial or other sorts. Even the people dealing with it wot1ld supply
it only for houshold purpose. It may be true that household consists of soap used
for cleaning utensils, laundry used for cleaning soiled clothes and soap toilet is c
used for bathing but household is compendiously used, toilet soap is used only by
the family for bathing purpose. Individual preference or choice or teste of a
particular soap for bath is not relevant. The soap "toilet" would, therefore fall
within the meaning the word of "household" in sub-item (1) of item 15 of the
Schedule. The classification shall accordingly be adopted. The appeals are
accordingly allowed. the cases are remitted to the primary authority to deal with D
the matters accordingly. We do not propose to go into the question of refund as it
is a matter to be dealt with by the authorities concerned in accordance with the law.
The appellants shall have to apply for refund and the authorities shall be required
to deal with it in accordance with law. It is for the authority, therefore, to decide
the question-1rS perlaw. In the circumstances parties are directed to bear their own
costs.

---·
V.M. Appeal allowed.