LexCOMMISSIONER OF CUSTOMS, (PREV.) GUJARAT versus M/S RELIANCE PETROLEUM LTD.
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[2008] 9 S.C.R. 247 + COMMISSIONER OF CUSTOMS, (PREV.) GUJARAT A V. M/S RELIANCE PETROLEUM LTD. (Civil Appeal No.1831 of 2006) MAY 16,2008 B [S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.] ,;. ... Customs Act, 1962: Notification No.11197-cus dated 1.3.1997 as amended by Notification No.55197-cus dated 13.6.1977 - Setting up of c crude petroleum refinery - Import of different parts of second hand mobile crane - Reassembled at site - Department held that self propelled modular transport (SPMT) system along with the crane could not be treated as one unit and thus ex- emption under said Notifications not available - Held: These D • are not two separate items but a single mechanical unit - The 4 equipment was consigned in different parts for convenience of transport- Since the services of crane were required at large number of places, to provide mobility to it, SPMT system was provided - It is not correct to say that only the crane part of E equipment would come within the purview of exemption notifi- cation and not the entire equipment - The imported item is a mobile crane and can also be considered as material han- dling equipment. s. 14 - Valuation - Import of second hand equipment - F Enhancement of value of import - Addition of 1 % of value of imported goods towards transportation charges - Held: Is con- trary to Rule 9(2)(b) of Valuation Rules. Interpretation of statutes- Exemption Notification - Held: G Interpretation of, depends upon the nature and extent thereof - When Exemption Notification ex facie applies, the purport -! should not be limited by giving strict construction thereto. 247 H 248 SUPREME COURT REPORTS [2008] 9 S.C.R A Respondent no.2 was required to make erections at 28 different locations for setting up a crude petroleum refinery. For the said purpose, it entered into a contract with the importer for supply of the crane and the trailer. The said item was imported in a dismantled condition in B 146 packages. Respondent claimed the benefit of concessional rate of duty in terms of Notification no.11/ 97 -cus dated 1.3.1997 as amended by Notification no.55/ 97-cus dated 13.6.1997 showing the value of imported item to be US$34 lacs. The said declaration was made for c custom purpose only. The value of the said item was re- assessed by the custom House at DFL 60 lacs. An Ap- praising Officer valued the said equipment at Rs. 11 crores as in the year of manufacture. A final assessment was made upon enhancing the value and denying the benefit D of concessional exemption claimed under Notification No.55/97-Cus. A total customs duty of Rs.20 crores was assessed by the Superintendent of Customs. A show cause notice was issued demanding differential customs duty. Commissioner (appeal) held that the imported item is a mobile crane and exemption from duty is admissible E under the said Notification and that goods imported were second hand goods and there was no justification in en- hancing the value of imports and that since assessment was made behind the back of respondent, the same was violative of principles of natural justice. Tribunal agreed F with the findings of Commission(appeals). In appeal to this Court, appellants contended that a distinction must be made between a mobile crane and a crane mounted on a moving platform fitted with wheels; G that the finding of the Tribunal was not clear as to whether the equipment was a mobile crane or a material handling equipment; that in any event only the crane would be a . .._ • ' ' " material handling equipment and not a platform fitted with ,_ H wheels as they had been manufactured by two different manufacturers and as regards valuation, keeping in view COMMISSIONER OF CUSTOMS v. RELIANCE 249 PETROLEUM -+ the report of the expert, the Commissioner (Appeals) as also the Tribunal committed a serious error in accepting A the invoice value. Dismissing the appeal, the Court HELD: 1. The First Appellate Authority has delved B deep into the matter to arrive at a finding of fact that the .). purpose for which the crane had to be used is an ordi- -\ nary mobile crane. It was opined that having regard to the nature of the work for setting up of a crude petroleum refinery would not have been possible and only for that c purpose, such a material handling equipment, as per the definition contained in the said notification No.11/97 as amended by notification No.55/97 had to be importe
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