IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 04.07.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Civil Miscellaneous Appeals Nos.212 to 223 of 2007 and 2370 to 2394 of 2007 M.P.No.1/07 etc. 1. The Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin 628 004. Appellant in C.M.A.Nos.212 to 223/07 2. The Commissioner of Customs Port Export Customs House, Chennai ... Appellant in C.M.A.Nos.2370 to 2394/07 v. 1. M/s. Edhayam Frozen Foods, 3/52, Krishna Rajapuram, Tuticorin 628 002. ... Ist Respondent in C.M.A.No.212/07 2.M/s.Theva &Co., 3/52,Krishna Rajapuram, Tuticorin-628 002. ..1st Respondent in CMA 213/2007 3.M/s. Kadalkanni Frozen Foods 3/52, Krishna Rajapuram, Tuticorin 628 002. ..1st Respondent in CMA 214/2007 4.M/s. Diamond Sea Food Exports 3/52, Krishna Rajapuram, Tuticorin 628 002. ..1st Respondent in CMA 215/2007 5.M/s. Nila Sea Foods (P) Ltd., 137, Pudur Pandiapuram, Tuticorin. ..1st Respondent in CMA 216/2007 6.M/s. Nila Sea Food, 137, Pudur Pandiapuram Tuticorin. ..1st Respondent in CMA 217/2007 https://hcservices.ecourts.gov.in/hcservices/ 7.M/s. Amulya Sea Food Exports C-97,Sipcot,Industrial Complex, Tuticorin. ..1st Respondent in CMA 218/2007 8.M/s. Khader Exports Pvt. Ltd., 3/284, Muttukadu Road,Neelankarai, Chennai -41. ..1st Respondent in CMA 219/2007 9.M/s.Universal Cold Storage Ltd., 3/284, Muttukadu Road, Neelankarai, Chennai-41. ..1st Respondent in CMA 220/2007 10.M/s. Khader Investments to Trading Co... 3/284, Muttukadu Road, Neelangarai, Chennai-41. ..1st Respondent in CMA 221/2007 11.M/s.Premier Marine Products 3/284, Muttukadu Road, Neelangarai, Chennai-41. ..1st Respondent in CMA 222/2007 12.M/s. Devi Marine Food Exports Ltd., 3/284, Muttukadu Road, Neelagarai, Chennai -41. ..1st Respondent in CMA 223/2007 13)M/S. Universal Cold Storage, 3-284, Mutukadu Road, Neelankarai Chennai-41. .. 1st respondent in CMA 2370/07 14)M/S.K.V.Marine Exports 61 Venkatesa Street, Chintadripet,Chennai 600 002. .. 1st respondent in CMA 2371/07 15)M/S. Chandrakantha Marine Exports, V.S.K.D. College, Bhimavaram, W.G.District, Andrapradesh. .. 1st respondent in CMA 2372/07 16)M/S. Jagadesh Marine Exports, Kommarada Road, Bhimavaram, W.G.District, Andrapradesh. .. 1st respondent in CMA 2373/07 17)M/S.Jayasathya Marine Products, Rest House Road, Bhimavaram, W.G.District, Andrapradesh. .. 1st respondent in CMA 2374/07 https://hcservices.ecourts.gov.in/hcservices/ 18) M/S.Supreme Exports, Elurupadu Village, Kalla Mandal, Bhimavaram, W.G.District, Andrapradesh. .. 1st respondent in CMA 2375/07 19)M/s.B.M.R.Exports, S.10, TNHB complex, 180, Luz Church Road, Mylapore, Chennai 600 004 .. 1st respondent in CMA 2376/07 20)M/S.Khader Investments & Trading Company Pvt. Ltd., 3-284, Mutukadu Road, Neelankarai, Chennai-41. .. 1st respondent in CMA 2377/07 21) M/s. Premier Marine Products, 3-284, Mutukadu Road, Neelankarai, Chennai-41. .. 1st respondent in CMA 2378/07 22) M/S.Kader Exports Pvt. Ltd., 3-284, Mutukadu Road, Neelankarai, Chennai-41 .. 1st respondent in CMA 2379/07 23) M/S.Sai Marine Exports pvt. Ltd., 35/4, and 5, Kopalle Village, Kallamandal, Bhimvaram, 534 206, W.G. District, Andra Pradesh. .. 1st respondent in CMA 2380/07 24)M/S.Kader Exports Pvt. Ltd., 3-284, Mutukadu Road, Neelankarai, Chennai-41 .. 1st respondent in CMA 2381/07 25)M/S. Devi Sea Foods Ltd., D.No.9-14-8/1 C.B.M.Compound, Visakhapatanam-3 .. 1st respondent in CMA 2382/07 26)M/s. Victoria Marine & Agro Products pvt. Ltd., No.3,3rd Floor, Gokul Arcade, No.2,S.P.Road, Chennai 600 020 .. 1st respondent in CMA 2383/07 27. M/s. Sri Sakthi Marine Products Pvt. Ltd No;16/9, Ram Krish Flats, Nehru Nagar, 3rd Street, Adyar, Chennai - 600 020 ...1st Respondent in C.M.A.2384/07 https://hcservices.ecourts.gov.in/hcservices/ 28. M/s.Sri Sakthi Cold Storage Pvt.Ltd No.16/9, Ramkrish Flats, Nehru Nagar, 3rd Street, Adyar, Chennai - 600 020. ...1st Respondent in C.M.A.2385/07 29. M/s.Star Agro Marine B-24, Grounds Floor, London Towers, Kilpauk, Chennai - 600 010. ..1st Respondent in C.M.A.2386/07 30. M/s. Nekkanti Sea Foods, Flat No.G-4, Mahara Block, Masa Bank, Hyderabad, Andhra Pradesh ......1st Respondent in C.M.A.2387/07 31. M/s. Anjanaya Sea Foods, Dr.No.39-1-406, Second Lane, Balaji Nagar, Ongloe, Andhrapradesh ......1st Respondent in C.M.A.2388/07 32. M/s.Liberty Frozen Foods Pvt.Ltd 3-284, Mutukadu Road, Neelankarai, Chennai - 41...1st Respondent in C.M.A.2389/07 33. M/s. Surya Marine Exports, R.H.Road, Kotari Compound, Bim Varam, W.G.District, Andhrapradesh ...1st Respondent in C.M.A.2390/07 34. M/s. Sai Sea Foods, G-11, Jayaprada Apartments, Navaji Road, Visagapattinam, Andhrapradesh ...1st Respondent in C.M.A.2391/07 35. M/s.Hari Priya Marine Foods Exports, Yenamadru Road, Bim Varam, Andhra Pradesh ....1st Respondent in C.M.A.2392/07 36. M/s. Jayalakshmi Sea Foods Pvt,Ltd., Flat No.6, Door No.8-3-21, Dhanista Apartments, Visagapattinam, Andhrapradesh ....1st Respondent in C.M.A.2393/07 37. M/s. Devi Marine Foods Exports Ltd. 3-284, Mutukadu Road, Neelankarai, Chennai - 41......1st Respondent in C.M.A.2394/07 https://hcservices.ecourts.gov.in/hcservices/ 2. The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Shastri Bhavan Annexe, Haddows Road, Chennai 6. 