TMI Blog1994 (7) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants have referred the above appeal. 2. The appellants hold a registration dated November 30, 1987 from the Ministry of Industry, Deptt. of Industrial Development. The said Registration Certificate specifies the article of manufacture as 'Multi-Colour Off-Set Printing and Automatic Punching' and the annual capacity is 9,60,00,000 impressions. 3. The appellants decided to import 1 No. Chambon Web-fed Off-set Rotary Printing Machine having the following configuration : (1) Automatic non-stop unwind, type Monomatic MDC 155. (2) Variable speed intermediate pull through appliance. (3) Web off-set printing appliance with DCP. (4) Infrared dryer. (5) Cutting units. (6) DCP Platen Cutter/Creaser. (7) A complete set of electronic equipments and control panel. The aforesaid configuration was decided on the basis of the techno-economic feasibility report prepared by their consultant covering various fields like project concept, market analysis, plant and machinery and process, raw material, utility and services etc. The project concept was to set up a project for undertaking multi-colour printing and production of catalogues, advertising and pac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to go in for an in-line printing conversion equipment with its all round superiority over conventional sheet-fed equipment, the equipment finally selected after scrutinising and evaluating all aspects, is a CHAMBON VO 650 in-line printing and conversion machine. The 'CHAMBON' in-line concept is to start with a reel of board or paper at one end of the machine and to deliver in a single operation, printed, varnished, embossed, cut, creased, stripped and counted printed blanks or reels at the other . (The show cause notice which gives the extract of the above para adds 'cartons' after 'blanks' in the last line, which is erroneous). The appellants imported the Web-fed off-set rotary printing machine having output of 35,000 composite impressions per hour, manufactured by CHAMBON Ltd., U.K. comprising the aforesaid configuration and presented Bill of Entry Rotation No. 624, dated 15-3-1989 and Line No. 177 for clearance thereof. 5. After the Bill of Entry was filed in the Customs House under Section 46 of the Customs Act, 1962, the same was taken over by the Special Investigation and Intelligence Branch of the Customs House (SIIB), who also got the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh their Consultant in their letter, dated March 18, 1991. Thereafter the respondent passed the impugned order. Hence this appeal. 7. We have heard Shri K. Srinivasan, learned Consultant and Shri S.K. Sharma, learned DR. 8. Shri K. Srinivasan, the learned Consultant for the appellants submits that there is no dispute that the imported machine is primarily a printing machine as would be evident from page 16 of the impugned order as the Collector has accepted the contention of the appellants that the machinery in question is primarily a printing machine and that even the cigarette shells which are manufactured after cutting and creasing nothing but products of printing industry. Classification under Heading 84.41 has been ruled out on the ground that printing is also the main function of the machine and not merely incidental. However, the Collector has wrongly proceeded on the basis that the machine is an integrated machine and, therefore, has gone into the question as to whether the integrated machine which has a printing press along with the DCP Platen Cutter/Creaser can be treated as a printing machine proper or becomes something different as it is capable of multifarious f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie-cutting, outlining or grooving paperboard for cartons, boxes, file covers, etc. machines for making folding cartons and boxes. The DCP platen cutter/creases will fall under this Heading. The Explanatory Notes further state that some of the machines under this Heading particularly the box folding machine may be equipped with a printing device and according to Note 3 to Section XVI such machine remains classified under Heading 84.41 provided that printing is not the principal function of the machine. In this case admittedly printing is the principal function. The function of the DCP Platen is to cut the profile of the shell blanks and form the creasing along which they are folded which is a function auxiliary to the printing of the shell blanks. The principal function is printing of the shell blanks with the brand name of the cigarette manufacturers and other essential marketing details (for example, the number of cigarettes). The DCP platen only enables the printed blanks for the shell blanks to be cut and creased to be used further for folding and gumming and provided with the slides to complete cigarette boxes. The adjudicating authority has ruled out classification under Headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving an offset printing mechanism and also a DCP Platen cutter/creaser, the former for printing wrapper or other material and the latter for cutting and creasing particular packing material like cigarette shells which may be subsequently converted by pasting into empty cigarette packets and the moot question is whether a composite machine can be termed as a printing machine or is different from a mere printing machine press. The techno-economy feasibility report prepared by the importer before importing the machine states that the importers are going to do the work of printing and specialised packaging since these facilities were not available in India. The report prescribes that the process will start with a reel of board or paper at one end of the machine and it will deliver in a single operation printed, varnished, embossed, cut creased, stripped and counted, printed blanks, cartons or reel at the other. As per the Explanatory Notes at page 1239, there can be other machines along with a printing machine but the notes do not mention that a composite machine which has a DCP Platen cutter/creaser as an essential component will also be classified under Heading 84.43. