Harmonious interpretation of refinery exemption extends concessional duty to post-commissioning maintenance cranes.

Mobile crawler cranes imported after commissioning of a crude petroleum refinery were analysed under Notification No. 21/2002-Cus., Serial No. 228, read with List 17 entries 44 and 45. The interpretation turned on whether goods required for running, repair and maintenance after initial setting up remained covered by the exemption. A harmonious reading treated the main entry and the supporting list entries as complementary, so the expression "setting up" was not confined so narrowly as to exclude post-commissioning maintenance goods. On that view, the cranes qualified for concessional duty, while the dissent considered the exemption limited to goods required only up to completion of setup.

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Issues: Whether mobile crawler cranes imported after a crude petroleum refinery had been set up were eligible for concessional duty under Serial No. 228 of Notification No. 21/2002-Cus. read with entries 44 and 45 of List 17.

Analysis: Serial No. 228 grants exemption to goods specified in List 17 required for setting up a crude petroleum refinery. Entries 44 and 45 within that list expressly refer to special maintenance systems and to sub-assemblies, tools, accessories, stores, spares, materials, supplies and consumables for running, repairing or maintenance of the specified goods. Reading the notification as a whole, the words used in the main entry cannot be so confined as to make these entries redundant. A harmonious construction requires effect to be given to both the main entry and the supporting list entries, and the expression "setting up" cannot be read so narrowly as to exclude goods required for running, repair and maintenance of the refinery after commissioning. The exemption was therefore held to extend to the imported cranes used for refinery maintenance.

Conclusion: The cranes were held eligible for the benefit of Notification No. 21/2002-Cus., and the demand was set aside in favour of the assessee.

Concurring Opinion: The third Member agreed that entries 44 and 45 would be rendered otiose if Serial No. 228 were read narrowly, and held that goods required for running, repairing or maintenance after the initial setting up of the refinery remained eligible for exemption.

Dissenting Opinion: One Member held that Serial No. 228 applied only to goods required for setting up the refinery, that setting up ends on completion, and that goods imported for post-set-up maintenance were outside the notification.

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