Full Judgment Text
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PETITIONER:
THERMAX PRIVATE LIMITED
Vs.
RESPONDENT:
COLLECTOR OF CUSTOMS (BOMBAY) NEW COUSTOMS HOUSE
DATE OF JUDGMENT19/08/1992
BENCH:
RANGNATHAN, S.
BENCH:
RANGNATHAN, S.
RAMASWAMI, V. (J) II
JEEVAN REDDY, B.P. (J)
CITATION:
1993 AIR 1339 1992 SCR (3) 943
1992 SCC (4) 440 JT 1992 (5) 281
1992 SCALE (2)212
ACT:
Customs Tariff Act, 1975/Central Excises & Salt Act,
1944:
Section 3(1) Section 8(1)/Rules 8(1), and Rule 192 in
Chapter X-additional duty on article imported equal to
excise duty leviable on a like article-Exemption/concession
granted to a like article under Rule 8(1) extends to
additional duty-Procedure specified in Chapter X-Extends to
additional duty on import_Concession available to importer
for supplying them to Indian manufacturers-Explanation to
S.3(1)-Applicable only where goods of exactly the same
description attracted different rates of duty-Highest rate
of duty-Applicability of.
HEADNOTE:
The appellant-assessee imported certain goods and paid
the customs duty and additional duty at the appropriate rate
under the relevant entry of the customs tariff but claimed
exemption from the additional duty of customs leviable under
S.3(1) of the Customs Tariff Act, 1975 on the basis of two
notifications issued u/s.8 of the Act, and refund of the
additional customs duty paid by it. Since the claim was
rejected by the Assistant Collector by his orders dated
25.2.85 and 30.9.85 the assessee preferred appeals to the
Collector, who allowed one appeal and dismised the other.
The assessee as well as the Revenue preferred appeals before
the Tribunal against the respective order which went against
them. The Tribunal allowed the appeal preferred by the
Revenue and dismissed the assessee’s appeal. Aggrieved by
the Tribunal’s orders, the assessee has preferred the
present appeals, contending that even if the tribunal was
right in its conclusion that the procedure of Chapter X of
the rules cannot be complied with, the exemption under the
notification dated 27.7.87 could not be denied.
On behalf of the Revenue it was contended that even
assuming that the goods fulfilled the conditions of the
notification, the rate of duty applicable would be 80% being
the highest rate by virtue of Explanation to
944
S.3(1) of the Customs Tariff Act.
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Disposing of the appeals, this court
HELD:1.1 The benefit of Chapter X of the Central Excise
Rules, 1944 will no doubt generally be claimed by a
manufacturer in which event he will have to make the
application, get the licence and give the assurances, bond
or guarantee required by the rules but it can also be
claimed by other persons. The language of the rule applies
to any person, not necessarily a manufacturer, wishing to
obtain remission of duty sanctioned by a notification under
rule 8 on excisable goods in a specified industrial process.
[955-C]
1.2. There is nothing in the scheme of the Rule 192
which makes it inapplicable to an importer of goods. The
assessee has imported the goods and is selling them for use
in a factory, a use which qualifies for the concession under
the notifications issued u/s. 8. The types of use specified
in the concessions notified could be of any kind. Only, for
claiming a concession in excise duty the user should be the
manufacturer himself or he must have made the purchase from
a manufacturer liable to pay excise duty on the item whereas
in regard to a claim for additional duty (CVD) concession,
the supplier will be an importer. the latter will be
entitled to sell the goods at the concessional rate of duty
(or at nil rate if there is an exemption) if the purchaser
from him who puts the goods to the specified use (whether a
manufacturer or not) fulfills the requirements of Rule 192.
Since the concession under Rule 192 turns only on the nature
and use to which the goods are put by the user or purchaser
thereof and on whether he has gone through the procedure
outlined in Chapter X, it would not be correct to deny it to
a manufacturer. That aspect is provided for by S.3(1) which
specifically mandates that the CAV will be equal to the
excise duty for the time being leviable on a like article if
produced or manufactured in India. If the person using the
goods is entitled to the remission, the importer will be
entitled to say that the CVD should only be the amount of
concessional duty and, if he has paid more, will be entitled
to ask for a refund. The Tribunal was in error in holding
that the assessees could not get a refund because the
procedure of Chapter X of the rules is inapplicable to
importers as such. [955G,H; 956A-G]
1.3. The board is right in observing that the benefit
of exemption or
945
concession should be granted wherever the intended use of
the material can be established by the importer or by other
evidence. However, the entitlement will depend on whether
the purchaser is the holder of an L-6 licence (or C.T.-2
certificate) or not. The goods were supplied by the
assessee to two firms of which one was the holder of an L-6
licence. The grant of concession in respect of the firm
having L-6 licence is , therefore, correct. In respect of
the other firm the assessee produced no material to show
that the "beneficiary" factory was eligible for the
concession under Rule 192, and so the benefit of such
concession to the assessee was therefore rightly denied.
