IMPORTANT POINT
While interpreting items in tax statutes resort should be had not to scientific or technical meaning of such items but to their popular meaning.

JUDGMENT

G.P. Mathur, J.-Leave granted in SLP (C) No. 1186 of 2000 (Municipal Corporation Katni v. M/s. Associated Cement Co. Ltd.).

2. Civil Appeal No. 7188 of 1997 has been preferred against the judgment and order dated 21.4.1997 of a Division Bench of Madhya Pradesh High Court deciding the issue relating to levy of export tax on certain products manufactured by M/s. Associated Cement Co. Ltd.

3. By a resolution published in M.P. Gazette dated 25.10.1991, the Municipal Corporation, Katni levied tax on export of goods from within the area of Municipal Corporation. Entry Nos. 1 and 2 in the Schedule appended to the Notification read as under:-

SCHEDULE

S.No. Name of Article Tax Proposed

(1) (2)          (3)

1. All types of Cement 1/2% of the cost of the consignment

2. Materials made of 1% of the cost of cement article

4. The appellants Associated Cement Co. Ltd. filed writ petition challenging the levy of export tax on refractory cement and Acco Proof basically on the ground that they were not covered by the Schedule as they were not cement. The writ petition was dismissed by a learned Single Judge but the Letters Patent Appeal was party allowed by a Division Bench and it was held that refractory cement is a cement so as to attract liability of export tax but Acco Proof being a water proofing compound was not cement and was therefore not exigible to export tax.

5. The main question which requires consideration is whether refractory cement is cement so as to attract liability of export tax. Shri T.R. Andhyarujina, learned senior counsel appearing for the appellant has submitted that the Associated Cement Co. (hereinafter referred to as the appellant ) has several factories in different parts of the country including a manufacturing unit by the name of Katni Refractory Works at Katni. This Unit manufacturers (i) Firebricks; (ii) Ramming masses; (iii) Fireclay mortors; (iv) High Alumina Refractory Binder; (v) Refractory Castables; (vi) Whytheat Castables. The aforesaid products in the commercial parlance are known as "Refractory material" and they are entirely different from "cement" or material made "out of cement". Most of the Refractory products are sold directly to the end users and only a small quantity is sold by way of retail sale whereas cement is sold through warehouses and cement stockists network. It has been submitted that the products manufactured by the appellant can by no stretch of imagination be equated with or used for the purposes for which cement is used. The refractory materials are used in furnaces and kilns to withstand high temperature, corrosion and abrasion and they are not usable as a substitute of cement or for construction activities. Learned counsel has further submitted that cement cannot be used for the purpose for which refractory material is used and the process of manufacturing cement and refractories are entirely different and the plant manufacturing refractories can neither be used nor can be converted for manufacturing any type of cement. The raw materials required for manufacturing refractory are also entirely different from those required for manufacturing cement. The main raw material required for manufacture of cement is limestone, silicous clay and gypsum whereas for manufacture of refractory products, the main raw material is bauxite, kyanite and fire clays. Bauxite and fire clay are not used for manufacture of cement and chemical composition and properties of the two products are entirely different. It has also been urged that so far as construction activity is concerned the most important criteria applicable in the case of cement is its strength in ordinary temperature but for refractoriness it is its refractories at high temperature. Lastly learned counsel has submitted that in common parlance and in trade, refractory can never be understood as cement. It has thus been u