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in machine bed, it type 2 spindle rewind (t) Complete set of electronic register control equipment for the control of colour to colour print registration (u) Complete set of electrical equipment, including main drive motor, control cabinets and machine control console. All inter-unit wiring and cabling supplied. (v) One set of essential 2 year's spares (mechanical, electrical and electronic). 15. The catalogue describes the functions of the various units of the machine. A few samples of the product printed on the imported machine are annexed as Annexure -A. 16. The allegation of the Department is that the appellants have imported a plant for production of printed cartons starting from the raw material - either board or paper. Reliance has been placed upon the catalogue to hold that the entire configuration was meant for in line printing and converting of folding cartons and the further charge is that the machine has been misdeclared as a printing machine for the purpose of overcoming ITC prohibition and for evading payment of appropriate customs duty. The working of the machine was explained to us during the course of the hearing by the learned Consultant Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of penalty. 18. The clear position that emerges is that the machine is not capable of manufacturing cartons or boxes either by folding or otherwise as it has no facility for folding or for gumming and pasting to convert the cut sheets into box shells. Even the Department recognises and admits that the machine is intended for manufacturing packaging material where cutting and creasing is not required as also packaging material where cutting and creasing is required as for the purpose of manufacturing blank cigarette packet shells. As we have held that the machine is not capable of manufacturing fully formed, shaped and gummed box shells with slides, we hold that the machine is nothing but a printing machine. This fact has been accepted by the adjudicating authority at page 16 of the impugned order where he gives a categoric finding that there is absolutely no dispute that the imported machine is a printing machine and that the cigarette shells manufactured after cutting and creasing are nothing but products of the printing industry. In the light of the above discussion, we hold that the appellants have not misdeclared the goods. The reference by the Collector to other en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice : 16. In para 2.3 the type of equipment that needs to be installed to meet the developing trends in the country is considered and it is stated : Accordingly, this 'in-line' installation, for the multi-colour printing and manufacture of cartons has been considered. Presently this sophisticated facility is not available with any converter in India. In this installation, in one single operation the board/paper in reel form will be printed in multi-colour, cut and creased with the trim waster extracted pneumatically. Electronic, computerised register controls between print to print units and printing to cutting/creasing units with high level of accuracy will ensure lower spoilage due to mis-register. Spoilage reduction by 3 to 4% is possible compared to conventional existing sheet-fed installations, purely from the point of inherent process difference. Sheeting costs are also eliminated. Sheet fed process pays an up charge ranging from 10% to 20% on sheeting/trimming loss of material and running cost. Execution of any given job in this process would be much faster compared to conventional sheet fed operation, which operates in stages. This equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of classification of functional machines. 19. Para 2.6 of the study deals with 'Plant Machinery and Process'. It says - Having decided to go in for an in-line printing conversion equipment which its all round superiority over conventional sheet-fed equipment finally selected after scrutinising and evaluating all aspects is a CHAMBON VO 650 in-line printing and conversion machine. The 'CHAMBON IN-LINE' concept is to start with a reel of board or paper at one end of the machine and to deliver in a single operation, printed, varnished, embossed, cut, creased, stripped and counted printed blanks or reels at the offer , (The show cause notice which gives the extract of the above para adds cartons after blanks in the last line, which is erroneous). 20. The Techno Feasibility study on which the Department relies so much, itself shows the basic philosophy underlining the selection of the technology and the particular machine and the product that will emerge, namely, printed, varnished, embossed, cut, creased and stripped and counted printed blanks or reels. 