IMPORTANT POINT
While interpreting the entries in Sales-tax Legislation, it should borne in mind that the words used in the entries must be construed not in any technical sense but as understood in common parlance.

Headnote:Central Excise and Tariff Act, 1985 – Sub – heading 9503.00 and Sub – heading 9504.90 of the First Schedule – Classification of branded word game “Scrabble” –Whether the product “Scrabble” is classifiable under sub – heading 9503.00 or sub –heading 9504.90 of the First Schedule to the Act, 1985 - Case of assessee that “Scrabble” was classifiable under sub – heading 9503.00 –However case of department that “Scrabble” was not a puzzle, it was not a toy but a game and, therefore, it could not be classified under sub – heading 9503.00; that, all games which contain boards and pieces were classifiable under sub – heading 9504.90 and since “Scrabble” has board(s) and pieces it was classifiable under sub – heading 9504.90 of CETA –Applying the test of “common parlance” or trade meaning and commercial nomenclatures, held that “Scrabble” was a board game – Hence even by the test of common parlance “Scrabble” is not the puzzle – It is a game – In a game there is a trial of skill or chance between two or more contesting parties according to some rule(s) by which one may succeed or fail – It is a contest for success, for a trial of chance or skill and it embraces every contrivance which has for its object sport, recreation or amusement – Applying the dictionary meaning, held that “Scrabble” was a board game and it was not a puzzle- In the circumstances, held that it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA. (Paras 17 to 23)
       Central Excise Act, 1944 – Section 11A(1) – Classification of branded word game “Scrabble – Conduct of the assessee clearly indicated that the assessee deliberately declared branded goods under sub – heading 9403.00 of the CETA to avoid any enquiry in the matter by the Department – Hence held that Department was justified in invoking the proviso to Section 11A (1) of the 1944 Act. (Para 22)
       Facts of the Case :
        Issue in consideration in present appeals was whether the product “Scrabble” is classifiable under sub-heading 9503.00 or sub-heading 9504.90 of the First Schedule to the Central Excise and Tariff Act, 1985
       Findings of the Court :
        Applying the test of “common parlance” or trade meaning and commercial nomenclatures, held that “Scrabble” was a board game. Hence even by the test of common parlance “Scrabble” is not the puzzle. It is a game.In a game there is a trial of skill or chance between two or more contesting parties according to some rule(s) by which one may succeed or fail . It is a contest for success, for a trial of chance or skill and it embraces every contrivance which has for its object sport, recreation or amusement. Applying the dictionary meaning, held that “Scrabble” was a board game and it was not a puzzle. In the circumstances, held that it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA.

JUDGMENT

S. H. Kapadia, J.—

1. This batch of civil appeals filed by the assessee involves common issue of classification of branded word game “Scrabble” - whether the product “Scrabble” is classifiable under sub-heading 9503.00 or sub-heading 9504.90 of the First Schedule to the Central Excise and Tariff Act, 1985 (“CETA”, for short).

2. Assessee is a proprietary firm engaged inter alia in the business of manufacture and trade of toys, games and puzzles of various kinds falling under Chapter 95 of the First Schedule to the CETA. The goods are manufactured by the assessee either under their own brand name of “United Toys” or under different brand names. One of the items manufactured by the assessee is “Scrabble” which is a registered brand name owned by M/s. J.W. Spears & Sons Ltd., U.K. According to the assessee, “Scrabble” is a puzzle or in the alternative it is an educational toy falling under sub-heading 9503.00 of the CETA. Assessee holds a licence from M/s. J.W. Spears & Sons Ltd., U.K., to use the brand name(s) “Scrabble” and to manufacture the product in India. Assessee pays royalty to M/s. J.W. Spears & Sons Ltd., U.K., on sale of “Scrabble” in India. In these civil appeals we are concerned with the period March 1996 to June 2001.

3. On 12.4.96, the assessee filed a declaration under Notification No.13/92-CE (NT) dated 14.5.92 informing the Department that the assessee manufactured toys and puzzles falling under sub-heading 9503.00 of the CETA which were fully exempt from payment of excise duty as per Notification No.81/90-CE amended by Notification No.56/94-CE. In the declarations for the relevant years in question, according to assessee, the Department was informed that they were manufacturing items classifiable under sub-heading 9503.00 as well as under Heading 95.04 either on their own account or by using the brand name of others. According to the assessee, along with the declaration(s), a list of toys manufactured by it, classifiable under sub-heading 9503.00, was also furnished. In the list the assessee stated that “Scrabble” was classifiable under sub-heading 9503.00. According to the assessee, subsequent to the filing of annual declarations, visits were made by the jurisdictional Central Excise Authorities and samples were collected by the Department.

4. It may be mentioned that in this batch of civil appeals we are concerned with the period March 1996 to June 2001 covered by two show cause notices dated 23.3.2001 and 18.1.2002. On 23rd March, 2001, assessee was served with a show cause notice (SCN) issued by the Commissioner alleging that “Scrabble” was not a puzzle, it was not a toy but a game and, therefore, it could not be classified under sub-heading 9503.00; that, all games which contain boards and pieces were classifiable under sub-heading 9504.90 and since “Scrabble” has board(s) and pieces it was classifiable under sub-heading 9504.90 of the CETA. The SCN also invoked longer period of limitation under Section 11A(1) of the Central Excise Act, 1944 (“1944 Act”, for short) alleging that the declarations filed by the assessee failed to mention that the assessee was manufacturing board games and that they had deliberately suppressed the process of manufacturing “Scrabble”. On these allegations, the Commissioner made the demand of Rs.22,72,233 (by first SCN) and Rs.71,690 (by second SCN) on the clearances of “Scrabble” made by the assessee during the period March 1996 to June 2001 charging excise duty for a longer period of limitation. In reply to SCN, assessee submitted that the longer period of limitation could not be invoked under Section 11A(1) of the 1944 Act as the assessee had stated in their declarations that they were manufacturing toys and puzzles classifiable under sub-heading 9503.00 as well as under sub-heading 9504.90 and they had specifically stated in the declarations that they were manufacturing toys and puzzles which also bear the brand name of M/s. J.W. Spears & Sons Ltd., U.K., and sin

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Judicial Analysis

SupremeToday

2009 Supreme(SC) 1731

2009(7) Supreme 323SUPREME COURT OF INDIAS.H. Kapadia and Aftab Alam, JJ. M/s. Pleasantime Products and Anr. — AppellantsversusCommissioner of Central Excise, Mumbai-I — RespondentCivil Appeal Nos. 4309-4311 of 2008Decided on : 12-11-2009

IMPORTANT POINT While interpreting the entries in Sales-tax Legislation, it should borne in mind that the words used in the entries must be construed not in any technical sense but as understood in common parlance.

Cases Referred (1)

Judicial Analysis

2009(7) Supreme 323
SUPREME COURT OF INDIA
S.H. Kapadia and Aftab Alam, JJ.
M/s. Pleasantime Products and Anr. — Appellants
versus
Commissioner of Central Excise, Mumbai-I — Respondent
Civil Appeal Nos. 4309-4311 of 2008
Decided on : 12-11-2009

IMPORTANT POINT
While interpreting the entries in Sales-tax Legislation, it should borne in mind that the words used in the entries must be construed not in any technical sense but as understood in common parlance.