| SooperKanoon Citation | sooperkanoon.com/5878 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Jul-30-1990 |
| Reported in | (1991)LC271Tri(Delhi) |
| Appellant | JaIn Engineering Company |
| Respondent | Collector of Customs |
2. The brief facts are : In the Year 1985, the dispute of classification of 'Connecting Rod Bushes and Can Shaft Bushes' for Ford Tractor Engines under Bill of Entry No. 1580/26 dated 27-06-1985 arose.
The appellants had sought classification under Heading 84.06 C.T.A.(prior to the rescheduling of the Tariff) and claimed benefit of Notification No. 281/76-Cus., dated 02-08-1976, which, however, was assessed under Heading 84.63(2) and benefit of Notification was denied and the decision in the appeal to the appellate courts of Collector (Appeals) and Appellate Tribunal were confirmed.
3. Before the Supreme Court, the issue got resolved when the Supreme Court held that "as soon as it is proved that the parts are of the engines mentioned in Heading No. 84.06, such parts will get the benefit of the Notification, irrespective of the fact that they or any or some of them have already been included under Heading 84.63 or under any other heading".
4. Meanwhile, several other consignments of similar goods had been assessed provisionally and the Notification No. 281/76 dated 02-08-1976 got amended by Notification No. 103/86 dated 17-02-1986, Notification No. 153/86 dated 01-03-1986, and Notification No. 208/86 dated 13-03-1986. By these amendments, the Tariff Schedule was restructured and the notification thereby got amended. The appellants claimed the benefit of the Notification No. 281/76 dated 02-08-1976 and as amended, keeping in view the principle enumerated in the order of the Supreme Court Civil Appeal No. 335 of 1987 [1987 (32) ELT 3 (SC)]. The appellants claimed that all parts of internal combustion piston engines which are not interchangeable with motor-vehicle parts should get the benefit of the concessional rate. The appellants filed a petition before the Supreme Court for extending the benefit of the Notification No. 281/76 dated 02-08-1976 and as amended from time to time and suffice it to state that in the Supreme Court's order dated 01-08-1989, the Hon'ble Court have ordered that if the Petitioners claim any exemption under the subsequent notification, the Collector will dispose of the same in accordance with law. Since in pursuance of the Supreme Court's order dated 18-09-1987, the Collector had passed the order dated 1-7-1988, the appellants have appealed against the order of the Collector which is now pending before the Tribunal.
5. In the impugned order No. S/26-797/85-J dated 01-07-1988, the Collector has extended the benefit of Notification No. 281/76-Cus., dated 02-08-1976 to such of those parts where proof had been adduced that they were not interchangeable with parts of other motor-vehicles.
But in respect of other amendments brought out subsequently, the Collector has viewed that when Supreme Court in its Order dated 18-09-1987 decided the appellants appeal, the effect of the amendments introduced by Notification No. 208/86-Cus. to Notification No. 281/76 was not a subject matter for consideration and, therefore, the claim of the appellants for the benefit of concession on or after 13-03-1986 would not flow from the directions of the Supreme Court, none the less he has analysed the scope of the amendments in extending the benefit to the appellant. The Collector's decision is as under :- "While extending the benefit of the concession of Notification 281/76-Cus., the Hon'ble Supreme Court in its judgment dated 18-9-1987 held : ...It is, however, clear that the Notification not only intends to grants exemption to internal combustion piston engines, but also to 'parts thereof' ...In our opinion, therefore, the Notification will apply to parts of the Engines mentioned under Heading 84.06....' '... when the notification grants exemption to the parts of the engines, as mentioned under Heading No. 84.06, we find no reason to exclude any of such parts simply because it is included under another Heading. The intention of the Notification is clear enough to provide that the parts of the engines, mentioned under Heading No. 84.06, will get the exemption under the Notification and in the absence of any provision to the contrary, we are unable to hold that the parts of the engines, which are included under a Heading other than Heading No. 84.06, are excluded from the benefit of the notification..' It is thus clear that the Hon'ble Supreme Court had extended the benefit to parts of such IC Engines in the Notification 281/76-Cus.
as they did not find any contradiction in the provisions of the notification to hold that only those parts of IC Engines which themselves are classifiable under Heading 84.06, are eligible for benefit of the notification and that other parts (of engines) which do not fall under the Heading 84.06 would get excluded from the benefit of the notification. This being so, and considering that the Notification 153/86 extends the benefit of a similar concession to the parts of IC Engines for Agricultural Tractors with effect from 13-3-1986 under S. No. 29 in the Table thereof, (in view of the amending Notification 208/86 dated 13-3-1986) by clearly specifying the eligibility of the concession to those goods which are specified in Column 3 thereof and falling under Heading/Sub-Heading Nos.
specifically mentioned in Col. 2 thereof, it is clear that in Notification 153/86 (with effect from 13-3-1986) there is specific exclusion from the benefit of concessional duty to such parts which do not fall under heading/sub-heading 84.09 of the Customs Tariff Act. Since the words and expressions which were analysed by the Hon'ble Supreme Court in interpreting the Notification 281/76 are not identical to those contained in Notification 153/86 (w.e.f.
