1990 (9) TMI 110 - SC - Customs

Whether the provisions of said paragraph 85 of the Import Trade Control Hand Book, 1969 prohibited the import of stainless steel strips? Held that - If the entry contained only the words stainless steel it was possible to argue that stainless steel in any form whether strips, sheets, plates, circles, ingots, rods etc. was included in it and hence prohibited. But the entry proceeded to mention the specific forms of stainless steel. It would mean that stainless steel only in its original form whatever it may be and its specific forms enumerated therein were alone banned. It may also mean that the conjunctive and after the words stainless steel had crept in the entry inadvertently. Such a reading of the entry would be legitimate taking into account its history referred to earlier. We have pointed out that in 1967 the relevant entry was stainless steel of any specifications whereas in 1968 it was stainless steel sheets/plates/strips/circles of any specifications . The erratum only brought the situation to the 1968 position. It is also for this reason that we cannot accept the contention that the erratum only made clear or explicit what was implicit in the entry earlier. This is apart from the settled legal position that taxation statutes have to be construed strictly, and the benefit of doubt, if any has to be given to the assessee. Appeal dismissed.

Summary

Issues:
1. Interpretation of Paragraph 85 of the Import Trade Control Hand Book, 1969 regarding the prohibition on the import of stainless steel strips.

Analysis:
The case involved a partnership firm engaged in the manufacture of stainless steel equipment, which obtained an import license for raw materials under the Registered Exporters' Promotion Scheme. The firm imported stainless steel strips in three consignments, leading to a penalty imposed by the Central Board of Excise and Customs under the Customs Act, 1962. The dispute centered around whether Paragraph 85 of the Import Trade Control Hand Book prohibited the import of stainless steel strips. The provision had undergone modifications over the years, with the 1969 version explicitly excluding strips from the prohibited items. An erratum issued in June 1969 clarified the inclusion of strips in the prohibition, but the firm had already contracted for the import before the correction.

The key contention was whether the term "stainless steel" in the provision included all forms of stainless steel or only the specific forms listed. The court analyzed the historical evolution of the provision from 1967 to 1969, noting that the 1968 amendment detailed specific forms like sheets, plates, and circles but omitted strips. The court held that the conjunctive "and" in the provision indicated a limitation to the specifically listed forms, and the erratum merely aligned with the 1968 position. Emphasizing the strict construction of taxation statutes and the benefit of doubt to the assessee, the court dismissed the appeal, upholding that the import of stainless steel strips was not prohibited under Paragraph 85 in 1969.

In conclusion, the judgment clarified the interpretation of Paragraph 85 of the Import Trade Control Hand Book, 1969 regarding the import of stainless steel strips. The court's analysis focused on the historical amendments to the provision, the specific forms mentioned, and the impact of the erratum issued in 1969. By emphasizing the strict construction of statutes and the benefit of doubt to the assessee, the court dismissed the appeal, ruling in favor of the partnership firm and holding that the import of stainless steel strips was not prohibited under the relevant provision.