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Judgment
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.
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 good
imported for initial setting up of a paper mill of 90000 tones 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.
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 ''basis 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 manufactured 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 April of a year to the 31st March of the next year. The Finance
Act relevant in this case is the Finance Act, 1983. Section 45 thereof provided for levy and collection of auxiliary duty of customs at an amount
equal to fifty per cent of the value of the goods, in the case of goods mentioned in the First Schedule to the Customs Tariff Act. According to
Section 45(4) of the Finance Act, 1983, the provision of the Customs Act and Rules and regulations made thereunder, including those relating to
refunds and exemptions from duties shall, so far as may be, apply in relation to the levy and collection of the auxiliary duties of customs leviable
under that section in respect of any goods as they apply in relation to the levy and collection of the duties of customs on each goods under the
Customs Act, or the rules and regulations, as the case may be. It is by virtue of the said provision in Section 45(4) of the Finance Act, 1983, the
Central Government issued Notification No. 62/83-Cus., dated 1.3.1983 by invoking the power u/s 25(1) of the Customs Act. The Notification to
the extent relevant, reads thus :
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 interests so to do, hereby exempts the goods specified in column (3) of the Table
annexed hereto to 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.
Table
------------------------------------------------------------------------
Sl. No. Heading No. or sub-heading No. Description of goods
of Heading No. of the First Schedule
to the Customs Tariff Act 1975
------------------------------------------------------------------------
.... ..... .... ....
84.31 Paper making
machinery and
component parts
thereof.
...... ....... ......
------------------------------------------------------------------------
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.
Table
------------------------------------------------------------------------
S. No. Chapter No. In the First Description of good
Schedule to the Customs
Tariff Act, 1975
------------------------------------------------------------------------
.... .... .... ....
84 Goods falling under Heading
No. 84.31 but excluding paper
making machinery and component
parts thereof.
84 Goods falling under Heading
No. 84.66.
.... .... .... ....
------------------------------------------------------------------------
It is the contention of the respondent that the goods imported by them fall under the description ''paper-making machinery'' and component
parts thereof'' and therefore covered by Notification No. 63/83-Cus. On the other hand, it is the contention of the appellants that the goods
imported by the respondent are covered by entry No. 12 in Notification No. 61/83-Cus. as the import is made under a contract registered as per
the provisions of Heading No. 84.66 and Project Imports (Regulations of Contract) Regulations, 1965.
It is necessary at this stage to refer to the relevant entries in the First Schedule to the Customs Tariff Act under the Headings 84.31 and 84.66 :-
------------------------------------------------------------------------
Heading Sub-heading No. and Standard Central
No. description of article rate of Excise
duty Tariff
Item
------------------------------------------------------------------------
(1) (2) (3) (4)
------------------------------------------------------------------------
..... ..... ..... ..... .....
84.31 Machinery for making or
finishing cellulosic pulp,
paper or paper board 40%
..... ..... ..... ..... .....
84.66 (i) All items of 40%
(a) Machinery including prime movers;
(b) Instruments, apparatus and appliances;
(c) Control gear and transmission equipment.
(d) Auxiliary equipment, as well as all
components (whether finished or not)
or raw materials for the manufacture
of the aforesaid items and their
components required for the initial
setting up of a unit, or the
substantial expansion of an existing
unit, of a specified -
(1) Industrial Plant
(2) Irrigation project
(3) Power Project
(4) Mining project
(5) Project for the exploration of
oil or other minerals and
(6) Such other project as Central
Government may, having regard to the
development of the country, notify in
the Official Gazette, in this behalf.
Provided these are imported (where in
one or more than one consignment)
against one or more specific
contracts which have been registered
with the appropriate Customs House
in the manner prescribed by
Regulations which the Central Board
of Excise and Customs may make under
Section 157 of the Customs act, 1962
(52 of 1962), and such contract of
contracts has or have been registered
before any order is made by the proper
officer of Customs permitting the
clearance from home consumption, or
deposit in a warehouse of items,
component of raw materials;
(ii) All spare parts other raw materials 40%
(including semi-finished materials) or
consumable stores imported, as a part
of a contract or contracts, registered
in terms of sub-heading (i) provided
the total value of such spare parts,
raw materials, and consumable stores
does not exceed ten per cent value of
the goods covered by sub-heading (i)
and further provide that such spare
parts, raw materials or consumables
stores are essential for the maintenance
of the plant of project mentioned in
sub-heading (i).