13-3-1986). I hold that with effect from 13-3-1986 the imported parts under dispute would be eligible for concessional duty only if such parts would fall under Heading 84.09 of CTA. I am, therefore, unable to accept the contention of the Importer for extension of such benefit in respect of all parts of IC Engines on or after 13-3-1986, irrespective of their classification".
For extending the benefit of Notification No. 69/87 dated 1-3-1987, the Collector states that in the statute both Heading 84.09 and 98.06 are co-existing and he does not accept the contention of the importer, and if he has any grievance with reference to the classification of any facts or application of Notification No. 69/87, he is advised to agitate the matter before the competent assessing officer and that he holds that the request for extension of the benefit under Notification No. 69/87-Cus., dated 1-3-1987 does not flow directly from the decision contained in the order of the Supreme Court.
7. Shri S.K. Dholkia, the Ld. Advocate argued the case. He stated that the Hon'ble Supreme Court in its order dated 18-09-1987 had decided that benefit of Notification No. 281/76-Cus., dated 02-08-1976 should be extended to all parts of Engines, even if such parts were classifiable under some other heading. With amendments to the notification by Notification No. 103/86 dated 28-2-1986, there was a change in the Heading No. to 84.07, 84.08 and 84.09 but with no change in the basic text of the Notification No. 281/76-Cus., dated 02-08-1976. With issue of Notification No. 208-Cus., dated 13-3-1986 and with inclusion of S. No. 29 to Notification No. 153/86-Cus., dated 01-03-1986, irrespective of the change in the tariff heading under which the parts fall under 84.07, 84.08 and 84.09, they were entitled to the basic concept of extending the benefit to parts of the I.C.Engines solely and principally used for agricultural tractors and which could not be interchanged with other motor-vehicles.
With the introduction of Heading 98.06 through the Finance Act of 1987, they will continue to get the benefit of the concession to the parts.
In terms of Chapter Note 7(d) to Chapter 98 which empowers the Government to issue notification in respect of parts having general application, by virtue of Notification No. 132/87-Cus., dated 19-03-1987, thus notified the parts solely and principally designed for use in ICP Engines for agricultural tractors would continue to fall under Heading No. 98.06 read with Heading No. 84.09 and gets covered by the Notification No. 69/87-Cus., dated 01-03-1987, and, therefore, the benefit of the concessional rate for the parts which through out, has been the underlying principle in granting such concessions to the parts of IC Engines for agricultural tractors, should not be denied to them.
8. Shri A.S. Sundar Rajan, Ld. JDR representing the department reiterated the order of the Collector, in his findings about the scope of the amending notification, and in respect of Notification No. 69/87, he said the notification cannot be extended for the reasons stated in the order of the Collector and the judgment of the Supreme Court would not cover the subsequent period after amendments had been issued in the notification and the tariff headings. He also pointed out that in the order of the Collr. in respect of the Notification No. 69/87, there has been a self contradiction, wherein the Collr. does not accept the contention of the importer (Appellant) for benefit of Notification No.69/87, he has at the same time directed the appellant to approach the lower authorities for considering the assessment.
9. Keeping in view the submissions made by both sides, the Tribunal has to decide the scope of the notification for the purpose of extending the benefit claimed by the appellants. The notification number 281/76-Cus., dated 2-8-1976 speaks that the articles specified in Column (2) of the table annexed and falling under Heading 84.06, are exempted from so much of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975, as is in excess of the rate specified in the entry in Column No. 3 of the table. The Sl. No. 2 of the table applies to "Internal Combustion piston engines for industrial and agricultural tractors and power tillers and parts thereof excluding those which are interchangeable for use with other motor vehicles".
