TaxTMI 
TaxTMI 
1994 (7) TMI 377
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....ts under Section 112, the appellants have referred the above appeal. 2. The appellants hold a registration dated November 30, 1987 from the Ministry of Industry, Deptt. of Industrial Development. The said Registration Certificate specifies the article of manufacture as 'Multi-Colour Off-Set Printing and Automatic Punching' and the annual capacity is 9,60,00,000 impressions. 3. The appellants decided to import 1 No. Chambon Web-fed Off-set Rotary Printing Machine having the following configuration : (1) Automatic non-stop unwind, type Monomatic MDC 155. (2) Variable speed intermediate pull through appliance. (3) Web off-set printing appliance with DCP. (4) Infrared dryer. (5) Cutting units. (6) DCP Platen Cutter/Creaser. (7) A complete set of electronic equipments and control panel. The aforesaid configuration was decided on the basis of the techno-economic feasibility report prepared by their consultant covering various fields like project concept, market analysis, plant and machinery and process, raw material, utility and services etc. The project concept was to set up a project for undertaking multi-c....
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....h 'Plant and Machinery and process' and says :- ''Having decided to go in for an in-line printing conversion equipment with its all round superiority over conventional sheet-fed equipment, the equipment finally selected after scrutinising and evaluating all aspects, is a CHAMBON VO 650 in-line printing and conversion machine. The 'CHAMBON' in-line concept is to start with a reel of board or paper at one end of the machine and to deliver in a single operation, printed, varnished, embossed, cut, creased, stripped and counted printed blanks or reels at the other". (The show cause notice which gives the extract of the above para adds 'cartons' after 'blanks' in the last line, which is erroneous). The appellants imported the Web-fed off-set rotary printing machine having output of 35,000 composite impressions per hour, manufactured by CHAMBON Ltd., U.K. comprising the aforesaid configuration and presented Bill of Entry Rotation No. 624, dated 15-3-1989 and Line No. 177 for clearance thereof. 5. After the Bill of Entry was filed in the Customs House under Section 46 of the Customs Act, 1962, the same was taken over by the....
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....to a penalty under Section 112 of the Customs Act, 1962. The appellants submitted a reply to the said show cause notice through their Consultant in their letter, dated March 18, 1991. Thereafter the respondent passed the impugned order. Hence this appeal. 7. We have heard Shri K. Srinivasan, learned Consultant and Shri S.K. Sharma, learned DR. 8. Shri K. Srinivasan, the learned Consultant for the appellants submits that there is no dispute that the imported machine is primarily a printing machine as would be evident from page 16 of the impugned order as the Collector has accepted the contention of the appellants that the machinery in question is primarily a printing machine and that even the cigarette shells which are manufactured after cutting and creasing nothing but products of printing industry. Classification under Heading 84.41 has been ruled out on the ground that printing is also the main function of the machine and not merely incidental. However, the Collector has wrongly proceeded on the basis that the machine is an integrated machine and, therefore, has gone into the question as to whether the integrated machine which has a printing press along with the DCP Platen ....
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....ds. HSN Explanatory Notes contain an illustrative list of machinery falling under this Heading which includes machines for die-cutting, outlining or grooving paperboard for cartons, boxes, file covers, etc. machines for making folding cartons and boxes. The DCP platen cutter/creases will fall under this Heading. The Explanatory Notes further state that some of the machines under this Heading particularly the box folding machine may be equipped with a printing device and according to Note 3 to Section XVI such machine remains classified under Heading 84.41 provided that printing is not the principal function of the machine. In this case admittedly printing is the principal function. The function of the DCP Platen is to cut the profile of the shell blanks and form the creasing along which they are folded which is a function auxiliary to the printing of the shell blanks. The principal function is printing of the shell blanks with the brand name of the cigarette manufacturers and other essential marketing details (for example, the number of cigarettes). The DCP platen only enables the printed blanks for the shell blanks to be cut and creased to be used further for folding and gumming a....
