The Commissioner of Income Tax Vs. Adar Tea Products Company - Court Judgment

SooperKanoon Citationsooperkanoon.com/831349
SubjectDirect Taxation
CourtChennai High Court
Decided OnDec-23-2008
Case NumberTax Case (Appeal) No. 228 of 2004
JudgePrabha Sridevan and ;K.K. Sasidharan, JJ.
Reported in(2009)221CTR(Mad)597; [2009]314ITR38(Mad); [2009]178TAXMAN126(Mad)
ActsIncome Tax Act, 1961 - Sections 154; Central Sales Tax Act, 1956 - Sections 8(1) and 14; Constitution of India - Article 286(3); Transfer of Property Act, 1952 - Sections 7; Customs Act - Sections 111; Income Tax Rules
AppellantThe Commissioner of Income Tax
RespondentAdar Tea Products Company
Appellant AdvocateN. Muralikumaran, Sr. Standing Counsel
Respondent AdvocateR. Venkata Narayanan, Adv. for Subbaraya Aiyar, Adv. and Padmanabhan & Ramamani
DispositionAppeal allowed in Favour of department
Cases ReferredBombay Chemical (P) Ltd. v. C.C.E.
Excerpt:
direct taxation - disallowance - section 154 of the income tax act, 1961 - petitioner issued notice to respondent calling for objection for withdrawal of 100% depreciation - respondent filed objection for disallowance - rejected - respondent filed appeal - appeal allowed - petitioner(department) filed appeal before tribunal - appeal dismissed - hence, present petition - held, table indicates intention to afford depreciation only to specifically listed equipments - drier was not an energy saving device - not within listed equipments - hence, petition allowed - prabha sridevan, j.1. the tax case appeal was admitted on the following substantial question of law:whether on the facts and in the circumstances of the case, the appellate tribunal was right in holding that even though the fluid bed drier is an energy saving device, and is entitled 100% depreciation is valid in law? the revenue has re-framed the question of law which are posed for our consideration and they are as follows:1. whether the tribunal was right in holding that fluid bed drier is entitled for 100% depreciation which does not find place in the restrictive definition of energy saving devices in the depreciation table appended to the income tax rules?2. when 'being' used to restrict the definition of 'energy saving devices' in the depreciation table appended to the income tax rules is the tribunal right in holding that an item not enumerated in the restrictive definition is also entitled for depreciation under the said definition?2. the assessee had claimed depreciation at 100% on fluid bed drier for the assessment year 1994-95. it was allowed. the notice under section 154 of the income tax act, 1961 ('act' in short) was issued calling for the assessee's objection for withdrawal of the 100% depreciation. the assessee objected to the disallowance. the objections were rejected as untenable since the revenue took the stand that a fluid bed drier is not enumerated as an energy saving device in the old appendix-i which is applicable for the assessment year period from 1988-1989 to 2002-2003. even earlier, the revenue took the same stand for the assessment year 1993-94. those orders were confirmed in appeal. but, the appeal filed against the assessment orders in this case was allowed by the commissioner of income tax (appeals), relying on (2002) 253 i.t.r. 71 [asst. c.i.t. v. bijoy nagar tea co. ltd.] (income tax appellate tribunal, calcutta 'b' bench) and the assessing officer was directed to allow 100% depreciation. the tribunal also dismissed the appeal filed by the revenue. so, the present tax case appeal has been filed.3. learned senior standing counsel appearing on behalf of the revenue submitted that in the table of depreciation, fluidized bed type heat boiler finds a place, but not bed type heat drier. learned standing counsel read out the table and submitted that the word 'being' should be construed as exhaustive and not inclusive. learned standing counsel submitted that, therefore, the questions of law must be answered in favour of the revenue.4. learned counsel appearing on behalf of the assessee produced certain orders as well as the brochure to sustain the case of the assessee. he also submitted that in the case of the holding company, viz. conoor tea estates, the depreciation at 100% was allowed.5. the table of depreciation reads as follows:block of assets depreciationallowance aspercentage ofwritten downvalue'iii. machinery and plant...8. ...(ix) energy saving devices, being -a. specialised boilers and furnaces :(a) ignifluid/fluidised bed boilers ](b) flameless furnaces and continuous ]pusher type furnaces ](c) fludised bed type heat treatment ] 80furnaces ](d) high efficient boilers (thermal ]efficient higher than 75 per cent ]in case of coal fired and 80 per ]cent in case of oil/gas fired ]boilers ]6. it is the case of the assessee that for the assessment year 1992-93, in respect of conoor tea estates, which is the holding company, the authorities had accepted the case of the assessee. those orders have been produced. the assessing officer, as against a depreciation of rs. 11,55,970/-, allowed the claim to the extent of rs. 11,43,586/-. the c.i.t. (appeals) directed the assessing officer to indicate the working of the claim of depreciation. the appeal filed by the revenue to the tribunal was dismissed. in the typed set of papers, a working sheet is enclosed, under which 100% depreciation for fluid bed drier is shown in the calculation. none of the orders in the holding company's case indicate anything to show that fluid bed drier has been accepted as an energy saving device. further, the reference in the assessment order in the present case is that the same stand was taken by the revenue for the assessment year 1993-94 and it has been accepted. but that order is not before us.7. the order in 253 itr 71 (supra) has been produced. it is a short order, wherein