Customs, Excise and Gold Tribunal - Delhi
Consolidated Petrotech Industries ... vs Collector Of Customs on 31 May, 1991
Equivalent citations: 1991(37)ECR75(TRI.-DELHI)
ORDER
Harish Chander, Vice-President
1. M/s. Consolidated Petrotech Industries Ltd., formerly Gujarat Carbon Ltd., R.C. Dutt Road, Baroda, have filed an appeal being aggrieved from the order passed by the Collector of Customs (Appeals), Bombay. Briefly the facts of the case are that M/s. Gujarat Carbon Ltd. had imported a consignment of one container declared to contain automatic form, fill and seal packaging machine valued at US $ 140,506.96 CIF vide bill of entry No. 2519/258 dated 1st October, 1987 and had sought its clearance under OGL and had also claimed the benefit of notification No. 125/86. The consignment was examined in the docks twice and the second examination was on the request of the appellants. The examin xation report and the photographs received from the dock staff revealed that the machine was supplied with gas flushing system but had no vacuumising facility. While, therefore, the importer's claim for OGL was conceded, their request for application of notification No. 125/86 for duty purposes could not be entertained. The Assistant Collector had observed that the imported machine was basically of the FFS type i.e. form, fill and seal machine and in order to qualify for the benefit of entry No. 17 of the notification No. 125/86, the machine was required to have both vacuumising and gas flushing facilities and the machine imported by the importer did not have the facility of vacuumising and as such the benefit of entry No. 17 could not be extended. He had further observed that entry No. 18 which was also claimed for these machines where ready-made flexible packages were packed by a gas flush packing system and the imported machine was basically an FFS machine and the relevant entry for such machine was entry No. 17, which, as explained above, was not available to the importer since all the specifications thereof were not satisfied. The Assistant Collector did not accept the correlation between the licensing policy and the Tariff sought to be explained by the importers in their letter dated 29th January, 1988. The Import Policy and the Customs Tariff flow from two different statutes and the internal constitution of one cannot be, Ipso facto, taken to apply to the other, and the notification had to be interpreted as it was worded. The Assistant Collector had denied the benefit of notification No. 125/86-Cus.
2. Being aggrieved from the order passed by the Assistant Collector, an appeal was filed before the Collector of Customs (Appeals), Bombay. It was contended before the Collector of Customs (Appeals) by the appellant that the imported machine Model No. DP 7D(714) was form, fill and seal packing machine with gas flushing equipment and this machine was required in the course of packing of potato chips. The appellant had requested for concessional assessment under notification No. 125/86-Cus. dated 17th February, 1986 and serial No. 17,18 and 19 of this notification read as under:
Serial No. 17 : FFS with vacuumising and inert gas flushing.
Serial No. 18: Gas flush packing system for flexible packages.
Serial No. 19 : Gas and vacuum packaging system for flexible packages.
It was explained to the Collector of Customs (Appeals) that there were two modes of packing food items in flexible packages. Either packages can be vacuuminised or packages should be flushed with inert gas like nitrogen, or carbon dioxide which replaces air and preserve the food article from deteriorating. If the vacuum is created two sides of the flexible package will tend to stick to each other (since the vacuum has been created) and in the process the potato chips will be crushed since they are brittle in nature. Vacuumisation is resorted to in the case of meat products since they cannot be crushed. Moreover, vacuumisation also increases shelf life by at least one month. A copy of the "Time Magazine" which contained an article on packaging entitled "Ship Shape" was also filed. Extract from the said article is reproduced below:
Japanese buyers agree, snapping up 70% of the New York tune catch. The rich oily fish are flash frozen at 60%F, packed in wooden coffins and flown in Tokyo's Tsukji fish market. Shipping fresh beef is more complex. Beef that is chilled to just above freezing, remains fresh for eight to fourteen days. An ocean freighter takes 12 days to sail from U.S. Ports to Asian markets. Air freight takes only hours for about one dollar per pound. Not surprisingly most U.S. beef destined for Asia is frozen.
But not for long. Meat packers now wrap beef in air tight plastic and suck out the air. It is called vacuum packaging and it keeps meat fresh for at least 30 days plenty of time for sea freight at about 15 cents per pound.
The next step up the technological ladder is controlled atmosphere package or CAP. The air in a package is replaced with another gas usually carbon dioxide or nitrogen which slows spoilage.
CAP enables U.S. farmers to sell more than 2000 tonnes of strawberries alone every year. The fragile fruit is picked in the evening packed in boxes flooded with carbon dioxide and loaded abroad air freighters by 4 a.m. The bright red berries land in Tokyo, Hongkong and other destination as ripe, juicy, and sweet as the moment they left the field. This list of products that travel the globe under controlled atmosphere is growing. Asparagus sails to Asia by the ton, swaddled in a protective CAP. Nectarines will be flown across the Pacific for the first time this summer, courtesy of CAP.
CAPed eggs stay fresh for nine weeks at room temperature. Chilled and CAPed chicken stays fresh for six weeks. With a little technological help, US agricultural products are finding their way to Asian markets sometimes fresher than Americans can get them at home.
It was also contended that the importers were advised to use CAP for packing potato chips. Serial No. 17 indicated that FFS machine should have both vacuumising and inert gas flushing. It was also contended that for the product of the importer both modes of packing were not required. The flexible packing was either to be vacuumised or flushed with inert gas as in their case serial No. 17 of this notification should be, therefore, interpreted and read as "FFS with vacuumising and FFS with gas flushing". It was explained that the description of the machine in this notification has been literally borrowed from the Import Policy Appendix 1 Part B which reads as under:
Form, fill and seal machines for flexible packaging materials with either vacuumising or gas flushing or both CCN Code No. 84.19.
