1999 (3) TMI 80 - SC - Customs

whether the entry 58 of the notification using word Machine in singular not plural viz. Machines , could it include other machines referred in the same notification for granting exemption or it qualifies only one composite machine for resistor to give benefit under it? Held that - The Tribunal gave good reasons for rejecting the interpretation given by the department. Having considered the submissions for the parties we find in case interpretation given by the department is to be accepted, no assessee could get exemption unless all the machines are imported as one composite machine reference of each separate machines with ( ) would have no meaning. This will make this notification unworkable, hence Tribunal rightly rejected Revenue interpretation. The notification has to be interpreted to give true import and meaning, not to make it purposeless and nugatory. It is well settled which is also provided in Section 13 of the General Clauses Act, 1897 of the Central Acts that unless there is anything repugnant to the subject or context the word singular shall include plural and vice versa. The Tribunal interpreted the word machine to be machines and, in our opinion, rightly so. It seems by this restrictive interpretation the very purpose of this notification since completely diluted which led into clarification/modification by the Government through the aforesaid letter. Appeal dismissed.

Summary

Issues: Interpretation of entry 58 of Notification No. 118/80-Cus regarding exemption for machines performing specific tasks.

Analysis:
1. Interpretation of Entry 58: The central issue in this case was the interpretation of entry 58 of Notification No. 118/80-Cus, which pertains to the exemption for specific machines. The dispute arose from the question of whether the word 'Machine' in the entry should be understood as singular or plural, affecting the eligibility for exemption under the notification.

2. Department's Argument: The Department contended that each machine imported by the respondent could not individually perform all tasks listed in entry 58. They argued that since the entry referred to 'Machine' and not 'Machinery,' the benefit of exemption could not be granted to the assessee for each separate machine. The Appellate Collector and the Revenue supported this interpretation, leading to the rejection of the respondent's appeal.

3. Assessee's Argument: On the other hand, the assessee argued that the term 'Machine' should be read as 'Machines' to align with the true intent of the notification. They claimed that each machine listed in the entry should be entitled to the exemption individually. This interpretation was crucial for the assessee to qualify for the benefits under the notification.

4. Tribunal's Decision: The matter escalated to the Tribunal, which ultimately allowed the revision filed by the assessee. The Tribunal rejected the Revenue's interpretation, emphasizing that if the Department's view was accepted, no assessee could avail exemption unless all machines were imported as one composite unit. The Tribunal's decision was based on the principle that the notification should be interpreted to serve its purpose and not render it ineffective.

5. Legal Precedents: The Revenue relied on legal precedents emphasizing strict construction of exempting provisions, placing the burden on the assessee to clearly establish eligibility for exemption. However, the Tribunal's decision in this case aligned with the principle that ambiguous provisions should be construed in favor of the assessee, especially when the notification's purpose would otherwise be defeated.

6. Final Judgment: The Supreme Court upheld the Tribunal's decision, affirming that the word 'Machine' in the notification should be understood as 'Machines' to ensure the notification's efficacy. The Court highlighted the general principle that singular terms can include the plural form unless context dictates otherwise. Consequently, the appeal by the Collector of Customs was dismissed, emphasizing that the restrictive interpretation would have diluted the notification's purpose.

In conclusion, the judgment clarified the interpretation of entry 58 of Notification No. 118/80-Cus, highlighting the importance of aligning legal interpretations with the true intent of statutory provisions to prevent rendering them ineffective.