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1992 (6) TMI 136
Issues:
Application against order demanding duty and penalty under Central Excise Rules - Pre-deposit of duty and penalty under Section 35F - Alleged financial hardship - Allegation of forged document - Violation of principles of natural justice - Cross-examination of witnesses - Handwriting Expert's opinion - Prima facie case for dispensing with pre-deposit.
Analysis:
The judgment involves two applications challenging an order demanding duty and penalty under the Central Excise Rules, seeking dispensation of pre-deposit under Section 35F based on alleged financial hardship and a prima facie case. The appellants argued that a statement was a forged document and there was a violation of natural justice as they were not provided with copies of statements or allowed to cross-examine witnesses. The appellants, running a small Bidi factory, cited financial constraints due to family size and income. The Collector had given opportunities for hearings, and witnesses were summoned for cross-examination, with some being cross-examined. The Handwriting Expert's opinion was submitted post-adjudication order, and the plea of a forged document was not raised during proceedings.
The tribunal considered the submissions and facts, observing that the appellants failed to establish a prima facie case for dispensing with pre-deposit. However, in the interest of justice, appellant No. (1) was directed to deposit Rs. 9 lakhs for duty, waiving the penalty pre-deposit of Rs. 5 lakhs. The deposit deadline was set, with non-compliance leading to appeal dismissal. For appellant No. (2), the pre-deposit of Rs. 1 lakh penalty was unconditionally waived, considering all circumstances of the case. The judgment balanced the financial constraints of the appellants with the procedural fairness and legal requirements, leading to a differential decision on pre-deposit requirements based on individual circumstances and merits of the case.
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1992 (6) TMI 135
Issues Involved:
1. Entitlement to return of confiscated trawler or its value.
2. Ownership of the trawler.
3. Consistency with Supreme Court decision.
4. Entitlement of charterer to trawler or its value.
5. Determination of compensation for loss of catch.
6. Ignoring evidence on record regarding fish and shrimp value.
7. Basis of valuation of catch.
8. Claim for litigation expenses and damages.
Issue-wise Detailed Analysis:
1. Entitlement to Return of Confiscated Trawler or Its Value:
The applicants sought a return of the confiscated trawler or its value on the date of the Tribunal's order. The Tribunal held that the applicants are not entitled to the value of the trawler, dismissing their claim for Rs. 50 lakhs. The Tribunal referenced the Charter Agreement between the applicants and Southern Marine Services Company Limited in reaching this conclusion.
2. Ownership of the Trawler:
The Tribunal was tasked with determining whether Southern Marine Services Company Limited or the applicant company was the rightful owner of the trawler. The Tribunal held that Southern Marine Services Company Limited was the owner of the trawler. This decision was challenged by the applicants, who argued that it contradicted the Supreme Court's decision in M/s. British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries & Ors.
3. Consistency with Supreme Court Decision:
The applicants contended that the Tribunal's decision was contrary to the Supreme Court's ruling in the case of M/s. British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries & Ors. The Tribunal examined this argument and concluded that their decision was consistent with the Supreme Court's ruling, thus no rectification was necessary.
4. Entitlement of Charterer to Trawler or Its Value:
The Tribunal addressed whether the applicant company, as the charterer, was entitled to receive back the trawler or its value. The Tribunal concluded that the applicant company was not entitled to the return of the trawler or its value, upholding the original decision.
5. Determination of Compensation for Loss of Catch:
The applicants argued that the compensation for the loss of the catch of fish and shrimps should be Rs. 20 lakhs, as initially valued by the department. The Tribunal initially awarded Rs. 5 lakhs but later rectified this amount to Rs. 20 lakhs, recognizing the department's valuation.
6. Ignoring Evidence on Record Regarding Fish and Shrimp Value:
The applicants claimed that the Tribunal ignored evidence regarding the quantum and value of the fish and shrimps. The Tribunal acknowledged this oversight and rectified the compensation amount to Rs. 20 lakhs based on the department's valuation.
7. Basis of Valuation of Catch:
The Tribunal evaluated the evidence on record and concluded that the market value of the fish and shrimps should be Rs. 20 lakhs, enhancing the initial compensation of Rs. 5 lakhs. The Tribunal did not grant the international market value as requested by the applicants.
