1. These are two appeals filed by the Revenue being aggrieved by two separate orders one passed by the Collector, Customs (Appeals), New Delhi and the other passed by the Collector, Customs (Appeals), Hyderabad. In both the appeals, similar issue is for our consideration.
Both the appeals were heard together and are being disposed of by this common order.
2. In the appeal decided by the Collector, Customs (Appeals), New Delhi the goods were described by the importers in the B/E as "Optional Time Domain Reflectometers". In another appeal in which the impugned order is by Collector, Customs (Appeals), Hyderabad, the goods were described as "Automatic Test Equipment - Single Mode Reflectometer". On examination, the goods were found to be 'optical time domain reflectometer'.
3. There is no dispute about classification. The respondents have claimed the benefit of Notification No. 96/91-Cus., dated 25-7-91 under serial No. 53 of the Table annexed to that notification which covers 'automatic testing or marking or printing or typing machine or any combination thereof.' The Asstt. Collector, Customs denied the benefit of the said notification but allowed the benefit of Customs Notification No. 59/88-Cus., dated 1-3-88 which covers specifically 'optical time domain reflectometer'. The Collector, Customs (Appeals) allowed the benefit of Notification No. 96/91-Cus. at serial No. 53 already referred to above.
4. We have heard Shri R.S. Sangia, JDR for the appellants Revenue. Shri Pragyan Sharma, Advocate is present for the respondents, M/s. H.C.L.
Ltd. in both the appeals.
5. Shri R. S. Sangia, JDR referred to the exemption Notification, No.96/91-Cus. and Notification No. 59/88-Cus. and submitted that there is no dispute of classification and it is an admitted position that the goods imported were 'optical time domain reflectometer'. As the 'optical time domain reflectometer' were specifically described in Notification No. 59/88-Cus., there was no question of coming to the Notification No. 96/91-Cus. He referred to the importers' own declarations and submitted that the, view taken by the adjudicating authorities in both the cases was correct.
6. In reply, Shri Pragyan Sharma, Advocate submitted that the goods were covered by both the notifications and that the importers had claimed the benefit which gave them the maximum relief. He referred to the written submission wherein it had been stated in Para 6 as under : "6. In any event of the matter, the Order-in-Original passed by the Assistant Commissioner of Customs has not disputed the fact that the item OTDR is also covered by S. No. 53 of Notification No. 96/91, but the only ground on which this exemption was denied is that the Notification No. 96/91 is of generic in nature and the Notification No. 59/88 is specific in nature. Hence, the grounds in the present appeal is beyond the scope of the proceedings. Such a ground cannot be taken at this stage by the Department." 7. It was his submission that when two notifications are available to an assessee, it is the option of the assessee to choose any one which is beneficial to him. He referred to a number of decisions in this regard which are given in para 7 of the written submissions.C.C.E, Baroda v. Indian Petro-chemicals - 1997 (92) E.L.T. 13 (S.C.) wherein the Apex Court had held that when the assessee was eligible to the benefit of two exemption notifications then the benefit of notification which was more beneficial to the assessee is to be given.
9. We have carefully considered the matter. We find that there is no dispute and it is an admitted position that the goods imported were 'optical time domain reflectometer'. 'Optical time domain reflectometer' are specifically described in Notification No.59/88-Cus., dated 1-3-88 which provided exemption to the goods specified in the Table annexed to that Notification No. 59/88-Cus.
which was falling under Chapters 84, 85 or 90 of the Customs Tariff.
The exemption was to the extent of the duty as was in excess of the amount calculated at the rate of 55% ad valorem. Subsequently, another Notification No. 96/91-Cus., dt. 25-7-91 was issued which exempted the goods falling within the Chapters 82, 84, 85 and 90 of the Customs Tariff which was used in the electronic industries. The exemption available was to the extent of duty which was in excess of the amount calculated at 20% ad valorem. At Serial No. 53 of the Table the following goods were covered : "Automatic testing or marking or printing or taping machine or any combination thereof." We find that the goods imported were 'Optical Time Domain Reflectometer' which was specifically covered by the already existing Notification No. 59/88-Cus. The description at Serial No. 53 of the Table under Notification No. 96/91-Cus., was general in nature and it could not be said that the goods were equally covered by both the Notification. When there is specific entry, it is the settled position in law that the goods would be classified under that specific entry as against the general entry.
