Customs, Excise and Gold Tribunal - Delhi
Sociedade De Fomento And Ors. vs Collector Of Customs on 26 February, 1987
Equivalent citations: 1987(12)ECC3, 1987(29)ELT620(TRI-DEL)
ORDER M. Gouri Shankar Murthy, Member (J)
1. These are nine Revision Applications heard as Appeals filed by M/s. Sociedade De Fomento and others, and two such matters by Chowgule & Company in regard to the classification of imported Dumpers, Loaders and Tractors. While Appeal Nos. 401, 406, 783, 827, 828 and 1029 as well as 399 and 402 relate to the classification of Dumpers/Loaders, Appeal Nos. 403, 404 and 405 relate to Catterpiller Tractors/Loaders.
2. The primary question that arises for consideration in the case of the import of Dumpers/Loaders/Tractors is as to whether they are mining machinery and classifiable as such under item No. 72(18), read with Exemption Notification No. 117-CUS dated 20.8.1955, or they could be classified as conveyances under item No. 75 of the First Schedule to the Customs Tariff Act.
3. The Dumpers in all the cases would appear to have been invariably declared as mining machinery so as to be entitled to the concessional assessment under item 72 (18), read with Notification No. 117-CUS dated 20.8.1955 but assessed as conveyances.
4. It is not as if the question is res integra.
(a) A Division Bench of the Bombay High Court in seven appeals [in W.A. 74/16 - V.M. Salgaocar v. Union of India] arising from a common judgment of dismissal by Deshmukh 3. of seven Miscellaneous Petitions by various nine owners, had held that:-
"Dumpers, which are basically conveyances though specifically built for carrying heavy iron ore in a rough terrain cannot be considered to be any part of the mining machinery for being classified under item 72(18). In our view, the fact that the said 'Dumpers' are specifically built and equipped with mechanical process of loading and unloading or that under the licence the Petitioners are required to use them only in their respective mining area would not make any difference to the nature of the 'dumpers' which would, nonetheless basically remain 'conveyances' and would not be considered as 'mining machinery' ". [para 26 of the Judgment].
(b) Another Division Bench of the High Court of Bombay had in SEA No. 145/78 [Salgaoncar Engineers (Pvt.) Ltd. v. Union of India], following the aforesaid decision had held that heavy duty Dumpers known as 'Silcard Dumpers' were substantially and basically conveyances even though they are equipped with technical contrivances which are meant to dump materials like, for example, the transport of excavated and other materials from one place to another.
(c) In 1980 ELT 423 [Hindusthan Motors Ltd. v. Union of India], on a question as to whether rear dumpers were exigible to duty under Item 34 of the First Schedule to the Central Excises and Salt Act, 1944, as "Motor Vehicles", it was held, inter alia, that "8.... These are used in rough terrain and for purposes of haulage of ores etc. within a short distance from . the site of the project. For example, the dumpers carry ores from the place of excavation to the railway wagon within the mining area, if it is a mining project. Admittedly, these vehicles are used at the place of mining operations. These machines which are the subject matter of this writ petition are excellent for working in the mining areas.
9. In relation to speed it is said that this slow speed of 18 K. Miles per hour indicates that they are not suitable to be driven along roads in transit or to carry materials from one site to another. But this is not conclusive. It is true that these dumpers are, in reality item of plant which occasionally are driven very slowly along short stretches of road in the immediate vicinity of the sites on which they are used rather than as road vehicles capable of being used in transit to carry passengers or goods.
...
12. Counsel for the petitioner contends that this is not the popular or the commercial sense in which dumpers are understood in the commercial world. I was referred to Dunlop India Ltd. V. Union of India, AIR 1977 SC 597. Counsel said that the dumpers of their manufacture and make are particularly suitable for the function of hauling and are unsuitable and uneconomical for the roads on which they would be only a source of danger or damage. I was referred to the standards and specifications of the Indian Road Congress recommended for motor vehicles which use roads. Counsel argued that these dumpers are generally called "off-the-highway" dumpers and are used in mining and project areas and are never used on the roads. It may be that they are known as "off-the-highway" dumpers in common parlance. But they do not cease to be dumpers. The epithet "Off-the-highway" used in relation to them will not take the vehicle out of the category of "motor vehicle".
13. Counsel then said that the dominant or primary purpose "off-the-highway" dumper is that they are used for hauling large quantities of rocks or mineral ores over short distances and are totally unsuitable and unfit for use on roads. If the dumpers in loaded conditions are allowed to operate on roads they would dig or damage the roads, he said. He called my attention to the Indian Tariff Act where the custom authorities have classified dumpers as "machinery and equipment". Similar, he said, is the classification made by Brussels Tariff Nomenclature (BTN) where dumpers are categorised as loading and unloading machinery. To this argument the short answer is that it is the definition of "motor vehicle" as given in item 34 which will govern us and not what has been said in other enactments or literature. The object of the Central Excise Act is to raise revenue and with this end in view the legislature has defined the term "motor vehicle". In the context of the Act the expression "motor vehicle" has to be understood. The context must govern the true meaning of the term 'motor vehicle'."
