Judgment:
Ferdino I. Rebello, J.
1. The petitioner is a partnership firm whose partners are national and citizen of India. The petitioner are manufacturers of Gems and Jewellery. It is the case of the petitioners that the action of the respondents in denying to them the benefits of exemption Notification No. 159/86 dated 1st March, 1986 is arbitrary. It is set out that the exemption notification grants exemptions to various machines/equipments which are imported for use in the manufacture of Gems and Jewllery by registered exporters of Gems and Jewellery and Cooperative Societies of Gold Smiths and artisans and used in processing and manufacture of gem and jewellery for the purpose of export. The impugned Notification under Serial No. 67 reads as 'steel pots/steel counter pins'. In the instant case we are concerned with steel pots which were imported by the petitioners and in respect of which the customs exemption notification is being denied to them.
2. The respondents have filed a reply of one Ramkrishna Gopal Bandodkar. In para.4 of the said reply with reference to the averments in para.49 of the petition it is set out that the amendment dated 1.8.1989 to List I of Appendix VI of the EXIM POLICY added three type of pots and at the same time retaining item as Sr. No. 68 - Steel Pots, and Steel Counter Pins which is clearly indicative of the fact that there is a distinction between these goods namely (1) Bottom Pressed Pots (2) Top Pots and (3) Pots for bottom and top to work on fancy cut stones over and above steel pots. Since the additional three items are not mentioned in the Custom Notification, they would be clearly outside the purview of the said Notification and Department's action was correct and justified in denying duty benefit. The classification of the goods follows the Harmonized System of Nomenclature (HSN) and, therefore, the description of the goods either in the Custom's Tariff or the Import Policy would closely follow each other. As the EXIM POLICY has clearly distinguished between 'Steel Pot & Press Pots', it is illogical on the part of the department to exclude 'Press Pots' from the benefit of said Notification No. 159/86 and 108/89.
3. We have heard the learned Counsel for the parties and their respective arguments. In the first instance in so far as the Customs Act is concerned, Section 12 is the charging Section which sets out that duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from India. Section 25 thereafter confers a power on the Government if it is satisfied in the public interest to exempt generally either absolutely or subject to such conditions as may be specified in the notification goods of any specified description from the whole or any part of the duty of customs leviable thereon. It is pursuant to the power under Section 25 that a Notification in the matter of exemption of goods set out in the table for the manufacture of gem and jewellery for export has been issued by the Government.
It is thus clear that duty on customs is payable pursuant to the provisions of the Customs Act and exemption is also pursuant to the provisions of the Customs Act.
4. The Exim Policy has been issued pursuant to the powers conferred under the provisions of the Import and Export Control Act, 1947. Section 3 confers the power on the Government to prohibit and restrict the import of goods. This Act neither confers a power on the Government to impose either duty or to exempt from payment of such duty.
5. When there be two Acts, may be both Special Acts what has first to be examined is the field that they cover. Duty is payable pursuant to the Customs Act. The Import and Export Control Act regulates the import or export of goods. In so far levy of customs duty is concerned, the Customs Act is the Special Act. The issue whether any goods can be imported or exported has nothing to do with the assessment of customs duty. In our opinion, therefore, once the Notification is issued under Section 25 of the Customs Act that Notification alone would govern the issue of exemption of customs duty. In the instant case a Notification has been issued. The Notification under Serial No. 67 of Table clearly uses the expression steel pots and steel counter pins made of steel as long as they are used for the manufacture of gem and jewellery for export. That has not been disputed. What has been contended is that by virtue of Exim Policy 'Press Pots' are not entitled to the benefit of the said notification. In our opinion, the stand of the respondents would be contrary to the provisions of the Notification issued under Section 25 of the Customs Act. The Exim Policy cannot have the effect of reading down the Notification issued under the provisions conferred under Section 25 of the Customs Act. The denial, therefore, of the benefit to the petitioners herein would be without jurisdiction and consequently this petition will have to be allowed.
6. In the light of that Rule made absolute in terms of prayer Clause (a). The Bank Guarantee furnished pursuant to the interim order of this Court be returned to the petitioner after cancellation.