while the tribunal holds that it is not possible for them, 'to go into the technicalities of finding the difference between a drier and a boiler', they were of the opinion 'that there is no reason why depreciation at the rate of 100% should not be given to fluid bed type drier also'. the conclusion is not satisfactory.8. initially, an objection was raised that the appeal itself is not competent since there is a circular of cbdt prescribing monetary limit for filing an appeal and since the tax effect in the present case was negligible and no substantial questions of law arose for consideration and therefore, the appeal itself deserves to be dismissed. learned senior standing counsel appearing on behalf of the revenue submitted that those circulars will not bind this court if this court decides to hear the matter for determining the question of law. we are not inclined to take note of this technical objection in this case.9. several judgments were cited to show how the words used shall be construed as 'exhaustive' or 'illustrative'. in (1976) 37 s.t.c. 319 [state of tamil nadu v. pyare lal malhotra], it was held that ordinarily the expression 'that is to say' is employed to make clear and fix the meaning of what is to be explained or defined. such words are not used, as a rule, to amplify a meaning. it also states that a definition is accepted to be exhaustive. its very terms may, however, show that it is not meant to be exhaustive. a purported definition may say that the term sought to be defined 'includes' what it specifies, but, in that case, the definition is not complete. in that case, the words that were construed by the supreme court were 'that is to say'.10. in : [1978]114itr802(mad) [commissioner of income-tax v. arasan fertilisers (p) ltd.], the word used was 'namely'. in item 13 of the fifth schedule to the income tax act, after the word 'fertilizers', the word 'namely' was introduced. our court held that 'namely' would restrict the interpretation of the word to those types of fertilizers that are enumerated and not to all types of fertilizers and answered the reference in favour of the revenue.11. in (2000) 118 s.t.c. 379 [commissioner of sales tax v. popular trading co.], the words used were 'that is to say', i.e., with regard to entry tax, oil seeds, 'that is to say...coconut' and the supreme court held that the expression 'that is to say' is descriptive, enumerative and exhaustive and circumscribes to a great extent the scope of the entry.12. though no judgments have been produced where the word 'being' has been interpreted, we find that there are some decisions which may throw light in this regard. in : (2004)2scc249 [m.p. cement . and ors. v. state of tamil nadu and ors.], it was held, '...royalty being a levy or tax on the restricted material,... '. in : air1963sc966 [h.h. sudhindara thirtha swamiar v. commissioner for hindu religious and charitable endowments], it was held, '...a fee being a levy in consideration of rendering a service of a particular type,....'. '...excise duty being a levy on the manufacture or production of goods could ordinarily have been collected at that stage itself...' - : air1998sc723 [state of kerala v. madras rubber factory ltd.]. in : 1998(101)elt529(sc) [union of india v. mustafa & najibai trading co.], it was held, '... confiscation of goods under section 111 of the customs act being a penalty in rem...'.13. let us see what can be used in the above extracts to substitute the word 'being'. for example, in the sentence, 'excise duty being a levy on the manufacture or production of the goods' can be read to mean, 'excise duty which is a levy on the manufacture or production of the goods'. therefore, how we may understand the word 'being' used in the depreciation table is, it means, energy saving devices 'which are' the devices mentioned therein. further, in the same table, the subject category in 8(ix) has the caption 'specialised boilers and furnaces' and the word 'drier' is not used. in the same table, the words 'ventilator used with anesthesia apparatus' and the words 'ventilators other than those used with anesthesia' are used with reference to 'life saving...being...'. if we have to treat 'being' as like or including, then it was not necessary to specifically mention 'ventilators used with anesthesia apparatus' and 'ventilators other than those used with anesthesia'. so, it does appear that the depreciation table enumerates and exhausts those equipments for which depreciation is admissible at the rates mentioned. under the head 'renewal energy devices', the 'solar crop driers' as well as 'solar water heaters' are included. so, if 'driers' was meant to be included, we are sure, they would have been specifically indicated therein.14. in 253 itr 71 (supra), no technical assessment has been made as to whether a fluidised bed drier is energy efficient. that is the criterion for inclusion.15. in the compilation given by the learned senior standing counsel, the words 'furnaces' and 'boilers' are explained, which information appears to have been downloaded from a website. 'furnace' is an enclosed chamber where heat is produced to heat buildings, destroy refuse, smelt or refine moss. 