(d) In AIR 1975 S.C. 17 (Bolani Ores v. State of Orissa), the Supreme Court had occasion to consider if dumpers, rockers and tractors are "Motor Vehicles" in the context of the definition thereof in the Motor, Vehicles Act. One of the Appellants herein, M/s. Chowgule & Company were interveners in that case. It was contended that "having regard to the nature of the vehicles in question they are particularly suitable for the functions they are performing and unsuitable for the roads on which they would be only a source of damage, inconvenience, danger and uneconomical compared with the other vehicles usually utilized for the transport of goods". Addressing themselves to the question as to whether dumpers, rockers and tractors are suitable or fit for use on roads, their Lordships held (in Para 26 of the report) that:-
"In respect of all these three types of vehicles it cannot be said that they are not adapted for use upon roads. That they are not so used or are confined for use to only places other than roads or public places is a different matter...."
(e) In the Tribunal as well, in 1986 (23) ELT 260, the idential question as to whether dumpers are classifiable under item 34 of the First Schedule to the Central Excises and Salt Act, 1944, was decided in the affirmative.
(f) On the contrary, a Division Bench of the Orissa High Court in AIR 1978 Orissa 96 [Orissa Mining Corporation v. Joint Secretary, Ministry of Finance] had held that six units of storage hoppers for automatic loading of iron ore, amongst various other items of machinery imported for mining operations were "mining machinery" within item 72 (18) of the First Schedule. "Mining Machinery brings within its sweep all machineries for the purpose in the wider sense than mere digging and excavating ores from underneath surface, as understood in common parlance by people who are usually engaged in mining business."
5. It will be observed, straightaway, that in AIR 1978 Orissa 96, various items of machinery were involved and amongst them "six units of storage hoppers for automatic loading of iron ore into wagons or trucks with measuring device". These devices for loading may not be "conveyances" as well. Nor was the question as to whether they were adapted for use on roads would appear to have arisen. The decision of the Hon'ble Supreme Court in AIR 1975 S.C. 17 was not referred to.
6. Despite the weight of the aforesaid authorities, barring, of course, the decision of the Hon'ble High Court of Orissa for the reason stated supra, the learned Counsel argued at considerable length to the effect that:-
(a) the judgment of the Hon'ble High Court of Bombay is not binding on us because there was no sufficient evidence of what the trade understood by the expression "mining machinery" in Item 72 (18) of the First Schedule to the Customs Tariff Act; should read Indian Tariff Act, 1934. [Reference to Paragraphs 15 and 16 at P. 11 of the judgment of the Division Bench in W.A. 74/76];
(b) on the contrary, in these appeals, sufficient evidence like e.g. the affidavit of Shri Bharne dated 31.3.1980 (P.45 of the Paper Book), the brochure of Bharat Earth Movers referring to the Dumpers as "machinery" and not "conveyance" [Page 59 of the Paper Book], certificate of Hindusthan Motors dated 27.12.1983 saying that Dumpers are mining equipment, etc., had been adduced;
(c) a judgment based on limited facts cannot be cited as the precedent in another case where more evidence was available to reach a contrary conclusion [Reliance on AIR 1976 S.C. 1766 (The Regional Manager v. Pawan Kumar Dubey):-
"one additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied in each case to similar facts". Also AIR 1960 S.C. 195 - Decisions of even the highest courts cannot be precedents on questions of fact].
(d) nor can it be said that the exposition of law in the said judgment, essentially depending on facts, as it were, cannot be a final, interpretation of the relevant tariff entries [Reliance upon 67 IA 464 (Punjab Co-op. Bank Ltd. v. C.I.T., Lahore) as well as 1901 AC 495 (Quinn v. Leathern) wherein it was observed by Lord Halsbury that judgments must be read as applicable to the facts proved, since the generality of the expressions which may be found there are not intended to be the exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found];
(e) the tribunal in deciding regular appeals is not exercising a restricted jurisdiction as Was the case with the High Court under Article 226 of the Constitution of India, so as to be unable to re-apprise the evidence on the record as a final court of appeal on facts [Reliance on (1975) 36 S.T.C. 291 - Commissioner of S.T. v. Dawoodbhai Tayaballi];
(f) after all, it is axiomatic that the entries in fiscal statutes describing the goods levied to tax have to be construed and understood in the sense in which it is understood by people dealing with them and viewed in that perspective and in the light of evidence in regard to it that has now come on the record, the goods in question have, necessarily, to be classified as "mining machinery" under Item 72 (18) and not as "Conveyances, not elsewhere specified" under Item 75 of the First Schedule to the Customs Tariff.
