Judgment

B. P. JEEVAN REDDY, JJ.

( 1 ) LEAVE granted. Heard counsel for the parties.

( 2 ) THESE appeals arise from the common judgment and order of the Bombay High court in a batch of writ petitions. The question is whether the photographic machinery imported by the appellants falls under Customs Tariff Heading No. 98. 01. If it falls under it, it is entitled to a concessional rate of duty. If not, it is chargeable to a higher duty.

( 3 ) THE Customs Tariff Act, 1975 was enacted by Parliament with a view to consolidate and amend the law relating to customs duties. It repealed the Indian Tariff Act, 1934 and Indian Tariff (Amendment) Act, 1949. Section 2 says that the rates at which duties and customs shall be levied under the Customs Act, 1962 are those specified in the First and Second Schedules. Section 3 levies additional duty equal to excise duty. Ch. 98 was introduced in the Schedule with effect from 28/02/1986. It relates to "project Imports; Laboratory Chemicals; Passengers Baggage, Personal Importation by air or post; Ship Stores". Ch. 98 provides a concessional rate of duty in respect of articles and items specified therein. Ch. Note (1 declares, "this Ch. is to be taken to apply to all goods which satisfy the conditions prescribed therein, even though they may be covered by a more specific heading elsewhere in this Schedule". In other words, if a particular article mentioned in Ch. 98 also falls under some other chapter/heading, still such item will be governed by Ch. 98 and not by that other chapter/heading. So far as photographic machinery is concerned, it is not disputed that it falls under Ch. 90 where the rate of duty is far higher. Ch. Note (2 which is of crucial relevance herein reads:

"heading No. 98. 01 is to be taken to apply to all goods which are imported in accordance with the regulations made under Section 157 of the Customs Act, 1962 (52 of 1962 and expressions used in this heading shall have the meaning assigned to them in the said regulations. "

(EMPHASIS supplied)

( 4 )

( 5 ) THE expression "industrial plant" is not defined in the Customs Tariff Act, 1975 or, for that matter, in the Customs Act, 1962. Ch. Note (2 of Ch. 98, which it must be emphasised is a part of statute itself, says that the expressions used in heading No. 98. 01 shall have the meaning assigned to them by the regulations made under Section 157 of the Customs Act and further that heading No. 98. 01 shall apply to all goods which are imported in accordance with such regulations.

( 6 ) AS contemplated by Ch. Note (2 of Ch. 98 of the Customs Tariff Act, the central government framed the Project Imports Regulations under Section 157 of the Customs Act, contained in notification No. 230/86-Cus. , dated 3/04/1986. They came into force on the same day. Regulation (1 of these regulations says that they shall be called "project Imports Regulations, 1986" and shall come into force on 3/04/1986. Regulation (2 says that the said regulations shall apply for assessment and clearance of goods falling under heading No. 98. 01. Regulation (3 defines certain expressions including the expression "industrial plant". The definition reads as follows:

" (A)industrial plant means an industrial system designed to be employed directly in the performance of any process or series of processes necessary for manufacture, production or extraction of a commodity, but does not include

(I) establishments designed to offer services of any description such as hotels, hospitals, photographic studios, photographic film processing laboratories, photocopying studios, laundries, garages and workshops; or

(II) a single machine or a composite machine, within the meaning assigned to it, in Notes 3 and 4 to Section XVI of the said First Schedule;"

( 7 ) A perusal of the definition of "industrial plant" makes it clear that it seeks to exclude industrial systems meant for "establishments designed tooffer services of any description". It mentions certain service establishments by way of