'boiler' is a heating unit that heats water, whereas a furnace is a heating unit that heats air. therefore, in both these equipments, heat is generated by the boiler or the furnace, as the case may be, whereas, as regards drier, the meaning is 'an apparatus for removing moisture either by forced ventilation or heat'. therefore, for a drier, heat is not necessary; the drier may remove moisture otherwise than by application of heat, whereas for both the boiler and a furnace, heat generation is a must. the assessee also has produced some documents to support his case. one such document is a letter written by the assessee himself, according to which a furnace is a generic name for a heating place, and one form of furnace is a drier. he has also given the brochure issued by the company which has sold the fluidised bed drier. of course, the literature in the brochure shows that 'there is efficient transfer of heat to the solid matter' and the drying chamber and the plenum chamber have 'double walled insulation to minimize losses' and it is stated, 'our driers and (sic) designed for maximum temperature of 83 degree centigrade. consequently, air requirement and power requirement are low'. these cannot conclude the issue, since the information is sufficient. but, even if the brochure clearly indicated the fluidised drier's energy efficiency, we doubt, if we can include what the law makers have chosen not to include.16. in p. ramanatha aiyar's 'advanced law lexicon', iii edition, 2005, the words 'being a trader' is translated as 'carrying on trade'; 'being partners' as one 'who have had relationship of partners'; and 'being the property of the assessee' means 'the assessee owns the property'. of course, this does not help us, but 'being a trader' could be expressed in other words as 'one who is a trader'. similarly, 'being partners' may mean 'who are partners' and 'being the property of the assessee' may mean 'which is the property of the assessee'. therefore, in this case, the only way we are able to consider the word 'being' is to read the table as 'energy saving devices which are the equipments named thereunder'. therefore, it would appear that 'being' is more like 'namely'.17. in diebold systems pvt. ltd. v. commissioner of commercial taxes (karnataka), bangalore (2006) 144 s.t.c. 59, the karnataka high court held as follows:'33. entry 20 (ii) of part 'c' of second schedule to the act speaks of 'peripherals'. the entry is as under:(ii) peripherals that is to say, -(a) all kinds of printers and their parts namely, dot matrix, ink jet, laser, line matrix and the like(b) terminals, scanners, multimedia kits, plotters, modem and their parts.immediately after the expression 'peripherals', the legislature has used the expression 'that is to say, all kinds of printers and their parts and terminals, scanners, multi-media kits, plotters, modem and their parts.the expression 'that is to say' is the commencement of ancillary clause, which explains the meaning of the principal clause. this expression is explained by the apex court in the case of state of tamil nadu v. pyarelal malhotra : [1976]3scr1 and in that, the court has observed that the expression 'that is to say' is employed to make clear and fix the meaning of what is to be explained or defined. such words are not used as a rule, to amplify the meaning while removing a possible doubt for which purpose the word 'includes' is generally employed. in unusual cases, depending upon the context of the words 'that is to say', this expression may be followed by illustrative instances. the supreme court in the case of sait rikhaji furtarnal v. state of a.p. 1991 supp. (1) scc 2002 has observed that the expression 'that is to say' is exhaustive and not illustrative. the meaning of the expression 'peripheral equipment' is defined in the illustrated computer dictionary (donald d. spencer - third edition) to mean input/output units and auxiliary storage units of a computer system, attached by cables to the central processing unit used to get data in the date out, and to act as a reservoir for large amounts of data that cannot be held in the central processing unit at one time. the word 'terminal' means key board/display or key board/printer device used to input programs and data to the computer and to receive the output from the computer.the legislature having introduced the phrase 'peripherals' under sub-entry (ii) of part 'c' of the second schedule to the act, has defined the term by using the expression 'that is to say'. the definition must determine the application of the phrase. in our view, the context in which the expression 'that is to say' is used in exhaustive and not illustrative. therefore, since atm's are not included under sub-entry 20 (ii) (b) of the part 'c' of second schedule to the act, by construction, it cannot be brought under that entry.18. the table of depreciation states that the energy-saving devices for which 100% depreciation is allowed are the equipments named therein, i.e., 'the energy devices' which are 'fluidised bed boilers, furnaces'.19. the supreme court has held that if a provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity, a liberal construction should be put upon the language of the statute - vide c.i.t. v. straw board . : [1989]177itr431(sc) .20. the items in an exemption notification are to be strictly construed, but once the goods in question fall even narrowly in one of the exempted categories, then the exemption notification has to be construed broadly and widegely - vide : 1995(77)elt3(sc) [bombay chemical (p) ltd. v. c.c.e.].21. the table includes energy-saving device in the context and for the purpose of encouraging industries to adopt energy-saving measures. while it was possible, in the context of encouraging industrial activity, to bring within the net of exemption, manufacture of products which may even 'be remotely considered as 'paper'; we cannot adopt the same reasoning here, since the table indicates its intention to afford depreciation at the rates mentioned only to the specifically listed equipments. it is not even proved that a drier of the kind mentioned herein is an energy saving device.22. for the reasons mentioned above, we answer the question raised in this appeal in favour of the revenue. the order of the income tax appellate tribunal, 'a' bench, chennai, dated 8.4.2003 passed in i.t.a. no. 1105/mds/2002 is set aside and the appeal is allowed.
Judgment:

Prabha Sridevan, J.

1. The Tax Case Appeal was admitted on the following substantial question of law:

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that even though the fluid bed drier is an energy saving device, and is entitled 100% depreciation is valid in law?

The Revenue has re-framed the question of law which are posed for our consideration and they are as follows:

1. Whether the Tribunal was right in holding that fluid bed drier is entitled for 100% depreciation which does not find place in the restrictive definition of energy saving devices in the depreciation table appended to the Income Tax Rules?

2. When 'being' used to restrict the definition of 'energy saving devices' in the depreciation table appended to the Income Tax Rules is the Tribunal right in holding that an item not enumerated in the restrictive definition is also entitled for depreciation under the said definition?

2. The assessee had claimed depreciation at 100% on Fluid Bed Drier for the Assessment Year 1994-95. It was allowed. The notice under Section 154 of the Income Tax Act, 1961 ('Act' in short) was issued calling for the assessee's objection for withdrawal of the 100% depreciation. The assessee objected to the disallowance. The objections were rejected as untenable since the Revenue took the stand that a Fluid bed drier is not enumerated as an energy saving device in the old Appendix-I which is applicable for the Assessment Year period from 1988-1989 to 2002-2003. Even earlier, the Revenue took the same stand for the Assessment Year 1993-94. Those orders were confirmed in appeal. But, the appeal filed against the assessment orders in this case was allowed by the Commissioner of Income Tax (Appeals), relying on (2002) 253 I.T.R. 71 [Asst. C.I.T. v. Bijoy Nagar Tea Co. Ltd.] (Income Tax Appellate Tribunal, Calcutta 'B' Bench) and the Assessing Officer was directed to allow 100% depreciation. The Tribunal also dismissed the appeal filed by the Revenue. So, the present tax case appeal has been filed.

