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TMI Blog1999 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods falling under the Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 imported into India for power projects (including gas turbine power projects) the end product whereof was electricity meant for public distribution and therefore the amendment Notification No. 306/86 dated 1-5-1986 was only clarificatory in nature. he learned Senior Counsel for the appellants is right in submitting that "power project" could not have meant "power plant" also and the scope for confusion or doubts, if any, was done away with by inserting a clarification. Thus the amendment notification was clarificatory merely. Though the refusal to register the respondent's contract with M/s. Asea Stal as contained in the letter of Assistant Collector of Customs, Paradeep dated 17-8-1987 is being upheld, we would like to make it clear that this refusal has to be read in the light of the averments made in the application dated 28-1-1986 of the respondent wherein it was stated that the registration of the contract was sought for securing the benefit of the Exemption Notification No. 71/85-Cus. of 17-3-1985 and thereby treating the respondent's imports for power project assessable at ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling under the Heading No. 84.66 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for the industrial plants or projects specified in column (2) of the Table hereto annexed, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table, subject to the condition that the importer produces a certificate from an officer not below the rank of a Joint Secretary to the Government of India in the Ministry administratively concerned with the paid industrial plants or projects that the goods in question required for the said industrial plants or projects and recommending grant of the above exemption. TABLE Sl. No. Description Rate (1) (2) (3) 1. Power projects (including gas turbine power projects) Nil 2. All other industrial plants or projects falling under Heading No. 84.66 (other than power project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... captive power plants set up by units engaged in activities other than power generation. xxx Xxx xxx" 4. Notification No. 133/85 (as amended by Notification No. 306/86) was superseded by a fresh Notification No. 67/87, dated 1-3-1987 which reads as under : "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 133/85-Customs, dated the 19th April, 1985, the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (2) of the Table hereto annexed and falling under Heading No. 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table. TABLE Sl. No. Description of goods Rate of Duty (1) (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y inserting an explanation thereto, the captive power project of the respondent was not entitled to exemption from payment of duty and therefore the prayer for registration of the contract entered into by the respondent with Asea Stal was being rejected and also the earlier registration of the respondent's contract with M/s. Gotaverken which was allowed earlier on 7-2-1986 was being cancelled. 7. Feeling aggrieved by refusal of registration of one contract and cancellation of the registration of the other contract, the respondent company filed a writ petition before the High Court of Orissa. The respondent sought for quashing of the cancellation of the earlier registration of one of the contracts and a mandamus commanding the Assistant Collector of Customs to register the other contract. At the same time, challenge was laid to the constitutional validity of amendment notification and to the validity of explanation appended to Notification No. 67/87 on the ground that both fell foul of Article 14 of the Constitution suffering from the vice of invidious discrimination. It was also submitted that it was ultra vires of the authority of the Central Government to withdraw an exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation; and (v) whether the action of the Assistant Collector of Customs in recalling/cancelling the registration of the respondent's contract with M/s. Gotaverken Energy Systems is sustainable in law. 10. The first three questions deserve to be taken up for consideration collectively as it would be convenient. Sub-section (1) of Section 25 of the Customs Act, 1962 reads as under :- "If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. " 11. The learned Senior Counsel for the appellants has submitted that Section 25 of the Customs Act has to be read along with Sections 14 and 21 of the General Clauses Act, 1897. He submitted that the very power to issue an exemption notification includes and implies power to issue such notifications from time to time as the occasion may require and also to amend, vary or rescind any exemption granted earlier. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution of power; it was not the intention of the Central Government to confer the benefit of full exemption from payment of duty on power plants set up by any units for generating power meant for captive consumption and not for distribution generally. The learned Senior Counsel for the appellants has in support of his submission invited our attention to material available on record substantiating his plea and having considered the same we find merit in the plea canvassed on behalf of the appellants. 13. Our attention has been invited to the Industrial Policy Resolution of 1956 of the Government of India wherein to achieve the national objective of adopting the socialist pattern of society the industries in the country were proposed to be classified into three categories of which the first category would consist of industries the future development of which will be the exclusive responsibility of the State though the division of industries into such separate categories did not imply a division into water-tight compartments; possibility of overlapping and dovetailing between industries in the private and the public sectors was not totally excluded. "Generation and distribution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy Resolution constitute a class by themselves distinct from the power plants established by industrial units generating electricity for captive consumption and not for distribution. The two classes are well defined. 14. What is prohibited by Article 14 of the Constitution is class legislation. If the Legislature takes care to reasonably classify persons for legislative purposes, so long as the classification is founded on an intelligible differentia which lays down a perceptible differentiation between the two groups and the differentiation has a rational relation with the object sought to be achieved, such a classification does not fall foul of Article 14 of the Constitution. We have already held that the two classes in the case at hand have a well defined differentiation. There is nothing wrong in the Central Government forming an opinion that it was in public interest to grant exemption from payment of custom duty to the imports meant for power projects engaged in production of power as an end product meant for public distribution as such while denying a similar benefit to the imports referable to power plants generating electricity for captive consumption only. 15. We agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition having laid challenge to the validity of the amendment notification on the ground of invidious discrimination but there is no plea raised that formation of opinion as to public interest was based on no material or was vitiated by mala fides. 17. Coming to the fourth point, insofar as the refusal to register the contract with M/s. Asea Stal is concerned, no fault can be found therewith. Mere making of an application for registration does not confer any vested right in the applicant. The application has to be decided in accordance with the law applicable on the date on which the authority granting the registration is called upon to apply its mind to the prayer for registration. The correspondence between the parties shows that further information-material in nature and having impact on acceptability of the respondent's prayer - was called for from the applicant and therefore the prayer was not ripe for consideration. In between there were drastic changes in the factual matrix. The exemption notification had stood clarified and Project Imports (Registration of Contract) Regulations, 1965 under which the application for registration was made had stood superseded by Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the new Regulations clearly carves out an exception as regards `things done or omitted to be done before such supersession'. The new Regulations do not contain any provision for superseding or cancelling any registration of the contract allowed under the superseded Regulations of 1965. Admittedly, no opportunity of hearing was given to the respondent before cancelling the registration of contract. In our opinion the new Regulations having specifically saved things done or omitted to be done under the superseded Regulations the authority empowered to register the contract could not have cancelled the registration already done, more so without affording the respondent any opportunity of hearing. The High Court was therefore justified in setting aside the communication by the Assistant Collector of Customs cancelling the registration of the contract. We may however make it clear that what will be the effect of such registration on the dutiability or exemption from payment of duty on the goods imported pursuant to the contract is not an issue before us and therefore we have not expressed any opinion thereon leaving it to be adjudicated upon as and when an occasion may arise for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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