Customs, Excise and Gold Tribunal - Delhi
Union Carbide India Ltd. vs Collector Of Customs on 8 February, 1984
Equivalent citations: 1984(18)ELT449(TRI-DEL)
ORDER
M. Gouri Shankar Murthy
1. This is an application purporting to be under Section 130 of the Customs Act, 1962, (hereinafter referred to as the Act) for reference of certain questions (set out in the Annexure hereunto) said to be questions of law arising out of the Order No. 429-D/1983 (July, 1983) in Appeal No. 10/1981-D of the 'D' Bench of this Tribunal.
2. The facts, in a brief compass, are-
(a) the Applicant imported a consignment of 30 Kgs. of film laminate for use in the manufacture of dry batteries and cleared the same vide B/E No. 376 D.I. (A.I.R.) dated 22-2-79, on payment of the duty assessed, in terms of Customs Tariff Chapter 48-[heading No. 48.01/ 21 (1)] of C.T.A., 1975;
(b) no protest was recorded in the bill of entry "by oversight";
(c) an application for refund filed on 1-1-80, claiming appropriate classification as a Miscellaneous Chemical under Chapter 38 [heading No. 38.01/58 (i)] rather than under Chapter 48 [heading No. 48.01/ 21 (1)] of the C.T.A., 1975 and consequential refund of duty collected in excess in a sum of Rs. 2,949.56, was rejected on the ground of bar of Limitation prescribed under Section 27 of the Customs Act, 1962;
(d) an Appeal in which it was claimed that the assessment was erroneous and cannot be substained and the payment of the assessed duty was under protest was dismissed on the ground that there was nothing to indicate payment under protest and the consequential claim for refund was, accordingly, barred by Limitation; a Revision Application filed against the aforesaid order in Appeal was transferred to the Tribunal, heard as an Appeal and dismissed again on the ground of bar of Limitation by the aforesaid order-now the subject matter of the instant Reference Application.
3. It may be observed that similar Reference Applications Nos. 29/83-B and 1034/83-B were rejected as 'incompetent' and not maintainable in the 'B' Bench of this Tribunal by their Orders Nos. 8/1984-B and B-842/1983 respectively.
4. Incidentally, Application No. 29/83-B was moved by Shri Chandrasekharan, the learned counsel appearing for the Applicant in this Reference Application and opposed by the Departmental Representative, Shri Lakshmi Kumaran. Nevertheless, Shri Lakshmi Kumaran, himself moved the Application No. 1034/83-B. In the instant proceeding, appearing for the Respondent curiously enough, he supports the Application for Reference. It is not clear if this change in the original stand of the Departmental Representative was on appropriate instructions. Certain it is, however, that we were bereft of the assistance that could have been rendered if the Application was opposed, consistant with the original stand of the Department.
5. Before us, Shri Chandrasekharan, for the Applicant rather ingeniously, contends, inter alia, that-
(a) in terms of Section 130 of the Act, it is only an Application for Reference of any question of law arising out of "an order" of the Tribunal "relating, among other things, to the determination of any question having a relation to the rate of duty or value for purposes of assessment" that is barred;
(b) by the use of the expression "relating to", it is meant and implied that the rate of duty or the value for purposes of assessment is the "dominant or immediate purpose or theme" of the order in question: [Reliance on 1973 (3) S.C.R. 9 at p. 65-Madhava Rao v. Union of India];
(c) the order of the Tribunal, in the premises, should be one whose dominant or immediate purpose or theme is the determination of the rate of duty or value for purposes of assessment, to be excluded from the ambit of the provisions enabling a Reference in Section 130 of the Act;
(d) in other words, unless the order of the Tribunal itself determines the rate of duty or value for purposes of assessment, an Application for Reference lies against it, in terms of Section 130 of the Act;
(e) a comparison with the language of the other provisions of the Act like e.g. Section 129(C) (4) (b) makes it abundantly clear that the legislature was aware of the distinction between a "case" where the determination of any question having a relation to the rate of duty or value for purposes of assessment arises and is in issue and an "order" relating to the determination of the said questions. Regardless, therefore, of whether the "case" involves a question relating to the determination of duty or value for purposes of assessment, unless the "order" deals with the said issues and determines either the rate of duty or value for purposes of assessment, a Reference Application under Section 130 of the Act is not barred;
(f) in the instant case, none of the orders right from adjudication to the Tribunal had even dealt with either the question of rate of duty or value for purposes of assessment;
(g) the reliance by the Tribunal in their Order No. 8/1984-B aforesaid on AIR. 1961 S.C. 1633 (C.I.T. Bombay v. India Steam Navigation Co. Ltd.) is misplaced, seeing that the words and expressions that fell to be construed were "any question of law arising out of" the Tribunal's order (occurring in Section 66 of the Income-tax Act, 1922, identical with Section 256 of the Income-tax Act, 1961, as well as the latter part of Section 130 of the Customs Act, 1962) rather than the words "relating to the determination..." in the earlier part of Section 130 of the Customs Act, 1962. In fact, the said decision is of no help in construing the expression "order relating ... to the determination";
(h) accordingly, a Reference Application lies and is maintainable, in this case;
(i) the Tribunal would appear to have fallen into an error in its failure to appreciate the scope and effect of a general protest in its applicability to all clearances subsequent thereto in terms of the proviso to Section 27 of the Act. Hence the questions of law that arise out of the order of the Tribunal (set out in the Annexure).