It was alternatively also argued that the machine imported by them also covered serial No. 18 of the notification and to support their claim the importer produced certificate from Dr. R. Rank, Technical Consultant and a member of ISI Advisory Committee who had opined that the equipment imported was gas flushing machine for flexible packaging. The Assistant Collector had not allowed the exemption under Serial No. 18 on the ground that this covered machine where ready-made flexible packages were packed by a gas flush packing system. He was of the view that this FFS machine was covered under serial No. 17. The Collector of Customs (Appeals) was of the view that the Customs Officers have to go with the wording of the notification and they could not travel beyond it and analyse the intentions behind while extending the benefit of concessional rate of duty. The Collector of Customs (Appeals) had observed in his order that the only situation where he could agree with the arguments put forward by the appellants was where it was proved that there could not be any such FFS machine which had the facility of both vacuumising as well as flushing. The Collector (Appeals) did not extend the benefit of the notification and had observed that since the exemption was for machines with gas flushing and vacuumising facility and the machine imported had only one such facility (gas flushing), he had upheld the findings of the Assistant Collector, and had rejected the appeal. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal.
3. Shri G. Ramaswami, the learned Senior Advocate with Shri M.N. Kothari, Advocate and Ms. Sujata Kashyap, Advocate have appeared on behalf of the appellant. Shri G. Ramaswami, the learned Senior Advocate has reiterated the facts. Shri G. Ramawsami, the learned Senior Advocate pleaded that the appellants had imported automatic form, fill and seal packaging machine vide bill of entry No. 2519/258 dated 1st August, 1987. Shri G. Ramaswami, the learned Senior Advocate pleaded that the machine imported by the appellants is for the purpose of packaging. He pleaded that if the machine is to be used for the purpose of packaging of meat, then there has to be a different vacuumising system and in case the same is to be used for packing of the potato chips, then there has to be an arrangement for gas flushing as potato chips are brittle and in case for the purpose of packing of potato chips if vacuumising is done, then the same being brittle, the potato chips shall get broken and thus damaged and for the packing of meat the vacuumisation has to be done. Shri G. Ramaswami, the learned Senior Advocate pleaded that the appellants had imported the machine for the packing of the potato chips. He referred to the Import Policy AM 1985-88 and referred to para No. 2 on page 4 of the appeal memo where relevant description in the Import Policy has been reproduced as under:
Form, Fill and Seal Machines for Flexible Packaging Materials with either vacuumising or Gas Flushing or both.
Shri G. Ramaswami, the learned Senior Advocate pleaded that the appellants have claimed the benefit of notification No. 125/86-Cus. dated 17th February, 1986 and referred to serial No. 17 of the said notification and serial No. 17 relates to "FFS with vacuumising and inert gas flushing." Shri Ramaswami pleaded that the appellants alternatively had pleaded that if the goods imported do not fall under serial No. 17, then alternatively serial Nos. 18 and 19 of the said notification and serial No. 18 relates to "Gas flush packing system for flexible packages" and serial No. 19 relates to "Gas and vacuum packaging system for flexible packages." Shri G. Ramaswami pleaded that the imported machine can have two types of items either 'F' for gas flushing or can be fitted with vacuumising machinery. He pleaded that vacuumising machine is an accessory to the machine imported by the appellants and for avoiding unnecessary expenditure and thereby saving the precious foreign exchange of the country, the appellants did not import the vacuumising machine. He pleaded that the Assistant Collector's view is incorrect that the machine required should have both vacuumising and gas flushing facilities and the Assistant Collector in the order has discussed that the imported machine is "FFS" and entry No. 17 was applicable and not entry No. 18. However, the Collector of Central Excise (Appeals) has made certain observations. Shri Ramaswami, the learned Senior Advocate pleaded that there was some difficulty experienced by the importers and thereafter the Government issued an amended notification No. 65/89-Cus. dated 1st March, 1989. Shri Ramaswami, the learned Senior Advocate, stated that issue of a later amended notification clearly shows the intention of the Government. He has referred to notification No. 125/86-Cus. dated 17th February, 1986 which appears on page 47 of the paper book and has referred to serial Nos. 17, 18 and 19 of the said notification. Shri Ramaswami pleaded that description at serial No. 17 is "FFS with vacuumising and inert gas flushing." Shri G. Ramaswami pleaded that the word "and" is to be read as "or". He argued that the notification should be interpreted in such a way that it should not lead to absurdity and the construction has to be read in a constitutional manner. In support of his argument, he referred to a judgment of the Supreme Court in the case of RL. Arora v. State of Uttar Pradesh reported in AIR 1964 SC 1231 where the Hon'ble Supreme Court had observed that if the language used was capable of only one construction and failed to carry out the intention of Parliament when making the amendment, the amendment may have to be struck down if it contravenes a constitutional provision. A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used in xxxxxx control the wide language used in a statute if that is possible by the setting in which the words are used and the intention of the law-making body which may be apparent from the circumstances in which the particular provision came to be made." He referred to para No. 9 of the said judgment. Shri G. Ramaswami, the learned Senior Advocate argued that the appellants could have very conveniently purchased the accessory for vacuumising and the price of the same was 1000.00 $ US and the appellants have saved the precious foreign exchange and the accessory would have been of no use to the appellants. Shri Ramaswami, the learned Senior Advocate also referred to letter dated 16th February, 1988 of the Woodman Company which appears on page 47 of the supplementary paper book and Dr. R. Rank's letter dated 19th October, 1988 which appears on page 46 of the supplementary paper book. Shri G. Ramaswami, the learned Senior Advocate referred to Collector (Appeals)'s order which appears on page 30 of the paper book and has made particular reference to the last para at internal page 2 where the appellants had taken the plea before the Collector (Appeals) that serial No. 17 of the notification should be read as "FFS with vacuumising and FFS with gas flushing." He has also referred to internal page 3 of the order-in-appeal which appears on page 33 of the paper book where the Collector (Appeals) himself has observed that "However, while extending concessional rate of duty, the Govt. have created some doubt by economising on words." Shri G. Ramaswami, the learned Senior Advocate argued that if this Court is not satisfied for accepting the goods imported to be falling at serial No. 17, alternatively he pleaded that serial No. 18 should be looked into. He argued that the Collector (Appeals) has not discussed the pleas raised by the appellants in a detailed manner. He argued that the Woodman's letter should have satisfied the Collector (Appeals). He again pleaded that the word "and" always does not mean "and" but it also means "or". Shri G. Ramaswami referred to page 313 of Justice G.P. Singh's Interpretation of Statutes 3rd edition where he has dealt with conjunctive and disconjunctive word "and". He has also referred to two English judgments of King's Division Bench reported in (1921) 1 King's Bench 403. Shri G. Ramaswami pleaded that "Where there are general words of description, following an enumeration of particular things such general words are to be construed distributively, reddendo singula singulis; and if the general words will apply to some things and not to others, the general words are to be applied to those things to which they will, and not to those to which they will not apply; that rule is beyond all controversy." He referred to 3rd edition of Principles of Statutory Interpretation by Justice G.P. Singh at pages 335, 336 and 337. Shri G. Ramaswami again referred to notification No. 125/86-Cus. dated 17th February, 1986 and referred to serial Nos. 1 and 6 of the said notification and the description at serial No. 1 is
1. Food processing machines namely:Fruit and vegetable cutting, coring, cubing, slicing, seeding, clearing, removing and stem removing machines.