8. Claim for Litigation Expenses and Damages:
The applicants sought damages and litigation expenses incurred due to the illegal detention, seizure, and confiscation of the trawler and its catch. The Tribunal held that such damages could not be awarded in these proceedings and should be pursued through appropriate legal channels, such as a civil court or the High Court.
Separate Judgments:
The Tribunal's decision was delivered collectively, without separate judgments from different judges.
Conclusion:
The Tribunal referred certain questions of law to the Hon'ble High Court of Orissa, specifically regarding the ownership of the trawler and the applicability of the Supreme Court's decision. The Tribunal dismissed the applicants' other claims, including those for litigation expenses and damages, and enhanced the compensation for the catch of fish and shrimps to Rs. 20 lakhs.
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1992 (6) TMI 134
Issues Involved:
1. Determination of the assessable value of imported goods under Section 14 of the Customs Act, 1962.
2. Applicability of Rules 3, 4, and 5 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.
3. Comparison of transaction values of identical goods imported contemporaneously.
4. Justification for confiscation and imposition of penalties under Section 111(m) of the Customs Act, 1962.
Detailed Analysis:
1. Determination of the Assessable Value of Imported Goods under Section 14 of the Customs Act, 1962
The appellants imported an "Asceptic Form Fill and Seal Machine Type 302" along with necessary attachments and declared its value as Rs. 1,25,13,177/-. The customs authorities questioned the declared value, citing that the price based on a 1987 proforma invoice could not be deemed the value under Section 14(1) of the Customs Act, 1962. The adjudicating authority determined the assessable value at Rs. 1,58,04,073/- based on the transaction value of an identical machine imported by M/s. Gujarat Injects Ltd. The appellants argued that the declared value should be accepted as the assessable value, as it was based on a contract price from 1987, without any escalation.
2. Applicability of Rules 3, 4, and 5 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988
The appellants contended that the value of imported goods under Rules 3 and 4 should be the "transaction value" or the price actually paid or payable. They argued that Rule 5 should only be invoked if the transaction value cannot be determined under Rule 4. They further claimed that even if Rule 5 were applicable, the lowest available price from different imports should be considered, referencing imports by M/s. Core Parenterals Ltd. at lower prices. The department argued that the provisions of Rules 3 and 4 must be read in conjunction with Section 14(1) of the Customs Act, which has overriding effect, and that the invoice price could not be accepted if it did not represent the ordinary sale price at the time and place of importation.
3. Comparison of Transaction Values of Identical Goods Imported Contemporaneously
The adjudicating authority compared the appellants' import with an identical machine imported by M/s. Gujarat Injects Ltd., determining a higher assessable value. The appellants argued that their machine was not identical to that imported by M/s. Gujarat Injects Ltd., as it was manufactured in 1987 and imported in 1990, whereas the latter's machine was manufactured and imported in 1990. They also pointed out that the machines imported by M/s. Core Parenterals Ltd. at lower prices were identical and should have been considered. The Collector rejected this claim, stating that the systems might not be identical and the imports were not contemporaneous.
4. Justification for Confiscation and Imposition of Penalties under Section 111(m) of the Customs Act, 1962
The adjudicating authority ordered the confiscation of the imported machine under Section 111(m) of the Customs Act, 1962, on grounds of misdeclaration of value, allowing redemption on payment of a fine and imposing a penalty on the appellants. The appellants argued that the transaction was conducted at arm's length, and the price was the sole consideration, thus the contracted price should be accepted as the assessable value. They cited various case laws to support their argument that the invoice price should be deemed the assessable value in the absence of any mutual interest between the buyer and seller.
Conclusion and Remand
The Tribunal found that the adjudicating authority failed to provide a reasoned finding on whether the imported machine was identical to those imported by M/s. Core Parenterals Ltd. and did not adequately examine the relevant documents. The Tribunal held that the impugned order was not a speaking order and suffered from non-application of mind. Consequently, the order was set aside, and the case was remanded for de novo adjudication, with instructions to consider the observations made and provide a suitable opportunity for a personal hearing. The appeal was allowed by way of remand, with a direction to adjudicate the case within three months.
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1992 (6) TMI 133
Issues:
Appeal dismissal for non-deposit of penalty, principles of natural justice, relevance of pre-deposit for appeal filing, consideration of additional documents, cross-examination request, remand authority selection, merits discussion requirement, waiver of pre-deposit, statutory right to appeal, conditions for appeal dismissal.
