TMI Blog1992 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... RESENTED BY : S/Shri V. Sridharan, R. Madhava Rao and V. Balachandran, Advocates, for the Appellant. Shri A.K. Ganguli, Sr. Advocate, Shri Dilip Tandon and Shri P. Parmeshwaran, Advocates, for the Respondent. [Judgment per : 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 Section 8 (This may be understood to refer to Rule 8 of the Central Excise Rules, 1944 Ed.) of the Central Excises Salt Act, 1944 (`the Act , for short). 2. 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 custom 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 Section 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 sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is successor-in-office, who dealt with the appeal from the later order of 30-4-1985, 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. 6. 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 1-3-1984. 7. However, the Section 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 dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. (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). Nil Twenty five per cent ad valorem Fifty per cent ad valorem Thirty per cent ad valorem Twenty-five per cent ad valorem If the said goods are so used;(i) the said goods are not resold within a period of five(ii) years from the date of installation; and (iii) the procedure specified in Chapter X of the Central Excise Rules, 1944, is followed. (1) (2) (3) (4) (5) (xiii) Any factory. (xiv) Electricity load despatch Centres. (xv) Indian Naval Ships. 4. (3) Parts of refrigerating and air-conditioning appliances and machinery, all sorts, the following, namely :- (i) Cooling coils or evaporator. (ii) Compressor. (iii) Condenser. (iv) Thermostat. (v) Cooling unit (excluding the room unit of split u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) Technical 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, State Government or a Local Authority. Twenty five per cent ad valorem If (i) the said parts are so used; and (ii) the procedure specified in Chapter X of the Central Excise Rules, 1944 is followed. (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. (3) Compressors used in the manufacture of water coolers. Nil If such use is elsewhere than in the factory of production of the said compressors then procedure prescribed under Chapter X of the Central Excise Rules, 1944 is followed. 8. It will be seen that the goods set out in the notification are mostly exigible to excise duty at the conces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 in 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 applicant to obtain an Excise Licence, he shall submit the requisite application along with the proof for payment of licence fee and shall then be granted a licence in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate enables the applicant to secure the necessary concession. 11. 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, a use which qualifies for the concession under the Section 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 private individuals or authorities and need not necessarily be manufacturers using the goods in question is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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