TaxTMI 
TaxTMI 
1994 (7) TMI 377
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....ave 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-colour printing and production of catalogues, advertising and packaging material, video casset....
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....nting 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 Special Investigation and Intelligence Branch of the Customs House (SIIB), who also got the consignment examined under their....
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....ted 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 Cutter/Creaser can be treated as a printing machine proper or becomes something different as it is capable of multifarious functions. The learned Consultant contends th....
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....rboard 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 and provided with the slides to complete cigarette boxes. The adjudicating authority has ruled out classification under Heading 84.43 on the ground that the DCP Pl....
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....laten 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 not mention that a composite machine which has a DCP Platen cutter/creaser as an essential component will also be classified under Heading 84.43. In view of the composite nature of the goods resort has to be mad....
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.... 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 the further charge is that the machine has been misdeclared as a printing machine for the purpose of overcoming ITC prohibition and for evading payment of appropriate customs duty. The working of the machine was explained to us during the course of the hearing by the learned Consultant Shri Srinivasan - the wrappers are printed by the machine in running length....
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.... 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 is absolutely no dispute that the imported machine is a printing machine and that the cigarette shells manufactured after cutting and creasing are nothing but products of the printing industry. In the light of the above discussion, we hold that the appellants have not misdeclared the goods. The reference by the Collector to other entries at Sl. No. 2 of Appendix I Part namely Sl. Nos. 6, 13, 14, 17 and....
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....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, purely from the point of inherent process difference. Sheeting costs are also eliminated. Sheet fed process pays an up charge ranging from 10% to 20% on sheeting/trimming loss of material and running cost. Execution of any given job in this process would be much faster compared to conventional sheet fed operation, which operates in stages. This equipment fitted with infra-red and electrical heating system, wou....
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.... 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). 20. The Techno Feasibility study on which the Department relies so much, itself shows the basic philosophy underlining the selection of the technology and the particular machine and the product that will emerge, namely, printed, varnished, embossed, cut, creased and stripped and counted printed blanks or reels. 21. The Project Feasibility Report further projects other production possibilities in Chapter III. On the same machi....
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.... 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 of its manufacture for its natural placement. 14. We had the privilege to see this outer shell i.e., the product of the petitioner. It is open from both sides. Without the slide it cannot hold or contain cigarettes. It is only when slide is inserted that it becomes complete and 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....
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.... 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 relevant for standardization and quality control. In the case of Indian Aluminium Cables Ltd. v. Union of India and Ors., 1985 (21) E.L.T. 3 = 1985 ECR 1465 (SC), Supreme Court observed that specifications issued by the Indian Standards Institution are for ensuring control and have nothing to do with the classification the goods belong to a Tariff Schedule. In another case Collector o....
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....ood 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 which can ordinarily come to the market to be sold and bought. But at the shell stage, it can neither be bought nor sold in the market. Box has a definite meaning as understood in the common parlance. Therefore, this mere outer shell by itself cannot be put in that category. To be call....
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....sed 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 and metals. The judgments cited by the learned JDR do not help the appellant in any way. The machines imported by the respondents are in conformity with the description given at Sl. No. 7 of the Notification No. 49/78-Cus. dated 1s....
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....CP. 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 of consumer and industrial products like cosmetics, detergents, pharmaceuticals, liquor, tea, confectionery, flash-lights, incense, hosiery, garments, auto-spares and be....
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....isting 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 unless the machines are designed to be permanently attached either to each or to a common base, frame housing, etc. 38. Note 3, Section XVI need not be invoked when the composite machine is co....
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.... 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 for reference to a third Member on the following points; "(1). Whether the appellants had described the goods correctly and completely in the bill of entry and other main documents at the time of importation or not ? (2) Whether th....
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.... held that the appellant had deliberately suppressed the facts that the imported complete machine was for production of cartons and intentionally misdeclared the goods as a web-fed off-set rotary printing machine having output of 35,000 composite impressions per hour in order to avail the benefit of notification No. 114/80-Cus. and had evaded duty and there was contravention of ITC regulation. The adjudicating authority had ordered confiscation but had given an option to redeem the same after the payment of redemption fine of Rs. 60 lacs and penalty of Rs. 10 lacs was imposed and the benefit of Notification No. 114/80-Cus. was also denied. 49. Being not satisfied with the order passed by the Collector, the appellant has filed an 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 as....
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....adjustment whilst the printing press is being made ready. He pleaded that the machine cuts and creases blanks. Cigarette shell gumming is done by another machine outside and there is no arrangement of gumming or folding in the machine. He referred to page 1239 of HSN which appears on page 203 of the paper book. He has referred to the bill of entry which appears on pages 76 to 98. He made special reference to page 96 where the appellant had duly mentioned DCP platen. He argued that DCP platen is the name of cutter crescent. He referred to the description given in the Tariff. He referred to the Heading 84.43 which pertains to printing machine, machines for uses ancillary to printing. Heading 84.41 relates to other machine for making up paper 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 t....
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.... the adjudicating authority viz. Collector and Vice-President rule out the same. He further argued that in terms of Rule 3C of the Rules of Interpretation last heading which is relevant is 8443.11. He argued that the appellant is a printer and principal function of the machine is printing and even value-wise 15% of the value is for the printing machine. Cutting machine is part of the printing machine. In support of his argument, he cited a decision of the Tribunal in the case of Associated Millers Pvt. Ltd. v. C.C., Madras reported in 1990 (50) E.L.T. 633 (T) = 1991 (32) ECR 461 (CEGAT SB-B2). He further argued that the appellant had supplied the catalogue voluntarily. He again referred to the Notification No. 114/80-Cus. which appears on page 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 ....
