Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5
PETITIONER:
AUTO TRACTORS LIMITED, PRATAPGARH
Vs.
RESPONDENT:
COLLECTOR OF CUSTOMS (APPEAL), BOMBAY
DATE OF JUDGMENT19/01/1989
BENCH:
RANGNATHAN, S.
BENCH:
RANGNATHAN, S.
MUKHARJI, SABYASACHI (J)
CITATION:
1989 AIR 1065 1989 SCR (1) 281
1989 SCC Supl. (1) 667 JT 1989 (1) 102
1989 SCALE (1)188
ACT:
Customs, Tariff Act, 1975: First Schedule ICT No. 87.01
(1) and Customs Notifications Nos. 200/79 dated 28.9.1979
and 179/80 dated 4.9.1980--Company manufacturing agricultur-
al tractors--Components imported to be used in the manufac-
ture thereof--Entitlement to concessional rate of
duty----Validity of.
HEADNOTE:
Customs Notification No. 200/79 dated 28.9.1979 exempts
components required for the manufacture of heavy commercial
motor vehicles or of tractors from customs duty in excess of
25 per cent ad valorem and whole of the additional duty
leviable thereon. Notification No. 179/ 80 dated 4.9.1980
exempts components required for the purpose of initial
setting up or for the assembly or manufacture of tractors,
an article falling under Heading No. 87.01(1) of the First
Schedule of the Act from so much of the customs duty as is
in excess of the rate applicable to the said article when
imported complete.
The appellant-company imported three consignments of
components of agricultural tractors. The Directorate General
of Technical Development issued certificate in terms of
notification No. 179/80 stating that the appellant-company
was holding a valid industrial licence for the manufacture
of agricultural tractors and have an approved manufacturing
programme. The appellant cleared the goods availing itself
of the said concession. Having realised later that it was
entitled to the larger concession available under Notifica-
tion No. 200 of 1979, it filed three applications in respect
of the said consignments claiming refund to the extent of
the difference between the entitlements to concession under
the two notifications. The DGTD issued certificates in terms
of notification No. 200 of 1979 in its favour.
The Assistant Collector of Customs rejected assessee’s
prayer on the ground that it had failed to produce end-use
certificate. Its appeals before the Collector of Customs
(Appeals) failed. The Customs, Excise and Gold (Control)
Appellate Tribunal dismissed the appeal on the ground that
the appellant did not produce the approved manufacturing
programme at the time of clearance of the goods as required
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5
under Notification No. 200 of 1979.
282
In these appeals it was contended for the respondents
that since the amended certificates were not produced at the
time of clearance but only much later the assessee was not
entitled to the concession under Notification No. 200 of
1979.
Allowing the appeals,
HELD: 1. The assessee is entitled to the concession
available under Notification No. 200 of 1979. [287B-C]
2.1 The grant of concession depends on production of
evidence by the importer to the Assistant Collector of
Customs at the time of clearance of the components or the
goods that they have a programme duly approved by the Minis-
try of Industry and the Industrial Adviser or Additional
Industrial Adviser of the Directorate General of Technical
Development of the Ministry of Industry for the manufacture
of such motor vehicles or of tractors and not on the refer-
ence in the certificates to the notifications that can be
availed of by the assessee. [286C-D; 287B]
2.2 In the instant case, the assessee had produced
unequivocal evidence in the form of original set of certifi-
cates from DGTD at the time of clearance of the goods of the
fact that the appellant held a valid industrial licence for
the manufacture of agricultural tractors and that it also
had an approved manufacturing programme. That was sufficient
compliance with the terms of the notification in question.
The omission of the assessee to request the DGTD to refer to
the assessee’s entitlement under the 1979 notification or
the omission of the DGTD to refer to the assessee’s entitle-
ment under the 1979 notification cannot take away the asses-
see’s rights. The order of the Tribunal is, therefore, set
aside. [286F-H; 287A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 850852
of 1988.
From the Order dated 23.10.87 of the Customs Excise and
Gold (Control) Appellate Tribunal, New Delhi in Appeal No.
830/83-B2 and C/3 105 & 3 105 of 87/B-2. Order Nos. 2091 to
2093/87-B.
A.N. Haksar, H.S. Anand and Mrs. M. Karanjawala for the
Appellants.
G. Ramaswamy, Additional Solicitor General, Ashok K.
Shrivastava and P. Parmeswaran for the Respondent.