6. It would appear to us on the submissions made and otherwise that-
(a) it is well settled in the construction of statutes that-
(i) an Act is to be regarded as a whole;
(ii) "Often enough, in interpreting statutory provisions, it becomes necessary to have regard to the subject matter of the statute and the object it is intended to achieve. That is why, in deciding the true scope and effect of the relevant words in any statutory provision, the context in which the words occur, the object of the statute in which the provision is included and the policy underlying the statute assume relevance and become material. The words should be construed in the light of their context rather than what may be either strict etymological sense or their popular meaning apart from that context."
[AIR 1965 S.C. 1839=1965(2) S.C.J. 839=1965(2) S.C.A. 156- Sheik Gulfam v. Sanat Kumar Ganguly].
(iii) a provision is not to be construed with exactitude, if it would frustrate the legislative intent or results in a meaning at variance with it or brings it to naught. In all such cases, the language may be modified with a view to give effect to and advance the intent of the legislature. As observed by Lord Reid in 1963 A.C. 557 at 577 [Luke v. I.R.C.-extracted in Maxwell on Interpretation of Statutes-12th Edition-p. 199], where to apply words literally would defeat the obvious intention of the legislation, we must do some violence to the words and so achieve that obvious intention and produce a rational construction;
(iv) again, as laid down by the Hon'ble Supreme Court in A.I.R. 1958 S.C. 56- [ =1958 S.C.R. 739 = 1958(1) M.L.J. (S.C.) 143 = 1958(1) Andhra W.R. (S.C.) 143 = 1958 Cr. L.J. 228- Ramaswamy Nadar v. State of Madras] "If, in construing the Section of an Act, the Court has to supply some words in order to make the meaning of the statute clear, it will naturally prefer the construction which is more in consonance with reason and justice";
(v) in the construction of words and expressions, it becomes necessary at times to examine other words of like import in the self same statute and if it is found that a number of such expressions have been subjected to limitations and qualifications of an identical nature, that circumstance is a strong argument for subjecting the expression in dispute to a like limitation or qualification;
(b) it hardly requires to be stated that the subject-matter of the Act is the levy, assessment and collection of duties of Customs. Needless to say that the object and policy of a fiscal enactment is to ensure that there should, to the extent possible, be no room for doubt or dispute in the extent and the objects of levy, or the assessment or quantification of duty, so that the tax lawfully due is collected and recovered with a degree of certainty and finality expeditiously. While it is obligatory to ensure sufficient safeguards for resolution of such doubts or disputes that may still arise in the interpretation and application of tax laws judicially so as to eliminate arbitrary or illegal exactions, it, obviously, cannot be the policy to provide concurrent and multiple parallel remedies in a plurality of forums regardless of the resultant dilatoriness in reaching a final decision in the matter;
(c) in the amendments made to the Act (by the Finance Act, 1980), a clear cut distinction between cases involving a determination of rates of duty or value for purposes of assessment on the one hand and those which do not involve any of the aforesaid issues on the other is made;
(d) the distinction becomes manifest in-
(i) the proviso(ii) to Section 129A ;
(ii) Section 129-C (3);
(iii) Section 129-C (4) (b);
(iv) Section 130(1);
(v) Section 130-E (b);
(vi) Section 131-B (2) (b) of Chapter XV of the Act;
(e) such distinction is not made without reason or pursose, for,-
(i) invariably, cases involving a determination of the applicable rate of duty or value for purposes for assessment involve a construction of statutory provisions or notifications. Questions relating to construction of statutory provisions are always questions of law or mixed questions of law and fact but never pure questions of fact. Determination of such questions resolves an issue of right in a way binding persons generally-almost a judgment in rem. Needless to say, such determination has far reaching consequences in its applicability to other cases of construction of identical or similar provisions in a fiscal statute for ascertaining the appropriate rate of duty or value for assessment where the levy is ad valorem;
(ii) on the contrary, cases involving mere penalties, fines, confiscation and other offences are like judgments in personam. Mostly, they involve questions of fact only. Such questions of law that may arise, more often than not, have relation to appreciation of the probative value of evidence or absence on record of evidence to support a finding and similar issues; rarely does a question relating to construction of statutory provision arise in such cases;
