vil Appeals No 26A42648 of 1987 From the Judgment and Order dated 75
1987 passed by the Customs Excise and Gold Control Appellate Tribunal New Delhi Order No 377 to 3811987 D in Appeal Nos
CDSAA Nos 2451 1989 to 1991  199286 D VC Mahajan RP Srivastava and P Parmeswaran for the Appellant
TA Ramachandran and Mrs J Ramachandran for the Respondents
The Judgment of the Court was delivered by RANGANATHAN J
These are four appeals by the Collector of Customs in the cases of Ms Western India Plywood Mfg Co Ltd and Kanara Wood  Plywood Industries Ltd herein after referred to as the assessee 
A very short common point is involved in these appeals
The assessee imported logs of timber from Burma
Under the  timber is chargeable to cus toms duty at 60
This we shall call the basic customs duty The relevant entry in the Schedule to the is under heading No 4401 which includes wood and timber
The Government had however issued a notification under section 251 of the exempting timber imported from certain countries of which Burma is one
The result was that the basic customs duty payable by the assessee in respect of its imports we shall call this the effective basic duty was nil
The assessee however was liable to pay an additional duty of customs in respect of its imports
This additional duty may be referred to as the auxiliary duty of customs
The levy of this duty is governed by the terms of notification No 265 dated 8121982 and its suc cessor notifications Nos
59 of 1983 and 126 of 1984
782 The last of these reads as follows TABLE section No Description of goods Rate 1 2 3 1 Goods in respect of which Forty  per cent the rate of duty of customs of the value of specified in the said First the goods as Schedule read with any determined in relevant notification of the accordance with Government of India for the the provisions time being in force is 60 per of Section 14 cent ad valorem or more
of the 52 of 1962
Goods in respect of which the Thirty  per cent rate of duty of customs of the value of specified in the said First goods as deter Schedule read with any relevant mined in accord notification of the Government ance with the of India for the time being in provisions of force is nil or less than 60 per Section 14 of cent ad valorem
52 of 1962  These percentage are 30 and 20 in the notification of 1982 and 35 and 25 in the notification of 1983
The terms of the notifi cations are otherwise identical
Explanation For the purpose of S1
Nos 1 and 2 in the above Table the expression the rate of duty of customs specified in the said First Schedule read with any relevant notification of the Government of India for the time being in force in relation to any article liable to two or more different rates of duty by reason of the country of origin of that arti cle means that rate of duty which is the highest of those rates
 The assessee cleared the goods by paying an auxiliary duty at 783 40
Subsequently however the assessee seems to have felt that its case falls under section No 2 of the above notification and that it should have paid an auxiliary duty of only 30 and not 40
It therefore applied to the respondent for a refund of the excess duty allegedly paid by it
This claim was rejected by the Assistant Collector
However on appeal the Collector of Customs Appeals held that the assessee was entitled to the refund claimed and this order has also been confirmed by the Customs Excise and Gold Control Appellate Tribunal CEGAT
The Collector of Customs has preferred these appeals
The order of the Tribunal in the appeals preferred by the present respondent was a very short order in which the Tribunal followed its earlier decision in the case of Ms Indian Plywood Company Limited Bombay
We have been taken through the decision of the Tribunal in the said case which is reported in 1987 29 ELT page 559
We have therefore had the benefit of the full reasoning of the Tribunal for reaching its conclusion
We are of opinion that the Tribunal has erred in its interpretation of the notification set out above and that the assessee s case is clearly covered by the explanation in the notification
It is true that the main part of the notification provides for an auxiliary duty at 40 in cases where the effective rate of basic duty ie the rates set out in the First Schedule read with any relevant notifica tion is 60 or above and an auxiliary duty at 30 in cases where such effective basic rate is nil or less than 60
If the notification had stopped here the assessee would have been perfectly within its rights to claim that the auxiliary duty payable by it would only be 30 because the effective basic rate in its case is nil
However the explanation has made an inroad into this simple rule
It has provided that where there are two or more effective basic rates applicable in respect of any article and the differentiation in rates is attributable to the country of origin of the goods imported then the auxil iary duty payable will be the higher of the two or the highest of the rates
In the present case when timber is imported from Burma and the other countries specified in the notification or notifications under section 251 the rate of basic duty is nil but if the goods are imported from other countries the notification does not apply and a basic duty of 60 would be leviable under the entry in the First Schedule
The result therefore is that when we read the rates specified in the First Schedule along with the rele vant notifications in respect of a particular article namely timber we find that the effec 784 tive basic duty is leviable on it at two rates and this differentiation in rates is attributable to the country of origin in regard to the import
Hence the explanation squarely comes into operation and the assessee will have to pay auxiliary duty by reference to the higher of the two rates of the effective basic duty namely 60
The contention on behalf of the respondent and this is also the view taken by the Tribunal appears to be that the explanation comes into operation only if there is more than one notification granting concession or exemption in respect of basic duty providing for different rates in respect of articles imported from different countries
We are unable to see any warrant for reading any such restriction into the terms of the explanation
As we see it the terms of the explanation are perfectly clear
