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PETITIONER: SUBHASH PHOTOGRAPHICS ETC.  ETC.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT11/05/1993

BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) VENKATACHALA N. (J)

CITATION:  1993 SCR  (3) 654        1993 SCC  Supl.  (3) 323  JT 1993 (4)   116        1993 SCALE  (2)909

ACT: Customs  Act, 1962/Customs Tariff Act, 1975/Project  Imports Regulations,  1986:  Ss.  156. 157,159/First Schedule, Second Schedule,  Chapter 90,  Chapter  98. Heading 98.01, Chapter Notes (1)  and  (2) Regulation/(3)-"Industrial  Plant "-Meaning  of-Photographic machinery  does not fall within the purview  of  "industrial plant". Administrative Law: Delegated  Legislation-Chapter  98 of  Customs  Tariff  Act, 1975-Concessional rate of duty on certain articles including "industrial  plant"--Chapter  Note (2) conferring  power  on Central  Board of Customs and Excise to  define  expressions used  in Chapter 98--Project imports Regulations made  Board defining   "industrial  plant"--  Exclusion  of   industrial systems meant for establishments designed to offer  services of  any  description such as  photographic  studios,  photo- graphic film processing laboratory etc. from the purview  of "industrial  plant "-Held-Regulation making power  conferred on  Board  by s. 157 of Customs Act, 1962 is same  as  rule- making  power conferred on Central Government under s.  156- Regulations  should not be contrary, to rules made under  s. 156-Project  Import  Regulations  cannot  be  said  to  have travelled  beyond  purview  of  statute-Board  by   defining "industrial  plant"  has  not travelled  beyond  its  brief- Chapter Note (2) does not amount to excessive delegation  of Parliaments essential legislative function. Words and Phrases: "Industrial Plant" occurring in Chapter 98 of Customs Tariff Act, 1975-Meaning of.

HEADNOTE: The  Customs  Tariff  Act  1975  by  its  First  and  Second Schedules  provided  the rates of and custom  duties  to  be levied  under the Customs Act, 1962.  Chapter 98  introduced in Second Schedule prescribed a concessional rate of duty in respect  of  articles and items specified therein.   As  per Chapter 655 Note  (1), if a particular article mentioned in  Chapter  98 also fell under some other Chapter/heading, still such  item would  be  governed  by Chapter 98 and  not  by  that  other

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chapter/heading. Photographic machinery was covered under Chapter 90  wherein the rate of duty was far higher, but for purposes of duty it was  claimed as "industrial plant" under Chapter 98.01.  The expression "industrial plant" was defined neither in Customs Tariff Act nor in Customs Act. Chapter  Note  (2) of Chapter 98 of the Customs  Tariff  Act laid  down  that  Heading 98.01 would  apply  to  all  goods imported  in accordance with the regulations made under.  s. 157  of  the Act and the expressions used in  heading  98.01 should  have  the  meaning  assigned to  them  in  the  said regulations.   Accordingly, the Project Import  Regulations, 1986  were  framed.   Regulation  (3)  of  said  Regulations defined   "industrial  plant"  exduding  from  its   purview industrial  systems  meant for "establishments  designed  to offer  services  of any description" such  as.  photographic studios, photographic film processing laboratories etc. On coming into force of the Project Import Regulations,  the Customs  authorities  refused  to  treat  the   photographic equipment  imported  by the appellants as  industrial  plant falling under heading 98.01 and sought to levy duty  thereon under Chapter 90 of the Customs Tariff Act, 1975. The  appellant  filed writ petitions before the  High  Court challenging the validity of the Project Import  Regulations, 1986.  The writ petitions were dismissed.  Hence the appeals by special leave. The appellant contended that regulations made by the Central Board of customs and Excise under s. 157 of the Customs  Act 1962,  not  being subject to Parliament’s  scrutiny  in  the sense that they were not required to be laid on the floor of the  Houses of Parliament under s. 159 stand on an  inferior footing  to  rules made by the Central Government  under  s. 156, and therefore, the regulation making power was confined only to peripheral and procedural matters and not for making substantive  provisions; the Act specified the articles  and things subjected to duty as also the rates of duty and  such A  power  was not left to be exercised by  a  delegate;  the Parliament  did not contemplate delegating to the Board  the power  to  cut  down the field and  ambit  occupied  by  the provisions of the Customs Act or the Customs Tariff Act  and such  a  power, if delegated to the Board, would  amount  to excessive delegation of legislative power; Regulation (3) of the Project Imports Regu- 656 lation  defining "Industrial plant" was outside the  purview of  the regulation making power conferred by s. 157  as  the same  took  away  under  the  garb  of  defining  the   said expression  the  beneficial  rate of duty  provided  by  the Parliament  in  the interest of industrial progress  of  the country. Dismissing the appeals, this Court, HELD  :  1.  The regulation-making power  conferred  on  the Central Board of Customs and Excise by s. 157 of the customs Act,  1962  is  not  confined  only  to  peripheral   and/or procedural  matters.   The  Parliament  has  appointed   the Central  Government and the Board to make  rules/regulations to  carry out purposes of the Act.  The character  of  Rules and of the Regulations made under ss. 156 and 157 of the Act respectively   Is   the   same-both   constitute   delegated legislation.   The Regulations are subject to an  additional limitation  viz., they should not be contrary to  the  Rules made  under s. 156.  The purpose of sub-section (2) in  both the sections is to allocate certain matters to each of  them exclusively;   subject  to  these  sub-sections,  both   the delegates can exercise the power vested in them for carrying