[957G,H; 958A,B]
2. It is no doubt true that Item 29A of the Schedule to
the Central Excises and Salt Act, 1944 is very wide and
covers various articles. The notification also deals with
various categories of articles falling under that item. But
there has been no dispute at any stage that the goods in
question fall under item with serial no. 8(3) of the
notification. So far as this category of goods is
concerned, there is only one rate of duty mentioned in the
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notification. The fact that certain other parts of
refrigerating and air-conditioning appliances and machinery
may fall under item with S. No. 4 (3) or elsewhere cannot
attract the higher duty in respect of the goods presently
under consideration. The Explanation to the notification is
applicable only where goods of exactly the same description
attract different rates of duty. [958F-H]
Collector of Customs v. Western India Plywood
Manufacturing Co. Ltd., [1989] Supl. 2 SCC 515 and Collector
of Customs v. Hansur Plywood Works, [1989] Suppl. 2
S.C.C.520, relied on.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4693-
94 (NM) of 1990.
From the Order dated 11.5.1990 of the Customs, Excise
and Gold (Control), Appellate Tribunal, New Delhi in
C/2636/86-B2 and C/1281/85-B2. (Order Nos. 283 & 284/90-B2).
V. Sridharan, R. Madhava Rao and V. Balachandran for
the Appellant.
A.K.Ganguli, Dilip Tandon and P.Parmeshwaran for the
Respondent.
The Judgment of the Court was delivered by
946
RANGANATHAN, J. These two appeals by Thermax (Pvt.)
Ltd. (hereinafter referred to as ’the assessee’) raise a
question of interpretation of two similar notifications
issued under S.8 of the Central Excises & Salt Act, 1944
(’the Act’, for short).
The assessee imported goods described as "Sanyo Single
Effect Chiller" from Japan for the purpose of using the same
for refrigeration/air conditioning of the factories of
Indian Rayon Corporation at Veraval and Nirlon Synthetics
Fibre and Chemicals Ltd.. It paid the customs duty leviable
thereon at the appropriate rate under the relevant entry of
the customs tariff but claimed exemption from the additional
duty of customs leviable under S.3(1) of the Customs Tariff
Act, 1975 (C.T. Act, in short). The relevant portion of the
said section reads thus:
"3. (1) Any article which is imported into India
Shall,in addition,be liable to a duty (hereafter in
this section referred to as the additional duty)
equal to the excise duty for the time being
leviable on like article if produced or
manufactured in India and if such excise duty on a
like article is leviable at any percentage of its
value, the additional duty to which the imported
article shall be so liable shall be calculated at
that percentage of the value of the imported
article.
Explanation :- In this section, the expression
"the excise duty for the time being leviable on a
like article if produced or manufactured in India"
means the excise duty for the time being in force
which would be leviable on a like article if
produced or manufactured in India, or, if a like
article is not so produced or manufactured, which
would be leviable on a class or description of
articles to which the imported article belongs, and
where such duty is leviable at different rates, the
highest duty"
(Underlining Ours)
In view of the language of the above provision, it is
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common ground between the parties that notifications of
exemption from central excise duty issued from time to time
under S.8.(1) of the Act would be applicable, in the case of
imported goods, for determining the leviability of the
additional duty under S.3(1) above-mentioned. In other
words, if any goods are entitled to full or partial
exemption from payment of central excise under
947
any such notification, the exemption or concession would
also extend to the additional duty payable under S.3(1) of
the C.T. Act, subject, of course, to the fulfillment of any
conditions or requirements that may have to be complied with
for availing the exemption under any particular
notification.
