2005 Supreme(SC) 987

2005(6) Supreme 270
Supreme Court of India
(From Central Excise, Customs & Gold (Control) Appellate Tribunal, New Delhi)
Mrs. Ruma Pal, Arijit Pasayat & C.K. Thakker, JJ.
Commissioner of Customs (General), New Delhi etc. etc. —Appellants
versus
M/s. Gujarat Perstorp Electronics Ltd. etc. etc. —Respondents
Civil Appeal Nos. 8568-8569 of 2001
With
Civil Appeal Nos. 8565-8567 of 2001
Decided on 5-8-2005
Counsel for the Parties :
For the Appellant : Mohan Parasaran, Additional Solicitor General, A.K. Ganguli, Rajiv Dutta, Sr. Advocates. T.A. Khan, Rupesh Kumar, P. Parmeswaran, B. Krishna Prasad, Advocates.
For the Respondents : M/s. Suresh A. Shroff & Co., Advocates (NP), V. Lakshmi Kumaran, V. Balachandran and Rajesh Kumar, Advocates.

Headnote:(i) Customs Act, 1962—Sections 28(1), 111(m) and 112—Customs Tariff—Order of confiscation—Imposition of penalty—Appellant company engaged in manufacture of Polyster Chips and other Polyethelene Terephthlate Bottle Grade and Film Grade since 1995 set up a plant—Company entered into a ‘know how’ and ‘Basic Engineering Agreement’ with M/s. Zimmer AG of Germany—Primary object of the agreement was to acquire requisite know how for the products of the company—According to the Revenue, Intelligence was gathered by Officers of Directorate of Revenue Intelligence that the company had imported actual goods under the Export Promotional Capital Goods Scheme at the concessional rate of duty and thereafter diverted some of the goods in the local market—A show cause notice was issued to the company—Demand of custom duty amounting to Rs. 4,18,12,425/- u/s 28(1) of the Act—Whether goods imported by the company in the form of Front End Engineering Package comprising of technical documentation, designs and drawings are classifiable under chapter sub-heading 4911.99 of the Customs Tariff—Whether goods imported by appellant in form of know-how containing latest up-to-date technical data and information including secret technical knowledge are classified under Chapter sub-heading 4901.99 of the Customs Tariff—Whether goods imported can be considered as ‘Printed Book’ classifiable under Chapter 49 of the Customs Tariff—Matter remitted to CESTAT for reconsideration—Order passed by CEGAT set aside.

       Held : So far as CEGAT is concerned, in our opinion, the learned counsel for the assessee is right in submitting that the point is finally concluded in favour of assessee and against the Department in Parasrampuria Synthetics Ltd. The Larger Bench observed that in several cases, Drawings, Designs and Plans were held to be covered under Chapter 49 and would fall under Heading 49.01 (Printed books, brochures, leaflets and similar printed matter whether or not in single sheets); 49.06 (Plans and drawing etc. for architecture, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand; had-written texts; photographic reproductions on sensitized paper and carbon copies of the foregoing); and 49.11 (other printed matter, including printed pictures and photographs) and not under 4911.99 (other). The Larger Bench also noted that in some cases, a contrary view was taken. But relying on the majority of the decisions, it was held that the relevant heading was 49.01 of Schedule I of the Act. No doubt this Court in an appeal against the order passed by the Larger Bench reversed the decision of CEGAT. The question, however, is whether the order passed by a two Judge Bench in Parasrampuria Synthetics Ltd. lays down correct law on the point. (Paras 28 and 29)

       In our opinion, all these questions have to be considered and decided by the CEGAT in the fact-situation of the case in hand. As already noted by us, some of the tests applied in Parasrampuria Synthetics Ltd. were not relevant and appropriate. The CEGAT will now consider the ratio in Parasrampuria Synthetics Ltd. in the light of the observations made by us in this judgment and decide the issue raised in the instant case. (Para 45)

       In our considered opinion, all these contentions raised by the assessee have to be dealt with and decided in the light of relevant statutory provisions of the Act and the Rules as also on the basis of decided cases on the point. As CEGAT has disposed of all the appeals merely on the basis of Larger bench decision in Parasrampuria Synthetics Ltd. and has not considered rival contentions on merits nor recorded findings thereon, it would be appropriate and in the fitness of things to remit the matters to CEGAT, now to Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to decide them on all points in accordance with law in the light of observations made in this judgment. For the foregoing reasons, all the appeals are allowed. The order passed by CEGAT is hereby set aside and the matter is remitted to CESTAT for reconsideration and for passing fresh order in accordance with law. (Paras 51 and 52)

       (ii) Words and Phrases—Word ‘book’—Dictionary meaning—Customs Act.

       Held : In our opinion, the counsel is right in submitting that when the expression ‘book’ is not defined in the Act, natural and ordinary meaning of the said expression must be kept in view. According to him, nowhere it is provided that all the nine characteristics or ingredients as highlighted by the learned Attorney General in Parasrampuria Synthetics Ltd. and referred to by this Court in paragraph 10 must be considered essential or sine qua non. He, therefore, submitted that a wrong test was applied by this Court in Parasrampuria Synthetics Ltd. and Scientific Engineering House Ltd. was erroneously distinguished. The proper way on the part of the Court was to consider the test laid down in Scientific Engineering House Ltd. and to come to a conclusion whether on the facts and in the circumstances of the case, Drawings, Designs and Plans in the case on hand could be said to be ‘book’. By not doing so, a clear error of law had been committed and the decision deserves to be overruled. (Para 42)