1983(03)LCX0042

BEFORE THE CEGAT, SPECIAL BENCH ‘B’, NEW DELHI

S/Shri B.B. Gujral, Vice President, K.L. Rekhi, Member (T) and Smt. V.S. Rama Devi, Member (J)

COLLECTOR OF CUSTOMS, MADRAS

Versus

 BHARAT HEAVY ELECTRICALS LTD., MADRAS

Order No. B-220/83, dated 31-3-1983

Advocated By :  Shri A.S. Sunder Rajan, D.R., for the Appellant.

Shri M.A. Rangaswamy, Consultant, for the Respondents.

[Order]. - The case came up for hearing today i.e. on 31-3-1983.

2.  M/s. Bharat Heavy Electricals Ltd., Tiruchirapalli imported hot mill equipments and mechanical equipments for hot rolling tubes among other things covered by different Bills of Entry. The goods were provisionally assessed under Heading 84.66(1) of the Customs Tariff Act, 1975 at 40%. The appellants cleared the goods after paying provisional duty and filed a claim for refund of duty in terms of Customs Notification No. 40/78, as amended by Notification No. 109/78, at 25%. Their claim was rejected by the Assistant Collector of Customs on the ground that the assessment was done under Project Import Regulations and having availed concessional assessment under those regulations the appellants were not eligible to avail of assessment under any other concessional notification. However, on appeal, the Appellate Collector of Customs, Madras allowed the concession in terms of Customs Notification 40/78 on the ground that availing of Project Import Concessional assessment was not a bar to the item being assessed on merits read with another concessional notification. However, the respondents were called upon to show cause why the said orders of the Appellate Collector should not be reviewed by the Government of India and why the same should not be set aside. The matter is now transferred to us under Section 131-B of the Customs Act, 1962.

3.  Shri Sunder Rajan argued that the order of the Assistant Collector of Customs was correct in law since no importer could avail of the concessional assessment under Project Import Regulations and under any other concessional notifications as well. He stated that the importer could either choose one or the other. According to him, availing of concession under the Project Import Regulations would act as a bar to availing of any more concessions under any other exemption notifications. Shri Sunder Rajan argued that it could not have been the intention of the Government to give double benefit to the importers and as such exemption notifications should be construed strictly as per the intention. Further, he stated that the Notification No. 109/78, which amended the earlier Notification No. 40-Cus/78 covers, inter alia, “Hydraulic Extrusion Press for manufacture of seamless Tubes, or profiles of steel and non-ferrous metal” and as” such it did not cover parts of the extrusion press imported by the respondents under different Bills of Entry and when no single Bill of Entry covered a complete machine.

4.  Shri Rangaswamy, on behalf of the respondents, countered the statement of Shri Sunder Rajan by stating that the goods imported by the respondents were not parts required for commissioning of Hydraulic Extrusion Press but they were an entire press. He explained that for the convenience of packing and transport, presses of that size could not come in a fully assembled and ready for operation condition and they had necessarily to come in a knocked down condition. In support of his statement, he produced contract invoices, and drawings to show that all the parts required for the entire presses had been brought in four shipments. He further clarified that the four Bills of Entry under which the goods were imported taken together cover two whole machines namely, a Hydraulic Extrusion Press and an Impact Extrusion Press. He tried to go into the background of Item 84.66 to explain that the exemption was intended always to encourage bringing in of goods for a project in order to assist further development of Indian industry. He referred to the Finance Minister’s speech while presenting the Budget on 18-2-1978 in this context. He also cited the Government of India’s clarification given to the Customs and Central Excise Advisory Council on 18-12-1982 (Item No. 35 of the Agenda) to the effect that exemptions in respect of specific items of capital goods can be availed of by importers of project contract goods also. As regards the Notification 40/78-Cus, he stated that the same had been issued with reference to articles falling under Chapter 84 and as such it would be necessary to apply the principle of interpretation as enunciated in Note 2 to Section. XVI of the Tariff under which Chapter 84 falls. He further stated that from the note it is evident that parts of machines of the kind covered by the instant case were to be classified in the heading covering the main machine. In this connection, he relied on the CBR’s Ruling No. 5 of 1928, as amended in 1930, which stated that machinery for original installation, dismantled or partially dismantled for shipment, was assessable as a whole even if shipped in more than one consignment. As a reply to Shri Sunder ‘Rajan’s argument that the exemption notification should be interpreted as per the intention, Shri Rangaswamy referred to the observations made by the Hon’ble Delhi High Court in Modi Rubber case - 1983 ELT 24 (Del.) - to the effect that by adding to or by amending or by construction, deficiencies in the language cannot be made up by going to the object which the authority had in his mind, but the scope, effect/ and the operation of the notification has to be judged by the words employed in the exemption notification. He concluded his arguments by stressing that the respondents are entitled to the benefit under Notification No. 40/ 78-Cus in addition to the concession under the Project Import Regulations.

5.  We have carefully followed the arguments of both the sides. We agree with the arguments put forward by Shri Rangaswamy on behalf of the respondents. We are convinced with his statement that the entire presses could not come in one consignment but they had to come in a knocked down condition under four consignments and under four separate Bills of Entry (of course under one contract) for the purpose of convenience. As regards the availing of benefit under Project Import Regulations as well as exemption notification No.40/78-Cus we find no such ground taken in the Show Cause Notice issued by the Government of India. However, since the point was raised during the hearing, we would like to add that there is no bar to availing of more than one benefit unless it is barred categorically. Hence we uphold the orders of the Appellate Collector and set aside the Show Cause Notice issued by the Government of India.

6.  We further direct that the appellants may be given the benefit of Notification No. 40-Cus./78 (as amended by Notification No. 109/78) after the customs authorities satisfy themselves that all the parts imported would form complete Hydraulic and Impact Extrusion Presses as described in the aforesaid notification based on the relevant Bills of Entry, contract and drawing etc.

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Equivalent 1987 (31) ELT 534 (Tribunal)