Holding

The appellant is not entitled to the total exemption from auxiliary duty under Notification 62/83; the Division Bench’s decision is affirmed.

Summary

Tamil Nadu Newsprint and Papers Ltd. imported machinery under a specific contract registered with customs under tariff heading 84.66 and had already received concessions on basic and additional customs duties under Notification 268/76. The company later claimed a total exemption from auxiliary duty under Notification 62/83, arguing that the machinery fell within one of the 19 items listed, specifically under heading 84.31. The Revenue contended that because the import was classified under 84.66, the company could only claim the reduced 20% auxiliary duty provided by Notification 61/83, not the total exemption. The Supreme Court held that the appellant could not re‑classify the machinery to 84.31 after having obtained benefits under 84.66, and therefore was not entitled to the exemption of Notification 62/83. Consequently, the appeals were dismissed, affirming the Division Bench’s decision.

Issues considered

Whether the appellant is entitled to the total exemption from auxiliary duty under Notification No. 62/83 when the machinery was imported under tariff heading 84.66.
Whether the appellant can re‑classify the imported machinery under heading 84.31 to claim the exemption.

Legislation cited

Customs Act, 1962s. 157, s. 25(1)
Customs Tariff Act, 1975s. Item 84.31, s. Item 84.66

Subjects

customs dutyauxiliary dutyexemption notificationtariff classificationcontract registrationSection 25(1) Customs ActNotification 62/83Notification 61/83import of machinery

Judgment

TAMIL NADlJ NEWSPRINT AND PAPERS LTD. A
v.
THE APPRAISER APPRAISING, DEPARTMENT,
CUSTOMS HOUSE AND ORS.

JANUARY 20, 2000
B
[DR. A.S. ANAND, 0., S. RAJENDRA BABU AND
R.C. 'LAHOTI, JJ.)

Customs Act 1962: Section 25(1).
c
Customs Tariff Act, 1975 : Item 84.66 and 84.31.

Customs Tariff-Notification No. 62183 dated J.3.1983-Exemption
from payment of auxiliary duty-Entitlement to-No:ification 61/83 dated
1.3.83--Applicability of. D

Assessee-lmport of certain items of machinery pursuant to a specific
contract registered with customs authorities for import of machinery falling
under Item 84.66-Assessee availed concession pursuant to that rr:gistered
contract in the matter of payment of basic customs duty as well as additional
duty in temis of Notification No. 268/76 dated 2.8.1976-Thereafter assessee E
claimed exemption from payment of auxiliary under Notification No.
62/83-Single Judge of High Court held that assessee was entitled to receive
benefit of Notification No. 62181--0n appeal by Revenue, Division Bench
reversed the decision of Single Judgc-Assessee preferred appeal before
Supreme Cowt--Benefit in payment of basic duty and additional duty, in F
terms of Notification No. 268176 dated 2.8.1976, has already been obtained
by the appellant for importing the machinery as per a contract registered with
the Customs Authorities under Tariff Item 84.66-Having so obtained that
benefit by claiming the imported machinery to be covered by tariff item 84.66,
it was not open to the appellant later on to canvass much less claim that the
machinery in question is covered by tariff Item 84.31, for receiving the benefit G
of total exemption under Notification 62/83 and that it is not liable to pay
auxiliary duty at the reduced rate of 20% on goods failing under tariff item
84.66 under Notification No. 61183-Therefore the appellant is not entitled to
the benefit of total exemption from payment of auxiliary duty under Notifica-
tion 62/83. H
327
328 SUPREME COURT REPORTS (2000) 1 S.C.R.
A CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5867-69
of 1994.

From the Judgment and Order dated 28.1.88 of the Madras High
Court in W.A. Nos. 2012-14 of 1987.

B V.R. Reddy, Soli J. Sorabjee, Anil B. Divan, Dr. L. M. Singhvi,
Ambrish Kumar, Somayji for the Appellants.

T.L.V. Iyer, Joseph Vallabh Pillai, A.K. Ganguli, T.C. Sharma, P.
Parmeswaran, A. Subba Rao, V.K. Verma, A.K. Srivastava for the Respon-
dents.
c
The following Order of the Court was delivered :

These appeals, by special leave have put in issue the judgment of the
Division Bench of the High Court of Madras, dated 28th January, 1988
D setting aside the judgment of a learned Single Judge dated 7th September,
1987 in a batch of Writ Petitions.

