"http://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 1 of 8 \nCASE NO.:\nAppeal (civil) 6980-6983 of 2004\nPETITIONER:\nM/s O.K. Play (India) Ltd. \nRESPONDENT:\nComm.of Central Excise,Delhi-III, Gurgaon \nDATE OF JUDGMENT: 03/02/2005\nBENCH:\nS.N. VARIAVA,Dr. AR. LAKSHMANAN & S.H. KAPADIA\nJUDGMENT:\nJ U D G M E N T\nWITH\nCIVIL APPEAL Nos.6776-6779 OF 2004\nCommissioner of Central Excise,\nDelhi-III, Gurgaon \\005 Appellant\nVersus\nM/s O.K. Play (India) Ltd. \\005 Respondent\nKAPADIA, J.\n The short question which arises for determination in \nthese Civil Appeals filed by the assessee and by the department, \nrespectively, under Section 35L(b) of the Central Excise Act, \n1944, is \\026 whether the assessee was right in classifying the \nfollowing articles under Chapter Heading 95.03 and clearing \nthe same without payment of duty. The said articles are \nActivity Desks and Chairs, Fun Fliers, Play Table, Play Pool, \nRockers, Slides and Swings.\n \n The assessee is engaged in the manufacture of toys. On \n24th April 1987, a team of officers from Anti Evasion Branch of \nthe Delhi Commissionerate visited the factory premises of the \nassessee situate at Gurgaon, Haryana, when they found that the \nassessee was manufacturing the above articles with the help of \nmachines and which were being cleared without payment of \nduty. \n On 4th November, 1997, a show-cause notice was issued \nto the assessee alleging mis-declaration in the classification list \nby prefixing and suffixing each of the above items with the \nwords \"baby\" and \"toys\" respectively. Consequently, \"Activity \nDesks and Chairs\" were described as \"Baby Chair Toy\" and \n\"Baby Desk Toy\"; Rockers were described as \"Baby Rocker \nToy\"; Slides were described as \"Baby Slide Toy\". According \nto the department, the said prefix and suffix was inserted to \neach of the above articles to mislead the department into \nbelieving that each article was a toy. Hence, the department \nsought to recover duty for the period from 1.4.1992 to \n28.2.1997 by invoking the proviso to section 11A(1) of the \nCentral Excise Act, 1944 (hereinafter referred to for the sake of \nbrevity as \"the 1944 Act\"). According to the department, the \nsaid items were classifiable under Chapter Headings 95.06, \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 2 of 8 \n94.01, 94.03 and 39.22 and, therefore, chargeable to duty.\n The basic question which arises for determination in \nthese Civil Appeals is \\026 whether the aforestated seven articles \nare \"toys\" classifiable under Tariff Heading 95.03 as claimed \nby the assessee?\n For the sake of clarity, since classification of seven \narticles is in issue, we have divided this judgment into three \ncategories.\n Before dealing with the issue of classification, certain \npoints are required to be clarified.\n In the case of A. Nagaraju Brothers v. State of Andhra \nPradesh reported in [1994 (72) ELT 801], it has been held by \nthis Court that no one single universal test can be applied for \ncorrect classification. There cannot be a static parameter for \ncorrect classification.\n Further, the scheme of the Central Excise Tariff is based \non Harmonized System of Nomenclature (for short \"HSN\") and \nthe explanatory notes thereto. Therefore, HSN along with the \nexplanatory notes provide a safe guide for interpretation of an \nEntry.\n Further, equal importance is required to be given to the \nRules of Interpretation of the Excise Tariff. Under rule 3(a), it \nis provided that the heading which provides a specific \ndescription shall be preferred to a heading having a more \ngeneral description. For example, in the case of \"toys\" referred \nto in the HSN Heading and the Tariff Heading, the description \nrefers to reduced size model of an Article used by adults. This \ntest helps us to understand the difference between \"toys\" and \n\"furniture\".\n Lastly, it is important to bear in mind that functional \nutility, design, shape and predominant usage have also got to be \ntaken into account while determining the classification of an \nitem.\n The aforestated aids and assistance are more important \nthan the names used in the trade or common parlance in the \nmatter of correct classification.\nA) CLASSIFICATION OF PLAY TABLE, TABLES, \n ACTIVITY DESKS AND CHAIRS.\n \n The assessee has classified the above articles under Tariff \nHeading 95.03, whereas the revenue has classified the same \nunder Tariff Headings 94.01 and 94.03, which read as follows:-\nHeading No.\nDescription of Goods\nRate of \nDuty\n94.01\nSeats (other than those of heading \nNo.94.02), whether or not convertible \ninto beds, and parts thereof.\n20%\n94.03\nOther furniture and parts thereof.\n20%\n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 3 of 8 \n95.03\nOther toys; reduced-size (\"scale\") \nmodels and similar recreational \nmodels, working or not; puzzles of all \nkinds.