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2017 (10) TMI 674 - BOMBAY HIGH COURTClassification of goods - Stainless Steel Articles - Duty Drawback - whether the “Stainless Steel Bright Bars of Austenitic Variety” is classifiable as “Bright Steel Bars” for the purpose of drawback schedule under the Customs and Central Excise Duties Drawback Rules, 1972? - whether the same will go under sub serial No.3606 or 3803 of schedule 'F' of the Rules? - Held that: - “Stainless Steel Bright Bars of Austenitic Variety” had been treated in a manner differently from that of bright steel bars and shafting at the relevant time. Stainless steel comprises of ingredients which are Nickel and Chromium, both imported items used in manufacturing of stainless steel. The duty drawback has also been treated differently for stainless steel articles from that of all types of bright steel bars and shafting. The duty drawback of stainless steel articles of “Austenitic Variety” was ₹ 8.90 per kg. as against ₹ 395/- PMT for bright steel bars and shaftings. This distinction has also been carried forward in the change effected in the schedule of duty drawback of the Rules from 1st June 1989. The duty drawback of stainless steel with effect from 1st June 1989 was ₹ 1090 PMT as against ₹ 540 PMT for other varieties of bright bars and shafting. Item No. 3803 subsequent to the change has been kept vacant. This only goes to show that at the relevant time there was a clear distinction made between stainless steel articles of “Austenitic Variety” as against bright steel bars both in terms of the classification and the duty drawback rate. The headings under which sub-serial No. 3606 and sub-serial No. 3803 comes, along with the entries at the relevant time. In the duty drawback rate prescribed, there was a substantial difference between stainless steel of austentic variety and bright steel bars - the words “all types of bright steel bars” would necessarily to apply to the dimensions of steel bars such as round, hexagon, octagon, flat but would not mean include all grades / variety of steel. This would therefore, not include stainless steel at the relevant time. “Stainless Steel Bright Bars of Austenitic Variety” could classify only for inclusion in subserial No. 3803 at the relevant time. It is a settled law that where there are two views possible, the one favourable to the assessee in the matter of taxation has to be preferred. We are of the view that the impugned order of the first Respondent has incorrectly arrived at a finding that the scheme of drawback schedule at the relevant time was such that the words “Steel” mentioned in sub-serial No. 3606 would include stainless steel also. We are of the view that the first Respondent has erroneously held in the impugned order that the goods exported are bright stainless steel bars and are appropriately classifiable under sub-serial No. 3606. We are not going into issue as to whether the first Respondent has validly exercised power under Section 129DD of the Customs Act 1962 in reviewing an order of the Commissioner (Appeals) pursuant to an application made by the Collector Customs (Judicial) as we find on merits itself that the impugned order is unsustainable and is required to be quashed and set aside. Appeal allowed - decided in favor of appellant.
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