------------------------------------------------------------------------
Regulations were framed in 1965 with reference to the contracts to be registered under the Heading No. 84.66. They are called Project Imports
(Registration of Contract) Regulations, 1965. Regulation No. 2 provides that the Regulations shall apply to every contract referred to in sub-
heading No. (i) of Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). The Procedure for registration of
contract is found in Regulation No. 3 Regulation No. 4 provides the assignment of a number to the contract while Regulations No. 5 prescribes the
procedure for the amendment of the contract.
The purpose of introducing Heading No. 84.66 in the First Schedule is to avoid hardship to the importers in establishing new projects which
may be caused by a delay in clearance by the Customs authorities. In respect of setting up of project initially or extending an existing project,
various equipments, machinery, apparatus, raw materials, spares and consumables, will be required. In the normal course, those items are
classifiable under different tariff heads, and they will attract different rates of customs duty. It would involve careful scrutiny of each and every item
for assessment, which would necessarily lead to a delay in clearance and certain amount of hardship on the importers. In order to alleviate the
same and to streamline the process of clearance of imported materials for the project as a whole and taking into consideration the purpose for
which the various items are imported, a separate heading numbered as 84.66 was incorporated in the First Schedule. It will not be out of place to
refer to the observations made by the Finance Minister when the Heading was introduced in the Act. Those observations are extracted in the
counter-affidavit filed by the Assistant Collector of Customs, Legal section, Customs House, in the writ petitions. They are as follows :-
There have been complaints that the import of equipment by project is impleaded as a result of meticulous assessment at the appropriate rates of
each constituent item required for setting up the project. I now propose to introduce a new tariff item to cover the import of equipment needed for
the initial setting up of new projects or for undertaking substantial expansion of existing projects in the fields of industry, power, mining and
prospecting for minerals or oil. Not only complete consignment but also component parts and raw materials imported specifically for fabricating
equipment within India, for a project and same quantity of initial stock of spare parts and others stores needed for the maintenance of the project
can be imported under this item. The contract of contracts would have to be registered in advance with the Customs authorities and a provisional
assessment will be made immediately obviating to the maximum possible extent the need for detailed assessment of individual lots, after the goods
arrive. The equipment is imported under the item will be charged to duty at the machinery rate....
A reading of the entry under the Heading 84.66 shows that it is not a residuary heading or a general heading relating to any class of goods. It is
specific entry introduced with the purpose and it relates only to goods imported for the initial setting up of a unit or a substantial expansion of an
existing unit of a specified industrial plant, irrigation project etc. When an importer registers a contract as required in the entry under the heading
84.66 all the goods imported by him under that contract will be subjected to duty only as per that entry. It will not be open to the Revenue to pick
out some of the goods imported under the contract and imposed a different rate of duty on the footing that they would be covered by a different
heading. If the conditions prescribed under the Heading No. 84.66 are satisfied, the duty is imposed on the goods imported under that heading, as
if they from the composite unit.
It is seen that the Heading No. 84.31, refers to machinery for making or finishing cellulosic pulp, paper or paperboards and the rate of duty is
40%. It so happens that the rate of duty under the Heading No. 84.66 is also 40%. If on any particular date, the rate of duty under the Heading
No. 84.31 is different from that under Heading 84.66, then the rate applicable to machinery imported for making or finishing cellulosic pulp, paper
or paperboards under a contract registered as per the Heading No. 84.66 will be the duty specified under the Heading No. 84.66 and not the duty
fixed under the Heading No. 84.31. Heading No. 84.31 will apply only to machinery imported otherwise than under a contract registered as per
Heading No. 84.66.