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....ia v. Wood Paper Ltd. 12. In reply Shri S.K. Sharma, the learned Departmental Representative argues that undisputedly the machine is an integrated machine having an offset printing mechanism and also a DCP Platen cutter/creaser, the former for printing wrapper or other material and the latter for cutting and creasing particular packing material like cigarette shells which may be subsequently converted by pasting into empty cigarette packets and the moot question is whether a composite machine can be termed as a printing machine or is different from a mere printing machine press. The techno-economy feasibility report prepared by the importer before importing the machine states that the importers are going to do the work of printing and specialised packaging since these facilities were not available in India. The report prescribes that the process will start with a reel of board or paper at one end of the machine and it will deliver in a single operation printed, varnished, embossed, cut creased, stripped and counted, printed blanks, cartons or reel at the other. As per the Explanatory Notes at page 1239, there can be other machines along with a printing machine but the notes do n....
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....frame mounted) (p) Variable speed pull through appliance (q) An cushion bed mounted turner-bar (r) DCP Platen cutter/creaser with inbuilt electronic insetting register control, receptacle and waste removal conveyor (s) At 90 degrees to main machine bed, it type 2 spindle rewind (t) Complete set of electronic register control equipment for the control of colour to colour print registration (u) Complete set of electrical equipment, including main drive motor, control cabinets and machine control console. All inter-unit wiring and cabling supplied. (v) One set of essential 2 year's spares (mechanical, electrical and electronic). 15. The catalogue describes the functions of the various units of the machine. A few samples of the product printed on the imported machine are annexed as Annexure -A. 16. The allegation of the Department is that the appellants have imported a plant for production of printed cartons starting from the raw material - either board or paper. Reliance has been placed upon the catalogue to hold that the entire configuration was meant for "in line printing and converting of folding cartons" and ....
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....with slides with the wrapper paper subsequently, an operation done by other units and not by my clients." 17. The issues which arise for determination are : (a) correct description of the goods (b) ITC angle (c) Classification (d) Extension of benefit of Notification 114/80-Cus. (e) Imposition of penalty. 18. The clear position that emerges is that the machine is not capable of manufacturing cartons or boxes either by folding or otherwise as it has no facility for folding or for gumming and pasting to convert the cut sheets into box shells. Even the Department recognises and admits that the machine is intended for manufacturing packaging material where cutting and creasing is not required as also packaging material where cutting and creasing is required as for the purpose of manufacturing blank cigarette packet shells. As we have held that the machine is not capable of manufacturing fully formed, shaped and gummed box shells with slides, we hold that the machine is nothing but a printing machine. This fact has been accepted by the adjudicating authority at page 16 of the impugned order where he gives a categoric finding that there ....
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....turers name and any other illustration/legend. Our view is further strengthened by the techno-economic feasibility report prepared for the appellants. In para 2.3 of the report the type of the equipment to be installed to meet the developing tends in India is considered and it is stated as follows in Paras 16 to 21 of the reply to the show cause notice : 16. In para 2.3 the type of equipment that needs to be installed to meet the developing trends in the country is considered and it is stated : "Accordingly, this 'in-line' installation, for the multi-colour printing and manufacture of cartons has been considered. Presently this sophisticated facility is not available with any converter in India. In this installation, in one single operation the board/paper in reel form will be printed in multi-colour, cut and creased with the trim waster extracted pneumatically. Electronic, computerised register controls between print to print units and printing to cutting/creasing units with high level of accuracy will ensure lower spoilage due to mis-register. Spoilage reduction by 3 to 4% is possible compared to conventional existing sheet-fed installations, pu....