The assessee, in the present case, cleared the imported
goods after paying the customs duty as well as the
additional duty (hereinafter referred to as ’CVD’) but, on
second thoughts, decided that it should have claimed a
concession in respect of the CVD on the strength of
notifications nos. 63/85 and 63/85 and 93/76 issued under
S.8 of the Act. It, therefore, made applications for refund
of the CVD but these were rejected by the Assistant
Collector of Customs by his orders dated 25.2.85 and
30.9.85.
The assessee appealed to the Collector of Customs
(Appeals) from these orders. The Collector allowed the
appeal from the order dated 25.2.85 but his successor-in-
office, who dealt with the appeal from the later order of
30.4.85, took a different view and dismissed the assessee’s
appeal. The assessee as well as the department preferred
appeals from the respective order which went against them.
The Tribunal accepted the department’s appeal but dismissed
the assessee’s appeal. Hence these two appeals by the
assessee.
It is common ground that customs duty is payable and
has been paid on the imported goods under customs tariff
item no. 84.17(1) at 40% of the value of the imported goods
plus a surcharge of 25% thereon. The rate of CVD, however
has to be determined on the basis of item no. 29A of the
central excise tariff. It is common ground that "chillers"
fall under sub-item (3) of item 29A and that the basic
excise duty payable thereon was at 80% of the value of the
goods under the above item read with notification 42/84-C.E.
dated 1.3.84.
However, the S.8. notifications referred to earlier
provide a further concession. Notification no. 93/76-C.E is
relevant for the purposes of the first appeal while
notification no.63/85-C.E. is relevant for the purposes of
the second. The notifications are somewhat differently
worded. It is, however, common ground that the two
notifications are worded alike in all respects material for
the purposes of the present appeals. It is therefore
sufficient if the terms of notification no. 63/85 dated
17.3.85 are extracted here. It reads :
948
EFFECTIVE RATES
63/85-CE, Dt.17.3.1985
"Effective rates of duty on Refrigerators, Evaporative
type of Coolers, Air-conditioning appliances, etc. and parts
thereof prescribed.
In exercise of the powers conferred by sub-rule (1)
rule 8 of the Central Excise Rules, 1944, the Central
Government hereby exempts goods of the description specified
in column (3) of the Table hereto annexed and falling under
the sub-item specified in the corresponding entry in column
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(2) of the said Table, of Item No. 29A of the First Schedule
to the Central Excises and Salt act, 1944 (1 of 1944), from
so much of the duty of excise leviable thereon under the
said Act at the rate specified in the corresponding entry in
column (4) of the said Table subject to the conditions, if
any, laid down in the corresponding entry in column (5)
thereof.
TABLE
------------------------------------------------------------
Sl. | Sub | Description | Rate | Condition
No. | Item| | |
| No. | | |
------------------------------------------------------------
1. | 2. | 3. | 4. | 5.
------------------------------------------------------------
1. | (1) | Refrigerators and | |
| | other refrigerating | |
| | appliances- | |
| | (i) Water-coolers | Nil |
| | (ii) Domestic |Twenty |
| | refrigerators of |five per |
| |capacity not exceeding|cent ad |
| |165 litres |valorem. |
| | (iii) Others |Fifty per|
2. | (2) |Evaporative type of |cent ad | If-
| |coolers |volorem | (i) the said
3. | (2) |Air conditioners and |Thirty pe|goods are so
| |and other airconditio |rcent ad | used;
| |ning appliances |volorem |(ii) the said
| |including package type|Twenty- | goods are not
| |airconditioners; |five per | resold within
| |split unit aircondi- |cent ad | a period of
| |tioners, the cooling |valorem. | five years
| |or room unit and | | from the
| |condensing unit there-| |
| |fore required for use | |
| |in any of the follow- | |
| |ing namely :- | |
------------------------------------------------------------
949
------------------------------------------------------------
Sl. |Sub | Description | Rate | Condition
No. |Item | | |
|No. | | |
------------------------------------------------------------
| |(i) Computer Rooms. | |date of in-
| |(ii) Research and Devel-| |stallation and
| | opment Laboratories. | |(iii) the
| |(iii) Animal Houses. | | procedure
| |(iv) Telephone Exchanges| | specified
| |(v) Broadcasting Studios| | in Chapter
| |(vi) Trawlers. | | X of the
| |(vii) Dams. | | Central
| |(viii) Mines and Tunnels| | Excise Rules,
| |(ix) Thermal or hydel | | 1944, is
| | power stations. | | followed.