2nd Respondents in all the CMA's Civil Miscellaneous Appeals filed under section 130A of the Customs Act, 1962 against the order dated 08.07.2005 made in Final Orders Nos.951 to 988 of 2005 on the file of Customs, Excise and Service Tax Appellate Tribunal, Chennai 6. For Appellant : Mr.M.Ravindran, Additional Solicitor General, for Mr.T.S.Sivagnanam For Respondents : Mr.Joseph Vellapally, Senior Counsel, for Mr.C.Natarajan, Senior Counsel, for Mr.R.Ashokan JUDGMENT K.RAVIRAJA PANDIAN, J. This batch of appeals is filed by the Commissioner of Customs, Tuticorin, questioning the correctness of the order of the Customs, Excise, Service Tax Appellate Tribunal, South Zone Bench, Chennai, dated 08.07.2005 made in Final Orders Nos.951 to 988 of 2005 whereby and wherein the Tribunal has rendered a finding that the exports of shrimps/prawn made by the respondents were not exigible to levy of cess under section 3 of the Agricultural Produce Cess Act, 1940 read with item No.7 in the Schedule attached to that Act, as the prawn and shrimps are different from fish for the purpose of Agricultural Produce Cess Act, 1940. The common questions of law that have arisen out of the order of the Tribunal for the decision of this Court in all these cases, as framed at the stage of admission, are : 1. Whether the Tribunal failed to consider that the provision of the Customs Act or the explanatory notes on the Harmonised systems of Nomenclature (HSN) cannot be relied upon to determine the scope of the various entries under the Schedule of the Agricultural Produce Cess Act, 1940? 2.Whether the Tribunal is right in not considering the issues that there cannot be any distinction with regard to definition and classification of fish and prawns/shrimps under the provisions of the Customs https://hcservices.ecourts.gov.in/hcservices/ Tariff Act, 1975, the Agricultural Produce Act, 1940 and the Marine Products Export Development Authority Act? 2. As the facts in all these cases are similar, for the sake of convenience, the appeal in C.M.A. No.212 of 2007 is taken as a typical case and the facts of that case are dealt with herein. 3. The Agricultural Produce Cess Act, 1940 was enacted to make better financial provision for the carrying out by the Indian Council of Agricultural Research of the objects for which it was established and for that purpose to impose on certain articles a cess by way of customs duty on export, the proceeds whereof to be paid to the said Council. 4. Section 3 of the said Act imposes cess at the rate of one half of one per cent ad valorem on all articles included in the schedule which are exported from India. Section 5A of the Act makes the provisions of the Customs Act 1962 and the Rules and Regulations made thereunder applicable in relation to the levy and collection of the cess on all the articles included in the schedule as they apply in relation to the levy and collection of customs duty. Item No.7 of the schedule lists 'Fish' as one of the items, which is exigible for cess on export as provided under section 3. 5. The respondents-exporters indisputably exported prawn/shrimps. On such export, cess was levied by the Assistant Commissioner of Customs. The exporter filed writ petition No.15565 to 15568 of 1999 to restrain the Assistant Commissioner from levying and collecting cess under the Agricultural Produce Cess Act, 1940 on export of prawns/shrimps. The writ petition was disposed of with the direction to the exporter to file appeals under the provisions of the Customs Act before the Commissioner for resolution of the lis on merits. Accordingly, the exporters preferred appeal before the Commissioner of Customs and Central Excise (Appeals I) against the order of levying cess on assessment of shipping bill of 5753/27.08.1999. The Commissioner, by his order dated 29.03.2004 observed thus : "From the above discussion I observe that the taxing statute, namely, the Agricultural Produce Cess Act has not defined the product 'fish'. However, the Marine Product Export Development Authority Act, 1972, which is also the taxing statute defines 'fish' and shrimps/prawns as different product. Therefore, it is observed that there seems to be confusion as to whether the fish will include shrimps/prawns. It is not explicitly defined under the Agricultural Produce Cess Act, whereas the Customs Tariff Act, Harmonised Commodity Description and Coding System, the Marine Products Export Development Authority Act, 1972 classify the fish and prawn/shrimps as different products. In view of the legal position and duly following the above cited case laws, the benefit of doubt has to be given to the appellants by not charging https://hcservices.ecourts.gov.in/hcservices/ the cess under the Agricultural Produce Cess Act, 1940. Accordingly, the appeal is allowed with the consequential relief". 