21. The Project Feasibility Report further projects other production possibilities in Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is at this stage when it is mere shell, without any aid, it cannot be called box. The other important component is the slide, insertion of which makes it a container or box. But in the factory of petitioner slides are not manufactured. In the absence of slides, the shell by itself at that stage cannot be called box. Therefore, the stage at which the duty is to be levied is a very relevant factor. The end-use of the article is irrelevant in the context of the entry, particularly when there is no reference to the use of the article. In order to determine what that given article is, its composition and contents are to be looked into. The fact that an article can be put to a different use is not a relevant consideration. Shell by itself has to be considered at the time of its manufacture for its natural placement. 14. We had the privilege to see this outer shell i.e., the product of the petitioner. It is open from both sides. Without the slide it cannot hold or contain cigarettes. It is only when slide is inserted that it becomes complete and can be called a box or container, but without slide it is neither. Broad description of the shell does not fit in the expression of box or con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s container, carton or bag as the case may be. Mr. Chandrasekharan contended that the shell is described as box under the Indian Standard Guide for principle uses and styles of fibreboard containers. I.S.I., guidelines 6.4 described slide type boxes. Slide type boxes consist of several pieces of liners and sleeves sliding in different directions into each other. This group also includes outside sleeves in other cases. Referring to this ISI guidelines, Mr. Chandrasekharan contended that the outside sleeves as in the present case, the shell, will fall into the category of boxes. He drew our attention to diagrammatical representation made in this book to emphasise that shell by itself is a box. This contention has no force because ISI guide is relevant for standardization and quality control. In the case of Indian Aluminium Cables Ltd. v. Union of India and Ors., 1985 (21) E.L.T. 3 = 1985 ECR 1465 (SC), Supreme Court observed that specifications issued by the Indian Standards Institution are for ensuring control and have nothing to do with the classification the goods belong to a Tariff Schedule. In another case Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co., 1988 (37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put in a bigger box or a container, such an outer container is known in commercial and common parlance as a carton. These cartons are then put in bigger cardboard boxes and such bigger containers are known as boxes. In commercial and in cigarette trade, the container in which cigarettes are packed is known as a packet of cigarette and not as a box or carton. Therefore, even for the sake of argument, if it is presumed that the outer shell is a packet, still it cannot be called a box. That packet consists of both the components, the shell and the slide. But in the absence of the slide by no stretch of imagination it can be called a box. 18. The definition of goods make it clear that to become goods an article must be something which can ordinarily come to the market to be sold and bought. But at the shell stage, it can neither be bought nor sold in the market. Box has a definite meaning as understood in the common parlance. Therefore, this mere outer shell by itself cannot be put in that category. To be called a box it must answer to the description of a box . An article cannot a box , it must answer to the description of a box . An article cannot be called a box , if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on an earlier order in Appeal No. 2552/83-B2 in the case of Collector of Customs, Bombay v. Living Media India Ltd. and it was held by the Tribunal that merely because a machine can perform other functions the benefit of the exemption cannot be denied. The Collector (Appeals) in his order had observed that the machine imported by the respondents carries out a small range of Brinell test and the same cannot be considered as a standard test as the machine is not designed to cover the full range of hardness testing under the Brinell's method which goes upto 3,000 kgs. The machine imported by the respondents is capable of testing upto 250 Kgs. The machine is basically devised to carry out the Vickers hardness test of steels and metals. The judgments cited by the learned JDR do not help the appellant in any way. The machines imported by the respondents are in conformity with the description given at Sl. No. 7 of the Notification No. 49/78-Cus. dated 1st March, 1978. 23.2 In the case of Escorts Ltd. v. Collector of Customs reported in 1990 (47) E.L.T. 68 the Tribunal held that concessional rate of duty in terms of Notification 243/78 to goods specified therein falling under C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up for undertaking multi-colour printing and production of catalogues, advertising and packaging material, video-cassette covers, record sleeves, etc. 29. To cater to this unfulfilled area of packaging Jindals have decided to set up a modern web-fed in-lines off-set machine in India . Accordingly, this in-line installation for the multi-purpose printing and manufacture of cartons has been considered . The plant will be producing multicoloured printed, varnished blanks and conventional packing materials . About half the capacity of the plant would be utilised for captive consumption of M/s. Godfrey Philips India Ltd., one of the principal cigarette manufacturers in India, the remaining capacity would be utilised for a wide range of consumer and industrial products like cosmetics, detergents, pharmaceuticals, liquor, tea, confectionery, flash-lights, incense, hosiery, garments, auto-spares and bearings, etc. Plant and machinery and process : It is a CHAMBON VO 650 in-line printing and conversion machine. The CHAMBON IN-LINE concept is to start with a reel of board or paper at one end of the machine and to delivery in a single operation, printed, varnished, embossed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following are examples of such composite machines: (1) Printing machines with a subsidiary machine for holding paper (Heading 84.43); (2) A cardboard packs making machine combined with an auxiliary machine for printing name or symbol design (Heading 84.41); (3) Cigarette making machinery combined with subsidiary packaging machinery. 