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TMI Blog1977 (5) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ressing plant at Daitari. Under the project Import (Registration of Contract) Regulations, 1965, the two contracts bearing Nos. Section 37C(G) Proj-3/66A and S 37C (G) Proj-269A were registered on February 24, 1966 and February 24, 1969 respectively in the Customs House at Calcutta. Two import licences were granted under the Imports and Exports (Control) Act, 1947, one on 7-12-55 and the other on 18-10-67. Both the licences contained a list particularising the goods to be imported, up to maximum value of ₹ 82,64,200 under the first licence and ₹ 23,10,962 under the second licence. Seven consignments were imported under the first contract and six under the second. 3. The petitioners' case is that those consignments contained items of machineries which are covered by item No. 72 (18) of the First Schedule to the Indian Tariff Act, 1934 and they are entitled to the concessional rate of duty in terms of Notification Customs No. 117/65 dated 20-8-65 (Annexure 13) which exempts mining machineries coming within the purview of Item 72 (18) of the First Schedule to the Indian Tariff Act, 1934 from so much of that portion of the duty of customs leviable thereon which is spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the designing fees should also form part of the assessable value of the consignments under the two notices Nos. S 37C (G) Proj-3/66A dated 3-5-72 and S 37C (G) Proj-2/69A dated 7-6-72 (Annexures 4 and 4-b). 6. The petitioners represented against Annexures 4 and 4-b on June 28, 1972 by two letters Nos. 19207 and 19208 about the assessment of duty under Indian Customs Tariff as also in respect of extra duty for loading. They claimed assessment under Item 72 (18) Indian Customs Tariff and objected to assessment under Item 72A. Respondent No. 4, however, by his letter dated 10-1-73 (Annexure 6) rejected the representations and confirmed his demand for payment of extra duty and refused re-assessment under Item 72 (18) I.C.T. 7. Being aggrieved by Annex. 6 the petitioners preferred two appeals to the Appellate Collector of Customs (respondent No. 2) under Section 128 of the Customs Act, 1962 on 6-3-1973 and 7-5-1973 (vide Annexures 7 and 7-a). Respondent No. 2, the Appellate Collector of Customs, by his impugned orders No. 1788/1973 and No. 1789/1973 dated 9-10-1973 (Annexures 8 and 8-a) held that designing fees were not chargeable to customs duty and allowed a portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to grant refund of ₹ 26,85,460 realised in excess from the petitioner No. 1, and, if necessary, ascertainment of the amount of refund be made upon re-assessment in accordance with law. 10. Mr. H. G. Panda for respondents 1 to 5 raises a preliminary objection of lack of jurisdiction of this Court on the ground that since duty was assessed at Calcutta, contracts were registered at Calcutta, orders of the Customs authorities were passed at Calcutta and Central Government's order was passed at New Delhi, no part of cause of action arose within the jurisdiction of this Court, The main controversy, however, is whether the items of machineries indicated above would be, for the purpose of tariff classification 'mining machineries' coming under the purview of Item 72 (18) of the First Schedule to Indian Tariff Act, 1934. If so, then it is not disputed that the petitioners will get the benefit of concessional rate of duty in terms of the notification Customs No. 117/65 (Annexure 13). It may be noted that the plea of estoppel which found favour with the appellate authority having been overruled by the Revisional authority, is no longer a live issue and was not sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-visional order (Annexure 11) were also communicated to the petitioner No. 1 there. Communication of appellate orders was a statutory requirement of Section 131 of the 'Customs Act, 1962. It prescribes a period of six months for making an application in revision to the Central Government from the date of communication to the applicant of the order against which the revision application is being made, that is, from the date of communication of the appellate orders, that is, Annexures 8 and 8-a. The appellate and revisional orders, therefore, become effective and binding on the petitioner No. 1 with effect from the date of their communication to it at its head office at Bhubaneswar and furnishes a further cause of action again within the local limits of jurisdiction of this Court. For these reasons we are of opinion that there is no merit in the preliminary point. 12. We will now proceed to the main controversy. The petitioners classify the machineries and equipments before-mentioned in para 4 above as 'mining machineries' for the purpose of tariff classification under Item 72 (18) of the Indian Customs Tariff and claim certain exemptions of customs duty on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. A particular type of strip may according to certain definition be skelp and according to others not skelp. This, however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding controversy unless the matter is beyond doubt in view of the popular meaning or meaning ascribed to the term in commercial parlance. In absence of any clear criterion to determine what is skelp and not strip, no useful purpose would be served by even remanding the matter to the Excise authorities for a decision after taking necessary evidence. It is only when taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip or skelp, it may be possible for the authorities to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test. This is, however, not possible when there is no identifiable standard. The best way is to define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, Volume 26, page 317). For instance, an open mine is one when it has been devoted by a person lawfully entitled to do so for the purpose of making a profit by the working and sale of the minerals therein. Whether a mine is open or not is a question of intention and the intention may be evidenced in various ways. If the mine has been worked and the produce sold, it is clear that it is open even if no profits have been made. Thus, mining in a broad and enlarged sense would include, apart from excavation operations, operations of removing the minerals and disposing of them commercially. Thus, when mining operations are carried on in a broad sense, all types of machineries needed for those operations would be mining machineries. Again, 'mine' and 'minerals' are related expressions. As already said, the primary meaning of 'mine' standing alone js an underground excavation made for the purpose of getting minerals. 'Minerals' on the other hand means primarily all substances which may be got for manufacturing or mercantile purposes. The term 'ore' has a definite signification and in its usual acceptance it designates the compound of metal and so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention." Annexure 10-a is an affidavit by one Shri Dev Raj Bharadwaj, a Mining Expert. He is a first class certified mining engineer and has been serving as Adviser/Consultant under the National Industrial Development Corporation, a Government of India Undertaking, for the last four years. He has scrutinised the two contracts of the petitioner company as was registered with Calcutta Customs authorities under No. S 37C (G) Proj-3/ 66A and No. S 37C (G)-Proj 2/69A as well as covering Import Trade Control Licence and invoices. In his opinion all machineries and equipments imported for the said Daitari Iron Ore Project have been correctly termed as mining machineries. According to him, the mining operations in respect of iron ore include all the processes starting from dislodging the ore lumps and boulders from the bowel of earth, crushing, screening, washing, grading and finally conveying and stocking for commercial delivery and, therefore, machineries and equipments required for the aforesaid operation are technically known as mining machineries. The major commercial use of iron ore is for manufacture of steel. For that purpose the minimum size of ores should be 1/4" ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is the context in which the word 'mine' has been defined and the object and the purpose of the Mines Act and the operation of that definition which may be taken into account in appreciating the sense in which 'mining' or 'mining machinery' is understood by people in mining trade and business. The wider inclusive definition of 'mine' in the Mines Act, 1952 may be taken to have been introduced in. recognition of. the commercial sense of 'mining'. In view of the aforesaid discussion and the evidence led by the petitioner, 'mining machinery' would bring within its sweep all machineries for the purpose of mining operations in the wider sense than mere digging and excavating ores from underneath surface, as understood in common parlance by people who are usually engaged in mining business. The classification made by the Customs authorities and by the Revisional authority, whose orders are impugned in this writ application, which appears to be one which could not be made by any reasonable interpretation of the provision in Item 72 (18) and runs counter to the normal rules of interpretation of fiscal statutes, construction having been m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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