6. The Commissioner of Customs carried the matter on appeal to the CESTAT, South zone Bench at Chennai. The Tribunal, in its common order, dated 08.07.2005 held as follows : "For the reasons stated we hold that the export of shrimp/prawn made by the respondentS were not exigible to levy of cess under section 3 of the Agricultural Produce Cess Act, 1940. The lower appellate authorities were giving the benefit of doubt to the assessee as they could not reach a finding with certainty that shrimp/prawn was different from fish. Beyond doubt, we hold that prawn and shrimps are different from fish for the purpose of the Agricultural Produce Cess Act, 1940 and we sustain the impugned order after removing the doubt. In the result, the appeal stands dismissed." 7. Learned Additional Solicitor General contended that under the scheme of the Agricultural Produce Cess Act, 1940, the articles shown in the schedule to the Act, are descriptive whereas the schedule to the Customs Tariff Act is classificatory. Hence, the provision of the Customs Tariff Act or the explanatory notes on the Harmonious Systems of Nomenclature should not have been relied upon to determine the scope of the various entries under the schedule to the Agricultural Produce Cess Act, 1940. According to him, the term 'fish' includes within itself all marine products. In order to substantiate his case, he brought to our notice the definition contained in Indian Fisheries Act, 1897. According to that Act, the word 'fish', includes shell fish. 8. He also relied on the Marine Zones of India (Regulations of fishing by Foreign Vessels) Act, 1981. Section 2 of the said Act provides that -- In this Act, unless the context otherwise requires, (b) fish means any aquatic animal, whether piscine or not, and includes shell fish, crustacean, molluscs, turtle (chelonia), aquatic mammal (the young, fry eggs and spawn thereof) holothurians, coelenterates, sea weed, coral (porifera and any other aquatic life. 9. In order to amplify his arguments, he brought to our notice the divisions and group of fishes stated in the FAO Year book, 1998, wherein under Code No.4 Crustaceans, shrimps and prawns were shown as group of species. By quoting this the learned Additional Solicitor General contended that when shrimps/ prawns were regarded as species of crustaceans, and the Marine Zones of India (Regulations of fishing by Foreign Vessels) Act, 1981, defines 'fish' inclusive of crustaceans, as shrimps/prawns being the species of crustaceans, should be regarded as one coming within the expression 'fish' enlisted in the Schedule to the Act. https://hcservices.ecourts.gov.in/hcservices/ 10. He further relied on the FAO Technical Guidelines for Fisheries Management in which the term 'fish' has been defined as follows : Definition of 'FISH' (1) Used as collective term, includes molluscs, crustaceans and any aquatic animal, which is harvested (2) Any animal living exclusively in the water primarily denoting animals provided with fins and destitute of limbs, but extended to include various crustaceans, octaceans, molluscs, etc. -- Oxford English Dictionary Vol IV, 1978. (5) A name loosely applied in popular usage to many animals of diverse characteristics, living in the water – Webster 1913 Dictionary. 11. He also relied on Elsevier's Dictionary of Fisheries complied by P.E.Eapen, in which fish has been defined to mean the cold blooded animals typically with backbone, gills, and fins and primarily depended on water as medium to live and breath with gills. 12. Per contra, Mr.Joseph Vellapally, learned senior counsel appearing for the exporters contended that the appeal filed under section 130 of the Customs Act is not maintainable as the issue to be decided is one of classification of the goods for the purpose of assessment. Section 130 of the Customs Act provides for an appeal to the High Court, but specifically excludes the appeal from an order relating to the determination of the question, having a relation to the rate of duty of customs or to the value of goods, for the purposes of assessment. This appeal having a relation to the rate of duty of customs cannot be maintained. 