The Heading 84.06 relates to "Internal Combustion piston engines", and the standard rate of duty is 100%. By this notification, if the description and conditions in the table annexed for the Internal Combustion Piston Engines in S. No. 2 are fulfilled, the concessional rate of 40% ad valorem is permitted. It was the contention of the department that if the parts fall under heading other than Heading 84.06, they were not entitled to the benefit of the notification, which, however, was over-ruled by the Hon'ble Supreme Court when it decided the judgment dated 18-09-1987, to quote "we find no reason to exclude any of such parts simply because it is included under another Heading. The intention of the notification is clear enough to provide that the parts of engines, mentioned under Heading 84.06 will get the exemption under the notification and in the absence of any provision to the contrary, we are unable to hold that the parts of the engines, which are included under a Heading other than Heading 84.06, are excluded from the benefit of the notification". Therefore, so long as the part was found to be a part of the Internal Combustion Engine of the description under S. No. 2 of the table to Notification No. 281/76 dated 02-08-1976, it wll get the benefit, even if the part was found classifiable under a separate heading.
10. Notification No. 281/76 was amended by Notification No. 103/86 dated 28-02-1986, when the Heading No. 84.06 was replaced by Heading Nos. 84.07, 84.08, 84.09. This change due to restructuring of the Tariff, also brought about a change in the description of the Heading 84.06. The Heading 84.06 referred to Internal Combustion Engines without any further amplification. But Heading 84.07, 84.08 and 84.09 specified the types of engines. Thereafter Notification No. 208/86 dated 13-3-1986 amended Notification No. 281/76 dated 2-8-1976 by deleting the entries in Sl. No. 1, 2, 3 and 5, and also amended Notification No. 153/86 dated 1-3-1986 by inserting S. No. 29. By doing so, the Heading Nos. 84.07, 84.08 and 84.09 were brought under Col. 2 of the table, and the description of the goods also underwent a modification. The Notification No. 208/86-Cus., dated 13-3-1986 is reproduced below: - (Notification No. 153-Cus., dated 1-3-1986 as amended by Notification No. 208-Cus., dated 13-03-1986) The Central Government exempts the goods specified in Column (3) of the Table hereto annexed and falling under Heading No. or sub-heading no.
of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in Column (2) of the said Table, when imported into India, from so much of that portion of the duty of Customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in Column (4) of the said Table :---------------------------------------------------------------------------Sl. Heading Description of Goods RateNo. No.or--------------------------------------------------------------------------(1) (2) (3) (4)--------------------------------------------------------------------------1 XX XX XX..
XX XX XX..
XX XX XX XX..
XX XX XX XX29.
84.07) (a) Stationary or industrial internal combus- 50 per cent ad 84.08) tion piston engines excluding those which are valorem 84.09) interchangeable for use with motor vehicles other than those specified in (c) below.
(b) Parts of goods covered by (a) above 40 per cent ad valorem (c) Internal combustion piston engines for in- 50 per cent ad dustrial and agricultural tractors and power valorem tillers excluding those which are interchange- (d) Parts of goods covered by (c) above.
40 per cent ad valorem (e) Marine engines excluding those which are 50 per cent ad interchangeable for use with motor vehicles valorem other than those specified in (c) above.
(f) Parts of goods covered by (e) above.
40 per cent ad valorem (g) Internal combustion piston engines for 50 per cent ad locomotives excluding those which are inter- valorem changeable for use with motor vehicles other (h) Parts of goods covered by (g) above.
40 per cent ad valorem30.
xx xx xxXX XX XX XX-------------------------------------------------------------------------------- The plain reading of the notification will indicate that not all parts of Internal Combustion Engines, which were earlier covered by Heading 84.06 will get the benefit of the concessional rate but only the parts of the Heading 84.07, 84.08 and 84.09 because the heading had undergone a change and are made specific, only those parts which fall under 84.09 will get the benefit of the notification. Therefore, when notification restricts the benefit to a particular heading, it cannot get extended to other parts falling under other heading. The fundamental principle laid down by the Supreme Court was only with reference to the Heading 84.06, under Notification No. 281/76 dated 2-8-1976 because that heading was a general one, and whatever part was found to be a part of an Internal Combustion Engines, will get the concession, even if it is classifiable under a different heading. It has to be explained here that the Hon'ble Supreme Court had decided the matter only with reference to Notification No. 281/76 and the Supreme Court has also in CMP No. 9289-90 and 11834 of 1989 has ordered "if the petitioners claim any exemption under the subsequent notification, the Collector will dispose of the same according to law". But now due to amendments to the notification No. 281/76 with the specific Heading 84.09, only that part which gets classified under 84.09 will get the concession. To that extent the view taken by the Collector is correct. The decision of the Supreme Court published in 1978 (2) ELT J 350 (SC) in the case of Hemraj Gordhandas v. Asstt. Collector of Central Excise & Customs fully covers the situation. Further, it is a well settled law as to what should be the import of words in a Statute. To quote from the decision of Supreme Court - AIR 1982 (SC) 149 - S.P. Gupta and Ors. v. President of India and Ors., "Para -197 : But there is one principle on which there is complete unanimity of all the Courts in the world and this is that where the words or the language used in a statute are clear and cloudless, plain, simple and explicit unclouded and un-obscured, intelligible and pointed so as to admit of no ambiguity, vagueness, uncertainity or equivocation, there is absolutely no room for deriving support from external aids. In such cases, the statute should be interpreted on the face of the language itself without adding, subtracting or omitting words therefrom." "Para -198 : It is equally well settled that it is not the duty of the court to import words which have been omitted deliberately or intentionally in order to fill up a gap or supply omissions to fit in with the ideology or concept of the Judge concerned. The words and the language used must be given their natural meaning and interpreted in their ordinary and popular sense".