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....d the raw-material requirements at the optimum capacity of 4,500 tons per annum. These considerations are of no relevance to the show cause notice. What is of relevance is the product concept, the selection of technology, the selection of the particular type of machine and, above all, what the machine actually produces, factors which have been completely ignored in the matter of classification of functional machines. 19. Para 2.6 of the study deals with 'Plant & Machinery and Process'. It says - "Having decided to go in for an in-line printing conversion equipment which its all round superiority over conventional sheet-fed equipment finally selected after scrutinising and evaluating all aspects is a CHAMBON VO 650 in-line printing and conversion machine. The 'CHAMBON IN-LINE' concept is to start with a reel of board or paper at one end of the machine and to deliver in a single operation, printed, varnished, embossed, cut, creased, stripped and counted printed blanks or reels at the offer", (The show cause notice which gives the extract of the above para adds "cartons" after "blanks" in the last line, which is erroneous). ....
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....a box or a container nor fall in the definition of a container or box. Container or box must be capable of holding by itself without any accessory. The outer shell in this case by itself cannot hold the cigarettes. It is to be seen at what stage excise duty is to be levied. In the case in hand, since the petitioner manufactures only outer shell which being open on both sides is incapable of holding any cigarettes and it is at this stage when it is mere shell, without any aid, it cannot be called box. The other important component is the slide, insertion of which makes it a container or box. But in the factory of petitioner slides are not manufactured. In the absence of slides, the shell by itself at that stage cannot be called box. Therefore, the stage at which the duty is to be levied is a very relevant factor. The end-use of the article is irrelevant in the context of the entry, particularly when there is no reference to the use of the article. In order to determine what that given article is, its composition and contents are to be looked into. The fact that an article can be put to a different use is not a relevant consideration. Shell by itself has to be considered at the time ....
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....both the sides. In the absence of the slide this shell by itself will not be in a position to hold the cigarettes. It is only when the slide is inserted inside the shell that it can be called a "box" or "container" but without slide it is neither. Broad description of the shell does not fit in the expression of box or container. 16. Mr. Chandrasekharan stated at the Bar that the Department is treating the shell as "box" and not as container, carton or bag as the case may be. Mr. Chandrasekharan contended that the shell is described as box under the Indian Standard Guide for principle uses and styles of fibreboard containers. I.S.I., guidelines 6.4 described slide type boxes. Slide type boxes consist of several pieces of liners and sleeves sliding in different directions into each other. This group also includes outside sleeves in other cases. Referring to this ISI guidelines, Mr. Chandrasekharan contended that the outside sleeves as in the present case, the shell, will fall into the category of boxes. He drew our attention to diagrammatical representation made in this book to emphasise that shell by itself is a box. This contention has no force because ISI guide is relevan....
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....a receptacle which can hold the thing in itself. Even if we do not give much importance to the dictionary meaning of the word "box" still the correct guide in such a case is the context and the trade meaning. The trade meaning is one which is prevalent in that particular trade. Fiscal Entry must be understood in that context of that particular trade. In the cigarette trade, Mr. Ravinder Narain pointed out that when 20 packets of cigarettes are put in a bigger box or a container, such an outer container is known in commercial and common parlance as a carton. These cartons are then put in bigger cardboard boxes and such bigger containers are known as boxes. In commercial and in cigarette trade, the container in which cigarettes are packed is known as a packet of cigarette and not as a box or carton. Therefore, even for the sake of argument, if it is presumed that the "outer shell" is a packet, still it cannot be called a box. That packet consists of both the components, the shell and the slide. But in the absence of the slide by no stretch of imagination it can be called a box. 18. The definition of "goods" make it clear that to become "goods" an article must be something wh....