3. Learned Senior Standing Counsel appearing on behalf of the Revenue submitted that in the Table of Depreciation, Fluidized Bed Type Heat Boiler finds a place, but not Bed Type Heat Drier. Learned standing counsel read out the Table and submitted that the word 'being' should be construed as exhaustive and not inclusive. Learned standing counsel submitted that, therefore, the questions of law must be answered in favour of the Revenue.

4. Learned Counsel appearing on behalf of the assessee produced certain orders as well as the brochure to sustain the case of the assessee. He also submitted that in the case of the Holding Company, viz. Conoor Tea Estates, the depreciation at 100% was allowed.

5. The Table of Depreciation reads as follows:

Block of assets Depreciationallowance aspercentage ofwritten downvalue'III. MACHINERY AND PLANT...8. ...(ix) Energy saving devices, being -A. Specialised boilers and furnaces :(a) Ignifluid/fluidised bed boilers ](b) Flameless furnaces and continuous ]pusher type furnaces ](c) Fludised bed type heat treatment ] 80furnaces ](d) High efficient boilers (thermal ]efficient higher than 75 per cent ]in case of coal fired and 80 per ]cent in case of oil/gas fired ]boilers ]

6. It is the case of the assessee that for the Assessment Year 1992-93, in respect of Conoor Tea Estates, which is the Holding Company, the authorities had accepted the case of the assessee. Those orders have been produced. The Assessing Officer, as against a depreciation of Rs. 11,55,970/-, allowed the claim to the extent of Rs. 11,43,586/-. The C.I.T. (Appeals) directed the Assessing Officer to indicate the working of the claim of depreciation. The appeal filed by the Revenue to the Tribunal was dismissed. In the typed set of papers, a working sheet is enclosed, under which 100% depreciation for fluid bed drier is shown in the calculation. None of the orders in the holding company's case indicate anything to show that fluid bed drier has been accepted as an energy saving device. Further, the reference in the assessment order in the present case is that the same stand was taken by the Revenue for the Assessment Year 1993-94 and it has been accepted. But that order is not before us.

7. The order in 253 ITR 71 (supra) has been produced. It is a short order, wherein while the Tribunal holds that it is not possible for them, 'to go into the technicalities of finding the difference between a drier and a boiler', they were of the opinion 'that there is no reason why depreciation at the rate of 100% should not be given to fluid bed type drier also'. The conclusion is not satisfactory.

8. Initially, an objection was raised that the appeal itself is not competent since there is a circular of CBDT prescribing monetary limit for filing an appeal and since the tax effect in the present case was negligible and no substantial questions of law arose for consideration and therefore, the appeal itself deserves to be dismissed. Learned senior standing counsel appearing on behalf of the Revenue submitted that those circulars will not bind this Court if this Court decides to hear the matter for determining the question of law. We are not inclined to take note of this technical objection in this case.

9. Several judgments were cited to show how the words used shall be construed as 'exhaustive' or 'illustrative'. In (1976) 37 S.T.C. 319 [State of Tamil Nadu v. Pyare Lal Malhotra], it was held that ordinarily the expression 'that is to say' is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used, as a rule, to amplify a meaning. It also states that a definition is accepted to be exhaustive. Its very terms may, however, show that it is not meant to be exhaustive. A purported definition may say that the term sought to be defined 'includes' what it specifies, but, in that case, the definition is not complete. In that case, the words that were construed by the Supreme Court were 'that is to say'.

10. In : [1978]114ITR802(Mad) [Commissioner of Income-Tax v. Arasan Fertilisers (P) Ltd.], the word used was 'namely'. In Item 13 of the Fifth Schedule to the Income Tax Act, after the word 'fertilizers', the word 'namely' was introduced. Our Court held that 'namely' would restrict the interpretation of the word to those types of fertilizers that are enumerated and not to all types of fertilizers and answered the reference in favour of the Revenue.