Turning to the Notification of exemption, it is seen that Notification No. 61/83 grants exemption to the goods specified in the Table appended
thereto from auxiliary duty of customs in excess of the amount calculated at the rate of 20 per cent of the value, Serial No. 11 of the Table refers to
goods falling under Heading No 84.31, but expressly excludes paper making machinery and component parts thereof, Serial No. 12 refers to all
goods falling under Heading 84.66. Serial No. 12 has to necessarily apply to paper making machinery and parts thereof, if they fall under Heading
No. 84.66. There is no exclusion of such machinery from that entry. Notification No. 62/83 exempts the whole of the auxiliary duty on paper
making machinery and component parts thereof falling under Heading No. 84.31. These is no entry in Notification No. 62/83 excepting paper
making machinery and component parts thereof falling under the Heading No. 84.66. Exemption from the whole of the auxiliary duty is available
only to such paper making machinery and component parts thereof, which would fall under the Heading No. 84.31. The following words in
Notification No. 62/83 viz., ''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...."" are very significant. The Notification prescribes two conditions for exemption. The first conditions is that the goods must be
of the description specified in column (3) of the Table and the second conditions is that the good must fall under Heading No. or sub-heading No.,
of Heading No. of the First Schedule specified in column (2) of the Table. If certain goods fall under a description found in column (3) of the Table
and do not fall under the heading specified in column (2), they would not be covered by the Notification. Similarly, if certain goods fall under the
Heading specified in column (2) but do not satisfy the description in column (3) of the Table, they would also not be covered by the Notification.
Thus, on a plain regarding of the Notification, it is clear that the paper making machinery and parts thereof would be exempted from the whole of
the auxiliary duty of customs only if they fall under the Heading No. 84.31. When Notification No. 61/83 refers to both Heading Nos. 84.31 and
84.66 but excludes paper making machinery and component parts thereof falling under Heading No. 84.31 only, it is clear that the Central
Government did not intend to treat paper making machinery and components parts thereof as a separate class by itself fit for exemption from the
whole of the auxiliary duty, whether they were imported under a contract registered under the Heading 84.66 or not.
Our attention is drawn to two other Notifications of exemptions issued by the Central Government. The first of them is Notification No. 268-
Cus., dated 2-8-1978, exempting goods falling under Heading No. 84.66 of the Fast Schedule to the Customs Tariff Act from the whole of the
additional duty leviable thereon u/s 3 of the said Act. There is no difficulty in construing the said Notification as it exempts all the goods falling
under Heading No. 84.66. The other Notification is Notification No. 217-Cus., dated 26.9.1981. It reads as follows :-
Exemptions to articles imported for manufacture of newsprint and printing and writing paper. - In exercise of the powers conferred by sub-section
(1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to
do, hereby exempts the articles, falling under Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when
imported into India for manufacture of newsprint and printing and writing paper, from so much of that portion of the duty of customs leviable
thereon which is specified in the said First Schedule as is in excess of 30 per cent ad valorem subject to the conditions that -
(i) at least 75 per cent bagasse plus is used for such manufacture, and
(ii) the Directorate General of Technical Development certifies in each case that such articles are or will be required for the purpose specified
above.
It is common ground that the respondent was entitled to the benefit of this Notification as the conditions prescribed therein were satisfied. It is
significant to note that the Notification does not exempt in general all the articles imported into India for manufacture of newsprint and printing and
writing paper where at least 75% bagasse pulp is used for such manufacture, and the Directorate General of Technical Development certifies in
each case that such articles are required for the said purpose. But, it exempts only those articles falling under Heading No. 84.66 of the First
Schedule. It is a condition precedent for claiming exemption under the said Notification that the import should be under Heading No. 84.66. When
the Central Government takes care to specify the Heading and grants exemption to goods of a particular description under that Heading, it will not
be open either to the importer or to the Customs Department to contend that the Notification would apply to all goods of such description whether
they all fall under that heading or not. In our view, the relevant Notification, viz., Notification No. 61/83 and Notification No. 62/83 are
unambiguous in their terms and there is no question of overlapping. We hold that the respondent is not entitled to the benefit of Notification No.
62/83 and the appellants are right in levying auxiliary duty as per the terms of Notification No. 61/83.