The short question which requires our consideration is : Whether in
the facts and circumstances of this case the appellant is entitled to the
benefit of the Exemption Notification No. 62/83, dated 1.3.83 issued by the
E Government of India in exercise of the powers under Section 25(1) of the
Customs Act, 1962? The question arises in the following circumstances :

The appellant imported certain items of machinery pursuant to a
specific contract registered with the Customs Authorities for import of
machinery falling under Item 84.66 of the Customs Tariff Act, 1975. The
F appellant has admittedly enjoyed the concession pursuant to that registered
contract in the matter of payment of basic custom duty as well as additional
duty. The appellant after having enjoyed that benefit also claimed benefit
of total exemption from payment of Auxiliary Duty under Notification
62/83, Customs, dated 1.3.1983. According to the appellant, since Notifica-
tion 62/83 was issued to grant total exemption from Auxiliary Duty on 19
G items in view of GAIT agreement, the appellant was also entitled to its
benefit since the machinery imported by him fell under one of the 19 items. .
According to the Revenue, however, the appellant was not entitled to claim
benefit of Exemption Notification 62/83, dated 1.3.1983 having imported
the machinery pursuant to the specific contract registered under heading
84.66 and that the appellant had to bear the auxiliary duty to the extent
H given in Notification 61/83, Customs, dated l.3.i983 vide which the auxiiiarY
TA.'dlL NADU NEWSPRINT AND PAPERS LTD. >. APPRAl~!NO AP RAISER DPTT. CUSTOMS HOUSE 329

duty on Item 84.66, besides some other items, had been reduced to 20%. A
The learned Single Judge, hearing the Writ Pt:tition took note of both the
above noticed Notifications and came to the conclusion that the appellant
was entitled to receive benefit of Exemption Notification 62/83 and not of ·
Notification 61/83. The Division Bench, however, accepted the appeal filed
by the Revenue and reversed the judgment of the learned Single Judge.
Hence, these appeals. B
We have heard learned counsel for the parties.

Tariff Item 84.31 reads as follows :

c
Heading Sub-Heading Standard Central
No. No. and descri- Rate of Excise
ption of Article Duty Tariff Item
(1) (2) (3) (4)
D
84.31 Machinery for making 40%
or finishing celluosic
pulp, paper or
paperboard.
- E
Item 84.66 reads thus :
----·
Heading Sub-Heading Standard Central
No. No. and descri- Rate of Excise
ption of Article Duty Tariff Item
(1) (2) (3) (4) F

84.66 (1) All items of: 40%
- ....
(a) Machinery including
prime-movers.
G
(b) Instruments, apparatus
and appliances.

(c) Control gear and
transmission equipment. H
330 SUPREME COURT REPORTS (2COOJ 1 S.C.R.
A (d) Auxiliary equipment as
well as all components
(whether finished or not)
or raw materials for the
manufacture of the
aforesaid items and their
B
components, required for
the initial setting up of a
unit, or the substantial
expansion of an existing
unit, of a specified :
c
(1) industrial plant,

(2) irrigation project,

(3) power project,
D
(4) mining project,

(5) project for the exploration
for oil or other minerals, and

E (6) such other projects as
Central Government may,
having regard to the economic
development of the country,
A=
notify in the Official Gazette
in this behalf :
F
"Providtd these are imported (whether in one or in more than one
consignment) against one or more specific contracts which have
been registered with the appropriate Custom House in the manner
prescribed by Regulations which the Central Board of Excise and
G Customs may make under Section 157 of the Customs Act, 1962
and such contract or contracts has or have been so registered
before any order is made by the proper Officer of Customs
permitting the clearance for home consumption or deposit in a
warehouse of items, components or raw materials."

H Notification 61/83, gave benefit of reduction in the rates of Auxiliary Duty
TAMIL NADU NEWSPRINT AND PAPERS LTD. " APPRAJSINU APRAISER DP'!T. CUS!DMS HOUSE 331

@ 20% on certain specified goods. Items 11 and 12 of that Notification A
read thus:

"11. Goods falling under Heading No. 84.31 but excluding paper
making machinery and component pwts thereof

12. Goods falling under Heading No. 84.66." B

The relevant portion of Notification No. 62/83, Customs, dated
1.3.1983 providing total exemption from Auxiliary Duty on 19 Item provides
in Item-15:

"15. 84.31 Paper making machinery and component parts thereof" c
A perusal of the Notification 61/83 (Supra) shows that against Item
No. 12, all goods falling under tariff No. 84.66 have been subjected to the
reduced Auxiliary Duty at 20% whereas in the Notification No. 62/83, no
exemption has been granted in respect of goods falling under Tariff Item D
84.66.

It is not disputed before us that benefit in payment of basic duty and
additional duty, in terms of Notification No. 268/76, dated 2.8.1976, has
already been obtained by the appellant for importing the machinery as per
a contrnct registered with the Customs Authorities under Tariff Item 84.66. E
Havinr: so obtained that benefit by claiming the imported machinery to be
covered by tariff Item 84.66, it was not open to the appellant later on to
canvass much less claim that the machinery in question is covered by tariff
Item 84.31, for receiving the benefit of total exemption under Notification
62/83 and that it is not liable to pay auxiliary duty at the reduced rate of
20% on goods falling under tariff item 84.66 under Notification No. 61/83. F
Whether or not the specific machinery imported by the appellant is also
covered by item No. 84.31, under the circumstances, was irrelevant and
apparently a devise to claim 'unavailable' benefit under Notification 62/83.

In the established facts and circumstances of the case, the appellant G
was not entitled to the benefit of total exemption from payment of auxiliary
duty under Notification 62/83 as rightly held by the Division Bench. These
appeals, therefore, fail and are hereby dismissed though for somewhat
different reasons, but without any order as to costs.

T.N.A. Appeals dismissed.