Priciple of interpretation of Law defined in case by HC.

Facts in Brief:

1. Petitioner is a Company engaged in the manufacture of bulk drugs in its factory at Pondicherry and Cuddalore. For the purpose of manufacturing drugs, the petitioner imports raw material. The notification No. 203/92 dated 19.5.1992 issued under section 25(1) of Customs Act exempted whole of the duty payable on the inputs imported into India against a Value Based Advance License (hereinafter referred to as "VABAL"), provided the export obligation is discharged by exporting goods manufactured in India in respect of which no input stage credit was obtained under Rules 56A or 57A of the Central Excise Rules, 1944. During the period between June, 1993 to March, 1995, the petitioner imported input under various VABALs and availed exemption under the said notification.

2. The petitioner had taken MODVAT credit under Rule 57A of the Central Excise Rules on the indigenous inputs which were also used for the manufacture of end product and cleared for home consumption on payment of Central Excise duty. After carrying out the export, the MODVAT credit taken in respect of inputs used in the manufacture of drug were reversed on actual use basis.

3. The writ petition is filed seeking the relief of issuance of writ of certiorari to call for the records of the first respondent, Customs, Excise and Service Tax Appellate Tribunal, (hereinafter referred to as "CESTAT") in final order No. 414 of 2004 dated 28.4.2004 and quash the same.

HC held as under,

4. It is well established and well recognised principle of interpretation that one should not concentrate too much on one word and pay too little attention to other words. No word in any provision can be construed in isolation. Every word must be looked at generally and in the context in which it is used and gather the mens or sententia legis of the Legislation. Where the words are clear and there is no obscurity or ambiguity and the intention of Scheme is clearly conveyed, there is no scope for the Court to take upon itself the task of amending or altering the provision as the Court is only interpreting the Scheme, but not framing the Scheme.

5. When the language is clear, the intention of Scheme has to be gathered from the language used and while doing so, what has been said and what has not been said has to be noted. The subordinate or subsidiary clause would yield to the substantive clause. (Vide M/s. GRASIM INDUSTRIES LTD. V. COLLECTOR OF CUSTOMS, BOMBAY. By adopting the said hitherto uncontroverted legal principle, if the Scheme is construed, the reversal of interest is in accordance with clause (a) of the scheme. Any other construction would amount to tinkering or doing violence to the express language used, particularly, clause (a) of the Scheme. It is evident that the Department also so construed the Scheme and accepted the reversal interest as in accordance with clause (a) of the Scheme from paragraphs 1 and 2 of their letter dated 4.2.1997.

6. The other contention that the compliance of the condition has to be considered in respect of each licence is also merits consideration as in the show cause notices itself the duty payable as against each licence was calculated and given separately. In addition to that, clause (b) of the Scheme is also provided in the same way by stating that if the condition as contemplated in Clause (a) is completed by 31.1.1997 "thereupon no demand of customs duty leviable on goods imported against the value based advance licence in question shall be payable". The VABAL licences is question or in dispute are 13 licences, which are the subject matter of two show cause notices stated above. Hence this contention is accepted.

7. Therefore, the orders of the respondents are hereby set aside and the matter is send back to the second respondent to consider the issue of quantifying the duty taking into account the reversal of duty and interest by the petitioner as certified by the competent Assistant Commissioner, Central Excise and proceed further thereupon, by allowing the writ petitions. 

Case Reference - Shasun Drugs And Chemicals Rep. By ... vs Customs, Excise And Service Tax