7. It is axiomatic in construction of statutes to decipher the legislative intent from the words used by the legislature itself [per Gajendragadkar J. in AIR 1957 S.C. 907 at 910 - Kantilal Sur v. Paramnidhi Sadhukhan], with due regard to the object and purpose of the enactment using such internal aids as there may be in the statute itself or external aids like e.g. dictionaries or statutes in pari materia. In construing a taxing statute, "one has to look merely at what is clearly said. There is no room for intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in. Nothing is to be implied. One can only look fairly at the language used [per Rowlatt J. in (1921) 1 K.B. 71 Cape Brandy Syndicate v. IRC]. In the words of Shah J., as he then was, in AIR 1961 S.C. 1047 (Salestax Commissioner v. Modi Sugar Mills). "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The Court must look squarely at the words in the statute and interpret them. It must interpret the statute in the light of what is clearly expressed; it cannot import provisions in the statute so as to supply any assumed deficiency". Every taxing statute has a fiscal philosophy a feel of which is necessary together with the intent and effect of its different Clauses [AIR 1976 S.C. 1935 - Controller of Estate Duty v. Kantilal Trikamlal]. A person who claims an exemption is to establish it [AIR 1959 S.C. 239 at Pages 241, 242 - C.I.T. v. Ramakrishna Deo]. One further rule is construing words in a taxing statute describing the goods liable to taxation. If a word has acquired a particular meaning in the trade or commercial circles that meaning should, normally, be accepted [Dunlop India v. Union of India, AIR 1977 S.C. 597 - V.P. Latex in synthetic rubber falling within Rubber raw - Item 39 of Central Excise Tariff and Union of India v. Gujarat Woollen Felt Mills, AIR S.C. 1548 - "Woollen Fabrics" did not include non-woven felts].
8. What then are the competing entries in the Customs Tariff should read Indian Tariff Act, 1934. They are :-
(i) Item 72 (18) ["Mining Machinery"] of the section headed "Machinery and Apparatus : Electrical Material";
(ii) Item 75 ["Conveyances not otherwise specified and components, parts and accessories thereof other than parts and accessories of motor vehicles, batteries and articles specified in Item No. 75(12A), also motor vans and motor lorries completely assembled] in the section headed "Transport Material".
It is nobody's case that the goods in question were "earth shifting machinery". Since they are different in specification and cost. Although dumpers could be used for earth shifting, earth shifting machinery cannot be judiciously used for the purpose for which dumpers are used, even according to the learned Counsel.
9. Item 75 would appear to be a residuary entry in a section devoted to goods used for transport. Amongst the goods specifically enumerated in that section would appear to be "coal tubs and tipping wagons designed for use on light rail tracks" [Item 74], tramcars [Item 74(1)], Railway materials [Item 74(2)], carriages or carts [Item 75(4)], cycles [Item 75(5)], apart from Motor cars [Item 75(1)] and Motor cycles and Scooters [Item 75(2)]. The component parts of "conveyances" other than those specified for Motor vehicles in Item 75 (12A) equally come within the ambit of Item 75. So also, Motor vans and motor lorries.
10. What then is a "conveyance"? A conveyance is a carriage or other vehicle which conveys from one place to another men or material. Hence, a transport material. A conveyance must, therefore, be adapted for use as a transport either on land, by road, or rail, water or air. It need not, necessarily, be a motor vehicle. A motor vehicle, however, being a mechanically propelled vehicle designed for use on roads is, necessarily, a conveyance.
11. Of particular significance is the enumeration of coal tubs or tipping wagons on light railway track amongst other transport material. Indisputably, they are used in mining for coal to convey or transport the coal mined. Yet they are not "mining machinery" in Item 72 (18) of the Customs Tariff should read Indian Tariff Act, 1934. Internal evidence of the legislative intent to distinguish transport materials from mining machinery is writ large in this item. When the policy of the legislature is thus evident, is any evidence to the contrary in the guise of commercial understanding admissible? Taking a clue from it, are not any other goods meant for transport or conveyance be construed as transport materials as distinguished from "mining machinery" although intimately connected with mining activity?
12. The learned Counsel, however, invites our attention to passenger lifts in item 72(4) under the heading "Machinery and Apparatus : Electrical Material". They are also conveyances but nevertheless enumerated under "Machinery" rather than "Transport materials". It is not possible to decipher such a clear intent, he says. But then, the case of electric lifts stands on different footing, since it is specifically described and particularized as such and not by construction of some other expression which may be intimately connected with it but not so exclusively as to be comprehended in that expression. There is no question of a competing entry when the item is so explicit. That is not the case with dumpers.