Analysis:
The appellant filed an appeal against the Collector of Customs (Appeals) order dismissing the appeal due to non-deposit of a penalty. The appellant argued that the dismissal without a personal hearing violated natural justice principles and cited precedents stating pre-deposit is not a condition for appeal filing. The appellant emphasized the need for a just adjudication, mentioning the relevance of additional documents and the lack of consideration for cross-examination of witnesses by the Adjudicating Authority. The appellant also submitted a Miscellaneous Application with three additional documents for consideration.
The respondent contended that the appeal was rightly rejected due to non-deposit of the ordered amount and argued against discussing the merits at the Tribunal stage. The respondent opposed the consideration of additional documents not before the Adjudicating Authority and suggested remanding the case only to the Appellate Authority.
The Tribunal considered the arguments and allowed the production of additional documents, waiving the pre-deposit of penalty due to a prima facie case and hardships faced by the appellant. The Tribunal emphasized the need for a just adjudication, mentioning the appellant's request for cross-examination and the relevance of the produced documents. The Tribunal remanded the case to the original Adjudicating Authority for a decision, directing a personal hearing, consideration of cross-examination requests, and a speaking order while observing natural justice principles.
Regarding the statutory right to appeal and conditions for dismissal, the Tribunal referred to a Supreme Court decision stating that the right to appeal is conditional, and non-deposit of penalty can lead to appeal dismissal. The Tribunal, while acknowledging the statutory conditions, allowed the appeal by way of remand to the original authority within a specified timeframe for a decision following the Tribunal's observations.
In conclusion, the Tribunal allowed the appeal by remanding the case to the Adjudicating Authority, emphasizing the importance of a just adjudication, consideration of cross-examination requests, and adherence to natural justice principles despite the statutory conditions for appeal dismissal based on non-deposit of penalty.
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1992 (6) TMI 132
Issues: Appeal against orders passed by Collector of Central Excise (Appeals) dismissing appellant's appeal against adjudicating authority's decision on duty payment for seized urea bags.
Detailed Analysis:
1. Background and Adjudication Order:
The appeal was filed against the Collector of Central Excise (Appeals) in response to the orders passed by the adjudicating authority. The authority had held the appellants accountable for duty payment on 29 bags of urea seized for being removed from the factory without duty payment.
2. Facts of the Case:
On a specific date, Central Excise officers checked the non-duty paid stock-room of a company and found urea bags. The company claimed the urea was part of a purchase from a non-existent firm. The authorities seized the urea for non-payment of duty and issued a show cause notice to the appellant.
3. Contentions of the Parties:
The appellant contended that there was no evidence to prove the seized urea was industrial grade or that it was cleared without duty payment. The burden of proof, according to the appellant, lay with the department. The department argued that the urea, being industrial grade, should have been cleared with duty payment.
4. Analysis of Evidence:
The Tribunal observed that the mere presence of urea in bags marked with a specific company's name did not conclusively prove duty evasion. The department failed to provide a test report confirming the industrial grade of the seized urea. The burden was on the department to prove duty evasion, which was not substantiated.
5. Factory Production and Duty Payment:
There was no evidence to link the seized urea to the appellant's factory or to establish that it was industrial grade urea removed without duty payment. The authorities' conclusions were based on presumptions and conjectures, lacking concrete proof.
6. Precedent and Decision:
The appellant cited a previous Tribunal decision that supported their argument. Following the lack of concrete evidence and relying on the precedent, the Tribunal allowed the appeal and set aside the impugned orders.
In conclusion, the Tribunal found that the department failed to prove duty evasion regarding the seized urea, emphasizing the importance of concrete evidence and burden of proof in such cases. The decision was based on the lack of substantial evidence and the reliance on a previous Tribunal ruling supporting the appellant's position.
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1992 (6) TMI 131
Issues:
1. Imposition of personal penalties under the Gold (Control) Act, 1968 and the Customs Act, 1962.
2. Confiscation of primary gold and other items seized.
3. Violation of principles of natural justice in the adjudication process.
Analysis:
Imposition of Personal Penalties:
The appellant filed two appeals against orders passed by the Additional Collector of Customs, Muzaffarpur, imposing personal penalties under the Gold (Control) Act, 1968, and the Customs Act, 1962. The penalties were Rs. 50,000/- under the Gold (Control) Act and Rs. 1 lakh under the Customs Act, along with the confiscation of primary gold valued at Rs. 1.32 lakhs. Both proceedings arose from the same seizure, and the facts were identical. The Tribunal decided to dispose of both appeals through a common order.