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....ation No. 114/80-Cus. is not available and referred to Serial No. 1 of the notification. During his arguments he cited a decision of the Tribunal in the case of Collector of Customs v. O.E.N. India Ltd. reported in 1989 (42) E.L.T. 235 (Tribunal). He argued that benefit of Notification No. 114/80-Cus. is not available to the appellants as it is a multi-function machine. He pleaded that the normal rate of duty is 85% and whereas after extending the benefit of the notification it is 35% and this benefit is not extendable to the appellant and the import is not covered under OGL. He pleaded for agreeing with the order passed by the Vice-president. 51. Shri K. Srinivasan, the learned Consultant pleaded for agreeing with the views expressed by the Member 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 t....
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.... fats or oils 50% 8479.30 -- Presses for the manufacture of particle board or fibre building board of wood or other ligneous materials and other machinery for treating wood or cork. 50% 8479.40 -- Rope or cable-making machines Other machines and mechanical appliances: 50% 8479.81 -- For treating metal, including electric wire coil-winders 65% 8479.82 -- Mixing, kneading, crushing, grinding, screening, sifting, homogenising, emulsifying or stirring machines 8479.89 -- Other 65% 8479.90 -- Parts 60%" The 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 machi....
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....adapted for 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". Similarly, in respect of multi-purpose machines and combination of machines, the Chapter notes under Chapter 84 specifies as follows :- "In general, multipurpose machines are classified according to the main purpose and main function of the machine. Composite machine 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 Sca....
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....er 84.59 (page 1367) which is for "Machines whether or not self propelled for spraying gravel on roads or similar surfaces and self propelled machines for spraying and tamping bituminous road surfacing' materials". While 11(F)(2) and (3) under the Explanatory Notes of BTN page-1367 are for road making machines, it is seen that the machine "The Remixer" has provision for mixing in a pugmill and with addition of new material the same is spread on the surface. It is a combination 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 th....
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....tion No. and Date Amendment (1) (2) (3) 125/86-Customs, dated the 17th February, 1986. In the said notification :- (i) for the w o r d s 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. (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 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 ....
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....quot;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 ....
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.... - (1984 2 SCC 183, pp. 224, 225 = AIR 1984 SC 684; M. Satyanarayana v. State of Karnataka - (1986) 2 SCC 512, 515 : AIR 1986 SC 1162]. As stated by SCRUTTON, L.J.: "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 State Co. (1928) 1 KB 561, p. 568; Nasiruddin v. State Transport Appellate Tribunal - AIR 1976 SC 331, p. 338 - (1975) 2 SCC 671; Municipal Corporation of 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 th....
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....l 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. 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 st....
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.... 310. 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. reported in 1990 (49) E.L.T. 243 (Tribunal). Para Nos. 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) E.L.T. 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 her....
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....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-finished' in relation to a 'flat-rolled product, hot-rolled' in coil form. The respondent, on the other hand, relies on a certificate of well-known firm of Consulting Engineers M.N. Dastur & Co. Credibility of this certificate is sought to be struck at by the Department on that no sample 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.....
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.... 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 judicial 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 B....
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....ere 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) Commissioner of Income-tax, Central Calcutta v. National Taj Traders - (1980) 121 ITR 535 (2) K.P. Varghese v. ITO, Eranakulam and Anr. - (1981) 131 ITR 597. (3) Commissioner of Income-tax, Bangalore v. J.H. Golta. - (1985) 156 ITR 323 at page 339. 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 n....
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....tual 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. Revenue's main argument is reliance on Note 7 of Chapter 84 of the Tariff, 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 other....
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....or the purposes of such detention or confiscation and the mode of verification of such evidence; (e) the reimbursement by an informant to any public officer of all expenses and damages incurred in respect of any detention of any goods made on his information and of any proceeding consequent on such detention; (f) the information required in respect of any goods mentioned in a shipping bill or bill of export which are not exported or which are exported and are afterwards re-landed; (g) the 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, impor....
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....titution or statute) is in question, the Court has to consider the nature, objects and scheme of the instrument as a whole, and on the basis of that examination, it has to consider what exactly was the area over which and the purposes for which power has been delegated by the governing law." In statutes like Customs Act and Customs Tariff Act one has also to keep in mind that such legislation can be properly administered only by constantly adjusting it to the needs of the situation. 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 essentia....
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....of such part of legislative power becomes a compulsive necessity for viability. If the 500 odd parliamentarians are to focus on every minuscule of legislative detail leaving nothing to subordinate agencies the annual output may be both unsatisfactory and negligible. The lawmaking is not a turnkey project, ready-made in all detail and once this situation is grasped the dynamics of delegation easily follow. Thus, we reach the second constitutional rule that the essentials of legislative functions shall not be delegated 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 ex....
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....tion was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration...Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with view to State monopoly was the only practical and reasonable manner of regulation. Another of the submission of the learned Counsel was that the G.O. Ms. No. 1312, 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 ....
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....rovisions in the said Rules. Thus, it is clear that the Rules for Interpretation will come into play, and can be invoked, if and only if the classification cannot be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided, such headings or Notes do not otherwise require. In other words, if the headings, read in the light of the Section or Chapter Notes, are clearly determinative of the classification, the Rules for Interpretation cannot be invoked. 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 cont....