TMI Blog1991 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of the aforesaid items and their components required for the initial setting up of a unit, or the substantial expansion of an ex isting unit of a specified : 1. Industrial plant: ***** ***** ***** Provided these are imported (whether in one or in more than one consignment) against one or more specific contracts, which have been registered with the appropriate Customs House in the manner prescribed by regulations which Central Board of Excise and Customs may make under Section 157 of the Customs Act, 1962 and such contract or contracts has or have been so registered before any order is made by the proper officer of customs permitting the clearance for home consumption, or deposit in a wareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h May, 1975 the petitioner applied to the Director General of Technical Development (DGTD), Government of India for making a recommendation to the CCI and E to make an endorsement on the petitioners' Import licence to be granted by the CCI E to the following effect. "Project Import Licence assessable to Customs Duty under 72A of the Indian Customs Tariff." It may be stated that 72A of the Indian Customs Tariff, has been replaced by Heading 84.66 of the Customs Tariff Act, 1975. 4. By a letter dated 7th June, 1975 to the CCI E, the DGTD recommended endorsement of the project import licence to be issued for the Import of the said empty gas cylinders under 72A of the Indian Customs Tariff. According to the petitioner the CCI and E is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Tariff Act, 1975. 7. On 18-1-1979 a Rule Nisi was issued as prayed. An interim order was also issued in terms of prayer (e) restraining the respondents from levying any duty on the import of the said cylinders except under the Heading 84.66 of the 1975 Act. The interim order was modified subsequently to the extent that the petitioner was directed to furnish a Bank guarantee in favour of the Collector of Customs for 60% of the difference between the concessional rate and the rate claimed by the Customs. 8. The petitioner has contended - (1) The sponsoring authority for the import of the cylinders was the DGTD. Before recommending the endorsement on the licence to CCI and E the DGTD had satisfied itself in accordance with para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e beginning. (2) The view of the respondent No.l was in any event not so unreasonable justifying interference under Article 226 of the Constitution. (3) The CCI E and DGTD were 'busy bodies' who had no business to make any recommendation regarding the classification of the said goods under the 1975 Act. In any event the CCI E had expressly left the matter to the discretion of the Customs Authorities to take action on the endorsement as they thought fit. (4) The phrase 'initial setting up' must be construed literally. There was no scope for reading "phased implementation" into the phrase. Reliance has been placed on the decision of the Supreme Court in M/s. Goodyear India Ltd. v. State of Haryana reported in AIR 1990 S.C. 781 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Heading '84.66' even strictly construed includes the setting up of a unit in stages for the first time. 14. Secondly the Customs Authorities cannot dismiss the recommendations and endorsement of the DGTD and the CCI E as being "certificate of busy bodies". The certification was made pursuant to the import and export procedure prescribed by the Government of India and the relevant rules in this regard. The Customs Authorities are a department of the same Government. It is arbitrary on their part to put a construction on the phrase "initial setting up" different from the construction put by the other departments of the Government of India. It maybe noted that the CEGAT m M/s. Uuival Surgical Traders v. Collector of Customs, Cochin repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reading the word "shall" used in the said regulation as meaning "may". On the other hand the construction of the word "shall" used in the regulation as casting a mandatory duty on the concerned authority to register the contract is in keeping with the pattern for effecting a project import. If the customs authorities were given a discretion, the elaborate procedure followed by the sponsoring authority and CCI E in recommending and granting an import licence as being eligible for the benefit of the Heading '84.66' would be rendered a futile exercise. 19. For all these reasons I hold that the decision of the respondent No. 1 as contained in the letter dated 10th January, 1979 cannot be sustained. The decision is accordingly set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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