Confiscation of Seized Items:
The appellant was intercepted at Lucknow Airport with 6 gold biscuits valued at Rs. 1.32 lakhs, along with other items. The appellant claimed the gold was purchased in Jeddah and intended for sale in India. The authorities seized the gold under the Customs Act and the Gold (Control) Act due to import restrictions. The appellant was issued a show cause notice, to which he replied. However, the adjudicating authority passed ex parte orders without giving the appellant a fair opportunity to present his case. The appellant requested cross-examination of witnesses and examination of defense witnesses, but these requests were not considered. The Tribunal found that the principles of natural justice were violated as the appellant was not granted a proper hearing and opportunity to defend himself. Therefore, the impugned orders were set aside, and the case was remanded back to the adjudicating authority for fresh adjudication, with directions to allow cross-examination of witnesses and the appellant to present evidence.
Violation of Principles of Natural Justice:
The appellant had requested adjournments for personal hearings due to religious festivals and had asked for documents and cross-examination of witnesses. The adjudicating authority claimed the appellant did not avail of the opportunities for hearings, but the appellant denied receiving notices for some dates. The Tribunal found discrepancies in the adjudication process, where the appellant's requests were not addressed, and natural justice was denied. The failure to consider the appellant's requests for cross-examination and examination of defense witnesses was deemed a violation of natural justice. As a result, the Tribunal allowed the appeal, set aside the impugned order, and remanded the case for a fresh adjudication with proper consideration of the appellant's requests and a fair hearing process.
This detailed analysis of the legal judgment addresses the issues of personal penalties, confiscation of seized items, and the violation of principles of natural justice in the adjudication process. The Tribunal's decision to set aside the impugned order and remand the case for a fresh adjudication ensures a fair opportunity for the appellant to present his case and defend against the penalties and confiscations imposed.
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1992 (6) TMI 130
Issues:
Appeal against confiscation of goods under Customs Act, imposition of redemption fine, and personal penalty.
Analysis:
The appeal was filed against the confiscation of aqua-ultron water purifying equipment and imposition of a redemption fine and personal penalty by the Additional Collector of Customs. The officers seized two consignments of the equipment imported by the appellants, suspecting misdeclaration under the Customs Act. The appellants contended that the equipment was non-domestic and designed for commercial use, not misdeclared. The adjudicating officer found misdeclaration, confiscated the goods, and imposed fines.
The advocate for the appellants argued that the equipment was non-domestic and fell under the Flexible Clause of the Import Policy. The J.D.R. for the respondents stated that the equipment was consumer goods, not capital goods, and import under the Flexibility Clause was not justified. The tribunal had to determine if the confiscation and penalties were lawful based on the definitions of capital and consumer goods in the Import Policy.
The tribunal analyzed the definitions of capital and consumer goods in the Import Policy. The Aqua-ultron equipment was found to be consumer durable, capable of directly satisfying human needs without further processing. The tribunal considered technical literature showing the equipment's domestic use for water purification. The report from the Industrial Adviser supported the view that the equipment was a consumer durable and not for industrial use.
The tribunal upheld the confiscation of the goods as consumer durables not misdeclared. However, it found the redemption fine on two consignments should have been separate to allow choice for redemption. The tribunal reduced the redemption fine to Rs. 1,50,000 for each consignment, totaling Rs. 3 lakhs. The personal penalty of Rs. 10,000 was deemed appropriate. The appeal was dismissed with modifications to the redemption fine.
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1992 (6) TMI 129
Issues:
1. Whether the appeal is barred due to the review of the order beyond the prescribed period under Section 129 of the Customs Act, 1962?
2. Whether the appeal is not maintainable as contended by the respondents?
Analysis:
1. The first issue revolves around the review of the order beyond the prescribed period under the Customs Act, 1962. The Board originally had the authority to review an order within two years from the date of the decision. However, the period was reduced to one year with effect from a specific date. In this case, the review was conducted after the revised deadline. The Tribunal referred to a previous decision to emphasize that proceedings initiated under the provisions existing at the time of initiation should adhere to the applicable time limitations. Consequently, the review in this case was deemed barred under the law, rendering the appeal not maintainable.