A somewhat similar question arose before the Supreme Court of India in Jain Engineering Co. Vs. Collector of Customs, Bombay and others,
, and it happened to be a converse case. The appellant before the Supreme Court claimed the benefit of the Notification No. 281/76-Cus. granting
part exemption from payment of customs duty in respect of the rod bushes and camshaft bushes imported by the appellant therein. The entry in the
exemption notification referred to internal combustion piston engines for industrial and agricultural tractors and power tillers and parts thereof,
which covered bushes imported by the appellant in that case. The Heading in the First Schedule of the Customs Tariff Act, viz. Heading No. 84.06
referred to internal combustion piston engines. The entry under the Heading No. 84.06 did not refer to parts of such engines. The contention
before the Supreme Court advanced on behalf of the Revenue was that as the entry in Heading No. 84.06 did not refer to the parts of internal
combustion piston engines, the appellant in that case was not entitle to claim exemption when he imported only the parts. Secondly it was
contended that even if the entry had contemplated parts of the engine such parts should be all the parts of the engine and not a few parts thereof.
Both the contentions were rejected by the Supreme Court. The third contention which was put forward was that some of the parts imported would
be covered by entry in Heading No. 84.63, and therefore, it would not fall under the Notification of exemption which specifically related to goods
falling under Heading No. 84.06. Repelling that contention, the Supreme Court observed thus -
In view of our findings that the notification exempts also parts of the engine mentioned in paragraph 2 of column (2) of the Table, In order to
avail of the benefit of the exemption granted by the notification, it has to be proved that the parts in respect of which the exemption is claimed, are
parts of the internal combustion piston engine, as mentioned under Heading No. 84.06. Some of such parts may have been included under
Heading No. 84.63. In other words, as soon as it is proved that the parts are of the engines mentioned in Heading No. 84.06, such parts will get
the benefit of exemption as provided by the notification irrespective of the fact that they or any or some of them have already been included under
Heading No. 84.63, or under any other heading. Therefore, even if bushings are the same as bearings, still they would come within the purview of
the notification, provided they are parts of the engines mentioned under Heading No. 84.06. The contention of the Customs authorities that the
article, which is provided under another heading other than Heading No. 84.06, will not get the exemption as provided in the notification, is not
readily understandable. When the notification grants exemption to the parts of the engines, as mentioned under Heading No. 84.06, we find no
reason to exclude any of the such parts simply because it is included under another heading. The intention of the notification is clear enough to
provide that the parts of the engine, mentioned under Heading No. 84.06 will get the exemption under the notification and in the absence of any
provision to the contrary, we are unable to hold that the pars of the engines, which are included under a heading other than Heading No. 84.06,
are excluded from the benefit of the notification.
The aforesaid ratio will apply on all fours to the present case. When the exemption notification refers specifically to Heading No. 84.31, and
describes certain goods falling under that heading, it will not be open to the importer to contend that the goods falling under another heading, viz.,
Heading No. 84.66 would be covered by the notification.
Learned counsel for the respondent repeated the contentions urged before the learned Single Judge and upheld by him. The first contention is
that the principle generalia specialibus non deragant would apply to this case. According to the learned counsel, Heading No. 84.66 is a general
entry and Heading No. 84.31 is a special entry and the exemption notification grants exemption to goods of a specific description viz. paper
making machinery and parts thereof, and, therefore, the special provisions should prevail over the general proviso. We do not agree with learned
counsel for the respondent as the Heading No. 84.66 is not a general entry. It is specific entry brought in.
The second contention urged by learned counsel is that a fiscal law has to be construed in favour of the tax-payer and not in favour of the
Revenue. That will be so only if there is any ambiguity in the language of the relevant provision. If the concerned, provision is clear enough, it has to
be given its plain meaning. It is well known that fiscal enactments have to be construed strictly according to their terms. There is no question of its
being interpreted in favour of the tax-payer when there is no ambiguity in the language Learned Counsel for the respondent places reliance of
Commissioner of Income Tax Vs. Balapur Sugar and Allied Industries Ltd., in support of his proposition. As we do not find any ambiguity in the
language of the relevant notification, the principle laid down in that case will not apply. Passages were read from Maxwell on the Interpretation of
Statutes, and Craies on Statute Law in support of the contention that ''subject is not to be taxed unless the language of the statute clearly imposes
the obligation''. Reliance is placed upon the dictum of Rowlatt J. in Cape Brandy Syndicate v. I.R.C. 1981 1 K.B. 64 found in the following terms
:-
In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax.
Nothing is to read in, nothing is to be implied. One can only look fairly at the language used.