13. Similarly, one may, as already stated, derive support from construction placed upon relevant entries in statutes in pari materia. As already observed, motor vehicles are conveyances adapted for use on roads and dumpers were held to come within that expression as defined in the Central Excise Tariff in the Hindusthan Motors case, in despite of all such features that distinguish one from the other. The Delhi High Court had followed the Supreme Court in the Bolani Ores case wherein the definition of Motor Vehicles in the Motor Vehicles Act was held to comprehend dumpers. If, therefore, a dumper could be a motor vehicle, is it not a conveyance as well, regardless of the fact that they may be used in uneven terrain?
14. Does the "fresh evidence", if any, that has been let in these proceedings make for any difference? The evidence consists of -
(a) a brochure produced by the Department of Earth Movers Ltd.;
(b) affidavit of Shri M.V. Bharne dated 31.3.1980;
(c) certificate of Hindusthan Motors dated 27.12.1983;
(d) pictures of dumpers being operated in mining areas;
(e) brochure from Komatsu Ltd.;
(f) brochure of Hindusthan Motors Ltd.;
(g) advertisement material from Hindusthan Motors Ltd. showing dumpers as earth moving equipment;
(h) affidavit dated 5.7.1986 of Dinesh Shantilal Seth;
(i) affidavit of Shri Ganpat Vasudeo Naik;
(j) affidavit of Shri Talavlikar;
(k) affidavit of Shri P.A. Balgi;
(1) affidavit of Shri Anand Krishna Shetye;
(m) affidavit of Shri V. Laxman;
(n) letter dated 7.11.1969 of the Under Secretary in the Government of India to the Collector of Customs;
(o) letter dated 19.11.1969 from the Collector of Imports to the Collector of Customs.
15. (a) It will be observed from a perusal of the Bombay High Court's decision (Judgment of B.N. Deshmukh J.) in Miscellaneous Petition Nos. 630 of 1969 that "some affidavits of qualified engineers belonging to the mining industry along with the affidavit of a mine owner himself have been produced. Besides, some letters written by high ranking officers like Deputy Secretaries and Secretaries to the Government of India and the Chief Controller of Imports and Exports have now made available". It is not, therefore, as if no evidence was produced earlier.
(b) One of the affidavits was by Shri M.S. Talavlikar, a mine owner. Another by Shri M.V. Bharne. A third by Shri Balgi. Similarly, letters dated 11.11.1969 from the Controller of Imports and Exports.
(c) Is the evidence now produced new or fresh evidence? If so, in what way? The same and yet not the same? The identical people, S/Shri Bharne and Balgi swear new affidavits on 27.3.1980 and that is supposed to be fresh evidence?
(d) In the appeal against Justice Deshmukh's order aforesaid, the affidavits were held to be sworn by the technical experts and on the basis of technical data and not by people in the trade. "Even on technical basis it is clear from the said affidavits of experts that the said dumpers were basically conveyances." As regards the correspondence with the Government officers, their Lordships say that the goods according to them were earth moving machinery. "That by itself negatives the Petitioner's case that the dumpers were known by the people in trade as "mining machinery. Looking to the nature of the said affidavits and correspondence,... do have an appearance of unreality about them."
(e) What are we left with then? S/Shri Bharne, Balgi, Seth were all technical experts. The advertisements are not evidence. Nor do they indicate that the dumpers cannot be used anywhere except mines. The list of purchasers of the dumpers manufactured by M/s. Hindusthan Motors does not show they were exclusively purchased for use in mines. The air of unreality about the correspondence exchanged with Government officials persists. We are invited to come to a conclusion contrary to the decision of the Bombay High Court on identical or similar evidence which, we categorically decline.
16. The facts sought to be established by all the evidence had been considered in the Bolani case as well. Their Lordships in paragraphs 24 and 26 considered the heaviness of the dumpers and rockers, which is such that roads over which they are driven may be damaged. "But that is not to say that all vehicles which exceed a particular weight are not adapted for use upon roads and are, therefore, not motor vehicles." Their Lordships considered the manufacturer's specifications. [The dumper will carry: bulk goods, building materials, mining products, agricultural and forest products, earth, stones, bricks, concrete, mortar etc.]. It was after considering all the various aspects that it was held that in respect of all three vehicles [dumpers, rockers and tractors] it cannot be said that they are not adapted for use upon roads and, hence, motor vehicles. Once they can be motor vehicles, there is no reason why they are not conveyances.
17. Nor does it appear to make for any difference where the goods are wheel loaders (Appeal No. 404), taxvactors (Appeal No. 405), or Crawler Tractors (Appeal No. 403 & 405). They are not classifiable as "mining machinery" and the classification adopted by the lower authorities does not appear to be wrong.
18. In the result, the appeals have no merits and are dismissed.