and he also referred to serial No. 6 which reads as:
6. Meat processing machines namely--mincing, deboning, mixing, cutting, chopping, flaking and skinning machines (industrial types).
Shri G. Ramaswami, the learned Senior Advocate pleaded that a clear reading of serial Nos. 1 and 6 shows that though the word has been used "and" but actually it means "or". Shri Ramaswami pleaded that whenever there is ambiguity in the language of the statute, the benefit of the ambiguity has to be given to the assessee and the benefit can be taken from the later legislation. In support of his argument, he referred to a judgment of the Supreme Court in the case of Jogendra Nath Naskar v. Commissioner of Income Tax, Calcutta where the Supreme Court has relied on the later legislation. The Supreme Court had observed that: "On the other hand, the language employed in 1961 Act may be relied upon as a Parliamentary exposition of the earlier Act even on the assumption that the language employed in Section 3 of the earlier Act is ambiguous. It is clear that the word "individual" in Section 3 of the 1922 Act includes within its connotation all artificial juridical persons and this legal position is made explicit and beyond challenge in the 1961 Act." In the case of Cape Brandy Syndicate v. Inland Revenue Commissioner reported in (1921) 2 King's Bench 403 at page 425 it was observed as under:
Accordingly it does seem to me that if you take the whole of this Act together, applying it with regard to non-continuous businesses, it does apply to such businesses commenced after the war. That reasonable plainness is emphasized, and I think almost to demonstration, by the section from the Act of 1920 to which the Master of the Rolls has referred. With regard to other businesses the question, I agree, is left in doubt, but in such slight doubt that any subsequent statutory recognition of the opposite position would, I think, be sufficient to resolve it. It appears to me that we do find in the different sections which have been referred to by my Lord and by the Lord Justice sufficient statutory recognition of that point of view, and accordingly I am prepared, taking for this purpose the view of the learned judge, to hold that even if the section of the Act of 1915 were itself less clear, with regard to the particular business with which we are here concerned, that business would be directly brought into charge by virtue of the provisions in the subsequent Act.
Shri Ramaswami pleaded that on simple common sense the word "and" is to be read as "or" for serial No. 17. Shri Ramaswami also referred to the following judgments:
1.
Koteswar Vittal Kamath v. K. Rangappa Baliga & Co.
2. Ishwar Singh Bindra and Ors. v. State of U.P.
3. M. Satyanarayana v. The State of Karnataka and Anr..
4. 1921 (2) K.B. 403 Cape Brandy Syndicate v. Inland Revenue Commissioner.
5. Padmakar Balkrishna Samant v. Abdul Rehman Antulay and Anr..
6. R.L. Arora v. State of Uttar Pradesh and Ors.
7. The Food Inspector, Trichur Municipality, Trichur v. O.D. Paul and Anr..
8. Municipal Council, Raipur v. Bishandas Nathumal
9. In re Salem Govindappa Chetty
10. Dinesh Chandra Srivastava and Ors. v. The State of U.P.
11. Tilkayat Shri Govindlalji Maharaj etc. v. State of Rajasthan and Ors. and Vice-Versa
12. Principles of Statutory Interpretation by Justice G.P. Singh, Third Edition pages 96, 97, 313, 314, 335, 336, 337.
He also referred to the bill of entry filed by the appellants which appears on page 41 of the paper book where the description of the machine has been given. Shri Ramaswami, the learned Senior Advocate has pleaded for the acceptance of the appeal.
4. Shri M.S. Arora, the learned JDR who has appeared on behalf of the respondent, pleaded that there was no bar for the appellants to import vacuumisation unit with the machine imported by the appellants and there is no evidence on record to show that the value of the vacuumising unit was US $ 1000.00. Shri Arora pleaded that the Collector (Appeals) has not looked into entry No. 18 of the notification No. 125/86-Cus. dated 17th February, 1986. Shri Arora has referred to last but one para of the Collector (Appeals)'s order where he has discussed at length. Shri Arora also referred to the New Webster's English Language Dictionary Deluxe Encyclopaedia Edition where at page 571 meaning of the word "Machine" has been given and at page 997 meaning of the word "System" has been given. Shri Arora has also referred to the ITC Policy. Shri Arora argued that the word "and" should be read as "and" and "or" should be read as "or" and the proposition put forth by the appellants that the word "and" should be read as "or" is not correct. He pleaded that the terms of the notification have to be construed very strictly and has relied on the following judgments:
(1) 1978 ELTJ 350 : ECRC 274 SC M/s. Hansraj Gordhandas v. H.H. Dave, Assistant Collector of C.E. & Customs, Surat and Ors.