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....sputed. The respondents had imported Brinell and Vickers Hardness Testing machine for determining the Brinell and Vickers hardness of all steels and metals under load upto 250 Kgs. We have also gone through the catalogue. We have also perused the Notification No. 49/78-Cus., dated 1-3-1978. Serial No. 7 pertains to "Vickers Hardness tester". We have also gone through the earlier order passed by the Tribunal. In para No. 6 of the order, the Tribunal had relied on an earlier order in Appeal No. 2552/83-B2 in the case of Collector of Customs, Bombay v. Living Media India Ltd. and it was held by the Tribunal that merely because a machine can perform other functions the benefit of the exemption cannot be denied. The Collector (Appeals) in his order had observed that the machine imported by the respondents carries out a small range of Brinell test and the same cannot be considered as a standard test as the machine is not designed to cover the full range of hardness testing under the Brinell's method which goes upto 3,000 kgs. The machine imported by the respondents is capable of testing upto 250 Kgs. The machine is basically devised to carry out the Vickers hardness test of steels an....
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....ribes the platen cutter, creaser and reception of "finished cartons", rotary waste stripping and waste extraction. It also describes the off-set unit type VO and Web-fed platen cutter, creaser type DCP. In the latter, apart from cutting, creasing, embossing waste extraction and 'carton transfer', it also describes 'carton reception' and delivery. 28. In the project report, it is mentioned, inter alia, that the project is being set up for undertaking multi-colour printing and production of catalogues, advertising and packaging material, video-cassette covers, record sleeves, etc. 29. "To cater to this unfulfilled area of packaging Jindals have decided to set up a modern web-fed in-lines off-set machine in India". "Accordingly, this in-line installation for the multi-purpose printing and manufacture of cartons has been considered". "The plant will be producing multicoloured printed, varnished blanks and conventional packing materials". "About half the capacity of the plant would be utilised for captive consumption of M/s. Godfrey Philips India Ltd., one of the principal cigarette manufacturers in India, the remaining capacity would be utilised for a wide range o....
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....ection Note 3 provides that in general multi-function machines are classified according to the principal function of the machines and in case of composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI are also classified according to the principal function of the composite machine. 36. The following are examples of such composite machines: (1) Printing machines with a subsidiary machine for holding paper (Heading 84.43); (2) A cardboard packs making machine combined with an auxiliary machine for printing name or symbol design (Heading 84.41); (3) Cigarette making machinery combined with subsidiary packaging machinery. 37. For the purpose of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other or mounted on a common base or frame or in a common housing. Assemblies of machines should not be taken to be fitted together to form a whole ....
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....industrial products has been mentioned. 43. In view of the above position, the High Court judgment in the case of Zupiter Printery v. UOI [1991 (34) ECR 7] does not come to the rescue of the appellants. 44. In view of the above position, I consider that the imported item was a composite machine capable of two main functions (1) Printing (2) Conversion of printed matter. As such, it was classifiable under Tariff Item 84.79. 45. Further such an item was not covered by Sl. No. 1 of Notification 114/80, the benefit thereof was also not available to the appellants. 46. Again such a composite machine was not covered by O.G.L. 47. In view of the above findings I consider that the Collector was right infolding that ITC violation as well as Customs Act, violation was involved. The goods were therefore liable to confiscation and the appellants were liable to penalty. Hence I confirm the Collector's order and reject the appeal. Sd/- (S.K. Bhatnagar) Vice President DIFFERENCE OF OPINION In view of the difference of opinion between the Hon'ble Member (Judicial) and the Vice-President, the matter is submitted to the Hon'ble President fo....
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....bsp; (S.K. Bhatnagar), Vice-President Dated 3-9-1993 Date 17-8-1993 Harish Chander, President 48. I have perused the order written by my learn....
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....appeal before the Tribunal. Shri K. Srinivasan, the learned Consultant has appeared on behalf of the appellant. He pleaded that the appellant had imported web-fed high speed letter and off-set rotary printing machine having output of more than 35,000 composite impressions with DCP platen. Shri Srinivasan argued that there is classification dispute. The importer has claimed the assessment as a printing machine under Heading 84.43, whereas the Revenue has assessed the same under Heading 84.79. Shri Srinivasan, the learned Consultant further pleaded that there is also allegation of ITC violation. He argued that the issue involved is whether the machine is eligible to the import under OGL Appendix I Part B which covers web-fed high speed off-set rotary printing machine having output of more than 35,000 composite impressions or copies per hour of A.M. 1988-91 Policy. Shri Srinivasan further pleaded that the appellant had claimed the benefit of Notification No. 114/80-Cus., dated 19th June, 1980. He argued that the description in the notification is the same which has been given in the ITC Policy, viz. web-fed high speed off-set rotary printing machine having output of more than 30,000 c....
