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High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. S RATNAVEL PANDIAN & THE HONOURABLE MR. JUSTICE SRINIVASAN
Appraiser, Madras Customs - Appellant
Versus
Tamil Nadu Newsprint Papers Limited - Respondent
Case No : W.A. No. 2012 to 2014 of 1987
Decided On : 28 January 1988
CUSTOMS - AUXILIARY DUTY - EXEMPTION - PAPER-MAKING MACHINERY AND COMPONENT PARTS THEREOF - NOTIFICATION NO. 62/83-CUS., DATED 1-3-1983 - INTERPRETATION - WHETHER THE RESPONDENT IS ENTITLED TO THE BENEFIT OF THE NOTIFICATION.
Fact of the Case:
The respondent, a public limited company, registered a contract as per Heading No. 84.66 of the Customs Tariff Act, 1975, and Project Imports (Registration of Contracts) Regulations, 1965 with the Custom House, Madras, for clearance of the goods imported for initial setting up of a paper mill of 90000 tonnes capacity. The goods imported were assessed to duty under the Heading No. 84.66 of the Customs Tariff Act. The respondent claimed exemption from the whole of the auxiliary duty of customs leviable under sub-clause (1) of clause 45 of the Finance Bill, 1983, with respect to paper-making machinery and component parts thereof imported by them, relying on Notification No. 62/83-Cus., dated 1-3-1983.
Finding of the Court:
The Court held that the respondent was not entitled to the benefit of Notification No. 62/83-Cus., dated 1-3-1983, granting exemption from the whole of the auxiliary duty of customs leviable under sub-clause (1) of clause 45 of the Finance Bill, 1983, with respect to paper-making machinery and component parts thereof imported by the respondent. The Court found that the goods imported by the respondent fell under the description 'paper-making machinery' and component parts thereof and therefore covered by Notification No. 63/83-Cus. However, the Court held that Notification No. 62/83-Cus. specifically excluded paper making machinery and component parts thereof falling under Heading No. 84.66. Therefore, the respondent was not entitled to the benefit of Notification No. 62/83-Cus.
Issues: Whether the respondent is entitled to the benefit of Notification No. 62/83-Cus., dated 1-3-1983, granting exemption from the whole of the auxiliary duty of customs leviable under sub-clause (1) of clause 45 of the Finance Bill, 1983, with respect to paper-making machinery and component parts thereof imported by the respondent.
Ratio Decidendi: The Court interpreted Notification No. 62/83-Cus., dated 1-3-1983, and held that it specifically excluded paper making machinery and component parts thereof falling under Heading No. 84.66. Therefore, the respondent was not entitled to the benefit of Notification No. 62/83-Cus. The Court also held that the principle 'generalia specialibus non derogant' did not apply to the case as Heading No. 84.66 was not a general entry but a specific entry introduced with a purpose.
Final Decision: The appeals were allowed and the writ petition Nos. 2054, 3257 and 3258 of 1983 were dismissed.
SRINIVASAN, J
The only question involved in these appeals is whether the respondent is entitled to the benefit of the Notification No. 62/83-Cus., dated 1-3-1983, granting exemption from the whole of the auxiliary duty of customs leviable under sub-clause (1) of clause 45 of the Finance Bill, 1983, with respect to paper-making machinery and component parts thereof imported by the respondent.
2.The respondent is a public limited company incorporated under the Companies Act, with the main object of establishing an industrial plant for manufacturing newsprint and writing and printing paper. The respondent registered a contract as per Heading No. 84.66 of the Customs Tariff Act, 1975, and Project Imports (Registration of Contracts) Regulations, 1965 with the Custom House, Madras, for clearance of the goods imported for initial setting up of a paper mill of 90000 tonnes capacity. As and when Bills of Entry were filed by the clearing agents of the respondent, the goods imported were assessed to duty under the Heading No. 84.66 of the Customs Tariff Act.
3.Section 2 of the Customs Tariff Act, provides for levy of duties as specified in the First and Second Schedules to the Act, which is commonly known as 'basic duty'. Section 3 of the said Act provides for levy of additional duty equal to the excise duty for the time being leviable on a like article if produced or manufacturred in India. A practice came into existence during recent years to levy a duty under the heading 'auxiliary duty' as a provision in the Annual Finance Acts, with a life period of only one year from 1st of April of a year to the 31st March of the next year. The Finance Act relevant in this case is the Finance Act, 1983
"Exemption from auxiliary duty on 19 items on which duty is bound under the GATT." *
In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), read with sub-clause (4) of Clause 45 of the Finance Bill, 1983, which clause has, by virtue of the declaration, made in the said Bill under the Provisional Collection of Taxes Act, 1931 (Act 16 of 1931); the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table annexed hereto and falling under Heading No. or sub-heading No. of Heading No. of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), specified in the corresponding entry in column (2) of the said Table, when imported into India, from the whole of the auxiliary duty of customs leviable thereon under sub-clause (1) of Clause 45 of the said Finance Bill.
4.On the same day, another notification was issued by the Central Government bearing No. 61/83-Cus., reading as follows :-
"Effective rates of auxiliary duty at 20 per cent on certain specified goods.-In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), read with sub-clause (4) of Clause 45 of the Finance Bill 1983, which clause has, by virtue of the declaration made in the said Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of the Table annexed hereto and falling within the Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the auxiliary duty of customs leviable thereon under sub-clause (1) of Clause 45 of the said Finance Bill as is in excess of the amount calculated at the rate of 20 per cent of the value of such goods as determined in accordance with the provisions of Section 14 of the first mentioned Act.
5.It is the contention of the respondent that the goods imported by them fall under the description 'paper-making machinery' and component parts
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