(2) Collector of Central Excise v. Parle Exports (P) Ltd.
(3) 1980 ELT 10 (Madras) : 1980 Cen-Cus 44D Assistant Collector of Central Excise, Pondicherry and Anr. v. New Horizon Sugar Mills (P) Ltd.
(para 9) Court cannot supply the deficiency.
He argued that the judgments cited by the learned Senior Advocate do not help him. He argued that the word "and" cannot be read as "or". In support of his argument, he has referred to a judgment of the Supreme Court in the case of Nasiruddin v. State Transport Appellate Tribunal , where the Hon'ble Supreme Court has observed that the word "or" cannot be read as "and". Shri Arora argued that the subsequent notification cannot grant exemption to the appellants. In support of his argument, he has referred to a judgment of the Supreme Court in the case of Cannanore Spinning and Weaving Mills Ltd. v. Collector of Customs and Central Excise, Cochin and Ors. reported in 1978 ELT J 375 : ECR C 334 SC and laid emphasis on para No. 6 where the Hon'ble Supreme Court had held that the rule making authority has not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect. The retrospective effect if proposed to be given in any notification will be beyond the powers of the rule making authority. He also referred to another judgment of the Tribunal in the case of Cosmic Dye Chem, Palghar v. Collector of Central Excise, Bombay where the Tribunal has observed that: "Since in construction of taxing statutes, it is impermissible to gather the intent of one provision even if ambiguous, by reference to a subsequently enacted provision unless the later of the two amounted to a retrospective declaration as to the meaning and intent of the earlier." Shri Arora, the learned JDR also referred to two letters which are in the nature of technical opinions and stated that these cannot be relied upon at this stage. Shri Arora also referred to another decision in the case of Orbital Enterprises v. Collector of Customs reported in 1990 (AT 71 (Tribunal) : 1988 (15) ECR 211 (Cegat), where the Tribunal had held that: "It is well known that in the eyes of law an expert is one who has acquired specialised knowledge, skill or experience in any branch of science, trade or profession. As observed by the Supreme Court in , the Court can refuse to place its reliance on the opinion of an expert which is unsupported by any reason." He pleaded that in the present matter no reasoning has been given. He also referred to another decision in the case of Western India Plywood Ltd. v. Collector of Central Excise, Cochin , where the Tribunal has observed that the technical evidence unless supported by authority has no value. Shri Arora lastly pleaded that the benefit of notification No. 125/86-Cus. cannot be extended to the appellants.
5. Shri Kothari, the learned advocate in reply pleaded that the word "and" conjunctive should be read as disconjunctive. He fairly stated that the notification cannot be retrospective but the intention for the issue of the notification has to be looked into. He pleaded that there is no controversy as to the technical aspect of the machinery imported by the appellants. He has pleaded for the acceptance of the appeal.
6. We have heard both the sides and have gone through the facts and circumstances of the case and the judgments cited by both the sides. For the proper appreciation of the correct interpretation of the notification No. 125/86-Cus. dated 17th February, 1986 which appears on page 47 of the paper book relevant extracts from the said notification are reproduced below:
Chapter 84 - Machinery and mechanical appliances: and parts thereof Effective rates of duty for specified food processing packing machines etc. In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (2) of the Table hereto annexed and falling under Chapter 84 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from
(a) 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 of 10% ad valorem; and
(b) the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act.
TABLE S. Description of goods No.
1. Food processing machines namely:
Fruit and vegetable cutting, coring, cubing, slicing, seeding, clearing, removing and stem removing machines.
xxxxxxxxxxx
6. Meat processing machines namely - mincing, debonmg, mixing, cutting, chopping, flaking and skinning machines (industrial types).
xxxxxxxxxxx
17. FFS with vacuumising and inert gas flushing.
18. Gas flush packing system for flexible packages.
19. Gas and vacuum packaging system for flexible packages.
Relevant extract of notification No. 65/89-Customs dated 1st March, 1989 is reproduced below:
NOTIFICATION No. 65/89-Customs 1st March, 1989 10 Phalguna, 1910 (Saka) GSR(E) In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed, shall be further amended in the manner specified in the corresponding entry in column (3) of the said Table, TABLE SI. Notification No. and date Amendment No. (1) (2) (3)
1. 125/86-Customs, dated the In the said notification:
17th February, 1986 (i)for the words and figures "Chapter 84 or
heading Nos. 39.20, 39.21 or 39.23", the words
and figures "Chapter 39 or 73 or 84 or 90"
shall be substituted; and (ii) in the Table,--
(1) (2) (3)
(a) for Sl. No. 17 and the entry relating thereto,
the following Sl. No. and entry shall be
substituted, namely: _
(1) (2)
17. Form, Fill and Seal machine for flexible
packaging materials with either vacuumising or
inert gas flushing or both.
A simple perusal of the notification No. 125/86-Cus. dated 17th February, 1986 serial No. 17 shows that the benefit is available to a machine FFS with vacuumising and inert gas flushing. We have perused the commercial invoice which appears on page 44 of the paper book. The description in the invoice has been given as under:
Food packing machinery Covering 2 Nos. automatic form, fill & seal packaging machine for flexible packaging material with gas flushing/vacuumising your model No. DP 7L(714) complete with spare parts kit and 2 extra assemblies heads per machine.