283
The Judgment of the Court was delivered by
RANGANATHAN, J. The appellant, M/s Auto Tractors Limit-
ed, is a company manufacturing tractors. For purposes of
manufacture, the company imports certain parts and compo-
nents from abroad.
There are two notifications on the Government of India
granting certain concessions from the levy of customs duty
which are applicable to such goods as have been imported by.
the appellant. The first of these, namely, Notification No.
200/79 dated 28.09.1979 (as amended from time to time)
exempts components "required for the manufacture of heavy
commercial motor vehicles ...... or of tractors" from so
much of the customs duty as is in excess of 25 per cent ad
valorem and the whole of the additional duty leviable there-
on. The grant of the concession was subject to the fulfill-
ment of certain conditions specified in the notification.
The second notification was Notification No. 179/80 dated
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5
4.9.1980 (as amended from time to time). This notification
confers an exemption in respect of parts of articles falling
under specific headings in the First Schedule to the Customs
Tariff Act, 1975. These admittedly included parts required
for the purposes of the initial setting up or for the assem-
bly or manufacture of "tractors", this being an article
falling under heading No. 87.01(1) of the First Schedule
above referred to. This exemption was in respect of so much
of the customs duty as is in excess of the rate applicable
to the said article (i.e. tractor) when imported complete.
This concession was again subject to a certificate and
recommendation from certain specified authorities, one of
whom is the Directorate General of Technical Development
(DGTD) The relief available to the assessee under the first
notification of 1979 is, apparently, larger than the one
available under the second notification of 1980.
The appellant company imported three consignments. Each
of the consignments was cleared after production of a cer-
tificate from the DGTD in the following terms:
"Certified that M/s Auto Tractors Ltd., Luc-
know are holding a valid Industrial Licence
for the manufacture of agricultural tractors
and have an approved manufacturing programme.
It is further certified that the above compo-
nents of agricultural tractors, which fall
under ICT No. 87.01 (1) qualify for conces-
sional rate of import duty in terms of Cus-
tom’s Notification No. 179/F No. 370/99/79CUS.
I dated 4.9.1980."
(underlining
ours).
284
Apparently, since the certificates of the DGTD referred only
to Notification No. 179/80, the appellant was granted the
concession available under the said Notification. The appel-
lant cleared the goods, availing itself of the said conces-
sion, in March, May and June 1981.
Subsequently, the appellant appears to have realised
that it was entitled to the larger concession available
under Notification No. 200 of 1979 and that it had erred in
clearing the goods after payment of duty subject only to the
smaller concession available under Notification No. 179 of
1980. The appellant therefore filed three refund applica-
tions in August, September and October 1981 claiming refund
to the extent of Rs. 1,55,342.50, Rs. 1,28,350.05 and
Rs.6,46,415.44, being the difference between the entitle-
ments on concession under the two notifications in question.
It also appears that the appellant subsequently applied to
the DGTD for an amendment of the original certificates to
make it clear that the goods imported by the appellant were
eligible for the concession under notification No. 200 of
79. The DGTD on such application issued a certificate to the
following effect:
"Certified that M/s. Auto Tractors Ltd. Pra-
tapgarh are holding an Industrial Licence to
manufacture Agricultural Tractors and have an
approved manufacturing programme. It is fur-
ther certified that the items listed above are
components of agricultural tractors falling
under ITC No. 87.01 (1) and are eligible for
concessional rate of import duty under custom
notification No. 200/79 and 52/81 as extended
by Custom’s notification No. 81/81 and 82/81
both dated 28.3. 1981.
This supersedes the earlier duty concession
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5
certificate issued by this office vide Notifi-
cation No. 179/F No. 370/ 99/79-CUS. I dated
4.9.1980 under this office letter No. DD-
II/5(49)/79 Ag dated 16.1.81."
These amended certificates were also produced before the
Customs authorities.
The assessee’s prayer for refund was however rejected by
the Assistant Collector of Customs on the ground that the
assessee had failed to produce "end-use" certificates. The
assessee’s appeals to the Collector of Customs (Appeals)
also failed. There were further appeals to the CUstoms,
Excise and Gold (Control) Appellate Tribunal, which by its
order dated 23.10.1987, dismissed the appeals of
285
the Appellants and hence the present appeals.