2. The second issue pertains to the maintainability of the appeal based on the nature of the order passed by the Collector. The Tribunal scrutinized the order and concluded that it lacked the necessary application of mind by the Collector to be considered an Adjudication Order. Citing a relevant case, the Tribunal highlighted that for an order to be appealable under the Customs Act, it must involve a judicial determination after providing an opportunity for the party to explain accusations. In this case, the Collector's action was deemed more executive than judicial, as it did not fulfill the criteria for an Adjudication Order. Therefore, the appeal was deemed not maintainable and subsequently dismissed.
In conclusion, the judgment addressed the issues of timeliness in the review process and the nature of the order passed by the Collector. The Tribunal's analysis emphasized adherence to statutory timelines and the judicial requirements for an order to be appealable under the Customs Act, ultimately leading to the dismissal of the appeal.
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1992 (6) TMI 128
Issues:
1. Inclusion of special testing charges in the assessable value of transformers.
2. Time-barred demand of excise duty.
3. Overlapping of duty demands.
Analysis:
Issue 1: Inclusion of Special Testing Charges
The case involved manufacturers of transformers who charged special testing fees not included in the assessable value. The appellants argued that these tests were post-manufacturing and not essential for marketability. They contended that charges for special tests should not be part of the assessable value. The JDR argued that these charges enhance the value of goods and should be included based on the Supreme Court's judgment regarding after-sale-service charges. The Tribunal referred to a similar case and ruled that charges for special tests should not be included in the assessable value as the goods were marketable without them.
Issue 2: Time-Barred Demand
The appellants claimed that the demand for duty was time-barred, as the department was aware of the charges for special tests since at least October 1983. The show cause notice issued in July 1988 covered a period beyond the statutory time limits. The Tribunal agreed that the demand for duty was time-barred for the period before July 1983 and partially within time for a specific period. However, this finding was deemed academic due to the ruling on the first issue.
Issue 3: Overlapping of Duty Demands
The appellants also raised the concern of overlapping duty demands in the impugned order. The JDR suggested remanding the matter to lower authorities if necessary. The Tribunal did not provide a specific ruling on this issue in the judgment.
In conclusion, the Appellate Tribunal CEGAT, New Delhi ruled in favor of the appellants, stating that charges for special testing should not be part of the assessable value of transformers. They also found the demand for duty to be time-barred for certain periods. The judgment did not address the issue of overlapping duty demands.
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1992 (6) TMI 127
Issues:
- Appeal against the order of the Collector of Central Excise, Bangalore, levying a fine in lieu of confiscation of a lorry under relevant sections of the Customs Act and Central Excises & Salt Act.
- Dispute regarding the imposition of the fine based on the absence of a properly dated gate pass for transporting goods.
- Allegation under Section 110 of the Customs Act and Section 12 of the Central Excises & Salt Act.
- Consideration of whether the lorry owner should be penalized for the absence of the lorry number or correct date on the gate pass despite the goods having suffered duty.
Analysis:
The appeal was filed against the order of the Collector of Central Excise, Bangalore, which imposed a fine in place of confiscating a lorry under relevant sections of the Customs Act and Central Excises & Salt Act. The appellant contended that the fine was imposed due to the absence of a properly dated gate pass for transporting goods on a specific date. It was argued that the goods had indeed suffered duty, as confirmed by the Tribunal in a previous order. The goods were kept in the manufacturing premises for customer inspection, leading to a delay in their removal, which was the reason behind the discrepancy in the gate pass. The appellant emphasized that the lorry owner was not complicit in any offense, as there was no evidence of wrongdoing on their part. The appellant sought to set aside the order based on these grounds.
During the hearing, the learned SDR presented the respondent's arguments. The Tribunal considered the admitted facts that the goods in the lorry had indeed undergone central excise duty, with proper entries made in statutory registers by the manufacturer. The delay in removing the goods was due to customer inspection, as acknowledged in a previous Tribunal order. The Tribunal noted that the lorry owner had taken precautions to ensure duty payment for the goods. The absence of the lorry number or correct date on the gate pass was not deemed sufficient to justify confiscation of the lorry under the relevant legal provisions. Given the penal nature of the proceedings, the appellant was entitled to the benefit of the doubt, especially considering the lack of evidence indicating knowledge or intent to commit an offense. The technical lapse at the manufacturer's end further supported setting aside the impugned order, leading to the allowance of the appeal with consequential relief.
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1992 (6) TMI 126
Issues:
1. Whether the exemption order issued by the Government of India under Section 5A(2) of the Central Excises & Salt Act, 1944, covers the project undertaken by the petitioner on a job work basis, including the fabrication that had already taken place.