Similar description has been given in the bill of entry which appears on page 41 of the paper book. It is an admitted fact by both the sides that the machine imported was supplied with the gas flushing system but had no vacuumising facility and the adjudicating authority had accepted the appellants' claim for the availing of the imported product under OGL of AM 1985-88 Policy. It appears that the description in the invoice as well as bill of entry was given in conformity with the AM 1985-88 Policy. However, the only issue before us is whether the appellants are entitled to the benefit of notification No. 125/86-Cus. dated 17th February, 1986 and whether the goods fall at serial No. 17 or 18 or 19 of the said notification. A simple perusal of serial No. 17 shows that the description has been given as "FFS with vacuumising and inert gas flushing." Shri G. Ramaswami, the learned Senior Advocate's main contention is that the word "and" should be interpreted as "or", otherwise the very intention of the Government as to the extension of benefit of notification No. 125/86-Cus. dated 17th February, 1986 will be defeated. The meaning of the word "and" in Black's Law Dictionary 5th Edition of St. Paul Minn West Publishing Co. 1979 at page 79 has been given as under:
AND. A conjunction connecting words or phrases expressing the idea that the latter is to be added to or taken along with the first. Added to; together with; joined with; as well as; including. Sometimes construed as "or". Land and Lake Ass'n v. Conklin, 182 A.D. 546,170 N.Y.S. 427,428.
It expresses a general relation or connection, a participation or accompaniment in sequence, having no inherent meaning standing alone but deriving force from what comes before and after. In its conjunctive sense the word is used to conjoin words, clauses, or sentences, expressing the relation of addition or connection, and signifying that something is to follow in addition to that which proceeds and its use implies that the connected elements must be grammatically co-ordinate, as where the elements preceding and succeeding the use of the words refer to the same subject matter. While it is said that there is no exact synonym of the word in English, it has been defined to mean "along with", "also", "and also", "as well as", "besides", "together with". Oliver v. Oliver, 286 Ky. 6,149 S.W. 2d 540, 542.
When expression "and/or" is used, that word may be taken as will best effect the purpose of the parties as gathered from the contract taken as a whole, or, in other words, as will best accord with the equity of the situation. Bobrow v. U.S. Casualty Co., 231 A.D. 91, 246 N.Y.S. 363, 367.
Maxwell on the Interpretation of Statutes, 12th edition by P. St. J. Langan published by N. M.Tripathi Pvt. Ltd. at pages 232 to 233 has held as under:
"And" and "or In ordinary usage, "and" is conjunctive (1967) 1 A.C. 192 and "or" disjunctive. (J.W. Dwyer Ltd. v. Met. Pol. Receiver (1967) 2 Q.B. 970. But to carry out the intention of the legislature (Uddin v. Associated Portland Cement Manufacturers Ltd. (1965) 2 Q.B. 582; R.V. Surrey Quarter Sessions, ex p. Commissioner of Metropolitan Police (1963) 1 Q.B. 990 it may be necessary to read "and" in place of the conjunction "or", and vice versa.
The Disabled Soldiers Act 1601, for example, in speaking of property to be employed for the maintenance of "sick and maimed soldiers", referred to soldiers who were either sick or maimed, and not only to those who were both. (Duke, Charitable Uses, p. 127).
The expression "local and public authorities", in Section 4(2) of the Prevention of Corruption Act, 1916 has been held by Vinn. J. not authorities which are either local or public." R.V. Newbould (1962) 2 Q.B. 102.
By Section 48(1) of the Mines and Quarries Act, 1954: "It shall be the duty of the manager of every mine to take, with respect to every road and working place in the mine, such steps by way of controlling movement of the strata in the mine and supporting the roof and sides of the road or working place secure." Lord Reid said that he could not "suppose that it was intended that in every case the manager must both attempt to control movement of the strata and provide support.
...The natural meaning of the words of the section is that one or other of the prescribed methods must be adopted in every case". John G. Stein and Co. Ltd. v. O. Hanlon (1965) A.C. 890, at p. 904.
Conversely, the court may substitute "and" for "or". An example is provided by the Bankrupts Act 1603, which made it an act of bankruptcy for a trader to leave his dwelling house "to the intent, or whereby his...creditors...shall or may be defeated or delayed." If construed literally, this would have exposed to bankruptcy every trader who left his home, even for an hour, if a creditor called during his absence for payment. This absurd consequence was avoided by reading "or" as "and" so that an absence from home was an act of bankruptcy only when coupled with the design of delaying or defeating creditors." Fowler v. Padget (1978) 7 T.R. 509. cf. R. v. Mortlake (1805) 6 East 397.
In his book Principles of Statutory Interpretation, 4th edition 1988 Justice G.P. Singh at page 250, 251 and 252 has written as under:
7. Conjunctive and Disjunctive Words 'OR' and 'AND' The word 'or" is normally disjunctive and 'and' is normally conjunctive but at times they are read as vice versa to give effect to the manifest intention of the Legislature as disclosed from the context. (Ishwar Singh Bindra v. State of U.P. , ; R.S. Nayak v. A.R. Antulay ; M. Satyanarayana v. State of Karnataka . As stated by SCRUTTON, LJ.: "You do sometimes read 'or' as 'and' in a statute. But you do not do it unless you are obliged because 'or' does not generally mean 'and' and 'and' does not generally mean 'or'. (Green v. Premier Glynrhonwy Slate Co. (1928) 1 KB 561, p. 568, Nasiruddin v. State Transport Appellate Tribunal ; Municipal Corporation of Delhi v. Tek Chand Bhatia, supra; State (Delhi Administration v. Puran Mal .
And as pointed out by LORD HALSBURY the reading of 'or' as 'and' is not to be resorted to, "unless some other part of the same statute or the clear intention of it requires that to be done." (Mersey Docks and Harbour Board v. Henderson Bros., (1888) 13 AC 595 (HL), p. 603. See further, Puran Singh v. State of M.P. ; Municipal Corporation of Delhi v. Tek Chand Bhatia, supra.
But if the literal reading of the words is less favourable to the subject provided that the intention of the ligislature is otherwise quite clear.