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....aper pulp, paper or paperboard, including cutting machines of all kinds and on page 491 of the paper book appears Heading 84.79 and the description is machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter. Shri Srinivasan argued that the appellant had placed 3 orders and in all the 3 orders there was a mention that the machine imported by the appellant is composite machine. He referred to the order-in-original. Shri Srinivasan referred to the observations made by the Member Judicial in her order and also argued that he relies on the findings given by the Member Judicial. Shri Srinivasan, the learned Consultant argued that it is a composite machine and referred to Section Note 3 of Section XVI of the Customs Tariff and Section Note 3 provides that unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted to the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. Shri Srinivasan, the lea....
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....age 493 of the paper book. He argued that it is a composite machine and not a multi-function machine. He pleaded that the order passed by the Member Judicial is correct and pleaded that the same should be accepted. 50. Shri S.K. Sharma, the learned Junior Departmental Representative has appeared on behalf of the respondent. He has referred to the bill of entry and argued that there is misdeclaration of the goods. He has also referred to bill of entry page 98 of the paper book wherein description has been given as Chambon web off-set, Rotary Printing Machine having output of more than 35,000 composite impressions per hour and also the invoices which appears on pages 100 to 102 of the paper book. He also argued that the invoice on pages 100 to 102 of the paper book is attached with the bill of entry and the packing list is from pages 104 to 112 of the paper book. He has referred to the order-in-original page 2 bottom where the Collector has mentioned that the importers had declared the description of the imported machinery in the bill of entry as one Chambon Web-fed offset rotary printing machine having output of 35,000 composite impressions per hour. He argued that the invoice wa....
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....ber Judicial. 52. I have heard both the sides and have gone through the facts and circumstances of the case. I have duly considered their oral submissions as well as written arguments. In the matter before me the dispute is Chambon off-set rotary printing machine having output of 35,000 composite impressions per hour falls under OGL entry 2(22) of 1988-91 Policy and also whether the benefit of Notification No. 114/80-Cus. is available to the appellant. For the proper appreciation the description as given in the Appendix Part 1B on page 495 of the paper book is as under :- "web-fed high speed letter press rotary and off-set rotary printing machine having output of more than 35,000 composite impressions or copies per hour." Notification No. 114/80-Cus., dated 19th June, 1980 as amended from time to time which appears on pages 493 and 494 of the paper book is reproduced below :- "Exemption to specified machines for printing industry. -- 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 s....
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....he description given in the bill of entry on page 98 of the paper book is as under :- "Chambon web offset, Rotary Printing machine having output of more than 35,000 composite impressions per hour." It is an admitted position that with the bill of entry the appellant had attached the invoice which contains the full details of the item imported and a perusal of the invoice on page 100 of the paper book (r) shows that there is mention of "DCP Platen cutter/creaser with inbuilt electronic insetting register control, receptacle and waste removal conveyor." The main argument of the adjudicating authority is that it is a multi-function machine and if a machine performs multifunction then there is a violation of ITC regulations as well as benefit of Notification No. 114/80-Cus, is not extendable to the appellants. Shri Srinivasan, the learned Consultant had cited a decision of the Tribunal in the case of Associated Millers Pvt. Ltd. v. Collector of Customs, Madras reported in [1990 (50) E.L.T. 633 (T) = 1991 (32) ECR 461]. Paras No. 8, 9 and 10 from the said judgment are reproduced below :- 8. The submissions made are considered. The machine as per the invoice impor....
