9911796707
TMI Blog1988 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... pacity. As and when Bills of Entry were filed by the clearing agents of the respondent, the goods imported were assessed to duty under the Heading No. 84.66 of the Customs Tariff Act. 3. Section 2 of the Customs Tariff Act, provides for levy of duties as specified in the First and Second Schedules to the Act, which is commonly known as 'basic duty'. Section 3 of the said Act provides for levy of additional duty equal to the excise duty for the time being leviable on a like article if produced or manufacturred in India. A practice came into existence during recent years to levy a duty under the heading 'auxiliary duty' as a provision in the Annual Finance Acts, with a life period of only one year from 1st of April of a year to the 31st March of the next year. The Finance Act relevant in this case is the Finance Act, 1983. Section 45 thereof provided for levy and collection of auxiliary duty of customs at an amount equal to fifty per cent of the value of the goods, in the case of goods mentioned in the First Schedule to the Customs Tariff Act. According to Section 45(4) of the Finance Act, 1983, the provisions of the Customs Act and the rules and regulations made thereunder, includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table annexed hereto and falling within the Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the auxiliary duty of customs leviable thereon under sub-clause (1) of Clause 45 of the said Finance Bill as is in excess of the amount calculated at the rate of 20 per cent of the value of such goods as determined in accordance with the provisions of Section 14 of the first mentioned Act. Table S.No. Chapter No. in the First Schedule to the Customs Tariff Act, 1975 Description of goods .... .... .... .... 11. 84 Goods falling under Heading No. 84.31 but excluding paper making machinery and component parts thereof. 12. 84 Goods falling under Heading No. 84.66. .... ..... .... .... 5. It is the contention of the respondent that the goods imported by them fall under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (including semi-finished materials), or consumable stores imported, as a part of a Contract or contracts, registered in terms of sub-heading (i) provided the total value of such spare parts, raw materials, and consumable stores does not exceed ten per cent of the value of the goods covered by sub-heading (i) and further provide that such spare parts, raw materials or consumables stores are essential for the maintenance of the plant or project mentioned in sub-heading (i) 40% 7. Regulations were framed in 1965 with reference to the contracts to be registered under the Heading No. 84.66. They are called Project Imports (Registration of Contract) Regulations, 1965. Regulation No. 2 provides that the Regulations shall apply to every contract referred to in sub-heading No. (i) of Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). The Procedure for registration of contract is found in Regulation No. 3. Regulation No. 4 provides the assignment of a number to the contract while Regulation No. 5 prescribes the procedure for the amendment of the contract. 8. The purpose of introducing Heading No. 84.66 in the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 shows that it is not a residuary heading or a general heading relating to any class of goods. It is a specific entry introduced with the purpose and it relates only to goods imported for the initial setting up of a unit or a substantial expansion of an existing unit of a specified industrial plant, irrigation project etc. 'When an importer registers a contract as required in the entry under the Heading 84.66 all the goods imported by him under that contract will be subjected to duty only as per that entry. It will not be open to the Revenue to pick out some of the goods imported under the contract and impose a different rate of duty on the footing that they would be covered by a different heading. If the conditions prescribed under the Heading No. 84.66 are satisfied, the duty is imposed on the goods imported under that heading, as if they form the composite unit. 10. It is seen that the Heading No. 84.31, refers to machinery for making or finishing cellulosic pulp, paper or paperboards and the rate of duty is 40%. It so happens that the rate of duty under the Heading No. 84.66 is also 40%. If on any particular date, the rate of duty under the Heading No. 84.31 is different fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification. Similarly, if certain goods fall under the Heading specified in column (2) but do not satisfy the description in column (3) of the Table, they would also not be covered by the Notification. Thus, on a plain reading of the Notification, it is clear that the paper making machinery and parts thereof would be exempted from the whole of the auxiliary duty of customs only if they fall under the Heading No. 84.31. When Notification No. 61/83 refers to both Heading Nos. 84.31 and 84.66 but excludes paper making machinery and component parts thereof falling under Heading No. 84.31 only, it is clear that the Central Government did not intend to treat paper making machinery and component parts thereof as a separate class by itself fit for exemption from the whole of the auxiliary duty, whether they were imported under a contract registered under the Heading 84.66 or not. 12. Our attention is drawn to two other Notifications of exemptions issued by the Central Government. The first of them is Notification No. 268-Cus., dated 2-8-1978, exempting goods faHing under Heading No. 84.66 of the First Schedule to the Cutoms Tariff Act from the whole of the additional duty leviable the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overlapping. We hold that the respondent is not entitled to the benefit of Notification No. 62/83 and the appellants are right in levying auxiliary duty as per the terms of Notification No. 61/83. 