37. For the purpose of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other or mounted on a common base or frame or in a common housing. Assemblies of machines should not be taken to be fitted together to form a whole unless the machines are designed to be permanently attached either to each or to a common base, frame housing, etc. 38. Note 3, Section XVI need not be invoked when the composite machine is covered as such by a particular heading, for example, some types of orientation machines. Insofar as the Customs Tariff is concerned, our attention has been drawn to Heading 84.43 (Printing Machinery; Machines for uses ancillary to printing). Off-set Printing Machinery: 84.43 - Reel Fed and to Chapter Note 7 says a machine which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof was also not available to the appellants. 46. Again such a composite machine was not covered by O.G.L. 47. In view of the above findings I consider that the Collector was right infolding that ITC violation as well as Customs Act, violation was involved. The goods were therefore liable to confiscation and the appellants were liable to penalty. Hence I confirm the Collector's order and reject the appeal. Sd/- (S.K. Bhatnagar) Vice President DIFFERENCE OF OPINION In view of the difference of opinion between the Hon'ble Member (Judicial) and the Vice-President, the matter is submitted to the Hon'ble President for reference to a third Member on the following points; (1). Whether the appellants had described the goods correctly and completely in the bill of entry and other main documents at the time of importation or not ? (2) Whether the item was a printing machine simplicitor or a composite machine ? (3) Whether the item is correctly classifiable under Heading No. 84.43 or 84.79 ? (4) Whether the appellants were entitled to the benefit of Notification No. 114/80-Cus. ? (5) Whether the import was covered by OGL ? (6) Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Heading 84.43 as a printing machine, whereas the Revenue had assessed the same under Heading 84.79. The Revenue authorities had held that the appellant had deliberately suppressed the facts that the imported complete machine was for production of cartons and intentionally misdeclared the goods as a web-fed off-set rotary printing machine having output of 35,000 composite impressions per hour in order to avail the benefit of notification No. 114/80-Cus. and had evaded duty and there was contravention of ITC regulation. The adjudicating authority had ordered confiscation but had given an option to redeem the same after the payment of redemption fine of Rs. 60 lacs and penalty of Rs. 10 lacs was imposed and the benefit of Notification No. 114/80-Cus. was also denied. 49. Being not satisfied with the order passed by the Collector, the appellant has filed an appeal before the Tribunal. Shri K. Srinivasan, the learned Consultant has appeared on behalf of the appellant. He pleaded that the appellant had imported web-fed high speed letter and off-set rotary printing machine having output of more than 35,000 composite impressions with DCP platen. Shri Srinivasan argued that there is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us reading of the cutting pressure. The platen can be driven independently from the press enabling (sic)forme preparation and adjustment whilst the printing press is being made ready. He pleaded that the machine cuts and creases blanks. Cigarette shell gumming is done by another machine outside and there is no arrangement of gumming or folding in the machine. He referred to page 1239 of HSN which appears on page 203 of the paper book. He has referred to the bill of entry which appears on pages 76 to 98. He made special reference to page 96 where the appellant had duly mentioned DCP platen. He argued that DCP platen is the name of cutter crescent. He referred to the description given in the Tariff. He referred to the Heading 84.43 which pertains to printing machine, machines for uses ancillary to printing. Heading 84.41 relates to other machine for making up paper pulp, paper or paperboard, including cutting machines of all kinds and on page 491 of the paper book appears Heading 84.79 and the description is machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter. Shri Srinivasan argued that the appellant had placed 3 orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal function of the machine is printing and the cutting machine falls under Heading 8441.11. He further argued that the adjudicating authority viz. Collector and Vice-President rule out the same. He further argued that in terms of Rule 3C of the Rules of Interpretation last heading which is relevant is 8443.11. He argued that the appellant is a printer and principal function of the machine is printing and even value-wise 15% of the value is for the printing machine. Cutting machine is part of the printing machine. In support of his argument, he cited a decision of the Tribunal in the case of Associated Millers Pvt. Ltd. v. C.C., Madras reported in 1990 (50) E.L.T. 633 (T) = 1991 (32) ECR 461 (CEGAT SB-B2). He further argued that the appellant had supplied the catalogue voluntarily. He again referred to the Notification No. 114/80-Cus. which appears on page 493 of the paper book. He argued that it is a composite machine and not a multi-function machine. He pleaded that the order passed by the Member Judicial is correct and pleaded that the same should be accepted. 