(f) (i) it is manifestly and indisputably the legislative intent to provide for an authoritative and speedy (not protracted or dilatory) determination finally of the issues relating to the rate of duty or value for purposes of assessment. Accordingly, an Appeal before the Tribunal involving the said issues is to be decided by a Special Bench of three Members of the Tribunal and an Appeal from the Tribunal's order (in Appeal) is provided straightaway and as of right, under Section 130E(b) of the Act (i.e. without certificate or Special Leave), to the Supreme Court-the final Court of Justice;
(ii) in the latter class of cases it is only questions of law that may arise that may be referred to the High Court for advice in the exercise of its special jurisdiction created under the relevant Act. [defined in Section 13 l(b) of the Act]. An appeal to the Supreme Court is provided against the decision of the High Court on such questions of law only if the High Court certifies the case to be fit [Section 130-E (a)];
(iii) obviously, the right to approach the Supreme Court in cases that do not involve a determination of the rate of duty or value for assessment is confined and restricted to questions of law and that too on a certificate of fitness, while in the cases involving the aforesaid issues it is a regular right of Appeal straightaway to the Supreme Court on fact as well Law;
(g) it is the aforesaid legislative intent that is effectuated in and governs an appropriate construction of the aforesaid provisions;
(h) it will be observed that, amongst the provisions cited in (d) supra,-
(i) while Sections 129-C (4) (b), 131-B (2) (b) and the second proviso to Section 129-A (1) speak of a case where "the determination of any question having a relation to the rate of duty of Customs or to the value of goods for assessment is in issue or one of the points in issue", Sections 129-C (3), 130(1) and 130E(b) refer to an order relating to "the determination of any question having a relation to the rate of duty or to the value of goods for purposes of assessment".
All the provisions are almost verbatim the same except for the use of the expression "a case where" in three of the aforesaid provisions and an "order relating to" in three others;
(ii) if the contention of the Applicant were to be accepted and Sections 129-C (3), 130 (1) and 130-E (b) were to be literally construed, cases where "the determination of any question having a relation to the rate of duty or to the value of goods for assessment is in issue or one of the issues" are not, necessarily, to be heard by a Special Bench of three Members of the Tribunal, and no Appeal can be taken to the Supreme Court against the order of the Tribunal itself, unless the order in Appeal or the order of the Tribunal, as the case may be, itself, determined the applicable rate of duty or value for assessment. In other words, a case may involve determination of rate of duty or value for assessment. Nevertheless, an Appeal in such a case need not be heard by the Special Bench, in terms of Section 129-C (3), if the order under Appeal did not, itself, determine any of the said issues. Nor does an Appeal lie to the Supreme Court under Section 130-E (b) if the order of the Tribunal itself did not decide any of the said issues;
(i) by parity of reasoning, it should be possible for a single Member of the Tribunal to hear and decide an Appeal against an order of the Collector (Appeals) if it does not determine the rate of duty or value for assessment, and the difference in duty is less than Rs. 10,000, notwithstanding that either the one or the other is one of the issues raised in the Appeal. But then that is not what is provided under Section 129-C (4) (b). Exclusion of a case from a hearing by a single Member under that Section is not on account of the order under Appeal (determining the rate of duty or value for purposes of assessment or failing to do so as the case may be). It is on the contrary, the issues that actually arise in the case and the Appeal that determines the exclusion;
(j) could it be that the legislature adopted almost the identical language in Clauses (3) and 4 (b) of Section 129-C in demarcating the jurisdiction of the Benches of the Tribunal and yet laid down criteria altogether different from each other? Is it possible to read both the aforesaid clauses literally and conclude that it is the order determining the rate of duty or valuation for assessment in one case and the issues in the case itself, regardless of whether the order dealt with them or not, in the other that determines which Bench of the Tribunal is to hear and decide the Appeal? Is it not odd and irrational to fix upon the nature of the order in one case and the case itself, regardless of the order in the other as the decisive factor to determine jurisdiction? Above all, does such a construction advance the objects of the legislation? If it does not, is it possible to read Sections 129-C (3), 130(1) and 130E (b) more in consonance with the other three provisions almost, in pari materia, so as to advance the objects of the legislation?