There is nothing with a specific purpose. It is not a residuary entry, as pointed out already. The principle that special excludes general, will not
apply to this case. The exemption Notification No 62/83, has to be understood on its terms and the language thereof has to be given full effect. If
the exemption notification had merely referred to the description of the goods as papermaking machinery and parts thereof without referring to any
Heading in the first Schedule, the contention urged by learned counsel for the respondent may have some force. But the notification expressly
refers to the heading under which the goods shall fall. There cannot be one heading for purpose of levying duty and another heading for purposes
of exemption. When the notification refers to the heading and exempts goods falling within that category, that cannot be availed of in cases where
the goods are not covered by that category. Hence, the decision of the Supreme Court in Superintendent of Central Excise, Surat and Others Vs.
Vac Met Corpn. (P) Ltd., etc. etc., and Atul Glass Industries (Pvt.) Ltd. Vs. Collector of Central Excise, relied on by learned counsel for the
respondent are not applicable to the present case. There two decisions lay down that when certain articles will fall under a specific entry, they
cannot be dealt with under a general entry, presumption as to a tax.
Far from helping learned counsel for the respondent, the dictum of Rowlatt J. favours the appellants in this case. On a plain reading of what is
clearly said in the notification, we have not doubt that the respondent is not entitled to the benefits of the exemption granted therein.
Learned counsel for the respondent drew our attention to the decision of the Bombay High Court in Bombay Paints and Allied Products Ltd.
Vs. Union of India and others, and that of the Cegat Special ''C'' Bench, New Delhi in Indye Chemicals, Ahmedabad v. Collector of Central
Excise, Ahmedabad, 1986 (25) ELT 318 (Tri) for the proposition that whenever there is any doubt in the meaning of an exemption notification, the
benefit of doubt must go to the assessee, so that the tax burden is lessened. In the present case, there is no question of giving any benefit of doubt
to the assessee as the notification of exemption is very clear in its meaning.
Learned counsel places reliance on the decision of the Supreme Court in Commissioner of Income Tax, Punjab Vs. Kulu Valley Transport Co.
P. Ltd., and the judgment of Venkataswami, J. in M/s. Raj Continental Exporters, Bangalore by Sampathraj v. Union of India, rep. by Secretary,
Ministry of Finance, New Delhi and others - W.P. 1429 of 1985 dated 14.5.1985 and that of a Division Bench in Union of India rep. by
Secretary, Ministry of Finance, New Delhi & another v. M/s. Raj''s Continental Exports Ltd., Bangalore, rep. by Sampathraj W.A. 451 of 1985
dated 28-6-1985, confirming the judgment of Venkataswami J. in support of his contention that if two views are possible the view which is
favorable to the assessee must be accepted while construing the provisions of a taxing statute. The proposition as such is not disputed by learned
counsel for the appellants. In the view we have expressed already, the above proposition will not apply to the facts of this case.
Learned counsel for the respondent submitted that the notification of exemption dealt with auxiliary duty only and not with additional duty or
basis duty. Learned counsel submitted that auxiliary duty is different from additional duty and basis duty and just because the goods were dealt
with under a particular heading for the purpose of basic duty and additional duty, they could not be classified under the same heading for the
purpose of auxiliary duty. Learned counsel invited our attention to the decision of the Supreme Court in Union of India (UOI) and Others Vs.
Modi Rubber Ltd., . In that case, the notification issued under Rule 8(1) of the Central Excise Rules, 1944, used the expression ''duty of excise''.
The Supreme Court held that the expression bears the same meaning which it has in Rule 8(1) and that meaning clearly is excise duty payable
under the Central Excises and Salt Act, as envisaged in Rule 2, clause (v), and that it cannot in the circumstances bear an extended meaning so as
to include special excise duty and auxiliary excise duty. It was, therefore, held that the assessee was entitled to exemption only in respect of basis
duty of excise leviable under the Central Excises and Salt Act, and not entitled to claim any exemption in respect of special duty of excise or
additional duty of excise of auxiliary duty of excise. We are at a loss to understand how this decision can help the respondent in the present case.
Auxiliary duty is levied u/s 45(1) of the Finance Act. As we have been already, the headings found in the First Schedule to the Customs Tariff Act
are adopted for the purpose of auxiliary duty. Exemption from auxiliary duty is granted by the power u/s 45(4) of the Finance Act read with
Section 25 of the Customs Act. The said headings as are relevant for levying the auxiliary duty will be applicable or the application of the
notification of exemption.
