ECHJAY INDUSTRIES PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are a Private Limited Company registered under the Companies Act and carry on business as manufacturers of Steel Forging at Rajkot in State of Gujarat. The petitioners imported one Multi Spindle Copying Duplicating and Profile Milling Machine complete with standard accessories. The import was from Italy. The machine was imported after payment of customs duty of Rs. 5,75,669.38. The machine could not be commissioned because of some defect and the defective part was required to be imported as replacement. The petitioners accordingly imported Contour Scan Valve. In support of import of this defective part, the petitioners claimed exemption from payment of customs duty in pursuance of exemption notification dated August 29,1970 issued by Government of India in exercise of powers conferred by Sub-section (1) of Section 25 of the Customs Act.

(2.) The notification, inter alia, provides that the articles and component parts thereof, when imported for replacement of defective articles or of component parts thereof, shall be exempted from the whole of the duty of customs leviable thereon, subject to the conditions. The relevant condition for the purpose of this petition reads as follows:

(3.) Shri Thakkar, learned Counsel appearing on behalf of the petitioners, submitted that the decision of the Assistant Collector suffers from serious infirmity. It was contended that the object of exemption notification was to confer benefit upon the importers of a defective part which was earlier imported and the benefit cannot be denied to the Company on the ground that the words used are "private personal property". The earned Counsel relied upon definition of "person" under Section 3(42) of General Clauses Act, 1897 and which sets out that the expression includes any company or association or body of individuals, whether incorporated or not. The submission urged on behalf of the petitioners is correct and deserves acceptance. The Assistant Collector was clearly in error in referring to the dictionary meaning to deny the benefits to the petitioners. The Assistant Collector overlooked that the notification grants benefit to the importer and had never contemplated that the importer will be an individual and not an association or a Company. In our judgment, the order of the Assistant Collector is entirely incorrect and cannot be sustained. Shri Bulchandani, learned Counsel appearing on behalf of the Department, submitted that CEGAT had taken identical view in the decision (Quality Steel Tubes Pvt. Ltd. Kanpur V/s. Collector of Customs, Bombay). The view taken by the Tribunal also refers only to the Dictionary meaning and is clearly erroneous. In our judgment, the petitioners are entitled to the reliefs.