1992 (4) TMI 49 - HC - Customs

Customs - Delegated legislation - Act and Rules - Classification of goods (Customs) - Project imports - Industrial plant

Summary

Issues Involved:
1. Classification of imported photographic machinery under Tariff Heading No. 98.01.
2. Validity of the definition of "industrial plant" under the 1986 Regulations.
3. Interpretation of "industrial plant" in common parlance versus regulatory definition.
4. Legislative authority and regulation-making power of the Board under Section 157 of the Customs Act.

Detailed Analysis:

Issue 1: Classification of Imported Photographic Machinery
The primary issue was whether the photographic machinery imported by the petitioners fell under Tariff Heading No. 98.01, which provided a concessional rate of duty. The court noted that prior to 28th February 1986, such machinery could be classified under Heading No. 84.66, which allowed for a concessional rate of duty for machinery required for the initial setting up or substantial expansion of a unit, subject to specific conditions. Post-28th February 1986, the relevant heading was changed to 98.01, which included similar provisions but was governed by new regulations, the "Project Import Regulations, 1986."

Issue 2: Validity of the Definition of "Industrial Plant" under the 1986 Regulations
The petitioners argued that the definition of "industrial plant" in the 1986 Regulations, which excluded establishments like photographic studios and film processing laboratories, was ultra vires Heading No. 98.01. The court examined whether the Board had the authority to define "industrial plant" in a manner that excluded the petitioners' goods. It was found that the definition provided by the Board was within its regulation-making powers under Section 157 of the Customs Act.

Issue 3: Interpretation of "Industrial Plant" in Common Parlance versus Regulatory Definition
The petitioners contended that the term "industrial plant" should be given its ordinary meaning, which would include their photographic machinery. The court held that while typically, legislative terms are given their common parlance meaning, in this case, the legislative scheme explicitly allowed the Board to define terms used in Heading No. 98.01. Therefore, the regulatory definition provided by the Board, which excluded the petitioners' goods, was valid and applicable.

Issue 4: Legislative Authority and Regulation-Making Power of the Board
The court addressed whether the Board had overstepped its regulation-making authority under Section 157 of the Customs Act by defining "industrial plant" in a restrictive manner. It was concluded that the Board's actions were within the scope of its powers, as the Customs Tariff Act and the Customs Act formed a composite legislative scheme, and the Board was explicitly empowered to define terms for the purposes of Heading No. 98.01. The court also noted that the petitioners' challenge did not extend to the legislative delegation itself but only to the regulations framed under it.

Conclusion:
The court dismissed the writ petitions, holding that the photographic machinery imported by the petitioners did not fall under Tariff Heading No. 98.01 due to the valid and applicable definition of "industrial plant" in the 1986 Regulations. The Board's regulatory definition was within its legislative mandate, and the petitioners were not entitled to the concessional rate of duty under Heading No. 98.01.