13. A somewhat similar question arose before the Supreme Court of India in Jain Engineering Co. v. Collector of Customs, Bombay and Others -1987 (32) E.L.T. 3 (S.C.) = 1887 4 SCC 492, and it happened to be a converse case. The appellant before the Supreme Court claimed the benefit of the Notification No. 281/76-Cus. granting part exemption from payment of customs duty in respect of the rod bushes and camshaft bushes imported by the appellant therein. The entry in the exemption notification referred to internal combustion piston engines for industrial and agricultural tractors and power tillers and parts thereof, which covered bushes imported by the appellant in that case. The Heading in the First Schedule of the Customs Tariff Act, viz. Heading No. 84.06 referred to internal combustion piston engines. The entry under the Heading No. 84.06 did not refer to parts of such engines. The contention before the Supreme Court advanced on behalf of the Revenue was that as the entry in Heading No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded under a heading other than Heading No. 84.06, are excluded from the benefit of the notification." 14. The aforesaid ratio will apply on all fours to the present case. When the exemption notification refers specifically to Heading No. 84.31, and describes certain goods falling under that heading, it will not be open to the importer to contend that the goods falling under another heading, viz., Heading No. 84.66 would be covered by the notification. 15. Learned counsel for the respondent repeated the contentions urged before the learned Single Judge and upheld by him. The first contention is that the principle generalia specialibus non derogant would apply to this case. According to the learned counsel, Heading No. 84.66 is a general entry and Heading No. 84.31 is a special entry and the exemption notification grants exemption to goods of a specific description viz., paper making machinery and parts thereof, and, therefore, the special provisions should prevail over the general proviso. We do not agree with learned counsel for the respondent as the Heading No. 84.66 is not a general entry. It is a specific entry brought in. 16. The second contention urged by learned counsel i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Surat v. Vac Met Corpn (P) Ltd., AIR 1986 S.C. 1167 and M/s. Atul Glass Industries (P) Ltd. v. Collector of Central Excise, AIR 1986 SC 1730 relied on by learned counsel for the respondent are not applicable to the present case. These two decisions lay down that when certain articles will fall under a specific entry, they cannot be dealt with under a general entry, presumption as to a tax." Far from helping learned counsel for the respondent, the dictum of Rowlatt J. favours the appellants in this case. On a plain reading of what is crearly said in the notification, we have no doubt that the respondent is not entitled to the benefits of the exemption granted therein. 17. Learned counsel for the respondent drew our attention to the decision of the Bombay High Court in Bombay Paints and Allied Products Ltd. v. Union of India and others, 1985 (21) E.L.T. 663 (Bom.) and that of the Cegat Special 'C' Bench, New Delhi in Indye Chemicals, Ahmedabad v. Collector of Central Excise, Ahmedabad, 1986 (25) E.L.T. 318 (Tribunal) for the proposition that whenever there is any doubt in the meaning of an exemption notification, the benefit of doubt must go to the assessee, so that the tax burde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Salt Act, and not entitled to claim any exemption in respect of special duty of excise or additional duty of excise of auxiliary duty of excise. We are at a loss to understand how this decision can help the respondent in the present case. Auxiliary duty is levied under Section 45(1) of the Finance Act. As we have seen already, the headings found in the First Schedule to the Customs Tariff Act are adopted for the purpose of auxiliary duty. Exemption from auxiliary duty is granted by the power under Section 45(4) of the Finance Act read with Section 25 of the Customs Act. The said headings as are relevant for levying the auxiliary duty will be applicable for the application of the notification of exemption. 20. It was next argued that just because the respondent had the benefit of exemption from thewhole of the additional duty under Notification No. 268-Cus., dated 2-8-1976 and a reduction of the duty to 30% ad valorem under Notification No. 271-Cus., dated 26-9-1981, the respondent cannot be deprived of the benefit of Notification No. 62/83, dated 1-3-1983, as there is no provision in law denying a double benefit to a tax-payer. Reliance is placed on the decision in C.P. & Berar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developing member countries, under the most-favoured-nation clauses, the contracting parties to GATT assume the obligation to extend one another the tariff concessions accorded to any one member country. Another central feature of GATT is the principle of reciprocity; mutual tariff concessions are designed to lead to equivalent increases in the exports and imports of each participant. The principles of non-discrimination and reciprocity of ten conflict, since the agreed-upon tariff reductions are extended to countries not obliged to reciprocate. To lessen this effect of giving 'free ride' to third countries, much tariff bargaining was carried out in an item-by-item bastis in the post-war period. This approach limited the scope of tariff reduction and, after initial successes, the progress of multilateral trade liberalisation slowed down." It is therefore submitted by learned counsel for the respondent that the 19 Items set out in Notification No. 62/85 are entitled to exemption from whole of the auxiliary duty of customs and papermaking machines and component parts thereof being Item No. 15 should have the benefit of exemption, whether they fall under Heading No. 84.31 or Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