50. Shri S.K. Sharma, the learned Junior Departmental Representative has appeared on behalf of the respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of flattened cartons and the purpose is not defined anywhere. He further argued that the benefit of Notification No. 114/80-Cus. is not available and referred to Serial No. 1 of the notification. During his arguments he cited a decision of the Tribunal in the case of Collector of Customs v. O.E.N. India Ltd. reported in 1989 (42) E.L.T. 235 (Tribunal). He argued that benefit of Notification No. 114/80-Cus. is not available to the appellants as it is a multi-function machine. He pleaded that the normal rate of duty is 85% and whereas after extending the benefit of the notification it is 35% and this benefit is not extendable to the appellant and the import is not covered under OGL. He pleaded for agreeing with the order passed by the Vice-president. 51. Shri K. Srinivasan, the learned Consultant pleaded for agreeing with the views expressed by the Member Judicial. 52. I have heard both the sides and have gone through the facts and circumstances of the case. I have duly considered their oral submissions as well as written arguments. In the matter before me the dispute is Chambon off-set rotary printing machine having output of 35,000 composite impressions per hour falls u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 -- Other 50% 8443.30 -- Flexographic printing machinery 50% 8443.40 -- Gravure printing machinery 50% 8443.50 -- Other printing machinery 50% 8443.60 -- Machines for uses ancillary to printing 50% 8443.90 -- Parts 40% 84.79 -- Machines and mechanical appliances having individual functions, not specified of included elsewhere in this Chapter. 8479.10 -- Machinery for public works, building or the like 65% 8479.20 -- Machinery for the extraction or preparation of animal or fixed vegetable fats or oils 50% 8479.30 -- Presses for the manufacture of par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asphalt surface course is heated and then completely plasticised by the Remixer's infrared heaters which are an integral part of the machine. The temperature is controlled by raising and lowering the heater banks and by varying the pressure across the heater banks. The surface is loosened down to the required depth by means of scarifying tynes which have automatic depth control. The material is then planed off by a levelling blade and fed to the middle of the machine by an auger. This results in the formation of a level base. 8A. The material mass is then fed into a compulsory pugmill mixer where it is thoroughly mixed with the addmix fed in from the top and if necessary with a bitumen recycling agent. 8B. The resulting new asphalt mix is forced from the pugmill in a window and spread over the heated level base by means of an auger. The Remixer's combined tamping and vibrating screed then ensures that a level surface with a high degree of compaction is achieved. The screed has slope and grade control. 8C. After final rolling the resurfacing process is complete having achieved the desired asphalt mix characteristics and surface texture. 8D. This is a multi-purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls; ceramic paste, unhardened cements plastering materials or other mineral products in powder and paste form; machines for forming foundry moulds of sand . The heading as per BTN Explanatory Notes, page 1353 covers machinery of a kind used, mainly in the extractive industries and also covers machinery for mixing mineral substances, Sl. No. 6 page 1356 which is reproduced below :- Machines for mixing mineral substances (crushed or broken stone, gravel, limestone, etc.) with bitumen, for preparation of bituminous road-surfacing materials . Mixing with bitumen for preparation of bituminous road surfacing materials would get covered by this heading. It can, therefore, be held that the main purpose or function of the machine being mixing, the other functions are complementary and the machine would correctly fall under Heading 84.56. The Tribunal has already laid the principle that classification being a question of law can be raised at any stage of proceeding - 1984 (17) E.L.T. 368 (Tribunal) = 1984 E.C.R. 1895, Collector of Central Excise v. West Glass Works, Firozabad. 9. Since the Heading 84.56 is found to be more appropriate, the classification under Heading 84.23 is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in the said First Schedule as is in excess of the amount calculated at the rate of 10% ad valorem; and (b) the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act. S. no. Description of goods (1) (2) Food processing machines, namely - 1. Fruit and vegetable cutting, coring, cubing, slicing, seed- ing, clearing, removing and stem removing machines. 6. Meat processing machines, namely - mincing, deboning, mixing, cutting, chopping, flaking and skinning machines (industrial types). 17. FFS with vacumising and inert gas flushing. 