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out the purposes of the Act. (662G-H, 663-G-H, 664-A) 2.1.  It is not for the Court to question the wisdom of  the Government’sor   for   that  matter,  of   Board’s   policy. Enactments  like Customs Act and Customs Tariff Act are  not merely  taxing statutes but are also potent  instruments  in the  hands of the Government for regulating the economy  and the  industrial  development  of  the  country.   Power   of taxation  is one of the weapons in the Government’s  armoury to  regulate  the economy.  A certain industry  may  require encouragement while another may not.  Such legislations  can be  properly administered only by constantly adjusting  them to the needs of the situation.  This calls for a good amount of  discretion to be allowed to the delegate.   "Flexibility is essential (in law-making) and it is one of the advantages of rules and regulations that they can be altered much  more quickly and easily than can Acts of Parliament".   Probably, it  is  for  this reason that  the  Parliament  has  through Chapter Note (2) vested the power to define the expressions, occurring in Chapter 98, in the Board which is a part of the Government  and  is  in  immediate  direct  charge  of   the administration  of  the  Act alongwith and  subject  to  the guidance  of  the Central Government.  Looked at  from  this angle,  it cannot be said that Chapter Note (2)  amounts  to excessive   delegation  of  the   Parliament’s   essentialle legislative function. (665-D-, G). 2.2.  Chapter  98  of  the Customs  Tariff  Act  provides  a concessional  tariff  to industrial plant.   The  expression "industrial plant" is a term of wide 657 connotation.  All kinds of Industrial plants may not require to  be encouraged.  Some may; others may not.  Decisions  of this  nature have to be made from time to time.   Parliament cannot  obviously do this.  It has, therefore, rightly  left the  function to the Board.  In 1986,  the  Government-which expression   includes  the  Board-thought  that  import   of ’industrial  systems’ meant for ’establishments designed  to offer services of any description such as hotels, hospitals, photographicstudios,     photographic    film     processing laboratories,  etc  need no encouragement in  the  shape  of concessional  custom  tariff and they said  so  through  the Project  Imports Regulations, 1986 which cannot he  said  to have  travelled beyond the purview of the statute.  Nor  can it be said that the Board has travelled beyond its brief  by excluding the "Establishments designed to offer services  of any  description" from the preview of "industrial plant"  as defined   under  Regulation  (3)  of  the  Project   Imports Regulations.   Accordingly, photographic equipment does  not fall within the ambit of "industrial plant". (665-G-H,  666- A, 668-E) 2.3.  It  cannot  be  said  that  the  Parliament  has,   by empowering  the Board to define the  expression  "industrial plant"  occurring  in Chapter 98,  delegated  its  essential legislative function.  There is, indeed, no  self-abnegation on the part of the Parlimaent.  The express power  conferred by  Chapter Note (2) of Chapter 98 of Customs Tariff Act  is undoubtedly different from the power of exemption  conferred by Section 25.  It makes little difference in principle that while  an exception notification is required to be  laid  on the floor of the parliament, Regulations made under  Section 157  are not so required.  Absence of such requirement  does not mean absence of control by the Parliament over the  acts of the delegate. (661-G-H) Supreme Court Employee Welfare Association v. Union of lndia [1989]  4  S.C.C.  187.  Avinder Singh v.  Punjab  [1979]  1 S.C.R.  845  & State of Tamil Nadu v. Hind  Stone  [1981]  2