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....ne consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary are classified according to the main purpose of main function of composite machine e.g. printing machines with a subsidiary machine for folding the paper (Heading 84.35)." 8E. Therefore, the parameters set forth for classification are that the machine which performs the principal function or the main purpose in a composite machine will decide the heading under which the principal function or main purpose has been mentioned. The machine imported is a Remixer. The material excavated by the Scarifier is heated and mixed in pugmill along with a new material bitumen and the resulting asphalt mix is spread. The tamping and vibrating device ensures level surface. The Assistant Collector in his order has observed: "The machine in question is a 'Remixer' by the nomenclature itself. This machine in addition to its functions of pre-heating, excavating, levelling and tamping also performs the function of mixing of old material with bitumen. After remixing the material is spread o....
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....ion with a device to prepare the material and then get it spread by the Remixer's combined tamping and vibrating, it is not doing the solo individual function of road surfacing. Therefore, its classification under 84.59(1) gets excluded. 10. Consequently the classification under Heading 84.56 being more appropriate, the residuary Heading under 84.59(1) which has been upheld by the respondent, is set aside. The appeal is, therefore, allowed with consequential benefit to the appellants. The Tribunal in the case of Consolidated Petrotech Industries Ltd. v. Collector of Customs reported in 1992 (57) E.L.T. 81 (Tribunal) in paras 6, 7 and 9 had held as under :- 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 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 pac....
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....l. 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 and 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." Similarly 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 tha....
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....n 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 ro....
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.... Delhi v. Tek Chand Bhatia, supra; State (Delhi Administration) v. Puran Mal - (1985) 2 SCC 589 = AIR 1985 SC 741. 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. - AIR 1965 SC 1583 p. 1584, (para 5); 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 Legislature 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 - AIR 1957 SC 699, p. 709) The words 'owner or master' as....
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....war Singh Bindra and Ors. v. State of U.P. reported in AIR 1968 SC 1450 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, 11th 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. reported in AIR 1....
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....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 non-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 tha....
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....ple was sent to M.N. Dastur & 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. reported in 1990 (49) E.L.T. 243 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. reported in AIR 1963 SC 1638 had 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 occasi....
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....d 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 corrollary 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 Sec....
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....iteral 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 vaccumising or inert gas flushing or both." 7. In view of the ....
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....riff, whereas the learned Consultant Shri K. Srinivasan argued that Note 7 of Chapter 84 is subject to Section Note 3 of Section XVI. Note 7 of Chapter 84 and Section Note 3 of Section XVI are reproduced below :- Note 7 of Chapter 84: "7. A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. Subject to Note 2 to this Chapter and Note 3 to Section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in Heading No. 84.79. Heading No. 84.79 also covers machines for making rope or cable (for example, stranding, twisting or cabling machines) from metal wire, textile yarn or any other material or from a combination of such materials." Note 3 of Section XVI "3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted to the purpose of performing two or more complementary or alternative functions are to be classified ....
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....e publication, subject to such conditions as may be specified therein, of names and other particulars of persons who have been found guilty of contravention of any of the provisions of this Act or the rules." 157. General power to make regulations. - (1) Without prejudice to any power to make regulations contained elsewhere in this Act, the Board may make regulations consistent with this Act and the rules, generally to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:- (a) the form of a bill of entry, shipping bill, bill of export, import manifest, import report, export manifest, export report, bill of transhipment, boat note and bill of coastal goods; (b) the conditions subject to which the transhipment of all or any goods under Sub-section (3) of Section 54, the transportation of all or any goods under Section 56 and the removal of warehoused goods from one warehouse to another under Section 67 may be allowed without payment of duty; (c) the conditions subject to which any manufactur....