| |(x) Techinical Building | |
| |of Military Engineering | |
| |Services and Mobile Tro-| |
| |po and Mobile Radar Unit| |
| |under the Ministry of | |
| |Defence. | |
| |(xi) Any hospital run by| |
| |Central Government,State| |
| |Government or a Local | |
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| |Authority. | |
| |(xii) Any hospital run | |
| |by a Public Charitable | |
| |Institution, the income | |
| |from which is exempt | |
| |under sub-section (22A) | |
| |of section 10 of the | |
| |Income Tax Act, 1961 | |
| |(43 of 1961). | |
| |(xiii) Any factory. | |
| |(xiv) Electricity load | |
| |despatch centres. | |
| |(xv) Indian Naval Ships | |
4. | (3) |Parts of refrigerating | |
| |and airconditioning |Eight |
| |appliances and machinery|per cent |
| |all sorts, the following|ad valorem
| |namely:- | |
------------------------------------------------------------
950
------------------------------------------------------------
Sl. |Sub | Description | Rate | Condition
No. |Item| | |
|No. | | |
------------------------------------------------------------
| |(i) Cooling coils or ev-| |
| |aporator. | |
| |(ii) Compressor | |
| |(iii) Condenser. | |
| |(iv) Thermostat. | |
| |(v) Cooling unit (exclu-| |
| |ding the room unit of | |
| |split unit air-condition| |
| |er), and in the case of | |
| |absorption types of | |
| |refrigerators in which | |
| |there is no | |
| |compressor, heater | |
| |including burners and | |
| |baffles in a karosene | |
| |operated absorption type| |
| |refrigerator. | |
| |(vi) Starting relay | |
| |controls (including | |
| |expansion valve and | |
| |solenoid valves) and | |
| |pressure switches. | |
| |(vii)Overload protection| |
| |/thermal rely. | |
| |(vii) Cabinet. | |
5. | (3)|Parts of refrigerating | |
| |and air-conditioning ap-| |
| |pliances and machinery, | Nil |
| |all sorts, other than | |
| |those specified inS.No.4| |
| |above. | |
6. | (3)| Parts of refrigerating |Twenty |If-
| |machinery as specified |five per |(i) the said
| |in S.No.4 above and |cent ad |parts are used
| |required for use in a |valorem. |in the said
| |cold storage for storage| |cold storage;
| |and preservation of the | |and
| |food stuffs specified in| |(ii)the
| |paragraph 3 of the Cold | |procedure
| |Storage Order,1964 dated| |specified in
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| |the 3rd September, 1964 | |Chapter X of
| | | |the Central
| | | |Excise Rules,
| | | |1944 is fol-
| | | |lowed.
------------------------------------------------------------
951
------------------------------------------------------------
Sl. |Sub | Description | Rate | Condition
No. |Item| | |
|No. | | |
------------------------------------------------------------
7. | (3)|Parts of refrigerating |Twenty fiv|If-
| |appliances and machinery|e percent |(i) the said
| |of the description speci|ad valorem|parts are so
| |fied in S.No.4 above and| |used;and
| |required for use in the | |(ii) the
| | manufacture of- | |procedure
| |(a)refrigerating vans, | |specified in
| |including wagons for | |Chapter X of
| |transport of perishables| |the Central
| |food and dairy products;| |Excise Rules,
| |(b)ships, including | |1944 is
| |frigates where provision| |
| |is made for the preser- | |
| |vation of perishable | |
| |goods in transport. | |
8. | (3)|Parts of refrigerating |Twenty fiv|If-
| |and air-conditioning app|eper cent |(i)the said
| |liances and machinery of|ad valorem|parts are so
| |the description specifie| |used;and
| |d in S.No.4 above and | |(ii)the
| |required for use in refr| |procedure
| |igerating or air-conditi| |specified in
| |ng appliances or machine| |Chapter X of
| |ry conditioning applianc| |Central
| |es or machinery in any | |Excise Rules,
| |of the following,namely:- |1944 is
| | | |followed.