18. Gas flush packing system for flexible packages. 19. Gas and vacuum packaging system for flexible pack- ages. Relevant extract of Notification No. 65/89-Customs, dated 1st March, 1989 is reproduced below :- Notification No. 65/89-Customs 1st March, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -88 Policy. However, the only issue before us is whether the appellants are entitled to the benefit of Notification No. 125/86-Cus., dated 17th February, 1986 and whether the goods fall at Serial No. 17 or 18 or 19 of the said notification. A simple perusal of Serial No. 17 shows that the description has been given as FFS with vacuumising and inert gas flushing. Shri G. Ramaswami, the learned Senior Advocate's main contention is that the word and should be interpreted as or , otherwise the very intention of the Government as to the extension of benefit of Notification No. 125/86-Cus., dated 17th February, 1986 will be defeated. The meaning of the word and in Black's Law Dictionary 5th edition of St. Paul Minn West Publishing Co. 1979 at page 79 has been given as under :- AND. A conjunction connecting words or phrases expressing the idea that the latter is to be added to or taken along with the first. Added to; together with; joined with; as well as; including. Sometimes construed as or , land and Lake Ass'n v. Conklin, 182 A.D. 546, 170 N.Y.S. 427, 428. It expresses a general relation or connection, a participation or accompaniment in sequence, having no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking place secure. Lord Reid said that he could not suppose that it was intended that in every case the manager must both attempt to control movement of the strata and provide support. ......The natural meaning of the words of the section is that one or other of the prescribed methods must be adopted in every case . [John G. Stein Co. Ltd. v. O. Hanlon (1965) A.C. 890, at p. 904. Conversely, the Court may substitute and for or . An example is provided by the Bankrupts Act, 1603, which made it an act of bankruptcy for a trader to leave his welling house to the intent, or whereby his ..... creditors ..... shall or may be defeated or delayed. If construed literally, this would have exposed to bankruptcy every trader who left his home, even for an hour, if a creditor called during his absence for payment. This absurd consequence was avoided by reading or as and so that an absence from home was an act of bankruptcy only when coupled with the design of delaying or defeating creditors. [Fowler, v. Padget - (1978) 7 T.R. 509. cf. R. v. Mortlake (1805 6 East 397.] In his book Principles of Statutory Interpretation, 4th edition 1988 Justice G.P. Singh at pages 250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; as 'or' would have produced an absurd result of leaving it to the Executive to select either the owner or master for being prosecuted without the Act giving any guidance for the selection. Such a result would have also been against the constitutional practice. [Federal Steam Navigation Co. Ltd. v. Department of Trade and Industry - (1974) 2 All ER 97 (HL)]. Similarly in Section 42(2) of the Income Tax Act, 1922 the result produced by reading 'or' as 'or' could not have been intended and the word 'or' was read in the context as meaning 'and'. [Mazagaon Dock Ltd. v. CIT EPT - AIR 1958 SC 861]. In Section 11 of the Suits Valuation Act, 1887, Clauses (a) and (b) of Sub-section (1) although separately by the word 'or' have been read conjunctively as that is the obvious intention disclosed by Sub-section (2). [Kiran Singh v. Chaman Paswan - AIR 1954 SC 340, p. 345] See further, Tilkayat Shri Govindlalji v. State of Rajasthan - AIR 1963 SC 1638, p. 1652 (para 39). Speaking generally, a distinction may be made between positive and negative conditions prescribed by a statute for acquiring a right or benefit. Positive conditions sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to suffer at all and mere participation would be enough to make him a political sufferer. That would defeat the rationale behind the rule. It would therefore, frustrate the intention and purpose of the Legislature. The expression 'and' in these circumstances cannot be read disjunctively. It is not possible to hold that Sub-clause (a) should be read independently of Sub-clause (b). A statute cannot be construed merely with reference to grammar. Statute whenever the language permits must be construed reasonably and rationally to give effect to the intention and purpose of the Legislature. The expression 'and' has generally a cumulative effect, requiring the fulfilment of all the conditions that it joins together and it is antithesis of 'or'. In this connection reference may be made to A.K. Gopalan v. State of Madras - 1950 SCR 88 at p. 126 (AIR 1950 SC 27). See also the observations of this Court in Ishwar Singh Bindra v. State of U.P. - (1969) 1 SCR 219. Shri G. Ramaswami, the learned Senior Advocate, has also relied on the following judgments where the word and has to be substituted by or : (1) The Food Inspector, Trichur Municipality, Trichur v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n must be construed in the context and the meaning should not be confined only to its grammatical meaning. There is also no dispute on the proposition that an ambiguity, if there be any, in the expression used should be resolved in favour of the assessee or tax-payer. Counsel also drew my attention to three affidavits of Bhupendra Singh Boid, Mangal Singh and S.K. Guin filed in support of this rule claiming to be the dealers in these types