Customs, Excise and Gold Tribunal - Delhi
B.H.E.L. vs Collector Of Customs on 9 September, 1987
Equivalent citations: 1990(47)ELT10(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. The appellants imported a consignment of Rough machined castings, Valve Cover and Valve Chamber under Bill of Entry Cash No. 1605, dated 22-3-1979. They cleared the goods on payment of customs duty which was assessed on merits.
2. Subsequently, the appellants made an application for re-assessment of the goods on the ground that the special alloy steel castings imported in rough machined condition are used in the assembly of Steam Turbine after marginal post importation .operation and, therefore, were entitled to the benefit of Notification No. 35/79-Cus., read with Interpretative Rule 2(a) of the Customs Tariff Act.
3. The Assistant Collector rejected the claim on the ground that the Heading 73.33/40 of CTA under which the goods were assessed, did not figure in the various headings listed in the Schedule to Notification No. 35/79.
4. The appeal filed before the Appellate Collector was rejected...on the ground that as the imported goods were subject to post-importation operations before fitment they did not qualify for the benefit of Notification No. 35/79. The appellants, therefore, filed a revision application before the Government of India. This application on statutory transfer to this Tribunal, is now an appeal before us.
5. We heard Shri P.K. Srivastava, Dy. Manager for the appellants. The Ld. Representative submitted that neither the Assistant Collector nor the Appellate Collector examined the matter in the light of the Interpretative Rule 2(a) of Customs Tariff Act. He agreed that the imported goods were tailor-made to the specific drawings and specifications and were used for the assembly of M.W. Steam Turbine. He further emphasised that under Interpretative Rule 2(a), the goods would be classifiable as parts of turbine as there was no change in the finished component. As a consequence, according to the Ld. Representative of the appellants, the goods would become eligible to the benefit of exemption Notification No. 35/79.
6. Shri J. Gopinath, Ld. Representative of the department opposed the arguments. He submitted that the Interpretative Rule 2(a) is to be applied only for the interpretation of the Schedule to the Customs Tariff Act and not for the interpretation of Notifications issued under Section 25 of the Customs Act, 1962. He further invited our attention to the words used in Notification No. 35/79 and argued that this Notification exempted "parts required for the purpose of the initial setting up or for the assembly of manufacture..." of articles falling under Tariff Heading specified therein.
7. We have considered the arguments of both sides. The appellants' request for the application of Rule 2(a) of the Rules for interpretation to interpret the Notification has been considered by us. These Rules, as mentioned therein, are intended for the interpretation of the Schedule to the Customs Tariff Act, 1975. They cannot be applied for interpreting a notification issued under Section 25 of the Customs Act, 1962, as is the case with Notification No. 35/79. In this context we recall the Judgment of Madras High Court in Witco Match Works, Kalugumalai and Anr. v. Union of India and Anr. reported in 1983 (12) E.L.T. 345 (Mad.), wherein the High Court was interpreting an exemption notification issued under Central Excise Law. The Court said "We are construing a provision in the notification which is in the nature of an exemption from normal levy of excise duty. In the circumstances, we have normally to interpret it in its ordinary, natural and grammatical sense and it will not be possible for us to import any notion of policy or otherwise to enlarge the exemption as such to categories which are not expressly covered."
8. We would also like to respectfully refer to the decision of the Supreme Court in Hansraj v. H.H. Dave AIR 1970 Supreme Court 755, wherein the Supreme Court was interpreting certain Notifications issued under Rule 8(1) of the Central Excise Rules granting exemption from excise duty on cotton fabrics. In this context, the Supreme Court observed as follows : -
"... It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here".
9. Both these Judgments are to the effect that a notification should be interpreted as it is worded. There can be no sanction to supply words or apply tools for interpretation, nor provided therein, to ascertain the scope and meaning of the Notification. This was the view taken by the Tribunal in Appeal No. 1516/84-B2 Guest Keen Williams Ltd., Howrah v. Collector of Customs, Calcutta) in Order No. 192/87-B2, dated 19-2-1987 (1987 (29) ELT 68 (Tri.). In this order the Tribunal held that the Section Notes and the Rules of Interpretation are explicitly intended to be for the interpretation of the Tariff and its various headings, and that it would not therefore be proper to apply those Notes and Rules to the interpretation of a Notification.
10. For these reasons, we reject the arguments of the appellants that Interpretative Rule 2(a) should be applied to the Notification No. 35/79 thereby enlarging the scope of the Notification.
11. We have perused the Notification No. 35/79. This Notification exempts, as submitted by the Ld. Representative for the department, "parts" required for the purpose of initial setting up or for the assembly or manufacture of any article falling under the Headings listed therein. The imported goods are admittedly semi-finished, rough machined castings. They cannot be called parts. They are, therefore, not entitled to the benefit of Notification No. 35/79.
12. We, therefore, reject the appeal.
Separate order recorded below.
Sd/- Sd/- (Harish Chander) (I.J. Rao) Member (J) Member (T)
13. I generally agree with the observations of my learned brother as well as with his final conclusion.
14. I would however like to add a few observations with reference to para 9 of my learned brother's order. I have seen the Tribunal's (unreported) Order No. 192/87-B2, dated 19-2-1987 in the case of Guest Keen Williams Ltd. With great respect to the learned Members of the Bench which passed that Order (who happen to be my brother members in this case). I would hesitate to endorse an unequivocal proposition that the Rules of Interpretation and the Section Notes cannot in any circumstances be extended to the interpretation of Exemption Notifications. I find that even the Hon'ble Supreme Court, in the case of Khandelwal Metal & Engineering Works [1985 (20) E.L.T. 222 (S.C.)] has been guided by Interpretative Rules and Section Notes in interpreting an exemption notification (vide paras 26 to 33 of the judgment). Where an exemption notification uses the very expression which occurs in the tariff heading to which it relates, there would be a strong case for giving the same meaning to the expression in the notification as it carries in the tariff heading. The present case is however different. What the appellants want is that the scope of the exemption notification should be widened by applying to the notification itself the principle of Interpretative Rule 2(a). I agree that this is not permissible, and therefore join my learned brother in rejecting this appeal.