It is this that if in respect of any article there are two or more effective basic duties in operation and the difference is referable to the country from which the article is imported then the highest of the effective rates will govern the levy of auxiliary duty
It does not matter whether the difference in the rates is because the First Schedule applies in certain cases and a concession notification applies in other cases
Clearly the use of the words rate   specified in the First Schedule read with any relevant notification does not necessarily require that there should be such a notifi cation they mean the rates specified in the First sched ule read with the relevant notification if any
If there is no notification the rate specified in the First Schedule has obviously to be taken into account for purpose of the notification we are now concerned with
It is
therefore not necessary that the differentiation referred to in the explanation should arise on account of the existence of more than one notification altering the basic duty set out in the Schedule
Sri Ramachandran contended that the construction sought to be placed by us would lead to this anomaly that a person will have to pay an auxiliary duty even though the effective basic duty is nil
This argument is without force for two reasons
In the first place that is the direct result of the explanation and therefore if that is the clear intention of the statutory instrument the anomaly cannot be helped
The second and perhaps more appropriate answer to Sri Rama chandran s contention is that the explanation is based on good reason
It will be seen that in a case of this type as well as in cases governed by more than one notification which make a distinction in the rate of duty based on the country of origin there will be different importers import ing goods but paying basic duty at different rates
The intention of the statute could well be that while for pur poses of basic duty a 785 differentiation in rates may be justified depending upon the country of origin that consideration would be totally irrel evant in the context of auxiliary duty
In the context of auxiliary duty it is equitable that all importers should pay the additional duty at the same rate and that they should have no advantage or disadvantage inter se
A grant of concession in the matter of auxiliary duty as well would result in widening the gulf between one importer and another and also that between such an importer and the local trader
The provision therefore seems to have been deliberately enacted to achieve this result which is not really an anoma ly as described by Sri Ramachandran
Sri Ramachandran sought to make same point on the use of the word article  in the notification
We do not however see any significance in the use of this word which has any relevance to the point at issue
The word article  is used because though a number of articles may be included in one item in the First Schedule the relevant notification may not govern all of them and it may be restrictedonly to some out of the many articles mentioned in the Schedule
The notification and the explanation therefore make it clear that the auxiliary duty has to be calculated with reference to each article based on the effective basic rates of duty applicable to such article in terms of the First Schedule read with any relevant notification under section 25
For the reasons mentioned above we are of opinion that the auxiliary duty paid by the assessee was perfectly in order and that its refund applications are not maintainable
We therefore set aside the order of the Tribunal and the Collector Appeals and restore the order of the Assistant Collector refusing refund to the assessee
The appeals are therefore allowed
In the circumstances of the case we make no order as to costs
NPV Appeals allowed


Summary:
The appellants had Fried separate writ petitions in the High Court challenging the basis for determination of irr igated land  under section 4A of the UP Imposition of Ceiling on Land Holdings Act 1960
In view of conflicting interpretations given earlier by Single Judges of that High Court a reference was made to the Division Bench in the case of the petitionerappellant Kallu Following the ratio laid down by the Division Bench in Kallu vs State of UP the writ petitions were dismissed
Before this Court the appellants disputed the correct ness of the view taken by the Division Bench and contended that in order to classify a land as irrigated land there should be evidence of assured irrigation  and secondly that the two crops in a Fasli year should have been raised on the entire extent of the land and not in a portion of land alone
Dismissing the appeals this Court HELD 1 The Uttar Pradesh Imposition of Ceiling on Land Holdings Act 1960 is a piece of social legislation for achieving the several objectives set out in the preamble
In order to give greater thrust to the objects underlying the Act the Legislature has changed the basis for reckoning the ceiling area from that of fair quality land  to that of assured irrigation facilities  available to a land
574C D 2 On a reading of section 4A it may be seen that the Legislature has prescribed different kinds of tests on the basis of which the authorities have to determine whether a land is irrigated or not for the purpose of determining the ceiling area of a tenure holder
The two broad tests are 1 availability of irrigation facilities and 2 the factum of raising or the capability of the soil raising at least two crops in an agricultural year
573F G 568 3 There is no merit in the contention that in addition to the materials and records set out in the section there must be independent evidence of assured irrigation facility before ever a Prescribed Authority can form an opinion about a land having assured irrigation facility
574F 4 Sub clause b of section 4 A cannot be read so as to mean that two crops should have been grown on the entire extent of a land having irrigation facility for classifying the land as irrigated land  as it would have the effect of limiting the operation of the sub clause contrary to the legislative intent
575A 5 The classification has to be made with reference to the potentiality of the land to yield two crops in one Fasli year and not on the basis of the actual raising of two crops on the entire extent of the land
574H 6 The raising of two crops even on a portion of the land will prove in the absence of material to show poor quality of soil in portions of the land due to salinity etc
the uniform nature and content of the soil of the entire land
575D