IMPORTANT POINT
Where the exemption notification ex facie applies, there is no reason as to why the purport thereof would be limited by giving a strict construction thereto.

Headnote:(a) Judicial Interpretation – Although an exemption notification should be construed directly but its interpretation would depend upon the nature and extent thereof – Where the exemption notification ex facie applies, there is no reason as to why the purport thereof would be limited by giving a strict construction thereto. (Para 20)
        (b) Customs Act, 1962 – Section 25(1) – In view of the entries and the purport and object the notification sought to achieve, the Commissioner (Appeals) and the Tribunal cannot be said to be wrong in their findings that the equipment in question would be entitled to the benefit of exemption. (Para 22)
       Facts of the case :
        1. Respondent No. 2, for the purpose of setting up a crude petroleum refinery was required to make erections at 28 different locations. For the said purpose, it entered into a contract with M/s. Europa BV of Holland on or about 23.10.1997 with effect from 20.11.1997 for supply of the crane and the trailer. A heavy duty platform ringer mobile crane and other equipments were imported on or about 31.1.1998
        2. Respondent claimed the benefit of concessional rate of duty showing the value of the imported item to be US $ 34,84,500 (CIF). The said declaration of valuation was made for custom purposes only.
        3. A total customs duty of Rs. 20,04,58,132/- was assessed by the Superintendent of Customs.
        4. A show cause notice was issued as to why the differential customs duty of Rs. 18,62,92,602/- should not be directed to be paid by the respondent.
        5. An appeal was preferred thereagainst. The Commissioner (Appeal), in terms of his order dated 5.5.2000 opined that the imported item was a self-propelled modular transport system. He furthermore found that the assessment having been made behind the back of the respondent, the same was violative of the principles of natural justice.
        6. The Tribunal agreed with the said findings of the Commissioner. It was found that such mounted cranes primarily used for hauling pressing or changing the site of operation and thus would be classified under Heading 84.26 or under Heading 8431 even if presented with the tractor (whether or not mounted thereon), such tractors, with its operating equipment are to be classified separately under Heading 87.01.
       Findings of the Court :
        There is no infirmity in the orders of Commissioner (Appeals) and the Tribunal. No interference is required.
       Result : Appeal dismissed with cost.

JUDGMENT

S.B. Sinha, J. —

1. The validity of an exemption notification bearing No.11/97-Cus dated 1.3.1997 as amended by notification No.55/97-Cus dated 13.6.1997 granting exemption to various imported goods including EOT mobile crane required for setting up crude petroleum refinery subject to fulfillment of certain conditions, is in question in this appeal which arises out of judgment and order dated 8.7.2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Court No. 2.

2. The fact that the crane in question was imported for using the same in setting up a refinery is not in dispute. What is in dispute is that whether a crane when placed on a vehicle which the appellant wrongly stated to be a ‘motor vehicle’ would fulfill the description of a mobile crane or a ‘material handling equipment’. Valuation of the said crane was also questioned. The fact that different parts of the said crane were imported by the respondent herein as second hand equipment is also not in dispute. It is, however, accepted that the original manufacturers of the two part of the said equipment were different. We may, at the outset, notice that the Notification dated 11.4.1997 was issued by the Central Government, in exercise of its power conferred upon it under Section (1) of Section 25 of the Customs Act, 1962, being satisfied that it was necessary in the public interest so to do, made further amendment in notification No.11/97, CUS. dated 1.3.1997, the relevant entry whereof is as under :

“(1) (2) (3) (4) (5) (6)

144A 84 or any Goods specified Nil Nil-”

other in List 8 A7 Chapter required for setting up crude petroleum refinery.

3. By reason of the amendment, it was, inter alia, provided that in the annexure, for List 8A the goods specified therein shall be substituted, relevant portion of which reads as under :

“16. All types of Materials Transporting Equipments, including loading and unloading arms and racks; gantries, dispatch tanks, loading/ transfer pumps, hydraulic systems, weighbridges, Diesel shunters, feed or injenction or spray nozzles, skimmers, soot blowers; with instrumentation and control systems, including load cells and metering stations.

xxx xxx xxx

18. All types of Material Handling Equipments, including belt or pneumatic conveyors, ducts, hoists, bucket or jib cranes, (with or without access gangways), pipes and hoses, funnels, hoppers, disenganging lock hoppers; catalyst addition pots, valves and sampler devices; bagging, weighing and bag stitching systems; weigh bridges; buoy systems for crude oil receipt; pipeline end manifolds with valves, tenders, mooring aids, laser docking systems, product tanker loading facilities; with associated equipments, instrumentation and control systems and auxiliaries.

xxx xxx xxx

44. Special Maintenance Systems, including hydrojetting tools, pneumatic torque wrenches; EOT/mobile cranes; hoists, grinders, high pressure cleaning systems, induction bending machines; auto welding machines, various welding equipments like girth-welding, vertical flux cord, bottom saw, four side edge preparation, angle rolls; rolling and leveling machines, sky climbers, hot tapping machines, bolt tensioners, high pressure test pumps, tube bundle pullers, tube nippers, ultrasonic leak detectors, machine condition monitoring systems and associated sub-assemblies; vibration analysers and computerized alignments systems.”

4. Respondent No. 2, for the purpose of setting up a crude petroleum refinery was required to make erections at 28 different locations. For the said purpose, it entered into a contract with M/s. Europa BV of Holland on or about 23.10.1997 with effect from 20.11.1997 for supply of the crane and the trailer. Pursuant to and in furtherance of the said contract, a heavy duty platform ringer mobile crane and other equipments were imported on or about 31.1.1998 wherefor the bill of entry contained the following declaration in respect of the

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2008 Supreme(SC) 903

2008(4) Supreme 157SUPREME COURT OF INDIA(From CESTAT)S.B. Sinha, J.Commissioner of Customs, (Prev.) Gujarat — AppellantversusM/s Reliance Petroleum Ltd. — RespondentsCivil Appeal No. 1831 of 2006Decided on : 16-05-2008

IMPORTANT POINT Where the exemption notification ex facie applies, there is no reason as to why the purport thereof would be limited by giving a strict construction thereto.

2008(4) Supreme 157
SUPREME COURT OF INDIA
(From CESTAT)
S.B. Sinha, J.
Commissioner of Customs, (Prev.) Gujarat — Appellant
versus
M/s Reliance Petroleum Ltd. — Respondents
Civil Appeal No. 1831 of 2006
Decided on : 16-05-2008

IMPORTANT POINT
Where the exemption notification ex facie applies, there is no reason as to why the purport thereof would be limited by giving a strict construction thereto.