(A.G. v. Beauchamp (1920) 1 KB 650; R. v. Oakes (1959) 2 All ER 92.
In Section 2(1)(d)(i) of the Bombay Lotteries and Prize Competition Control and Tax Act, 1948, (as amended by Act 30 of 1952) the Supreme Court read 'or' as 'and' to give effect to "the clear intention of the Legislature as expressed in the Act read as a whole.
(State of Bombay v. RMD Chamarbaugwala ).
The words 'owner or master' as they occur in Section 1(2) of the Oil in Navigable Waters Act, 1955 were construed by the House of Lords to mean 'owner and master' making both of them guilty of the offence under that section as reading of 'or' as 'or' would have produced an absurd result of leaving it to the Executive to select either the owner or master for being prosecuted without the Act giving any guidance for the selection. Such a result would have also been against the constitutional practice. (Federal Steam Navigation Co. Ltd. v. Department of Trade and Industry (1974) 2 All ER 97 (HL). Similarly in Section 42(2) of the Income-tax Act, 1922 the result produced by reading 'or' as 'or' could not have been intended" and the word 'or' was read in the context as meaning 'and'. (Mazagaon Dock Ltd. v. CIT & EPT .) In Section 11 of the Suits Valuation Act, 1887, Clauses (a) and (b) of Sub-section (1) although separately by the word 'or' have been read conjunctively as that is the obvious intention disclosed by Sub-section (2). (Kiran Singh v. Chaman Paswan . See further, Tilkayat Shri Govindlalji v. State of Rajasthan .
Speaking generally, a distinction may be made between positive and negative conditions prescribed by a statute for acquiring a right or benefit. Positive conditions separate by 'or' are read in the alternative but negative conditions connected by 'or' are construed as cumulative and 'or' is read as 'nor' or 'and'.
In the case of R. v. Oakes reported in (1959) 2 All ER 9 it was held as under:
In Section 7 of the Official Secrets Act, 1920, which reads: 'Any person who attempts to commit any offence under the principal Act or this Act, or solicits or incites or endeavours to persuade another person to commit an offence, or aids or abets and does any act preparatory to the commission of an offence', the word 'and' printed in Italics was read as 'or' for by reading 'and' as 'and' the result produced was unintelligible and absurd and against the clear intention of the Legislature.
(Extract taken from Principles of Statutory Interpretation by Justice G.P. Singh page 252). Hon'ble Supreme Court in the case of Ishwar Singh Bindra and Ors. v. State of U.P. at page 1454 in para 11 had held as under:
Now if the expression "substances" is to be taken to mean something other than "medicine" as has been held in our previous decision it becomes difficult to understand how the word "and" as used in the definition of drug in Section 3(b)(i) between "medicines" and "substances" could have been intended to have been used conjunctively. It would be much more appropriate in the context to read it disconjunctively. In Stroud's Judicial Dictionary, 3rd Ed. it is stated at page 135 that "and" has generally a cumulative sense, requiring the fulfilment of all the conditions that it joins together, and herein it is the antithesis of or. Sometimes, however, even in such a connection, it is, by force of a context, read as "or". Similarly in Maxwell on Interpretation of Statutes, 1lth Ed., it has been accepted that "to carry out the intention of the legislature it is occasionally found necessary to read the conjunctions "or" and "and" one for the other.
Hon'ble Supreme Court in the case of M. Satyanarayana v. The State of Karnataka and Anr. had held that the statute cannot be construed merely with reference to grammar. Para No. 5 from the said judgment is reproduced below:
5. If the expression 'and' in Clause (a) is read independently then there was no need for him to suffer at all and mere participation would be enough to make him a political sufferer. That would defeat the rationale behind the rule. It would, therefore, frustrate the intention and purpose of the legislature. The expression 'and' in these circumstances cannot be read disjunctively. It is not possible to hold that Sub-clause (a) should be read independently of Sub-clause (b). A statute cannot be construed merely with reference to grammar. Statute whenever the language permits must be construed reasonably and rationally to give effect to the intention and purpose of the legislature. The expression 'and' has generally a cumulative effect, requiring the fulfilment of all the conditions that it joins together and it is antithesis of 'or'. In this connection reference may be made to A.K. Gopalan v. State of Madras . See also the observations of this Court in Ishwar Singh Bindra v. State of U.P. .
Shri G. Ramaswami, the learned Senior Advocate, has also relied on the judgments where the word "and" has to be substituted by "or":(1)
The Food Inspector, Trichur Municipality, Trichur v. O.D. Paul and Anr.(2)
Municipal Council, Raipur v. Bishandas Nathumal (3) In re : Salem Govindappa Chetty (4) Dinesh Chandra Srivastava and Ors. v. The State of U.P. This Tribunal had an occasion to deal with the interpretation of exemption notification in the case of Collector of Customs v. Delhi Tubes Pvt. Ltd . Paras No. 15 and 25 from the said judgment are reproduced below:
15. Hon'ble Calcutta High Court in the case of the Bengal National Textile Ltd. v. C.T.A. Pillai, Jt. Secretary and Ors. reported in 1979 (4) ELT J-664 had held that "it is well settled that the provisions of a statute or legislation should be construed in the context and the interpretation should not be confined only to its grammatical meaning. If there is any ambiguity in the expression used in the statute, it should be resolved in favour of the assessee or the tax-payer. It is not the technical meaning that should be adhered to in interpreting the expression in a statute but preference should be given to the expression as understood in the world of commerce." It was further held by the Hon'ble High Court as under:
In this connection reference was made to the significantly different languages used in the earlier notification dated 24th March, 1972 and 24th July, 1972 referred to hereinbefore, and also to the subsequent notification dated the 16th March, 1976 which according to counsel for the petitioners was redundant if the nbn-cellulosic fibre content was included in the acrylic fibre. Counsel naturally stressed that in constructing a provision of this nature the expression used in the context or the statute must be looked into and mere grammatical meaning or dictionary meaning of one particular expression divorced from the context or the scope of the notification or the statute should not be adhered to and in this context the context and the purpose and the entire scheme was much more important than grammar as, he stressed, was emphasised by Sir Thomas Moore as indicated in Craies Law, on Statute 7th Edition, page 159 to 160. There is, however, in my opinion, no dispute on this proposition and now it is well settled that an expression of this nature in a particular fiscal or in any other legislation must be construed in the context and the meaning should not be confined only to its grammatical meaning. There is also no dispute on the proposition that an ambiguity, if there be any, in the expression used should be resolve in favour of the assessee or tax-payer. Counsel also drew my attention to three affidavits of Bhupendra Singh Boid, Mangal Singh and S.K. Guin filed in support of this rule claiming to be the dealers in these types of goods and who have alleged that acrylic fibre is now known in the trade as non-cellulosic fibre. In this connection, reliance was placed on the decision in the case of Union of India v. Delhi Cloth & General Mills , where the Supreme Court has reiterated that in constructing expressions of this nature, it is not the technical meaning that should be adhered to but rather preference should be given to the expression as understood in the world of commerce.