11. In (2000) 118 S.T.C. 379 [Commissioner of Sales Tax v. Popular Trading Co.], the words used were 'that is to say', i.e., with regard to entry tax, oil seeds, 'that is to say...coconut' and the Supreme Court held that the expression 'that is to say' is descriptive, enumerative and exhaustive and circumscribes to a great extent the scope of the entry.

12. Though no judgments have been produced where the word 'being' has been interpreted, we find that there are some decisions which may throw light in this regard. In : (2004)2SCC249 [M.P. Cement . and Ors. v. State of Tamil Nadu and Ors.], it was held, '...royalty being a levy or tax on the restricted material,... '. In : AIR1963SC966 [H.H. Sudhindara Thirtha Swamiar v. Commissioner for Hindu Religious and Charitable Endowments], it was held, '...a fee being a levy in consideration of rendering a service of a particular type,....'. '...Excise duty being a levy on the manufacture or production of goods could ordinarily have been collected at that stage itself...' - : AIR1998SC723 [State of Kerala v. Madras Rubber Factory Ltd.]. In : 1998(101)ELT529(SC) [Union of India v. Mustafa & Najibai Trading Co.], it was held, '... confiscation of goods under Section 111 of the Customs Act being a penalty in rem...'.

13. Let us see what can be used in the above extracts to substitute the word 'being'. For example, in the sentence, 'excise duty being a levy on the manufacture or production of the goods' can be read to mean, 'excise duty which is a levy on the manufacture or production of the goods'. Therefore, how we may understand the word 'being' used in the depreciation table is, it means, Energy saving devices 'which are' the devices mentioned therein. Further, in the same table, the subject category in 8(ix) has the caption 'specialised boilers and furnaces' and the word 'drier' is not used. In the same table, the words 'ventilator used with anesthesia apparatus' and the words 'ventilators other than those used with anesthesia' are used with reference to 'life saving...being...'. If we have to treat 'being' as like or including, then it was not necessary to specifically mention 'ventilators used with anesthesia apparatus' and 'ventilators other than those used with anesthesia'. So, it does appear that the depreciation table enumerates and exhausts those equipments for which depreciation is admissible at the rates mentioned. Under the head 'Renewal energy devices', the 'solar crop driers' as well as 'solar water heaters' are included. So, if 'driers' was meant to be included, we are sure, they would have been specifically indicated therein.

14. In 253 ITR 71 (supra), no technical assessment has been made as to whether a fluidised bed drier is energy efficient. That is the criterion for inclusion.

15. In the compilation given by the learned senior standing counsel, the words 'furnaces' and 'boilers' are explained, which information appears to have been downloaded from a website. 'Furnace' is an enclosed chamber where heat is produced to heat buildings, destroy refuse, smelt or refine moss. 'Boiler' is a heating unit that heats water, whereas a furnace is a heating unit that heats air. Therefore, in both these equipments, heat is generated by the boiler or the furnace, as the case may be, whereas, as regards drier, the meaning is 'an apparatus for removing moisture either by forced ventilation or heat'. Therefore, for a drier, heat is not necessary; the drier may remove moisture otherwise than by application of heat, whereas for both the boiler and a furnace, heat generation is a must. The assessee also has produced some documents to support his case. One such document is a letter written by the assessee himself, according to which a furnace is a generic name for a heating place, and one form of furnace is a drier. He has also given the brochure issued by the company which has sold the fluidised bed drier. Of course, the literature in the brochure shows that 'there is efficient transfer of heat to the solid matter' and the drying chamber and the plenum chamber have 'double walled insulation to minimize losses' and it is stated, 'Our driers and (sic) designed for maximum temperature of 83 degree centigrade. Consequently, air requirement and power requirement are low'. These cannot conclude the issue, since the information is sufficient. But, even if the brochure clearly indicated the Fluidised drier's energy efficiency, we doubt, if we can include what the law makers have chosen not to include.