It was next argued that just because the respondent had the benefit of exemption from the whole of the additional duty under Notification No.
268-Cus., dated 2.8.1976 and a reduction of the duty to 30% ad valorem under Notification No. 271-Cus., dated 26-9-1981, the respondent
cannot be deprived of the benefit of Notification No. 62/83, dated 1.3.1983 as there is no provision in law denying a double benefit to a tax-
payer. Reliance is placed on the decision in C.P & Berar Provincial Co-op Bank. Ltd., Nagpur v. Commissioner of Income Tax, U.P., Lucknow,
14 ITR 479 and Commissioner of Income Tax (Central) Vs. Express Newspapers Ltd., in support of the said proposition. Again, the proposition
is not disputed by learned counsel for the appellants. It is not the contention of the appellant that the respondent would be getting a double
advantage if the Notification No. 62/83 is applied to the goods in question, and, therefore, the notification is not available to them; but, the
contention is that on the terms of the notification, it cannot be invoked by the respondent. We have already held that a notification will not apply to
the goods imported by the respondent under a contract registered under Heading No. 84.77.
Yet another contention was urged by learned counsel for the respondent that the Notification No. 62/83 is made by the Central Government
pursuant to its obligation under the General Agreement on Tariffs and Trade (GATT). He points out that India is one of the contracting parties to
the GATT and is bound to give effect to the terms thereof Learned counsel invites our attention to the following passage at page 1968 of Volume
17 of Encyclopaedia Britannica -
Efforts to liberalise trade : A great tide of protectionism rose during the depression of the 1930s, when industrial nations raised tariffs and other
barriers to trade in an attempt to held domestic producers. Since most countries adopted these ''begar-my-neighbour'' policies, the effect was to
stifle trade. The gains to protected industries were offset by the harm to export industries. As the failure of these policies became apparent,
proposals to stem the tide of protectionism and to reduce tariffs though multilateral agreement were put forward. Political and economic
uncertainties prevented the realisation of these goals in the years preceding World War II.
The post-World War II period witnessed several efforts to reduce tariff barriers. Prominent among these were the tariff reductions undertaken in
the framework of the General Agreement on Tariffs and Trade (GATT) after that organisation came into being in 1948. GATT members include
virtually all major trading nations of the world, but only the more developed countries have participated in the successive rounds of tariff reduction.
But such reductions are automatically applied to imports from developing member countries, under the most-favoured-nation clauses, the
contracting parties to GATT assume the obligation to extend one another the tariff concessions accorded to any one member country.
Another central feature of GATT is the principle of reciprocity; mutual tariff concessions are designed to lead to equivalent increases in the exports
and imports of each participant. The principles of non-discrimination and reciprocity often conflict, since the agreed-upon tariff reduction are
extend to countries nor obliged to reciprocate. To lessen this effect of giving ''free ride'' to third countries much tariff bargaining was carried out in
an item-by-item basis in the post-war period. This approach limited the scope of tariff reduction and, after initial successes, the progress of
multilateral trade liberalisation slowed down.
It is therefore submitted by learned counsel for the respondent that the 19 Items set out in Notification No. 62/85 are entitled to exemption from
whole of the auxiliary duty of customs and papermaking machines and component parts thereof being Item No. 15 should have the benefit of
exemption, whether they fall under Heading No. 84.31 or Heading No. 84.66. We do not agree. It is not for us to consider the motive or the
purpose of the notification. We are bound by the language of the notification, which, in our view, is very clear and unambiguous. On the terms of
the notification, the goods described in column (3) will have the benefit of exemption only if they fall under the heading mentioned in column (2) of
the Table attached to the notification.
The learned Single Judge has rested his conclusion on the two principles (1) generalia specialibus non-derogant and (2) the rule of construction
of fiscal law should be in favour of the tax-payer. We have already pointed out that both the principles are not applicable to the facts of this case
and they do not help the respondent.
In the result, the order of the learned Single Judge allowing the three writ petitions has to be set aside. The appeals are allowed and the writ
petition Nos. 2054, 3257 and 3258 of 1983 are dismissed. There will be no order as to costs.