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S.C.R. 742, relied on. Vasantial Maganbhai Sanjanwala v. State of Bombay, [1961]  1 S.C.R. 341 & Devidas v. State of Punjab [1967] 3 S.C.R. 557, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2684 (NM) /93 etc. etc. From  the Judgment and Order dated 2.4. 92/ 27.4. 92 of  the Bombay High Court in W.P. No. 27 of 1990. 658 Harish  N.  Salve,  R.P.  Bhatt,  A.K.  Ganguli,  Dr.  Nitin Kantawala,  Ms.  Hemantika Wahi, T.V.S.N. Chari,  Ms  Tanuja Sheel,  Mrs. Sheela S. Rao, P. Parmeswar and E.C.  Agrawala, Ranjit Kumar, R. Venkataramani, Mrs. M. Qamaruddin,  Abhijat P. Medh for the appearing parties. The Judgment of the Court was delivered by B.P. JEEVAN REDDY,J.  Leave granted.  Heard counsel for  the parties. These  appeals arise from the common judgment and  order  of the  Bombay  High Court in a batch of writ  petitions.   The question  is whether the photographic machinery imported  by the appellants falls under Customs Tariff Heading No. 98.01. If it falls under it, it is entitled to a concessional  rate of duty.  If not, it is chargeable to a higher duty. The Customs Tariff Act, 1975 was enacted by Parliament  with a view to consolidate and amend the law relating to  customs duties.  It repealed the Indian Tariff Act, 1934 and  Indian Tariff (Amendment) Act, 1949.  Section 2 says that the rates at  which  duties  and customs shall  be  levied  under  the Customs  Act,  1962  are those specified in  the  First  and Second Schedules.  Section 3 levies additional duty equal to excise duty.  Chapter 98 was introduced in the Schedule with effect  from  February  28, 1986.  It  relates  to  "Project Imports; Laboratory Chemicals; Passengers Baggage,  Personal Importation  by  air  or post;  Ship  Stores".   Chapter  98 provides a concessional rate of duty in respect of  articles and  items  specified therein.  Chapter Note  (1)  declares, "this  chapter  is to be taken to apply to all  goods  which satisfy the conditions prescribed therein, even though  they may be covered by a more specific heading elsewhere in  this Schedule." In other words, if a particular article mentioned in Chapter 98 also falls under some other chapter/  heading, still  such item will be governed by chapter 98 and  not  by that   other  chapter/heading.   So  far   as   photographic machinery  is  concerned, it is not disputed that  it  falls under  chapter  90  where the rate of duty  is  far  higher. Chapter Note (2) which is of crucial relevance herein reads "Heading  No.  98.01 is to be taken to apply  to  all  goods which  are imported in accordance with the regulations  made under section 157 of the Customs Act, 1962 (52 of 1962)  and expressions  used  in this heading shall  have  the  meaning assigned to them in the said regulations. (emphasis added) 659 Heading   98.01   (Sub-Heading  9801.00),   being   relevant for our purpose, must also be set out: ------------------------------------------------------------ Heading     Sub          Description of     Rate of duty No.         heading      article            Standard             No.                             Prefential Areas ------------------------------------------------------------ 98.01       98.01.00   All items of machinery   60%