| |(i) Computer Rooms. | |
| |(ii)Research and Devel- | |
| |opment Laboratories. | |
| |(iii) Animal Houses. | |
| |(iv)Telephone Exchanges.| |
| |(v) Broadcasting Studios| |
| |(vi) Trawlers. | |
| |(vii) Dams. | |
| |(viii) Mines and Tunnels| |
------------------------------------------------------------
952
------------------------------------------------------------
Sl. |Sub | Description | Rate | Condition
No. |Item| | |
|No. | | |
------------------------------------------------------------
| |(ix) Thermal or hydel | |
| |power stations. | |
| |(x) Techinical Building | |
| | of Military Engineering| |
| | Services and Mobile | |
| | Tropo and Mobile Radar | |
| | Unit under the Ministry| |
| | of Defence. | |
| |(xi) Any hospital run by| |
| | the Central Government,| |
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| | State Government or a | |
| | Local Authority. | |
| |(xii) Any hospital run | |
| | by a Public Charitable | |
| | Institution, the income| |
| | from which is exempt | |
| | under sub-section (22A)| |
| | of section 10 of the | |
| | Income Tax Act, 1961 | |
| | (43 of 1961). | |
| |(xiii) Any factory. | |
| |(xiv) Electricity load | |
| | despatch centres. | |
| |(xv) Indian Naval Ships.| |
9.| |Compressors used in the | Nil |If such use is
| |manufacture of water | |elsewhere than
| |coolers. | |in the factory
| | | |of production
| | | |of the said
| | | |compressors
| | | |then procedure
| | | |prescribed
| | | |under Chapter
| | | |X of the
| | | |Central Excise
| | | |Rules, 1944 is
| | | |is followed.
------------------------------------------------------------
953
It will be seen that the goods set out in the
notification are mostly exigible to excise duty at the
concessional rate of 25% ad valorem provided that they
fulfill the conditions set out in column (5) of the above
table. It is again common ground that the item of goods
presently in question is one of those mentioned in S.NO.8,
sub-item no. (3) of the notification and that it also
conforms to the description of the said item as set out in
column (3) of the above table. Turning to column (5), it
requires the fulfillment of two conditions to enable the
assessee to get the concession :
(i) that the said parts should be so used i.e. used
in refrigerating or air-conditioning appliances or
machinery in any one of the places set out as items
(i) to (xv) column (3) against item 8(3); and
(ii) that the procedure specified in Chapter X of
the Central EXcise Rules, 1944 is followed.
Here parties are agreed that the chillers imported by
the assessee are used in a factory-vide item (xiii) - and
that, therefore the first of these conditions has been
fulfilled.
These assessee’s claim for concession has, however,
been rejected not on the ground that the second of the above
conditions has not been fulfilled but on the broader ground
that the procedure of Chapter X is designed to facilitate
clearances only for the purposes of central excise and that
the said procedure cannot be fulfilled at all in the case of
an importer. In other words, the view was that the second
condition was such that it was attracted only for purposes
of central excise and could not at all be invoked to claim a
concession in CVD. It is the correctness or otherwise of
this conclusion that has to be determined in these appeals.
This takes us to a consideration of the provisions of
Chapter X of the Central Excise Rules, 1944. This Chapter
provides for a "remission of (central excise) duty on goods
used for special industrial purposes". Rule 192 is the
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principal rule in this Chapter which reads thus:
"Rule 192. - Application for concession - Where the
Central Government has, by notification under rule
8 sanctioned the
954
remission by duty on excisable goods other than
salt, used in a specified industrial process any
person wishing to obtain remission of duty on such
goods, shall make application to the Collector in
the proper Form stating the estimated annual
quantity of the excisable goods required and the
purpose for and the manner in which it is intended
to use them and declaring that the goods will be
used for such purpose and in such manner. If the
Collector is satisfied that the applicant is a
person to whom the concession can be granted
without danger to the revenue, and if he is
satisfied, either by personal inspection or by
that of an officer subordinate to him that the
premises are suitable and contain a secure store-
room suitable for the storage of the goods, and if
the applicant agrees to bear the cost of such
establishment as the Collector may consider
necessary for supervising operation his premises
for the purposes of this Chapter, the Collector may
grant the application, and the applicant shall then
enter into a bond in the proper Form with a surety
or sufficient security, in such amount and under
such conditions as the Collector approves. Where,
for this purpose, it is necessary for the
application along with the proof for payment of
licence fee and shall then be granted a licence is
the proper Form. The concession shall, unless
renewed by the Collector, cease on the Expiry of
the Licence.