10. The learned Advocate had submitted that the Asstt. Collector, Customs had not disputed that the item- in question was covered by Serial No. 53 of Notification No. 96/91-Cus. We find that the Asstt.
Collr., Customs, had only referred that entry under Customs Notification No. 96/91-Cus. was generic in nature and covered broad category of goods of particular nature. We find that he had held that the goods were not covered by Serial No. 53 of Notification No.96/91-Cus.
11. Learned Advocate had also referred that when two notifications were available to an assessee it was the option of the assessee to choose any one which was beneficial to him. He referred to the case-law in support of his contention. We consider that in the present case the two notifications were not equally applicable to the goods in question. In one notification, the goods were specifically and categorically described while the description in another notification was general in nature. We consider that the case-law will be applicable only when the two notifications are equally applicable to the goods and the manufacturer.
12. In view of this, we consider that the decision of the Apex Court in the case of C.C.E., Baroda v. Indian Petro Chemicals (supra) is also not applicable to the facts and circumstances of the cases.
13. Learned Collector, Customs (Appeals), Hyderabad had referred to the Tribunal decision in the case of Indian Oil Corporation v. C.C.E. - 1991 (53) E.L.T. 347 (T) In that decision, the Tribunal had held that when there are two notifications which are in force simultaneously then that notification which is beneficial to the assessee should be applied. In that decision, the matter involved the two Notification No.44/71, dt. 7-4-71 and Notification No. 44/78, dt. 1-3-78. The Tribunal observed that the product satisfied all the criteria of Notification No. 44/71, dt. 7-4-91 as amended and observed that when there were two notifications which were in force simultaneously then that notification which was beneficial to the assessee should be applied. Para 12 from that decision is extracted below : "12. In this connection in the ruling of the Delhi High Court as given in Indian Aluminium Company Ltd. and Anr. v. Union of India as reported in 1983 (12) E.L.T. 349 (Del.), the observations made in para 14 are relevant :- "The exemption clause appearing in taxation laws should be reasonably interpreted. It should be given its full and reasonable scope and amplitude so long as violence is not done to the language used. The exemption is "from so much of the duty of excise leviable thereon" as is in excess of 75% of such duty. It would include the auxiliary duty of excise and there is nothing in the language to restrict its scope of application only to the basic duty of excise.
The exemption notification must be interpreted in a way so that the remedy provided by the legislature may be availed of by the tax-payer. The Finance Minister's statement is to the effect that the Central Government would introduce what was called a.
"Production Incentive Scheme" to encourage higher industrial production by providing relief in excise duty. The main notification was to give effect to the policy statement. The relief in excise duty is intended to cover in its scope both the basic duty of excise and the auxiliary duty of excise. For these reasons, I am inclined to hold that the exemption under the main notification covered the auxiliary duty of excise leviable under Section 36 of the Finance Act, 1976." Therefore, it cannot be doubted that the Government of India did not intend to give benefit to spindle HVI oil used for manufacture of agricultural spray oil. It is well-known that the Government of India has been extending benefits to the agricultural sector.
Therefore, it cannot be taken to mean that the appellants' product was not to get the benefit merely because there exists another Notification which should specifically describe the product. This is what Bombay High Court has observed in the case of Deccan Sales Corporation and Anr. v. R. Parthasarthy and Ors. as reported in 1982 (10) E.L.T. 885 (Bom.) at Para 27, which is reproduced below :- "It is now well settled that where a taxing provision or an exemption provision is capable of more than one interpretation, then that interpretation must be put which would reduce the incidence of tax or enlarge the ambit of the exemption provision." "If two interpretations of a provision are permissible and one interpretation may render the provision subject to serious constitutional challenge, the other interpretation ought to be preferred. In other words, the provision must be read down and given a restricted meaning to protect it from a legal challenge as to its vires or validity." 14. In the present cases, we find that the importers had described the goods as "Optical Time Domain Reflectometer" at the time of import. The goods were examined and were found to be 'Optical Time Domain Reflectometer'. When there is a specific entry for the goods imported, we consider that their classification could not be taken to another general entry and in the facts and circumstances of the case, it could not be said that both the exemption entries were equally applicable to the goods in question.
15. Taking all the relevant facts and considerations into account, we do not agree with the view taken by the Collector, Customs (Appeals) in both the cases. We set aside the same and restore the orders-in-original passed by the adjudicating authorities. As a result, both the appeals filed by the Revenue are allowed.