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                      including prime movers,                        instruments, apparatus                        and appliance, control                        gear and transmission                        equipment, auxiliary                        equipment (including                        those required for                        research and development                        purposes, test and quality                        control), as well as all                        components (whether finished                        or not) or raw materials for                        the manufacture of the aforesaid                        items and their components                        required for the intial setting                        up of a unit, or the substantial                        expansion of an existing unit,                       of a specified : (1)Industrial plant,                      (2) irrigation project,                      (3) power project,                      (4) mining project,                      (5) project for the exploration                          or oil or other minerals, and                      (6) such other projects as                      Central Government may, having                      regard to the economic development                      of the country notify in the                      official Gazette in this behalf;                      and spare parts, other raw                      materials (including semifinished                      material) or consumable stores not                      exceeding 10% of the value of the                      goods specified. above 660                 provided that such spare parts,                   raw materials or consumable stores                   are essential for the maintenance of                   the plant or project mentioned in  to                   6 above."                                      (emphasis added) The  expression  "industrial plant" is not  defined  in  the Customs Tariff Act, 1975 or, for that matter, in the Customs Act, 1962.  Chapter Note (2) of Chapter 98, which it must be emphasized  is  apart  of  statute  itself,  says  that  the expressions used in heading No. 98.01 shall have the meaning assigned  to them by the regulations made under Section  157 of the Customs Act and further that heading No. 98.01  shall apply  to  all goods which are imported in  accordance  with such regulations. As  contemplated  by Chapter Note (2) of Chapter 98  of  the Customs  Tariff  Act,  the  Central  Government  framed  the Project Imports Regulations under Section 157 of the Customs Act,  contained in notification No. 230/86-Cus. dated  April 3, 1986.  They came into force on the same day.   Regulation (1)  of  these Regulations says that they  shall  be  called "Project  Imports  Regulations, 1986" and  shall  come  into force  on April 3, 1986.  Regulation (2) says that the  said Regulations  shall  apply for assessment  and  clearance  of goods  falling  under  heading  No.  98.01.  Regulation  (3) defines   certain  expressions  including   the   expression "industrial Plant".  The definition reads as follows:               "Industrial Plant" means an industrial  system               designed  to  be  employed  directly  in   the               performance  of  any  process  or  series   of               processes necessary for manufacture production

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             or  extraction  of a commodity, but  does  not               include-               (i) establishments designed to offer  services               of any description such as hotels,  hospitals,               photographic  studios, photographic film  pro-               cessing  laboratories,  photocopying  studios,               laundries, garages and workshops; or               (ii)a  single machine or a composite  machine,               within the meaning assigned to it, in Notes  3                             and  4  to  section  XVI  of  the  said   Firs t               Schedule." A  perusal of the definition of "industrial plant" makes  it clear that it seeks to exclude industrial systems meant  for "establishment designed to offer services of 661 any    description".     It   mentions    certain    service establishments by way of illustration.  Photographic studios and  photographic film processing laboratories happen to  be mentioned   specifically  as  some  of  the   establishments designed to offer services. Once  the Project Imports Regulations came into  force,  the Customs  authorities  refused  to  treat  the   photographic equipment   imported  by  the  appellants  and   others   as "industrial  plant"  falling  under  heading  98.01  of  the customs Tariff Act.  They sought to levy duty thereon  under Chapter  90.   In  view  of  the  refusal  of  the   Customs authorities to treat the photographic machinery imported  by them as "industrial plant" within the meaning of Chapter 98, the  appellants approached the Bombay High Court by  way  of the  batch  of writ petitions.  Their  contention  was  that until  April  3, 1986, photographic machinery  was  included within  the  expression  "industrial  plant"  occurring   in heading 98.01 as well as in tariff heading 84.66 of the  old tariff.   This fact was affirmed by the Government of  India when  a  doubt  was  raised-in  their  letter  bearing  No.F 526/52/83-Cus.   (T.U.)  dated  November  4,   1988.    Even according  to  the  normal meaning and  connotation  of  the expression "industrial plant", photographic machinery  falls within  its  purview.  This is the sense in which  the  said expression  is used in the Tariff Entry 98.0 1. If  so,  the ambit and field of the said-expression cannot be cut-down by a regulation made under Section 157 of the Customs Act.   If any particular machinery or equipment is to be excluded from the purview of the "industrial plant", it can and should  be done  only  by  the  Act itself but  not  by  a  subordinate legislation  like  regulations.  It was submitted  that  the 1986 regulations are outside the purview of Section 157  and are  incompetent.  The contentions were negatived  and  writ petitions dismissed by the Division Bench. In  these appeals, S/Sri Harish Salve and  Kantawaala  urged the following contention : (1)  A  perusal  of the Customs  Tariff  Act  discloses  its scheme.  The Act specifies the articles and things subjected to duty as also the rate to duty.  Specification of articles is not left to be done by a delegate.  It is true that power of exemption is conferred upon the Central government  under Section 25 of the Customs Act, but it is relevant to  notice that a notification of exemption issued under Section 25  is required  to  be  laid on the floor of both  the  houses  of parliament by Section 159 of the Act.  This shows the  close control  which the Parliament intended to exercise over  the specification of articles and the rate of duty thereon.  The Regulations  made  under  Section 157  are  not  subject  to Parliament’s  scrutiny  in  the  sense  that  they  are  not