Provided that, in the event of death,
insolvency or insufficiency of the surety, or where
the amount of the bond is inadequate, the Collector
may, in his discretion, demand a fresh bond: and
may, if the security furnished for a bond is not
adequate, demand additional security".
Rules 193 to 196-BB make provisions for proper packing
and transport of the goods in question to the premises of
the applicant, their storage in a distinct and separate
place under the control of the applicant, the maintenance of
proper accounts in respect thereof, controls over their
transfer and movement and finally regarding the disposal of
such goods where they are found to be in surplus or
defective or damaged and even
955
of the refuse resulting from their use in the specified
industrial process. It is unnecessary to go into the
details of these provisions for our present purposes.
Though the latter part of Rule 192 also enables an applicant
where necessary, to obtain a licence in Form L-6 and also
prescribes a form of application (From AL-6) for grant of
duty concession on goods purchased for the process of
manufacture during the period of currency of the licence,
the opening words of the rule are very wide and general.
The benefit of Chapter X will no doubt generally be claimed
by manufacturer in which event he will have to make the
application, get the licence and give the assurances, bond
or guarantee required by the rules but it can also be
claimed by other persons. The language of the rule applies
to any person, not necessarily manufacturer, wishing to
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obtain remission of duty sanctioned by a notification under
rule 8 on excisable goods in a specified industrial process.
The industrial processes specified in Column (2) are also
not very complicated or elaborate in every case. Even a
purchase by a person for use of the part in question in a
factory could be covered by the scope of Column (2). Such
a person has only to make an application setting out the
quantity of goods required as well as the manner and purpose
of their use and give a declaration that they will be used
for the specified purpose. Thereupon the Collector, if
satisfied that the concession can be granted without danger
to the revenue may grant the application subject to the
conditions set out in the section. He may grant a licence
in Form L-6 in appropriate cases and, in others, direct the
grant of a certificate in Form CT-2. The possession of the
licence or the production of the CT-2 certificate enables
the applicant to secure the necessary concession.
It will at once be seen that there is nothing in the
scheme of the rule which makes it inapplicable to an
importer of goods. The assessee here has imported the goods
and is selling them for use in a factory, as use which
qualifies for the concession under the S.8 notifications.
The types of use specified in the concessions notified could
be of any kind and, even in the notifications under our
consideration, they are many and varied. In respect of
items, falling under S.Nos. 3 and 8, in particular, the
actual users may be
956
private individuals or authorities and need not necessarily
be manufacturers using the goods in question in an
"industrial process" in a narrow sense of that term. For
instance, any computer room, hospital or factory purchasing
parts of refrigerating and air-conditioning appliances and
machinery for use in the computer room, hospital or factory
would be entitled to claim the concession by following the
prescribed procedure. Only, for claiming a concession in
excise duty the user should be the manufacturer himself or
he must have made the purchase from a manufacturer liable to
pay excise duty on the item whereas in regard to a claim for
CVD concession, the supplier will be an importer. The
latter will be entitled to sell the goods at the
concessional rate of duty (or at nil rate if there is an
exemption) if the purchaser from him who puts the goods to
the specified use (whether a manufacturer or not) fulfills
the requirements or Rule 192. Since the concession under
Rule 192 turns only on the nature and use to which the goods
are put by the user or purchaser thereof and on whether he
has gone through the procedure outlined in Chapter X, it
would not be correct to deny it to a supplier of such goods
on the ground that he is an importer and not a manufacturer.
That aspect is provided for by S.3(1) of C.E.T. Act which
specifically mandates that the CAV will be equal to the
excise duty for the time being leviable on a like article if
produced or manufactured in India. In other words, we have
to forget that the goods are imported, imagine that the
importer had manufactured the goods in India and determine
the amount of excise duty that he would have been called
upon to pay in that event. Thus, if the person to the using
the goods is entitled to the remission, the importer will be
entitled to say that the CVD should only be the amount of
concessional duty and, if he has paid more, will be entitled
to ask for a refund. In our opinion, the Tribunal was in
error in holding that the assessees could not get a refund
because the procedure of Chapter X of the rules is
inapplicable to importers as such.