\n15%\n Mr. S. Ganesh, learned senior counsel appearing on \nbehalf of the assessee submitted that \"Activity Desks and \nChairs\" were specifically designed for amusement of small \nchildren. He submitted that the said Desk has a slate with a \nremovable desk top with twin wells for crayons, toys, books \netc. The children can even draw or learn the basics of writing \non this table. Similarly, the play table is designed for group \nplay. These articles were aids for the play of small children. \nThey were bought and sold in the market as toys. They were \nexclusively available in toy shops and not in furniture shops. It \nwas submitted that the usage and commercial parlance show \nthat the articles were toys classifiable under Tariff Heading \n95.03 as toys. In this connection, reliance was placed on the \nCertificates obtained from Toys Association of India and from \nSports Goods Export Promotion Council, letters from various \ndistributors and catalogues of various international \nmanufacturers and rotational moulding association. It was \nsubmitted that the department has not adduced any evidence to \nshow that in commercial parlance, these articles are not known \nas toys. Reference was also made to Note-1 under Chapter 94 \nto show that the said chapter did not cover the toy furniture. \nAccording to the assessee, toy furniture has not to be \nunderstood as furniture under Chapter 94 but should be \nexcluded therefrom as a toy furniture was specifically designed \nfor play and amusement of children. It was also not \nsynonymous with doll furniture. These articles, according to \nthe assessee, were aids for play and, therefore, classifiable \nunder Heading 95.03. Reliance was also placed on the product \ncatalogue to show the shape, colour and size of these articles \nindicating that they were toys and not furniture.\n Per contra, Mr. Rajiv Dutta, learned senior counsel \nappearing on behalf of the department submitted that the mere \nfact that an article was meant for exclusive use of children \nwould not place that article in the category of toys. Baby \nchairs, desks and tables were used predominantly by children to \nsit on and write on. They were smaller versions of tables and \nchairs used by adults and, therefore, rightly classified as \nfurniture under Headings 94.01 and 94.03. He submitted that \nwhat was excluded from Chapter 94 was doll’s furniture. In \nthis connection, reliance was placed on Note (A)(12) of HSN \nHeading 95.03 which refers to Dolls’ houses and furniture \nincluding bedding. It is this type of furniture that can be \ntreated as toy furniture which is excluded from Chapter 94. \nReliance was also placed on the note to HSN Heading 94.01 \nwhich refers to different types of chairs like infant’s chair, \nchildren’s seat etc. Therefore, according to the department, the \naforestated articles were classifiable under Headings 94.01 and \n94.03.\n We are inclined to agree with the department. The mere \nfact that an article is meant for exclusive use of children would \nnot place it in the category of toys. The word \"toys\" is not \ndefined. However, Tariff Heading 95.03 describes \"toys\" as \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 4 of 8 \nreduced-size models and similar recreational. This tariff \nheading is identical to HSN Heading 95.03 which also refers to \n\"toys\" as reduced-size models. Both the headings describe \n\"toys\" as representing animals or non-human objects. They \nrefer to toy musical instruments, apparatus, appliances etc. \nHeading 95.03 is a residuary item. It covers Doll houses and \nfurniture. Under the explanatory notes to HSN Heading 95.03, \nreference is made to toys like sewing machines, musical \ninstruments etc. distinguishable by their size and limited \ncapacity from real sewing machine, musical instrument etc. \nSimilarly, under the explanatory Note (B) to HSN Heading \n95.03, reduced-size model includes models of aircraft, trains \netc. which are reproductions of Articles. It is important to note \nthat Section XX of the Central Excise Tariff Act, 1985 \n(hereinafter referred to for the sake of brevity as \"the 1985 \nAct\") covers Chapters Nos.94, 95 and 96 under the caption \n\"Miscellaneous Manufactured Articles\". Chapter 94 deals with \nFurniture. Chapter Note 1(k) excludes toy furniture or toy \nlamps from Chapter 94. Chapter Note 2 refers to the articles of \nfurniture, falling in Chapter 94, subject to the condition that \nthey are for placing on the floor or ground. Tariff Heading \n94.01 refers to Seats. Further, the HSN Heading 94.03, which \nis similar to Tariff Heading 94.03, refers to any movable article \nwhich can be placed on the floor and mainly used in dwelling \nhouse, schools, cafes etc. as furniture. It covers desks, chairs \netc. Basically, toys, as indicated by HSN Heading, are \nminiature reproduction of the articles used by the adults, like, \nfurniture, musical instruments etc.\n In the light of what is stated above, we are of the view \nhat play tables, activity desk etc., enumerated above, are more \nakin to furniture under Headings 94.01 and 94.03 than toys \nunder Heading 95.03.