16. In P. Ramanatha Aiyar's 'Advanced Law Lexicon', III Edition, 2005, the words 'being a trader' is translated as 'carrying on trade'; 'being partners' as one 'who have had relationship of partners'; and 'being the property of the assessee' means 'the assessee owns the property'. Of course, this does not help us, but 'being a trader' could be expressed in other words as 'one who is a trader'. Similarly, 'being partners' may mean 'who are partners' and 'being the property of the assessee' may mean 'which is the property of the assessee'. Therefore, in this case, the only way we are able to consider the word 'being' is to read the table as 'energy saving devices which are the equipments named thereunder'. Therefore, it would appear that 'being' is more like 'namely'.

17. In Diebold Systems Pvt. Ltd. v. Commissioner of Commercial Taxes (Karnataka), Bangalore (2006) 144 S.T.C. 59, the Karnataka High Court held as follows:

'33. Entry 20 (ii) of Part 'C' of Second Schedule to the Act speaks of 'peripherals'. The Entry is as under:

(ii) Peripherals that is to say, -

(a) All kinds of printers and their parts namely, dot matrix, ink jet, laser, line matrix and the like

(b) Terminals, scanners, multimedia kits, plotters, modem and their parts.

Immediately after the expression 'peripherals', the Legislature has used the expression 'that is to say, all kinds of printers and their parts and terminals, scanners, multi-media kits, plotters, modem and their parts.

The expression 'that is to say' is the commencement of ancillary clause, which explains the meaning of the principal clause. This expression is explained by the Apex Court in the case of State of Tamil Nadu v. Pyarelal Malhotra : [1976]3SCR1 and in that, the Court has observed that the expression 'that is to say' is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used as a rule, to amplify the meaning while removing a possible doubt for which purpose the word 'includes' is generally employed. In unusual cases, depending upon the context of the words 'that is to say', this expression may be followed by illustrative instances. The Supreme Court in the case of Sait Rikhaji Furtarnal v. State of A.P. 1991 Supp. (1) SCC 2002 has observed that the expression 'that is to say' is exhaustive and not illustrative. The meaning of the expression 'peripheral equipment' is defined in the Illustrated Computer Dictionary (Donald D. Spencer - Third Edition) to mean input/output units and auxiliary storage units of a computer system, attached by cables to the Central Processing Unit used to get data in the date out, and to act as a reservoir for large amounts of data that cannot be held in the Central Processing Unit at one time. The word 'terminal' means key board/display or key board/printer device used to input programs and data to the computer and to receive the output from the computer.

The Legislature having introduced the phrase 'peripherals' under sub-entry (ii) of Part 'C' of the Second Schedule to the Act, has defined the term by using the expression 'that is to say'. The definition must determine the application of the phrase. In our view, the context in which the expression 'that is to say' is used in exhaustive and not illustrative. Therefore, since ATM's are not included under sub-entry 20 (ii) (b) of the Part 'C' of Second Schedule to the Act, by construction, it cannot be brought under that Entry.

18. The Table of Depreciation states that the energy-saving devices for which 100% depreciation is allowed are the equipments named therein, i.e., 'the energy devices' which are 'fluidised bed boilers, furnaces'.

19. The Supreme Court has held that if a provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity, a liberal construction should be put upon the language of the statute - vide C.I.T. v. Straw Board . : [1989]177ITR431(SC) .

20. The items in an exemption notification are to be strictly construed, but once the goods in question fall even narrowly in one of the exempted categories, then the exemption notification has to be construed broadly and widegely - vide : 1995(77)ELT3(SC) [Bombay Chemical (P) Ltd. v. C.C.E.].

21. The table includes energy-saving device in the context and for the purpose of encouraging industries to adopt energy-saving measures. While it was possible, in the context of encouraging industrial activity, to bring within the net of exemption, manufacture of products which may even 'be remotely considered as 'paper'; we cannot adopt the same reasoning here, since the table indicates its intention to afford depreciation at the rates mentioned only to the specifically listed equipments. It is not even proved that a drier of the kind mentioned herein is an energy saving device.

22. For the reasons mentioned above, we answer the question raised in this appeal in favour of the Revenue. The order of the Income Tax Appellate Tribunal, 'A' Bench, Chennai, dated 8.4.2003 passed in I.T.A. No. 1105/MDS/2002 is set aside and the appeal is allowed.