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required to be laid on the floor of the houses of Parliament under Section 159.  Evidently, Regulations were not supposed to deal 662 with any matters of substance. (2) While enacting Section 157, Parliament could never  have contemplated delegating, to the Board, the power to cut-down the  field  and  ambit occupied by  the  provisions  of  the Customs Act or Customs Tariff Act.  Regulations made by  the Board stand on an inferior footing to the rules made by  the Central Government under Section 156.  The regulation-making power  was  intended  to  be utilised  for  the  purpose  of providing procedural and peripheral provisions but certainly not  for  making a substantive provision  cutting  down  the content and ambit of the provisions of the Act. (3) Even if it is held for some reason that such a power was intended  to be and was delegated to the Board, it would  be bad since it amounts to excessive delegation of  legislative power.   Regulation  (3)  of  the  new.   Regulations  which defines the expression "industrial plant" is clearly outside the province of regulation-making power conferred by Section 157.   The legislative history of tariff entry 98  militates against  any such power being exercised by the  Board.   The Board  cannot take away what the Parliament has given.   The regulation  in  effect  have  the  effect  of  amending  the provision  in  the Act.  They take away under  the  garb  of defining the expression "industrial plant"’, the  beneficial rate  of  duty  provided by Parliament in  the  interest  of industrial  progress  of the country.  The  Regulations  are inconsistent with the provisions of the Customs Tariff Act. S/Sri Ganguly and T.V.S.N. Chari, learned counsel  appearing for  the  Central  Government,  on  the  other  hand,  fully supported  the  validity  of  the  said  regulations.   They pointed  out that the validity of chapter Note (2)  was  not questioned before the High Court has been expressly recorded in  the  judgment  under appeal.  They  submitted  that  the appellants  should not be permitted to do so at this  stage. Once Chapter Note (2) is taken as good, the challenge to the 1986  Regulations  must fail.  The said note is not  bad  as amounting to excessive delegation of legislative power.   In short,  they refuted each and every submission made  by  the learned counsel for the appellants. Customs   Act,  1962  and  Customs  Tariff  Act,  1975   are complimentary.  to each other.  Section 157 of  the  Customs Act  confers  upon the Central Board of Excise  and  Customs (constituted under the Central Boards of Revenue Act,  1963) the power to make regulations "consistent with this Act  and Rules,  generally  to carry out the purposes of  this  Act". Sub-section (2) particularises certain matters with  respect to  which  regulations can be made.   The  specification  of certain  matters in sub-section (2) is without prejudice  to the generality of the power conferred by 663 Sub-section  (1).   This  is consistent  with  the  standard legislative practice.  Section 157 reads;               " 157.  Central power to make regulations.               (1)  Without  prejudice to any power  to  make               regulations contained elsewhere, in this  Act,               the Board may make regulations consistent with               this Act and the rules,generally to carry  out               the purposes of this Act.               (2) In particular and without prejudice to the               generality   of  the  foregoing   power   such               regulations may provide for all or any of  the               following matters, namely-