2. Whether the show cause notice issued to the petitioner is barred by limitation under Section 11A of the Act.
Analysis:
1. The petitioner filed two petitions seeking waiver of pre-deposit of duty and penalty under impugned orders related to the fabrication of cement-coated steel pipes for a water supply project. The petitioner argued that various governmental bodies recommended exemption from excise duty for the project in public interest, culminating in Government Order No. 6/91 issued under Section 5A(2) of the Act. The petitioner contended that the exemption order should cover the entire project, including past fabrication. The learned counsel emphasized the exceptional nature of the order and challenged the adjudicating authority's interpretation of its prospective application. The Tribunal examined the order and surrounding correspondence, leaning towards granting the waiver based on prima facie grounds due to the order's broad scope and the limitation bar under Section 11A.
2. The Respondent, through the learned SDR, argued that the exemption order did not expressly cover goods already manufactured before its issuance. However, the Tribunal noted that the order specifically exempted all excisable goods fabricated for the project, without limiting it to future production. The Tribunal also considered the purpose of the project and the public interest involved, concluding that the exemption order likely encompassed the petitioner's project, including prior fabrication. The Tribunal found merit in the petitioner's argument regarding the limitation bar under Section 11A, further supporting the grant of a waiver of pre-deposit and stay of recovery pending appeal.
3. Given the Special Bench nature of the appeals, the Tribunal directed the transmission of papers to CEGAT, New Delhi, for disposal. The comprehensive analysis of the exemption order, the circumstances surrounding the project, and the statutory provisions led to the Tribunal's decision to grant the waiver and stay, pending the final resolution of the appeals. The judgment highlighted the exceptional nature of the exemption order and its likely coverage of the petitioner's project, emphasizing the public interest aspect and the statutory limitations on the show cause notice.
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1992 (6) TMI 125
Issues Involved:
1. Whether the subject goods (Fax Machines) are non-OGL capital goods.
2. Whether the subject goods can be imported against Exim Scrips in terms of para-195(A) of the Policy AM 1990-93.
Detailed Analysis:
Issue 1: Whether the subject goods (Fax Machines) are non-OGL capital goods.
The appellants contended that Fax Machines should be considered capital goods as per the definition found in para-7(11) of the relevant policy. The Department initially treated Fax Machines as capital goods during the policy period of 1985-88, and the definition of capital goods remained identical in both policy periods (1985-88 and 1990-93). The appellants argued that the Customs Authorities had previously allowed the clearance of such goods, and there was no reason to change this classification.
The Department, however, viewed Fax Machines as office machines governed by para-124 of the Policy 1990-93, which restricts the import of office machines to one unit for the registered exporter's own use. The Department also noted that the goods were misdeclared as being of Singapore origin when they were actually made in Japan, leading to the conclusion that the goods were liable for confiscation under Sections 111(d) and (m) of the Customs Act, 1962.
The Tribunal concluded that the definition of capital goods for both policy periods was identical, and the Department's previous treatment of Fax Machines as capital goods should continue. The Tribunal referred to the decision of the Supreme Court in Indian Metals & Ferro Alloys Ltd. v. Collector of Central Excise, which emphasized that a contemporaneous exposition by administrative authorities is a useful and relevant guide for interpreting policy expressions. Therefore, the Tribunal held that Fax Machines imported by the appellants are capital goods.
Issue 2: Whether the subject goods can be imported against Exim Scrips in terms of para-195(A) of the Policy AM 1990-93.
The appellants argued that para-195(A) of the policy, introduced later, should prevail over para-124. Para-195(A) allows the import of permissible non-OGL capital goods without any upper value limit and without the actual user condition. The appellants contended that the restrictions under para-124 and para-214 relate to specific imports and do not apply to imports made under para-195(A).
The Department argued that para-124, which specifically deals with office machines, should prevail over the more generic para-195(A). The Department contended that the import of office machines, including Fax Machines, should be governed by the specific provisions of para-124 and not by the generic provisions of para-195(A).
The Tribunal examined the relevant policy provisions and the amendments brought in by Public Notice No. 250/ITC(B)/90-93, dated 28-11-1991. The Tribunal noted that the amendment to para-220(3)(iii) eliminated the upper limit for the import of permissible non-OGL capital goods, including office machines. The Tribunal concluded that para-195(A) permits the import of such goods without any upper limit and without the actual user condition, independent of the restrictions in para-124.