(k)(i) an order made by any judicial tribunal is on the case before it. It does not exist in the void being one, necessarily, made in relation to the case decided by the Tribunal. It may be that the case could be decided on a preliminary issue. That does not mean the, order, is, any the less, an order in relation to the case. The dismissal of a suit in a civil court, for example, for money had and received or for possession and mesne profits or damages in contract or tort, on a preliminary issue, is still disposal of the suit for any of the aforesaid reliefs. An Appeal filed against such dismissal, is not an Appeal for a decision on the preliminary issue but an Appeal against dismissal of a suit for the aforesaid reliefs and treated as such for valuation for purposes of court fees as well as for jurisdiction. One cannot be heard to say that the Appeal is merely to set-aside the judgment and decree on the preliminary issue, amongst a host of others, that actually arise in the suit and it should be valued either for jurisdiction or court fees accordingly. Likewise, under the provisions of the Act it is a case in which rate of duty or value for assessment that may arise, as the issues. It is these issues that the various forums created under the Act, are invited to decide. A refusal to decide the said issues on account of, say, the bar of limitation is embodied in a formal order. An order refusing to decide those issues despite being required to do so is also an order relating to the said issues and the case in which they have been raised. Seeing that it is a principle "well known to law that a relief asked for and not granted should be deemed to have been refused" [per Venkatarama Iyyer J. in AIR 1961 S.C. 1663 at P. 1645-Commissioner of Income Tax v. Scindia Steam Navigation Co.];
(ii) there is no magic in words, In 1971 (3) SCR 1 (Madhava Rao v. Union), it was in the context of a provision in the Constitution (Art. 363) purporting to exclude the jurisdiction of the courts, not to be readily inferred in the absence of a clear enactment or neceseary implication, that Justice Shah (as he then was) [after laying it down that "a provision in a statute will not be construed to defeat its manifest purpose and general values which animate its structure"] refused to accept that the expression "relating to" merely meant "referring to" and held it to mean (along with Chief Justice Hidayatullah), "dominant theme or purpose", "having a dominant and immediate connection with". May be, a provision in the Constitution is not to be interpreted "in the attitude of a lexicographer with one eye on the provision and the other on the lexicon," We are not concerned with a Constitutional provision in this case. Even if it were, it is not irrelevant to point out that in that very case the expression "relating to" was interpreted by the other three learned judges to mean nothing more than-
"stand in some relation, to have bearing or concern, to pertain, to refer, to bring into association with or connection with"
(Justice Mitter at p. 142 of the report) "to bring into relation or establish relation between".
(Justice Hegde, at page 187) and bring a thing or person in relation to one another, to connect, establish a relation between, to have reference to, to be related, having relation to, and to stand in some relation to another thing".
(Justice Ray as he then was at page 213);
(iii) the preceding extracts should suffice to establish demonstrably that it was not the interpretation of the majority that the expression "relating to" meant the "dominant theme or purpose". According to the majority, it meant merely "stand in some relation", "concern" or "refer", "to bring into relation" "establish a relation between". Secondly the narrower meaning was resorted to by the other two learned judges only in the context of the Constitutional provision which sought to exclude the jurisdiction of courts. It is unwarranted to adopt such a narrow construction in the present case, more so when to adopt it would imply the negation of the indisputably larger right of an unrestricted Appeal to the Supreme Court [Section 130-E (b)] and substitution in its place a reference to the High Court merely on questions of law and a conditional right of Appeal thereafter to the Supreme Court on a literal construction of the relevant provisions;
(vi) construed accordingly the words "an order relating to", occurring in Sections 129-C (b), 129-C (3), 579, 130 (1), 130-E (b) merely mean "an order standing in some relation to" or "an order concerning or pertaining" to the determination of any question relating to rate of duty of customs or to the value of goods for assessment and not "an order whose dominant purpose or theme is the determination of" the aforesaid issues;
(I) it may become necessary, otherwise, to read into Sections 129-C(3), 130 (1) and 130-E (b), the words "in a case" so that they read as follows-
"an order in a case relating, amongst other things, to the determination..."
so as to advance the legislative intent and remove the anomalies in construction of all six of the aforesaid provisions;
(m) in any view, therefore, the construction contended for cannot be accepted.