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             (a)  the  form of a bill  of  entry,  shipping               bill, bill of export, import manifest,  import               reports, export manifest, export report,  bill               or  transshipment,  boat  note  and  bill   of               coastal goods;               (b)  the  conditions  subject  to  which   the               transshipment  of all or any goods under  sub-               section (3) of Section 54, the  transportation               of  all or any goods under Section 56 and  the               removal   of   ware-housed  goods   from   one               warehouse  to another under section 67 may  be               allowed without payment of duty,               (c)  the  conditions  subject  to  which   any               manufacturing process or other operations  may               be  carried  on in a warehouse  under  Section               65." section 156 confers upon the Central Government the power to make rules "consistent with this Act generally, to carry out the  purposes of this Act".  SubSection (2) of  Section  156 again Specifies certain matters with respect to which  rules can  be  made.   The specification  in  sub-section  (2)  is without  prejudice to the generality of the power  conferred by sub-section (1). The  Parliament has appointed two authorities  i.e.  central government and the Board to make rules/regulations to  carry out  the  purposes of the Act generally.  The  character  of Rules and of the Regulations made under Sections 156 and 157 respectively   is  the  same   both   constitute   delegated legislation.   The Regulations are subject to an  additional limitation viz., they should not be contrary to the Rules 664 made  under Section 156.  The purpose of sub-section (2)  in both the sections is inter alia to allocate certain  matters to  each of them exclusively; subject to these  subsections, both the delegates can exercise the power vested in them for carrying  out  the  purposes of  the  Act.   No  established legislative  practice of any considerable duration has  been brought  to our notice to read any further  limitation  into the regulation-making power under Section 157, assuming that a  legislative  practice can be read as  a  limitation.   We cannot,  therefore, accept the contention  that  regulation- making  power under Section 157 should be confined  only  to peripheral  and/or procedural matters.  It is not  necessary for  the purposes of this case to emphasis the need  or  the growing  relevance  of  delegated  legislation.    Moreover, enactments  like customs Act and Customs Tariff Act are  not merely taxing statues but are also potent instruments in the hands  of the Government for regulating the economy and  the industrial  development  of  the  country.   The  ’economic’ ministries  had  the establishments allied to  them  keep  a close   watch  on  the  economy,  closely   monitoring   its behaviour.   Power  of  taxation is one of  weapons  in  the Government’s  armoury  to regulate the economy.   A  certain industry  may require encouragement while another  may  not. Yet  another  sector  may  require  to  be   controlled-nay, discouraged  on  some  occasions.   In  an   under-developed country  like  ours,  the emphasis is bound to  be  more  on capital  goods  industry  rather  than  on  consumer  goods’ industry.   The domestic industry has also to  be  protected and   encouraged  in  certain  situations.   In  1986,   the government  which expression in this discussion includes the Board-evidently thought that import of ’industrial  systems’ meant for ’establishments designed to offer services of  any description such as hotels, hospitals, photographic studios, photographic  film  processing laboratories’ etc.  needs  no

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encouragement in the shape of concessional custom tariff and they  said  so through the said Regulations  made  in  April 1986.  It is not for the court to question the wisdom of the government’s  or for that matter, of Board’s  policy.  Board is a part of the government.  It is in direct charge of  the administration  of  the  Act  along  with  the   government. Probably,  it  is for this reason that the  Parliament  has, through  Chapter  Note (2), vested the power to  define  the expressions  occurring in Chapter 98 in the Board.  In  this scheme of things, we cannot accept the argument of Sri Salve with respect to some kind of an inherent limitation upon the regulation-making  power of the Board.  We cannot  say  that the said power is confined only to, what the learned counsel calls, peripheral and/or procedural matters. There  is  another and perhaps more simpler  answer  to  the attack upon the validity of the said Regulations. They  are relatable not only to Section 157 of  the  Customs Act but more 665 particularly  to  Chapter  Note (2) of  Chapter  98  of  the Customs Tariff Act.  Chapter Note (2) expressly states  that the expressions used in Heading 98.01 shall have the meaning assigned  to  them in the said regulations.   In  accordance with the said Chapter Note, Project Imports Regulations have been  made  excluding  "establishments  designed  to   offer services of any description" from the purview of "industrial plant".   If the said regulations are good any valid,  there can  be  no  escape from what  they  say;  the  photographic equipment  does  not fall within the  ambit  of  "industrial plant".   In this view of the matter, the relevance  of  the alleged  legislative  practice with respect  to  regulation- making  power,  or of the situation obtaining prior  to  the framing  of  the  said regulations,  is  very  little.   The express  power conferred by Chapter Note (2) of  Chapter  98 cannot  be curtailed or abridged with reference  to  alleged legislative  practice relating to  regulation-making  power, assuming  that  such  a  practice  is  established  and   is relevant.  The only question which really arises is  whether Chapter   Note  (2)  amounts  to  excessive  delegation   of legislative power. As  rightly  pointed  out by Thommen,J.   In  Supreme  Court Employees  Welfare  Association v. Union of India  [1989]  4 S.C.C. 187 "where the validity of a subordinate  legislation (whether made directly under the constitution or statute) is in  question, the court has to consider the nature,  objects and scheme of the instrument as a whole, and on the basis of that  examination, it has to consider what exactly  was  the area  over which and the purposes for which power  has  been delegated  by the governing law." In statutes  like  Customs Act and Customs Tariff Act one has also to keep in mind that such  legislation  can  be  properly  administered  only  by constantly adjusting it to the needs of the situation.  This calls  for a good amount of discretion to be allowed to  the delegate.  As is often pointed out "flexibility is essential (in law-making) and it is one of the advantages of rules and regulations  that they can be altered much more quickly  and easily  than  can acts of Parliament." We have  pointed  out hereinbefore  the  necessity  of  constant  and   continuous monitoring  of the nation’s economy by the  government  (and its  various  institutions)  and  the  relevance  of   these enactments  as  a  means of ensuring a  proper  and  healthy growth.  Looked at from this angle, we are unable to see any substance  in the argument that Chapter Note (2) amounts  to excessive   delegation   of   the   Parliament’s   essential legislative  function.  Chapter 98 provides  a  concessional