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....n. This calls for a good amount of discretion to be allowed to the delegate. As is often pointed out "flexibility is essential (in law-making) and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can Acts of Parliament." We have pointed out hereinbefore the necessity of constant and continuous monitoring of the nation's economy by the Government (and its various institutions) and the relevance of these enactments as a means of ensuring a proper and healthy growth. Looked at from this angle, we are unable to see any substance in the argument that Chapter Note (2) amounts to excessive delegation of the Parliament's essential legislative function. Chapter 98 provides a concessional tariff inter alia to industrial plant. The expression "industrial plant" is a term of wide connotation. All kinds of industrial plants may not require to be encouraged. Some may; others may not. Decisions of this nature have to be made from time to time. Parliament cannot obviously do this. It has, therefore, left the function to the Board which, as emphasised hereinbefore, is in immediate direct charge of the administration of the Act, ....
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....elegated but the inessentials, however, numerous and significant they be, may well be made over to appropriate agencies. Of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed, corrected or cancelled by the principal." 18. Applying the principles aforesaid, we cannot say that the Parliament has, by empowering the Board to define the expression "industrial plant" occurring in Chapter 98, delegated its essential legislative function. Indeed, we see no self-abnegation on the part of the Parliament. The power conferred by Chapter Note (2) is undoubtedly different from the power of exemption conferred by Section 25. It makes little difference in principal that while an exemption notification is required to be laid on the floor of the Parliament. Regulations made under Section 157 are not so required. Absence of such requirement does not mean absence of control by the Parliament over the acts of the delegate. Nor are we satisfied that by excluding the industrial systems meant for establishments designed to offer services of any description, the Board has travelled beyond its brief. Reference may b....
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...., dated December 2, 1977 involved a major change of policy, which was a legislative function and therefore beyond the competence of a subordinate legislating body. We do not agree with the submission. Whenever there is a switch over from 'private sector' to 'public sector' it does not necessarily follow that a change of policy requiring, express legislative sanction is involved. It depends on the subject and the statute. For example, if a decision is taken to impose a general and complete ban on private mining of all minor minerals, such a ban may involve the reversal of a major policy and so it may require legislative sanction. But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it, such a ban, if it is otherwise within the bounds of the authority given to the Government by the Statute, cannot be said to involve any change of policy." 19. The statement of law is clear and we agree with it respectfully. We are, therefore, of the considered opinion that Chapter Note (2) cannot be faulted as an instance of excessive delegation of essential legislative function nor can the Project Imports Regulations be faul....
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....ed. We have to see whether, in the present case, the classification can be determined having regard to the headings and the relative Section and Chapter Notes." Chapter 84 of the Customs Tariff Act relates to Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof and Note 7 of the said Chapter lays down that a machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. Subject to Note 2 to this Chapter and Note 3 to Section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in heading No. 84.79. Heading No. 84.79 also covers machines for making rope or cable (for example, stranding, twisting or cabling machines) from metal wire, textile yarn or any other material or from a combination of such materials. Note 7 clearly lays down that Chapter Note 7 is subject to Chapter Note 3 of Section XVI which provides that unless the context otherwise requires, composite machines consisting of two or more machines fitted together to f....
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.... of Notification No. 114/80-Cus. (5) The import is covered under OGL. (6) The goods fall under OGL and under Heading 84.43 and also the benefit of Notification No. 114/80-Cus. is extendable to the appellants and as such, there was no justification for the confiscation of the goods and levy of penalty and as such, the impugned order is to be set aside and the appeal is required to be allowed with consequential relief as held by the Member Judicial. 53. In view of the above observations, I agree with the conclusions arrived at by the Member Judicial. Accordingly, I direct the Registry to place the matter before the regular Bench for passing appropriate orders in accordance with law. Sd/- (Harish Chandar) Dated 11-07-1994 President FINAL ORDER In view of the majority opinion the item imported is a composite machine classifiable under Heading 84.43 and entitled to benefit of Notification No. 114/80-Cus. The goods were covered by OGL. There was no cause for confiscation of goods and imposition of penalty. As such the impugned order is set aside and the appeal is allowed with consequential relief if any due. Sd/- &nb....