7. In the premises, we see no merits in the instant Application and accordingly dismiss it.
QUESTIONS OF LAW
1. Whether the learned Tribunal was justified, in the facts and circumstances of the case in rejecting the appeal arising out of refund claim bill dated January 1, 1980 in respect of imported film laminate cleared on February 22, 1979 on the alleged ground that the said claim is time-barred.
2. Whether in the facts and in the circumstances of the case the learned Appellate Tribunal should have held and erred in law in not holding that payment of Customs Duty under protest in respect of an imported article on the ground of wrong classification of such article should be deemed to be general protest applicable to all subsequent importation of same article for the purpose of limitation under Section 27 of the Customs Act, 1962.
3. Whether in the facts and in the circumstances of the case the learned Appellate Tribunal should have held and erred in not holding that the Applicant's letter dated 21-2-79 addressed to Member, CBEC with a copy to the Collector of Customs, Calcutta constitutes a general protest against the purported classification of Film Laminate as Taper' and all subsequent payment of duty on importation of the said article should be deemed to have been paid 'under protest'.
4. Whether the learned Tribunal should have held and erred in law in not holding that inasmuch as the applicant had raised objection against classification of the film laminate under Entry 48 of ICT- 1975 from its very inception and lodged general protest against leyy of customs duty on the said film laminate as paper, the claim bill dated January 1, 1980 falls well within the proviso to Sub-section (1) of Section 27 of the Customs Act for the purpose of special limitation.
5. Whether in determining the questions of limitation u/s 27 of the Act, it was incumbent upon the learned Tribunal to take into account the vital facts that the appellant all through raised objection against the purported classification of film laminate as paper, paid duty as assessed by the department under protest since the department purported to levy duty for the first time on the imported film laminate as paper as well as on several subsequent consignments and that the appellant recorded a general protest by its letter dated February 21, 1979, putting on record that payment of duty on film laminate as paper will be made under protest.
6. Whether the proviso to Sub-section (1) of Section 27 contemplates recording of protest in the matter of payment of duty in respect of each consignment where there are series of transactions of the same nature or that the protest lodged by the appellant in general nature would bring all payments made subsequent to the said general protest within the scope of the said proviso for the purpose of determining special limitation u/s 27 of the Act.
7. Whether the learned Tribunal should have held and erred in law in not holding that the general protest lodged by the assessee vide its said letter dated February 21, 1979 against the classification of film laminate as paper as well as against the levy of custom duty on that basis extends to the assessee the benefits of the special limitation provided under Section 27 of the Act.
8. Whether the learned Tribunal should have held and erred in law in not holding that the general protest lodged by the applicant vide its letter dated February 21, 1979 coupled with the specific protest lodged in the previous bills of entries and being the documents of the earlier importation make it abundantly clear that the applicant had been challenging the very basis of classification and as such, was not required to record its specific protest in respect of importation of each future consignment during the period the question of classification remained undecided.
9. Whether the learned Tribunal should have held and erred in law in not holding that the instructions issued by the Board of Central Excise and Customs in regard to limitations being dated May 27, 1958 numbered 19/56/56-CX. 11 wherein it is provided that 'when a general protest has been lodged relative to whole of series of impending transactions, it is not necessary while the general question raised is under consideration, for each subsequent payment of duty to be accompanied by a special protest...' is equally applicable in respect of Section 27 of the Customs Act.
10. Whether the learned Tribunal misread and misconstrued the proviso to Sub-section (1) of Section 27 of the Customs Act, 1962 and erred in not holding 'the limitation of one year or six months, as the case may be, shall not apply where any duty has been paid under protest', embraces within its fold all payment made subsequent to the lodging of the said general protest in respect of transactions of the same nature.