of goods and who have alleged that acrylic fibre is not known in the trade as non-cellulosic fibre. In this connection, reliance was placed on the decision in the case of Union of India v. Delhi Cloth General Mills, AIR 1963 SC 791, where the Supreme Court has reiterated that in constructing expressions of this nature, it is not the technical meaning that should be adhered to but rather preference should be given to the expression as understood in the world of commerce. Hon'ble A.P. High Court in the case of Andhra Pradesh Paper Mills Ltd. v. Assistant Collector of C.E. reported in 1980 (8) E.L.T. 210 had held that the object of the exemption notification is to confer a certain benefit upon the manufacturer or the buyer/consumer as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isaged by the Act it is necessary to concentrate on Sections 3, 4, 16, 22 and 34. The scheme of the Act, as its preamble indicates, is to provide for the better administration and governance of the temple of Shri Shrinathji at Nathdwara. It proceeds on the basis that the temple of Shrinathji is a public temple and having regard to the background of the administration of its affairs in the past, the Legislature thought it was necessary to make a more satisfactory provision which will lead to its better administration and governance. In doing so the Legislature has taken precaution to safeguard the performance of religious rites and the observance of religious practices in accordance with traditional usage and custom. When the validity of any legislative enactment is impugned on the ground that its material provisions contravene one or the other of the fundamental rights guaranteed by the Constitution, it is necessary to bear in mind the primary rule of construction. If the impugned provisions of the statute are reasonably capable of a construction which does not involve the infringement of any fundamental rights, that construction must be preferred though it may reasonably be possib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that where two interpretations are possible, the interpretation which is in favour of the assessee should be adopted. Para No. 20 from the said judgment is reproduced below :- 20. On behalf of the Revenue it is pointed out that a great deal of inconvenience will result if a voluntary return can be entertained at any time in accordance with Section 22(3) when loss is involved and in order to give the assessee the benefit of the carry-forward of the loss, a number of assessments would have to be reopened. It is difficult to accede to such an argument merely on the ground of inconvenience. Moreover, it is common ground that a voluntary return cannot be filed beyond the period specified in Section 34(3) of the Act. It cannot be overlooked that even if two views are possible, the view which is favourable to the assessee must be accepted while construing the provisions of a taxing statute. Hon'ble Supreme Court in the following cases has also observed that where two reasonable constructions are possible - that in favour of the assessee should be accepted :- (1) Commissioner of Income-tax, West Bengal v. Vegetable Products Ltd. (1973) 88 ITR 192 (2) Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flushing' should be read as 'or'. In other words, it is urged that the benefit of concessional rate of duty would be available either to FFS with vacuumising or FFS with inert gas flushing. If the word 'and' is not read as 'or', it has been contended by the appellants that anomalies and absurdities, will arise. Referring to those anomalies and absurdities, it has been pointed out that that vacuumising with FFS machine is normally used for packing of meat and meat products whereas gas flushing system is used for packing vegetable and vegetable products. Either of the system is an accessory to the main machine. Both the systems can be imported as accessories, if an importer has, as his product range, both meat products and vegetable products like potato chips. Since the appellant is manufacturing only potato chips, it was, therefore, not considered necessary by him to import the accessory of vacuumising system. The vacuumising system is absolutely unsuitable for packing potato chips inasmuch as the vacuumising system would have made both the sides of the package stick together and thus, breaking the potato chips due to outside pressure. It could also never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1962 relates to vest the Board to make regulations consistent with this Act and rules generally to carry out the purpose of the Act. For proper appreciation of the legal position, Sections 156 and 157 of the Customs Act, 1962 are reproduced below:- Section 156. General power to make rules. - (1) Without prejudice to any power to make rules contained elsewhere in this Act, the Central Government may make rules consistent with this Act generally to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :- (a) the manner of determining the price of imported goods under Sub-section (1A) of Section 14; (b) the conditions subject to which accessories of, and spare parts and maintenance and repairing implements for, any article shall be chargeable at the same rate of duty as that article; (c) the precautions that shall be taken by the owner, his agent and the person-in-charge of any conveyance or animal for the purposes of Sub-section (2) of Section 115; (d) the detention and confiscation of goods the importation of which is prohibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 98 of the Customs Tariff Act. Chapter Note (2) expressly