13. On merits he contended that the term 'fish' stated in the schedule to the Agricultural Produce Cess Act, 1940, in the absence of any definition in that Act, has to be construed by applying the common parlance theory. The question as to whether the expression 'fish' includes prawns/shrimps is a question of fact. When the question of fact has been decided by the authorities under the Act as well as the Tribunal, the Court shall not interfere with such a finding of fact of the Tribunal arrived at bona fide while exercising the jurisdiction under section 130 of the Customs Act, 14. Mr.C.Natarajan, learned Senior Counsel appearing for the appellant argued in line with the arguments made by Mr.Joseph Vellapally. 15. In reply to the said arguments, the learned Additional Solicitor General contended that the Legislature, during the time of enacting Agricultural Produce Cess Act, 1940 did not think to define the term 'fish' or any other term contained in the schedule. In such circumstances, the object of the Act must be taken into https://hcservices.ecourts.gov.in/hcservices/ consideration, while deciding whether an item enumerated in the Schedule should encompass within it the other items also. As the object is to make financial provisions for the carrying out the object by the Indian Council of Agricultural Research, the terminology 'fish' has to be determined in a wider manner to include prawns/shrimps also. 16. Heard the learned counsel on either side and perused the materials available on record, perused the questions of law formulated at the time of admission. From the above narrated facts and the arguments by either of the parties, the following points arise for consideration : 1.Whether, an appeal under section 130 of the Customs Act is maintainable before this Court, having regard to the dispute to be resolved in this appeal? 2. Whether on the facts and circumstances of the case, the expression 'fish' stated as item No.7 to the schedule to the Act, 1940 would include within itself prawns/ shrimps? The questions of law formulated at the time of admission are modified as above. 17. We will now deal with the first question of law regarding the maintainability of the appeal before this Court. We are not able to concur with the learned counsel for the respondent/exporters that the appeal is not maintainable in view of the fact that the determination of question involved in these cases does not have a relation to the rate of duty or value of the goods for the purpose of assessment. The very section has been the subject matter of consideration by the Supreme Court in the case of Naveen Chemicals Mfg. And Trading Co. Ltd. v. Collector of Customs, (1993) 4 SCC 320. Though in that judgment, much was concentrated on section 129(c) of the Customs Act, reference has also been made to section 130 of the Act and ultimately the Supreme Court has evolved a test for the purpose of determining the question. 18. To put it in the words of the Supreme Court, the test is as follows : "This, then, is the test for the purposes of determining whether or not an appeal should be heard by a Special Bench of CEGAT, whether or not a reference by CEGAT lies to the High Court and whether or not an appeal lies directly to the Supreme Court from a decision of CEGAT : does the question that requires determination have a direct and proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods." While thus holding, the apex Court dismissed the Civil Appeal by observing thus : "Strictly speaking, on the interpretation that we have placed upon the said expression, this appeal would not lie from the impugned order of CEGAT to the Supreme Court. But we do not propose to dismiss it on that https://hcservices.ecourts.gov.in/hcservices/ ground. We dismiss it on the ground that the appellants were in error in contending that their appeal before CEGAT ought to have been heard by a Special Bench and could not have been heard and decided by a member of CEGAT, sitting singly." 19. In the above stated observations, the terms 'Reference by CEGAT lies to the High Court' can be read as appeal to the High Court from the order of the CEGAT. After evolving the test as above with reference to the facts of that case wherein the goods imported under licence as crude emitine was found to contain emitine hydrochloride, which is not permitted to import under the licence, were confiscated and allowed the importer to clear the same on payment of redemption fine. The Supreme Court observed that the order of the Additional Collector under appeal before CEGAT in that case did not have any direct or proximate relation, for the purposes of assessment, either to the rate of duty applicable to the said goods or to the value thereof. All that the Additional Collector’s order did was to confiscate the said goods allowing to the appellant the option of redeeming them upon payment of a fine of Rs 10,000. That the appellant might avail of the option, pay the fine and clear the said goods, when questions as to the rate of duty and value for purposes of assessment might possibly arise, is far too remote a contingency to satisfy the test that is laid down. 20. The principle laid down in that case squarely applies to the facts of the case. Hence, the first question as to the maintainability of the appeal is answered in the affirmative, in the sense, the appeal is maintainable. 