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tariff  inter  alia  to industrial  plant.   The  expression "industrial plant" is a term of wide connotation.  All  kind of industrial plants may not require to be encouraged.  Some may;  others may not.  Decisions of this nature have  to  be made  from  time to time.  Parliament  cannot  obviously  do this.   It  has, therefore, left the function to  the  Board which,  as emphasised hereinbefore, is in  immediate  direct charge  of  the administration of the Act,  along  with  and subject to the guidance of the central 666 government. In Vasantlal Maganbhai Sanjanwala v. State of Bombay  [1961] 1  S.C.R.  341,  it is observed by this  Court  that  "self- effacement of legislative power in favour of another  agency either in whole or in part is beyond the permissible  limits of delegation".  At the same time, it is held, "it is for  a court  to hold on a fair, generous and liberal  construction of an impugned statute whether the legislature exceeded such limits.   But  the said liberal construction should  not  be carried  by  the Courts to the extent of  always  trying  to discover a dormant or a latent legislative policy to sustain an  arbitrary power conferred an executive authorities.   It is  the  duty  of  the Court  to  strike  down  without  any hesitation any arbitrary power conferred on the executive by the legislature".  These words were quoted with approval  in a  subsequent decision of the Constitution Bench in  Devidas v. State of Punjab [1967] 3 S.C.R. 557. Krishna lyer, J. emphasised this very aspect in the  context of  a  taxing  statute in Avinder Singh v.  Punjab  1979]  1 S.C.R. 845.  The learned Judge said:               "..... the legislature cannot self-efface  its               personality  and make over, in terms  plenary,               the  essential  legislative  functions.    The               legislature  is responsible and responsive  to               the   people  and  its  representatives,   the               delegate may not be and that is why  excessive               delegation  and  legislative, hara  kiri  have               been frowned upon by constitutional law.  This               is a trite proposition but the complexities of               modem   administration   are   so   bafflingly               intricate and bristle with details, urgencies,               difficulties and need for flexibility that our               massive  legislatures  may not get  off  to  a               start    if    they    must    directly    and               comprehensively handle legislative business in               all   their   plenitude,   proliferation   and               particularisation.  Delegation of such part of               legislative   power   becomes   a   compulsive               necessity  for  viability.   If  the   500-odd               parliamentarians   are  to  focus   on   every               minuscule   of  legislative   detail   leaving               nothing  to  subordinate agencies  the  annual               output   may   be  both   unsatisfactory   and               negligible.   The law-making is not a  turnkey               project, readymade in all detail and once this               situation   is   grasped   the   dynamics   of               delegation easily follow.  Thus, we reach  the               second constitutional rule that the essentials               of   legislative   functions  shall   not   be               delegated   but  the  inessentials,   however,               numerous and significant they be, may well  be               made over to appropriate agencies.  of course,               every delegate is subject to the authority and               control  of  the  principal  and  exercise  of               delegated   power  can  always  be   directed,