Hon'ble A.P. High Court in the case of Andhra Pradesh Paper Mills Ltd. v. Assistant Collector of C.E. reported in 1980 (8) ELT 210 had held that the "object of the exemption notification is to confer a certain benefit upon the manufacturer or the buyer/consumer as the case may be, as an incentive, with a view to encourage production or consumption. But, it cannot be said that this would virtually amount to adding a part of the excise duty to the manufacturing cost and profits while arriving at the assessable value under Section 4 of the Central Excise Act.
25. It is also a well-settled proposition that where a term is not defined in a statute, the meaning given to that term by the people generally dealing with such a statute should be applied.The department has not adduced any evidence as to what is meant by the expression 'semi-finished1 in relation to a 'flat-rolled product, hot-rolled1 in coil form. The respondent, on the other hand, relies on a certificate of well-known firm of Consulting Engineers M.N. Dastur and Co. Credibility of this certificate is sought to be struck at by the department on that no sample was sent to M.N. Dastur and Co. This, in our view, is not a good ground when the description of the product namely, 'unpickled, with mill edges, fish tail and unskin-passed' is not challenged and it is on the basis of that description that a certificate has been given to the effect that the product is semi-finished.
The order of the Tribunal in the case of Collector of Customs, Madras v. Delhi Tubes Pvt. Ltd. was affirmed by the Hon'ble Supreme Court in Civil Appeal No. 4887/90, Collector of Customs v. Delhi Tubes Pvt. Ltd. and the appeal filed by the department was dismissed by the Hon'ble Supreme Court. The order of the Supreme Court in Civil Appeal No. 4887/90, Collector of Customs, Madras v. Delhi Tubes is reproduced below:
The Civil Appeal is dismissed.
Hon'ble Supreme Court in the case of Tilkayat Shri Govindlalji Maharaj v. State of Rajasthan and Ors. held that where two constructions possible - the Court should adopt that construction which upholds validity. Para No. 40 from the said judgment is reproduced below:
40. Later, we will have occasion to deal with the specific sections which have been challenged before us, but at this stage, it is necessary to consider the broad scheme of the Act in order to be able to appreciate the points raised by the Tilkayat and the denomination in challenging its validity. For the purpose of ascertaining the true scope and effect of the scheme envisaged by the Act it is necessary to concentrate on Sections 3,4,16,22 and 34. The scheme of the Act, as its preamble indicates, is to provide for the better administration and governance of the temple of Shri Shrinathji at Nathdwara. It proceeds on the basis that the temple of Srinathji is a public temple and having regard to the background of the administration of its affairs in the past, the legislature thought it was necessary to make a more satisfactory provision which will lead to its better administration and governance. In doing so the legislature has taken precaution to safeguard the performance of religious rites and the observance of religious practices in accordance with traditional usage and custom. When the validity of any legislative enactment is impugned on the ground that its material provisions contravene one or the other of the fundamental rights guaranteed by the Constitution, it is necessary to bear in mind the primary rule of construction. If the impugned provisions of the statute are reasonably capable of a construction which does not involve the infringement of any fundamental rights, that construction must be preferred though it may reasonably be possible to adopt another construction which leads to the infringement of the said fundamental rights. If the impugned provisions are reasonably not capable of the construction which would save its validity, that of course is another matter, but if two constructions are reasonably possible, then it is necessary that the Courts should adopt that construction which upholds the validity of the Act rather than the one which affects its validity. Bearing this rule of construction in mind, we must examine the five sections to which we have just referred. Section 3 no doubt provides for the vesting of the temple property and all its endowments including offerings in the deity of Shrinathji, and that clearly is unexceptionable. If the temple is a public temple, under Hindu Law the idol of Shrinathji is a juridical person and so, the ownership of the temple and all its endowments including offerings made before the idol constitute the property of the idol. Having thus stated what is the true legal position about the ownership of the temple and the endowments, Section 3 proceeds to add that the Board constituted under this Act shall be entitled to the possession of the said property. If the legislature intended to provide for the better administration of the temple properties, it was absolutely essential to constitute a proper Board to look after the said administration, and so, all that Section 3 does is to enable the Board to take care of the temple properties and in that sense, it provides that the Board shall be entitled to claim possession of the said properties. In the context, this provision does not mean that the Board would be entitled to dispossess persons who are in possession of the said properties: it only means that the Board will be entitled to protect its possession by taking such steps as in law may be open to it and necessary in that behalf. Section 4 is a mere corollary to Section 3 because it provides that the administration of the temple and all its endowments shall vest in the Board. Thus, the result of reading Sections 3 and 4 is that the statute declares of the temple vest in the deity of Shrinathji and provides for the administration of the said properties by appointing a Board and entrusting to the Board the said administration.