\n In Corpus Juris Secundum, Volume 37 at page 1412, the \nword \"furniture\" is defined as under:-\n \"A comprehensive term of very broad \nmeaning and general application whose meaning \nchanges so as to take the colour of, or be in accord \nwith, the subject to which it is applied. It has been \nvariously defined as meaning anything which \nfurnishes or equips; a supply of necessary, \nconvenient or ornamental articles, for any business \nor residence, or with which a residence is supplied, \nequipment, outfit, supplies, that which fits or \nequips for use or action, that which fits or supplies \na house for use or which furnishes or is added to \nthe interior of a house for use or convenience; that \nwith which anything is fitted, out, furnished, or \nsupplied, that with which anything is furnished or \nsupplied for use, those movables required for use \nor ornament in a dwelling, a place of business or of \nassembly; those readily movable articles which \nwould be serviceable generally as household \nfurniture without any special reference to a \nparticular building. It is not confined in its \nmeaning to such things as are necessaries to a \nfamily, but embraces about everything with which \na house or anything else is or can be furnished. \nThe term ordinarily relates to movables chattel; \npersonal chattels in the use of a family and applies \nto all personal chattels which may contribute to the \nuse or convenience of the house-holder or the \nornament \"of the house\". \"Furniture\" is not \ngenerally included by the term \"fittings\".\"\n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 5 of 8 \n According to Concise Oxford Dictionary, \"toy\" is an \nobject for a child to play with. It is a model or a miniature of \nsomething. \n According to Encyclopedia Americana, a \"toy\" is a \ntrifle. It is a thing of little or no value. It is a play thing. It has \nno practical use. \n According to Oxford Classical Dictionary, a Doll’s \nhouse furniture is a \"toy\". \n According to Random House Dictionary, a \"toy\" is an \nobject. It is a small representation of something familiar to the \nchild such as an animal an object, person etc. It is something \ndiminutive. \n According to Collins Cobuild Dictionary, a \"toy\" is an \nobject that the children play with, for example, a doll or a \nmodel car or an air-craft. \n \n In the circumstances, we hold that play table, activity \ndesks and chairs constitute \"furniture\" in terms of Tariff \nHeading 94.01/94.03. \nB) CLASSIFICATION OF \"SWINGS, SLIDES, FUN \n FLIERS AND ROCKERS\".\n The next question which arises for determination is \\026 \nwhether the above items are \"toys\" under Tariff Heading 95.03, \nas contended by the assessee; or whether they are equipments \nfor general physical exercise, gymnastics and athletics, as \nsubmitted on behalf of the department.\n To decide the above controversy, we quote hereinbelow \nTariff Headings 95.03 and 95.06:\nHeading No.\nDescription of Goods\nRate of \nDuty\n95.03\nOther toys; reduced-size (\"scale\") \nmodels and similar recreational models, \nworking or not; puzzles of all kinds.\n15%\n95.06\nArticles and equipment for general \nphysical exercise, gymnastics, athletics, \nother sports (including table-tennis) or \nout-door games, not specified or \nincluded elsewhere in this Chapter.\n15%\n As stated above, Tariff Heading and HSN Heading 95.03 \ndescribe \"toys\" as reduced-size models. Toys are miniature \nreplica of articles used by adults. Tariff Heading 95.06 is \nsimilar to HSN Heading 95.06. According to explanatory notes \nto HSN Heading 95.06, equipments for exercise etc. are parallel \nbars, rings, trapeze etc. The said note excludes toys under \nHeading 95.03. However, it covers swings, slides etc. used in \nthe playground. Therefore, on a bare reading of these \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 6 of 8 \nexplanatory notes, we find that the articles in question are not \nequipments for general physical exercise. They are toys under \nTariff Heading 95.03.\n In Black’s Law Dictionary, the word \"equipment\" is \ndefined to mean an article or implement used for a specific \npurpose or activity. \n \n In Random House Dictionary, an \"equipment\" is defined \nas an article used for gaining skill. \n According to Collins Cobuild Dictionary, \"equipment\" is \na thing which is used for a particular purpose. \n Applying the above tests, we hold that the purpose of \nreduced size models of slides, swings etc. is amusement and not \nphysical exercise. The Tribunal was, therefore, right in \nclassifying these items under Tariff Heading 95.03.\n C) CLASSIFICATION OF PLAY POOL \n In this case the Adjudicating Authority had classified \n\"Play Pool\" as \"Baths\" under Tariff Heading 39.22, as against \nthe claim of the assessee that \"Play Pool\" was a toy under Tariff \nHeading 95.03. The Tribunal, however, held that \"Play Pool\" \nwas neither a toy under Heading 95.03 nor did it fall in category \nof \"Baths\" under Heading 39.22. The Tribunal classified it \nunder Heading 39.22, against which the department has not \ncome in appeal.\n We quote hereinbelow the aforestated Tariff Headings \n39.22, 39.26 and 95.03:\nHeading No.