The Tribunal held that there was no conflict between para-195(A) and para-124. Even if there were a conflict, the later-introduced para-195(A) would prevail over the earlier para-124. The Tribunal found that the import of Fax Machines was in accordance with para-195(A) of the Import Policy 1990-93 and that there was no violation of Section 111(d) of the Customs Act, 1962. Consequently, the confiscation of the goods and the imposition of penalties were set aside.
Conclusion:
The Tribunal allowed the appeal, setting aside the confiscation of the goods and the imposition of penalties, and concluded that Fax Machines are non-OGL capital goods that can be imported under para-195(A) of the Policy AM 1990-93.
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1992 (6) TMI 124
The Tribunal directed the Customs Department to comply with the Tribunal's order for refund to M/s. Cibatui Limited. The Department was given a last chance to ensure compliance, with a warning of potential contempt proceedings if not done by the next hearing date. The Collector of Customs was instructed to take necessary actions to promptly implement the Tribunal's order. Case to be reviewed on 27-8-1992.
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1992 (6) TMI 123
Issues Involved:
The issues involved in the judgment are the interpretation of Notification No. 175/86-C.E., dated 1-3-1986, regarding the exemption of Central Excise Duty on specified goods and the calculation of duty payable by a manufacturer based on the value of goods cleared under different brand names.
Interpretation of Notification No. 175/86-C.E., dated 1-3-1986:
The case involved a dispute over the benefit of exemption under Notification No. 175/86-C.E., where the respondents manufactured and cleared goods under their own brand and 'Bajaj' brand. The Assistant Collector contended that the respondents were only entitled to exemption up to an aggregate clearance value of Rs. 15 lakhs, as they were manufacturing goods under one heading of the Central Excise Tariff, irrespective of different brand names. The Collector (Appeals) disagreed, stating that the value of goods cleared under the 'Bajaj' brand should not be included in computing the exempted clearance value of Rs. 15 lakhs, as it was beyond the purview of the notification.
Calculation of Duty Payable:
The Revenue appealed against the Collector (Appeals) decision, arguing that the total value of clearances should include goods cleared on payment of duty, and duty should be paid on clearances exceeding Rs. 15 lakhs. The Revenue contended that the respondents were not entitled to any exemption beyond Rs. 15 lakhs, regardless of the brand name. The Tribunal analyzed the Notification's provisions and concluded that goods cleared under a brand name not eligible for SSI exemption should be charged at the normal rate of duty, but such goods should not be considered for computing the aggregate value of first clearances of Rs. 15 lakhs.
Conclusion:
The Tribunal upheld the decision of the Collector (Appeals), stating that the value of goods cleared under the 'Bajaj' brand should not be included in computing the aggregate value of first clearances of Rs. 15 lakhs under Notification No. 175/86-C.E. The Tribunal rejected the Revenue's appeal and provided consequential relief to the respondents, if any.
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1992 (6) TMI 122
The Appellate Tribunal CEGAT, New Delhi upheld the levy of cess on Ream Wrapper Paper, following the Supreme Court ruling in the case of Barnagore Jute Factory Co. The appeal was dismissed, and the orders of the lower authorities were affirmed.
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1992 (6) TMI 121
Issues Involved:
1. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
2. Penalty on M/s. Savitri Electronics and Shri Onkar Nath Bhardwaj under Section 112(a) of the Customs Act, 1962.
3. Entitlement of M/s. Esvee Enterprises to clear the goods.
4. Legality of the importation and the role of the foreign supplier.
Issue-wise Detailed Analysis:
1. Confiscation of Goods under Section 111(d) of the Customs Act, 1962:
The adjudicating authority held that the goods were liable to confiscation under Section 111(d) of the Customs Act, 1962, as M/s. Savitri Electronics had not produced any valid Actual User Import Licence. The goods were found to be almost complete 'car cassette' players in CKD/SKD condition, and the firm was deemed to be fictitious with no manufacturing facility. The authority rejected the claim by M/s. Esvee Enterprises, suspecting that they had come forward to claim the goods to prevent confiscation. However, the Tribunal found that the foreign supplier retained ownership of the goods as the original consignee, M/s. Savitri Electronics, did not retire the documents from the bank. The Tribunal referenced the Supreme Court judgment in Union of India v. Sampat Raj Dugar, which held that the ownership of the goods continues to vest with the exporter if the importer fails to pay for the goods. Therefore, the Tribunal concluded that the goods should not be confiscated and M/s. Esvee Enterprises should be given an opportunity to clear the goods with a valid licence.