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             corrected or cancelled by the principal." 667 Applying  the principles aforesaid, we cannot say  that  the Parliament  has,  by  empowering the  Board  to  define  the expression  "industrial  plant"  occurring  in  Chapter  98, delegated  its essential legislative function.   Indeed,  we see  no self-abnegation on the part of the Parliament.   The power conferred by Chapter Note (2) is undoubtedly different from  the power of exemption conferred, by Section  25.   It makes little difference in principle that while an exemption notification  is  required to be laid on the  floor  of  the Parliament,  Regulations made under Section 157 are  not  so required.  Absence of such requirement does not mean absence of control by the Parliament over the acts of the  delegate. Nor  are  we  satisfied that  by  excluding  the  industrial systems meant for establishments designed to offer  services of any description, the Board has travelled beyond its brief Reference may be had, in this connection to the decision  of this  court  in State of Tamil Nadu v. Hind Stone  [1981]  2 S.C.R. 7421 Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 empowers the State Government  to make rules for regulating the grant of quarry lease,  mining lease  and  other mineral concessions in  respect  of  minor minerals  and purposes connected therewith.  In exercise  of the  said power, the Government of Tamil Nadu  framed  Tamil Nadu  Minor Mineral concession Rules, 1959.  Rule 8  of  the Rules  prescribed  the procedure for lease  of  quarries  to private  persons.   Rule 8(C), which was introduced  in  the year  1977, imposed a prohibition on the grant of  lease  of quarries  in  respect of black granite to  private  persons. The  Rule  provided  that notwithstanding  anything  to  the contrary contained in the said rules, no lease for quarrying black  granite  shall be granted to private  persons  on  or after7th  December,  1977.  It could be ranted only  to  the State  Government  or to a corporation wholly owned  by  it. The validity of Rule 8(C) was challenged on the ground  that it  travels  beyond the purview of the Act inasmuch  as  the power  to make rules conferred upon the State Government  by Section  15  was  meant for regulating the  rant  of  quarry leases in respect of minor minerals but not for  prohibiting it for creating a monopoly in itself (State Government).  It was  also argued that since the decision contained  in  Rule 8(C)  involved  a major change of policy, it could  be  done only by the legislature and not by a subordinate legislative body.   Both  these  arguments  were  rejected.    Following observations are apposite:               "....It  was pointed out by the Privy  Council               in  Commonwealth of Australia v. Bank  of  New               South Wales- and we agree with what was stated               therein-that the problem whether an  enactment               was regulatory or something more or whether  a               restriction was direct or only remote or  only               incidental  involved,  not so  much  legal  as               political,       social      or       economic               consideration.... Each case, it was said, must               be  judged  on its own facts and  in  its  own               setting of time and circumstances and it might               be that in regard to some economic 668               activities   and  at  same  Stage  of   social               development, prohibition with a view to  State               monopoly was the only practical and reasonable               manner of regulation.               Another  of  the  submission  of  the  learned               counsel  was that the G.O.Ms. No.  1312  dated

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             December  2, 1977 involved a major  change  of               policy,  which was a legislative function  and               therefore   beyond   the   competence   of   a               subordinate legislating body.  We do not agree               with  the  submission.  Whenever there  is  as               witch  over from ’private sector’  to  ’public               sector’ it does not necessarily follow that  a               change of policy requiring express legislative               sanction  is  involved.   It  depends  on  the               subject  and the statute.  For example,  if  a               decision  is  taken to impose  a  general  and               complete  ban on private mining of  all  minor               minerals, such a ban may involve the  reversal               of  a  major  policy and  so  it  may  require               Legislative  sanction.  But if a  decision  is               taken to ban private mining of a single  minor               mineral for the purpose of conserving it, such               a ban, if it is otherwise within the bounds of               the  authority Given to the Government by  the               Statute, cannot be said to involve any  change               of policy." The  statement  of  law  is clear   and  we  agree  with  it respectfully.  We are, therefore, of the considered  opinion that  Chapter Note (2) cannot be faulted as an  instance  of excessive  delegation of essential legislative function  nor can the Project Imports Regulations be faulted on the ground of travelling beyond the purview of the statute. For  the above reasons, the appeals fail and are  dismissed. No costs. RP.                           Appeals failed. 669