The Tribunal disposed of the assessee’s claim by a short
order. It observed that the Notification No. 200/79 entitled
an assessee to the concessions therein mentioned on the
fulfillment of three conditions:
(i) A manufacturing programme as duly approved by the Direc-
tor General of Technical Development (D.G.T.D.) should be
produced at the time of clearance of the goods.
(ii) The list of components and goods should be produced
duly certified by the D.G.T.D.; and
(iii) An End-use certificate from the same Directorate to be
produced in clue course in regard to the consumption of
goods in the manufacture of the motor vehicles or tractors,
etc.
The Tribunal proceeded to observe:
"The first statutory condition of the notifi-
cation that the manufacturing programme of the
appellants as approved by the D.G.T.D. should
have been produced before the Assistant Col-
lector at the time of clearance of the goods
was not fulfilled by the appellants. As a
matter of fact at the time of clearance of the
goods there was no claim even by the appel-
lants under Notification Nos. 200 and
201/79Cus. Their claim at that time was under
a different notification No. 179/80-Cus. Which
contained no requirement to produce an ap-
proved manufacturing programme. Since the
statutory wording of the notification made it
imperative for the appellants that the ap-
proved manufacturing programme should have
been produced at the time of clearance and
since this condition was not fulfilled, the
entitlement of the appellants to the exemption
is not accepted.
5. The approved manufacturing
programme was available all along with the
appellants yet they did not produce it at the
time of clearance before the Assistant Collec-
tor."
(underlining
ours)
We have heard the learned counsel for the appellant as
well as learned Additional Solicitor General and we are of
the opinion that
286
the Tribunal has erred in denying the appellant the benefit
of the Notification No. 200 of 1979. This notification made
the availability of the concession thereunder subject to
three conditions of which one alone is relevant for our
purposes. The Tribunal thought that this condition was that
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5
the approved manufacturing programme should have been pro-
duced at the time of clearance and it has denied the asses-
see the benefit of the concession, even though satisfied
that the approved manufacturing programme was all along
available with the assessee, because such programme was not
produced at the time of the clearance. The Tribunal has
committed an error in its reading of the relevant condition
of the notification. The condition is not that the manufac-
turing programme should be produced but that "the importer
should produce evidence to the Assistant Collector of Cus-
toms at the time of clearance of the components or the goods
that they have a programme duly approved by the Ministry of
Industry and the Industrial Adviser or Additional Industrial
Adviser of the Directorate General of Technical Development
of the Ministry of Industry for the manufacture of such
motor vehicles ..... or of tractors". In other words, the
importer had only to satisfy the customs authorities that it
had an approved industrial programme for the manufacture of
tractors by production of a certificate from the DGTD. It is
indeed common ground before us that the second set of cer-
tificates issued by the DGTD constitutes sufficient evidence
that would entitle the appellant to the concession under
Notification No. 20)/1979. But the argument is that the
amended certificates were produced not at the time of the
clearance of the goods but only much later and that there-
fore the appellant is not entitled to the concession under
the said notification. There is a fallacy in this approach,
for, even ignoring the subsequent amendment of the certifi-
cates, we are of the opinion that the production of the
original set of certificates at the time of clearance of the
goods was sufficient compliance with the terms of the noti-
fication in question. We have extracted the terms of this
certificate earlier. It is an unequivocal certificate by the
DGTD that the appellant holds a valid industrial licence for
the manufacture of agricultural tractors and that it also
has an approved manufacturing programme. That is all the
second set also says. There is therefore no doubt that the
assessee had produced evidence, in the form of the said
certificate, of the fact that the appellant had an approved
industrial programme. This was the only requirement of the
notification and this requirement has, in our opinion, been
complied with. The further words in the first set of certif-
icates that the assessee was eligible for the concession
under 1980 notification were mere surplusage. The omission
of the assessee to request the DGTD to refer to the asses-
see’s entitlement under the
287
1979 notification or the omission of the DGTD to refer to
the assessee’s entitlement under the 1979 notification
cannot take away the assessee’s rights. The grant of conces-
sion depends on a certificate that the assessee had an
approved manufacturing programme--which is there--and not
the reference therein to the notifications that can be
availed of by the assessee. We are therefore of the opinion
that the order of the Tribunal should be set aside and that
the assessee should be held entitled, in respect of the
three consignments referred to earlier, to the concession
available under Notification No. 200 of 79. We direct ac-
cordingly. The appeals are allowed but having regard to the
circumstances we make no order as to costs.
P.S.S Appeals allowed.
288