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Learned counsel for the assessee however contended
that, even if the conclusion of the Tribunal that the
procedure of Chapter X of the rules cannot be complied with
in such cases is correct, the exemption under the
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notification cannot be denied. He relied, in support of
this submission on a letter of the Central Board of Excise &
Customs (F.No.332/65/86 TRV dated 27.7.87) the relevant
portion of which runs as under :
"The Board is of the view that it would legally not
be correct to levy additional (counter-valing) duty
is actually payable in respect of such goods when
manufactured in India (sic). It follows therefore,
that when there is no excise duty, there can be no
additional (counter-valing) duty. The conditions
in the relevant Central Excise Notifications that
in respect of use of the material elsewhere than in
the factory of manufacture, the procedure set out
in Chapter X of the Central Excise Rules should be
followed is condition relating to procedural
requirement which obviously cannot be satisfied by
the imported goods.
In view of the above, it would not be correct to
deny the benefit of exemption notification to
imported goods only because the procedural
condition in the notification is not satisfied by
the imported goods. It has therefore, been decided
that wherever the intended use of the material can
be established by the importer who may be the
manufacturer of chemicals or from other evidence,
the benefit of exemption under the exemption
notification should not be denied to imported goods
only because the procedural condition of following
Chapter X procedure is not complied with."
It will be seen that this letter also proceeds on the
same view as that of the Tribunal that Chapter X procedure
cannot be satisfied in the case of imported goods. This is
at variance with the interpretation which we have placed on
rule 192. We, however, agree with the observation of the
Board that the benefit of exemption or concession should be
granted wherever the intended use of the material can be
established by the importer or by other evidence.
This conclusion however does not entitle the assessee
to the concession claimed in both these appeals. Its
entitlement will depend on whether the purchaser is the
holder of an L-6 licence (or C.T.-2 certificate) or not.
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The tribunal has pointed out that the goods were supplied by
the assessee to Indian Rayon Corporation and M/s Nirlon
Synthetics Fibre and Chemicals, Ltd., of which the latter
was the holder of L-6 licence. The position in regard to
the former is not known. The grant of concession in respect
of the former by the Collector (Appeals) in the first
appeal is, therefore, correct and is upheld. So far as the
other appeal is concerned, the assessee produced no material
to show that the "beneficiary" factory was eligible for the
concession under rule 192. The benefit of such concession
to the assessee must therefor be held to have been rightly
denied in that appeal.
Shri A.K. Ganguly, on behalf of the Revenue, raises a
contention that, even assuming that the goods fulfill the
conditions of the notification referred to earlier, the CVD
rate applicable would be 80% by virtue of the Explanation to
S.3(1) of the C.E.T. Act. He submits that the goods
imported by the assessee are "parts of refrigerating and
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air-conditioning equipment". They are chargeable at
different rates of duty accordingly as they fall under item
with serial no.4 (80%) or that with serial no. 5 (Nil) or
that with serial no. 6 (20%) or that with serial no 7 & 8
(25%). In such a situation, he says, the provisions of the
Explanation to S.3(1) are attracted and hence the assessee
will be liable to duty at the highest rate of 80% we are
loth to permit the Department to raise at this stage a fresh
contention not taken before the Tribunal or earlier. That
apart, we do not think it is well-founded. It is no doubt
true that Item 29A of the Schedule to the C.E. Act is very
wide and covers various articles. The notification also
deals with various categories of articles falling under that
item. But there has been no dispute at any stage that the
goods we are concerned with fall under item with serial
8(3) of the notification. So far as this category of goods
is concerned, there is only one rate of duty mentioned in
the notification. The fact that certain other parts of
refrigerating and air-conditioning appliances and machinery
may fall under item with S.No.4(3) or elsewhere cannot
attract the higher duty the goods presently under
consideration. The Explanation to the notification is
applicable only where goods of exactly the same description
attract different rates of duty. See, in this connection,
the
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decisions on analogous provision in Collector of Customs v.
Western Indian Plywood Manufacturing Co. Ltd. and Collector
of Customs v. Hansur Plywood Works, [1989] Suppl. 2 S.C.C.
515 and 520. We therefore, reject this contention.
For the reasons stated above, we allow C.A. 4693/90
treating it as the appeal arising out of the order passed by
the Tribunal from the order of the Collector of Customs
dated 16.4.85. C.A. 4694/90 will however stand dismissed
but, in the circumstances, without costs.
G.N. C.A. 4693/90 allowed,
C.A. 4694/90 dismissed.
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