Paragraph numbers below are the court’s original numbering, recovered from the source text.
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: "Something of secondary or subordinate importance; Something contributing in subordinate degree to a general result or effect; an adjunct or accompaniment; Accessory is an article or device that adds to convenience or effectiveness of, but is not essential to, main machinery." c
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 of Andhra 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: c 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: "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 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) 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 light used in projectors in cinemas. The fact that they can also be 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 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] ·f 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: "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 ,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 of AP, [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 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 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) [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 H on them. Name plates convey to the consumers the distinct features it carries. PRAG A Tl 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. 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.
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: "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 (2007] 5 S.C.R. 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 c notes to the entire Section (Section XVII), of which Chapter 87 is a part. The General Explanatory Note to Section XVII states as follows: 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 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) 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 ·corresponds to the principal use of that part or accessory. [Emphasis supplied] Further explanation regarding Note 2 reads as follows: (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 PRAGATI SILICONS PVT. LTD. v. COMMNR. OF CENTRAL EXCISE, DELHI (BHAN, J.J 667 in Chapter 39).
26. Referring to Note 2 of Chapter XV, Section Notes. 2.- Throughout the Nomenclature, the expression "parts of general B 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) 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, G he drew our attention to the further explanation that is provided on Note 2(b ), – ·"'· 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.
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 3 9.
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. 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.