Hon'ble Supreme Court in the case of CIT v. Kulu Valley Transport Co. (P) Ltd. had held that where two interpretations are possible, the interpretation which is in favour of the assessee should be adopted. Para No. 20 from the said judgment is reproduced below:
20. On behalf of the revenue it is pointed out that a great deal of inconvenience will result if a voluntary return can be entertained at any time in accordance with Section 22(3) when loss is involved and in order to give the assessee the benefit of the carry-forward of the loss, a number of assessments would have to be reopened. It is difficult to accede to such an argument merely on the ground of inconvenience. Moreover, it is common ground that a voluntary return cannot be filed beyond the period specified in Section 34(3) of the Act. It cannot be overlooked that even if two views are possible, the view which is favourable to the assessee must be accepted while construing the provisions of a taxing statute.
Hon'ble Supreme Court in the following cases has also observed that where two reasonable constructions are possible--that in favour of the assessee should be accepted:
1.
Commissioner of Income-tax, West Bengal v. Vegetable Products Ltd.
2. Commissioner of Income-tax, West Bengal v. Naga Hills Tea Co. Ltd.
3. Controller of Estate Duty v. R. Kanakasabai and Ors.
In the following decisions the various courts had held that where a literal construction would defeat the obvious intention of the legislation and produce a wholly unreasonable result, the courts must "do some violence to the words" and so achieve that obvious intention and produce a rational construction.
1. (1980) 121 ITR 535 Commissioner of Income-tax, Central Calcutta v. National Taj Traders.
2. K.P. Varghese v. ITO, Eranakulam, and Anr. 3.
Commissioner of Income-tax, Bangalore v. J.H. Golta in which it was held as under:
Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task of interpretation of a statutory provision is an attempt to discover the intention of the Legislature from the language used. It is necessary to remember that language is at best an imperfect instrument for the expression of human intention. It is well to remember the warning administered by Judge Learned Hand that one should not make a fortress out of the dictionary but remember that statutes always have some purpose or object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning.
In the matter before us, the Government amended the notification vide notification No. 65/89-Customs and serial No. 17 of notification No. 125/86-Customs dated 17th February, 1986 has been amended as under:
17. Form, Fill and Seal machine for flexible packaging materials with either vacuumising or inert gas flushing or both.
7. In view of the above discussion, we are of the view that the word "and" should be interpreted as "or" in a disconjunctive manner. Accordingly, we set aside the impugned order and order that the appellants are entitled to the benefit of notification No. 125/86-Cus. dated 17th February, 1986 and the appeal is allowed.
Sd/- (Harish Chander) Vice-President 23.5.1991 Sd/- (K. Section Venkataramani) Member (T) 29.5.1991
8. While I agree with the conclusions reached in the proposed order drafted by my learned brother Shri Harish Chander, Vice-President, I would like to add a few words.
9. The appellants have urged that the word 'and' occurring in the expression "FFS with vacuumising and inert gas flushing' should be read as 'or'. In other words, it is urged that the benefit of concessional rate of duty would be available either to FFS with vacuumising or FFS with inert gas flushing. If the word 'and' is not read as 'or', it has been contended by the appellants that anomalies and absurdities will arise. Referring to those anomalies and absurdities, it has been pointed out that that vacuumising with FFS machine is normally used for packing of meat and meat products whereas, gas flushing system is used for packing vegetable and vegetable products. Either of the system is an accessory to the main machine. Both the systems can be imported as accessories, if an importer has, as his product range, both meat products and vegetable products like potato chips. Since the appellant is manufacturing only potato chips, it was, therefore, not considered necessary by him to import the accessory of vacuumising system. The vacuumising system is absolutely unsuitable for packing potato chips in-as-much as the vacuumising system would have made both the sides of the package stick together and thus, breaking the potato chips due to outside pressure. It could also never be the intention, as rightly pointed out by the appellant's learned Advocate that the Government would have insisted for import of an accessory, if it is not needed by an actual user on account of his peculiar product range and thus, allowed the foreign exchange to go waste. I find considerable force in the aforesaid plea of the appellant's learned Counsel. This plea is further fortified by the subsequent amendment No. 125/86, dated 17th February 1986 by Notification No. 65/89-Customs, dated 1st March 1989, allowing concessional rate of duty when FFS machine is imported either with vacuumising accessory or inert gas flushing accessory or with both the accessories.
10. If we look at the problem in a slightly different manner accepting for a moment the Department's contention that both the accessories must be imported with FFS machine in order to extend the benefit of concessional rate of duty, we would be faced with the situation where a user of this machine must be packing meat products as well as vegetable products like potato chips. In other words, the concession would not be available to a person, who is packaging either meat products only or vegetable products only. We fail to understand any rationale behind such an exemption if the Department's point of view is accepted that the concession would be available to a person who manufactures both meat products and vegetable products but would not be available to a person who manufactures either of those products. It appears to be more rational that the concession is given to both types of manufacturers as appears to be clear from the ITC Policy, where the benefit from import trade control regulations has been given to FFS machine with either vacuumising system or gas flushing system or both.
11. It is, therefore, apparent that the intention of Notification No. 125/86 could not be to deny the benefit of concessional rate of duty to FFS machine when it is imported either with vacuumising accessory or with inert gas flushing accessory or with both. The word 'and', therefore, in the context of the above discussion would be required to be read as 'or'. Such a reading is permissible in view of the intention of the legal provisions enacted or in view of the irrationalities and anomalies arising out of the reading of 'and' as a conjunctive word. Good number of authorities have already been referred to in learned Vice-President's judgment which support the above. Accordingly, the benefit of Notification No. 125/86 should be extended to the appellants who have imported the FFS machine with inert gas flushing system only. I order accordingly.
31.5.1991 Sd/- (P.C.Jain) Technical Member