\nDescription of Goods\n39.22\nBaths, shower-baths, wash-basins, bidets, \nlavatory pans, seats and covers, flushing \ncisterns and similar sanitary-ware, of plastics\n39.26\nOther articles of plastics and articles of other \nmaterials of heading Nos.39.01 to 39.14\n95.03\nOther toys; reduced-size (\"scale\") models and \nsimilar recreational models, working or not; \npuzzles of all kinds.\n In the present case the evidence on record indicates that \nthe \"Play Pool\" has a diameter of 5 ft.; it has a depth of 2.5 ft.; \nit has steps to go down; it has a seat and a slide. Its water \ncarrying capacity is 1000 to 1500 litres. During summer, \nchildren can take a cool dip in it. During winter, it can be used \nas a play-pen. Adults can also sit in it. \n In view of the above specifications, \"Play Pool\" cannot \nbe said to be a toy under Tariff Heading 95.03. Further, in the \nexplanatory notes to HSN Heading 39.22, it is clarified that \n\"Baths\" in the said heading would cover baby baths and \ncamping toilets. Therefore, in our view, the department was \nright in classifying \"Play Pool\" as \"Baths\" under Heading \n39.22.\n We would have remanded the matter to the Tribunal, if \nthere was any ambiguity about the classification of \"Play Pool\" \nunder Tariff Heading 39.22. However, we are not inclined to \nremit the matter as the item stands fully covered by the \nexplanatory notes to HSN Heading 39.22. Moreover, at the \n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 7 of 8 \nstage of show-cause, full opportunity was given to the assessee \nto disprove that it was not falling under Heading 39.22. On the \nfacts and circumstances of this case and without going into the \nquestion as to what course the department should follow when \nthe Tribunal classifies the item in a different category, we hold \nthat the Adjudicating Authority was right in classifying \"Play \nPool\" under Tariff Heading 39.22.\n On the question of limitation, it may be stated that one of \nthe show-cause notices is dated 4.11.1997 claiming duty from \nthe assessee for the period commencing from 1992-93 to \n28.2.1997. By the impugned judgment, the Tribunal came to \nthe conclusion that the assessee had filed its classification list \ngiving exact description of the goods; that all the relevant \nfeatures of the products manufactured were available with the \ndepartment; that it was for the officers of the department to \nconduct further examination to see whether the classification \ngiven by the assessee was correct or not and, therefore, the \ndepartment was not entitled to invoke larger period of \nlimitation. Consequently, the Tribunal directed the department \nto drop the proceedings pursuant to show-cause notice dated \n4.11.1997.\n Being aggrieved, the department has come to this Court \nby way of Civil Appeal Nos.6776-6779 of 2004. We do not \nfind any infirmity in the decision of the Tribunal. The \nclassification list was filed as far back as on 22nd October, 1992. \nUnder the said list, the goods were declared as \"Baby Slide \nToy\", \"Baby Chair Toy\", \"Baby Rocker Toy\" etc. The said list \nwas approved without enquiry by the department on the \ndescription of the product. The department did not call for the \nproduct catalogue during the aforestated period till February, \n1997. According to the impugned show-cause notice dated \n4.11.1997, the product catalogue described the above items as \n\"Rockers, Slides, Swings\" and not as \"Baby Rocker Toy, Baby \nSlide Toy\" etc. According to the department, on reading of the \nproduct catalogue with the classification list, it becomes clear \nthat the word \"Baby\" has been deliberately prefixed and the \nword \"toy\" has been wilfully suffixed to the \"Rockers, Slides, \nSwings\" etc. in order to mislead the department into believing \nthat the said products were toys.\n We do not find any merit in these arguments. Nothing \nprevented the department from calling upon the assessee over \nthe years to produce their catalogues. The classification lists \nwere duly approved by the department from time to time. All \nthe facts were known to the department, whose officers had \nvisited the factory of the assessee on at least 12 occasions. In \nthe circumstances, we do not find any infirmity in the reasoning \ngiven by the Tribunal in coming to the conclusion that there \nwas no wilful suppression on the part of the assessee enabling \nthe department to invoke the extended period of limitation \nunder the proviso to section 11A(1) of the 1944 Act. However, \nwe may clarify that the show-cause notices dated 24.6.1997, \n27.5.1998, 15.10.1998, 31.3.1998 and 30.9.1999 are in time as \nheld by the Tribunal.\n Subject to what is stated hereinabove regarding \nclassification of \"Play Pool\" under Tariff Heading 39.22, we do \nnot find any infirmity in the impugned judgment of the \nTribunal. Hence, the Civil Appeals filed by the assessee and \nthe cross-appeals filed by the department are dismissed. \nHowever, in the facts and circumstances of this case, there will \nbe no order as to costs.\n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 8 of 8 \n \n"