states that the expressions used in Heading 98.01 shall have the meaning assigned to them in the said regulations. In accordance with the said Chapter Note, Project Imports Regulations have been made excluding establishments designed to offer services of any description from the purview of ''industrial plant . If the said regulations are good and valid, there can be no escape from what they say; the photographic equipment does not fall within the ambit of industrial plant . In this view of the matter, the relevance of the alleged legislative practice with respect to regulation making power, or of the situation obtaining prior to the framing of the said regulations, is very little. The express power conferred by Chapter Note (2) of Chapter 98 cannot be curtailed or abridged with reference to alleged legislative practice relating to regulation-making power, assuming that such a practice is established and is relevant. The only question which really arises is whether Chapter Note (2) amounts to excessive delegation of legislative power, 15. As rightly pointed out by Thommen, J. in Supreme Court Employees Welfar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f always trying to discover a dormant or a latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of the court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature . These words were quoted with approval in a subsequent decision of the Constitution Bench in Devidas v. State of Punjab [1967 (3) SCR 557]. 17. Krishna Iyer, J. emphasised this very aspect in the context of a taxing statute in Avinder Singh v. Punjab [1979 (1) SCR 845]. The learned Judge said: .....the legislature cannot self-efface its personality and make over, in terms plenary, the essential legislative functions. The Legislature is responsible and responsive to the people and its representatives, the delegate may not be and that is why excessive delegation and legislative hara kiri have been frowned upon by constitutional law. This is a trite proposition but the complexities of modern administration are so bafflingly intricate and bristle with details, urgencies, difficulties and need for flexibility that our massive legislatures may not get off to a start if they must directly and comprehensively handle leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was introduced in the year 1977, imposed a prohibition on the grant of lease of quarries in respect of black granite to private persons. The Rule provided that notwithstanding anything to the contrary contained in the said rules, no lease for quarrying black granite shall be granted to private persons on or after 7th December, 1977. It could be granted only to State Government or to a corporation wholly owned by it. The validity of Rule 8(C) was challenged on the ground that it travels beyond the purview of the Act inasmuch as the power to make rules conferred upon the State Government by Section 15 was meant for regulating the grant of quarry leases in respect of minor minerals but not for prohibiting it for creating a monopoly in itself (State Government). It was also argued that since the decision contained in Rule 8(C) involved a major change of policy, it could be done only by the legislature and not by a subordinate legislative body. Both these arguments were rejected. Following observations are apposite : .......It was pointed out by the Privy Council in Commonwealth of Australia v. Bank of New South Wales - and we agree with what was stated therein-that the problem wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heavy Electricals Ltd. v. Collector of Customs, Madras [1987 (28) E.L.T. 545] at para 11 had laid down. 11. In view of the above discussions, we are of the view that no general and precise guidelines can be laid down regarding the consideration that should weigh as to when interpretative Rule 2(a) would be applicable for assessment and when assessment will have to be done without reference to this interpretative Rule 2(a) and a view has to be taken on the basis of facts of each case. In this case this point had not been urged by the Revenue at any time and we do not see any reason to examine it and hence we reject this plea. We also observe that this plea will not arise for our consideration, when a specific entry is to be found in the tariff. The Tribunal in the case of Rajasthan Synthetics Industries Ltd. v. Collector of Central Excise reported in 1989 (42) E.L.T. 24 (Tribunal) in para No. 19 at page 28 had held as under :- 19. According to Rule 1 of the Rules for the Interpretation of the Excise Tariff Schedule, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 (45) E.L.T. 525 (S.C.) in para No. 3 had held as under :- 3. The question before us is whether the Department is right in claiming that the items in question are dutiable under Tariff entry No. 68. This, as mentioned already, is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item. Learned sister Ms. Jyoti Balasundaram, Member Judicial has dealt at length the facts as to the working of the machine and as such, I need not reproduce the same. The principal function of the machine is of printing. The mere fact that it is a composite machine, it cannot be taken out from the heading of the printing. Accordingly, I am of the view that there is no violation of ITC regulations and the goods imported fall under Heading 84.43 as a printing machine as claimed by the appellant. In these circumstances, I agree with the findings of the learned sister Member Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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