21. As regards, the second question of law, we are not able to accept the argument of the learned Additional Solicitor General that 'fish' includes molluscs and crustaceans and as such, the crustaceans would otherwise mean and include prawns/shrimps and hence, prawns and shrimps should be regarded as 'fish' for the purposes of assessment and such meaning should be given to the expression 'fish' incorporated as item No.7 to the Schedule to the Act. If that be the intention of the lawmakers, then it would have been very easy for them to describe the expression 'all aquatic animals' or 'all marine products', instead of 'fish' in item No.7 of the Act, 1940. But, it is not so, the item No.7 in the schedule to the Act sets out only 'fish'. 22. How to interpret the provisions or the entries contained in the Schedule to the fiscal statutes has been repeatedly explained by the apex Court in catena of decisions. The uniform opinion of the Supreme Court, in all those cases, run as follows : "No words or expression used in any statute can be stated to be redundant or superfluous. In matters of interpretation, one should not concentrate too much on one word and pay too little attention to other words. Every provision or every word must be looked at generally and the context in which it is used and not in isolation. The https://hcservices.ecourts.gov.in/hcservices/ elementary principle of interpreting any word while considering a statute is to gather the mens and sententia legis of the legislature. Wherever the language is clear the intention of the legislature is to be gathered from the language used. While doing so, what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided." (emphasis supplied). 23. As stated by the Privy Council, in the case of Crawford v. Spooner, (1846) 6 Moore PC 1, "We cannot aid the legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there. In case of an ordinary word, there should be no attempt to substitute or paraphrase of general application. Attention should be confined to what is necessary to deciding the particular case." (See:Gwalior Rayons Silk Mfg. (Wvg) Co. Ltd. v. Custodian of Vested Forests, AIR 1990 SC 1747, Union of India v. Deoki Nandan Aggarwal, AIR 1992 SC 96, Institute of Chartered Accountants of India v. Price Waterhouse, (1997) 6 SCC 312, Harbhajan Singh v. Press Council of India, (2002) 3 SCC 722, and M/s. Grasim Industries Ltd. v. Collector of Customs, Bombay, J.T. 2002 (3) SC 551. 24. The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not flow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law i.e. the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter.(See:Mathuram Agrawal v. State of M.P., (1999) 8 SCC 667 = AIR 2000 SC 109, Bank of Chettinad Ltd. v. CIT, (1940) 8 ITR 522 (PC), IRC v. Duke of Westminister, 1936 AC 1, Parrington v. Attorney General, (1869) 4 HL 100, Russel (Inspector of taxes) v. Scoot (1948) 2 All E. R. 1). 25.Having in mind the above said well established legal principle, we will have to see whether 'fish', found as the 7th item in the schedule to the Agricultural Produce Cess Act, would include within itself prawns/shrimps also. https://hcservices.ecourts.gov.in/hcservices/ 26. It is an admitted fact that the word 'fish' has not been defined in the Act itself. In the absence of the definition, rule of interpretation is that particular words used by the legislature in the denomination of articles or goods should be understood according to the common or commercial understanding of the term used, for the Legislature does not suppose our merchants to be naturalists or geologists or biologists and thus resort should be made to understand the popular meaning or the meaning attached to them by finding out as to how those goods were understood by those dealing with them, that is to say, to their commercial sense. (See: Mathuram Agrawal v. State of M.P., (1999) 8 SCC 667). 27. The fish and prawns are delicacies in the South India. If the common parlance test is applied, it cannot be contended that fish and prawn are one and the same commodity. If