"Para - 202 : At page 344, it has also been pointed by the author that alteration, interpolation or elimination of words are not permissible. In this connection, the author makes the following observations while dealing with an American case :- "As we have already stated, the intention of the legislature must be primarily ascertained from the language used. This obviously means, as a general rule, that the courts have no power to add to, or to change, alter, or eliminate the words which the legislature has incorporated in a statute, not even in order to provide for certain contingencies which the legislature failed to meet, or to avoid hardship flowing from the language used, or to advance the remedy of the statute".
11. The appellants, thereafter claimed the exemption under Notification No. 69/87-Cus., dated 1-3-1987. In respect of which the Collector has observed thus : - "With reference to the claims made by M/s. Jain Engineering Co., Delhi, for extending the benefit in terms of Notification No. 69/87 dated 1-3-1987, I observe that this benefit flows to parts falling under Heading 98.06. The statute i.e. the Customs Tariff Act, was amended w.e.f. 1-3-1987 and that in the statute both 84.09 and 98.06 are co-existing and in the matter gone into by the Hon'ble Supreme Court there was no occasion to consider the changes effected in the statute, even though their order was dated September 1987. I do not accept the contention of the Importer for benefit under Notification 69/87-Cus in respect of parts which are not classifiable under Heading No. 98.06 of CTA. If the importer has any grievance with reference to classification of any parts or application or otherwise of Notification No. 69/87-Cus or any other notification, he is advised to agitate the matter before the competent assessing officer for his consideration. I hold that the request for extension of the benefit under Notification No. 69/87-Cus., dated 1-3-1987 does not flow directly from the decision and directions contained in the original order dated 18-09-1987 of the Hon'ble Supreme Court which is the main judgment which has to be applied in deciding all the pending cases".
To this, the Ld. J.D.R. has stated that the Collector's finding is a self-contradiction wherein on the one hand he does not accept the contention of the importers for benefit under Notification No. 69/87 in respect of parts which are not classifiable under Heading No. 98.06, CTA and at the same time advises the importer to agitate the issue before the competent assessing officer. The Collector has not given any reasoned finding for coming to the conclusion that he does not accept the appellant's contention for extending the benefit of Notification No. 69/87. In the absence of any speaking or reasoned orders, the Tribunal does not find any basis for deciding the issue. Moreover, each Bill of Entry under which the goods are imported is an assessment document filed under the provisions of Section 46 of the Customs Act and is an order of assessment. The definition of assessment as given in Section 2(2) of the Customs Act is "assessment" includes provisional assessment, re-assessment and any order of assessment in which the duty assessed is nil". Therefore, an assessment becomes an order against which an importer is eligible to appeal before the Collector (Appeals) and if aggrieved by his order prefer an appeal before the Appellate Tribunal under the provisions of Sections 128 and 129 of the Customs Act respectively. Therefore, the appellants should in the first instance follow the heirarchy for relief set forth in the statute, for getting their grievances annulled. Since no points have been urged by the department in respect of applicability of Notification No. 69/87 and no assessment order or appellate order has been passed by any lower authority, the Tribunal cannot pass an order unless, the party which may get affected is also been given opportunity of putting forth their grounds. The principle of natural justice requires that the Revenue should express its point of view in the matters. Therefore, this Tribunal cannot play the role of a wise counsel to the legislature, and at this stage to decide the scope of Notification No. 69/87.
12. In effect, while upholding the order of the Collector in respect of the application of Notification No. 281/76 and its amendments, the appellant's prayer for extending the benefit of the amended Notification to Notification No. 281/76 for certain parts of the items imported by them, which were denied by the Collector in his order as listed in Annexure-'C' for which they have now produced catalogue is allowed, and the Collector may now re-examine the eligibility as per the catalogue and pass an order accordingly, after hearing the appellants. To this extent alone the appeal is allowed by way of remand, otherwise the appeal has no merits and is dismissed.