2. Penalty on M/s. Savitri Electronics and Shri Onkar Nath Bhardwaj under Section 112(a) of the Customs Act, 1962:
The adjudicating authority imposed penalties on M/s. Savitri Electronics and Shri Onkar Nath Bhardwaj under Section 112(a) of the Customs Act, 1962, for being involved in the illegal importation of goods. Shri Onkar Nath Bhardwaj admitted to assisting Shri O.P. Vij in floating the fictitious firm M/s. Savitri Electronics and acknowledged that the imported goods were intended for sale in the market. However, the Tribunal, considering that M/s. Savitri Electronics and Shri Onkar Nath Bhardwaj had not taken steps to clear the imported goods and the confiscation order no longer survived, decided to set aside the penalties, taking a lenient view.
3. Entitlement of M/s. Esvee Enterprises to Clear the Goods:
M/s. Esvee Enterprises claimed entitlement to clear the goods, arguing that the foreign supplier had transferred the documents in their name. They contended that the ownership of the goods continued to vest with the foreign supplier, who had the right to transfer the documents to another buyer. The Tribunal agreed with this argument, referencing the Supreme Court judgment in Union of India v. Sampat Raj Dugar, which supported the position that the exporter retains ownership if the importer fails to pay for the goods. The Tribunal directed that M/s. Esvee Enterprises should be given an opportunity to clear the goods with a valid licence, provided the import was otherwise legal and permissible.
4. Legality of the Importation and the Role of the Foreign Supplier:
The Tribunal found no evidence that the foreign supplier was involved in any fraud or attempted illegal importation. The documents were sent on a collection basis, and since M/s. Savitri Electronics did not retire them, the foreign supplier retained ownership. The Tribunal concluded that the foreign supplier was entitled to either find another buyer or ask for re-export of the goods. The Tribunal directed that M/s. Esvee Enterprises should be allowed to clear the goods against a valid licence, ensuring that the import was legal and permissible.
Conclusion:
The Tribunal set aside the impugned order, directing that M/s. Esvee Enterprises should be given an opportunity to clear the goods against a valid licence after establishing the legality of the import. The penalties on M/s. Savitri Electronics and Shri Onkar Nath Bhardwaj were also set aside, considering the circumstances and their lack of action to clear the goods. The appeals were disposed of accordingly.
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1992 (6) TMI 120
Issues Involved:
1. Refund Claim for Additional Duty of Customs (CVD)
2. Re-classification of Imported Goods
3. Applicability of State Excise Duty under Section 3 of the Customs Tariff Act, 1975
4. Limitation Period for Filing Refund Claims
Detailed Analysis:
1. Refund Claim for Additional Duty of Customs (CVD):
The appellants sought a refund of additional duty collected on a consignment of British Spirit/Scotch Malt, arguing that the State Excise duty should not be included under Section 3(1) of the Customs Tariff Act, 1975. They contended that since there is no Central Excise Duty on compound alcoholic preparations used for manufacturing beverages, no CVD was payable. The Assistant Collector initially rejected this claim, concluding that State Excise duty is applicable for additional duty of customs under Section 3 of the CTA, 1975. The Collector (Appeals) upheld this decision, noting that the goods were not denatured alcoholic liquors, which would be excluded from such duty.
2. Re-classification of Imported Goods:
In one appeal, the appellants argued that the goods should be reclassified under sub-heading 2208.10 CTA as compound alcoholic preparations, subject to a lower duty rate. They claimed that the goods were concentrates, not portable whisky, and thus should not be classified under the higher duty rate applicable to whisky. The Assistant Collector and the Collector (Appeals) rejected this claim as it was not part of the original refund claim and was filed beyond the statutory time limit under Section 27 of the Customs Act, 1962.
3. Applicability of State Excise Duty under Section 3 of the Customs Tariff Act, 1975:
The appellants contended that the term "Excise Duty" in Section 3(1) of the CTA, 1975, should refer only to Central Excise Duty and not State Excise Duty. They argued that since the goods were alcohol, which is outside the purview of Central Excise, no additional duty of customs should be levied. The Tribunal referred to the Supreme Court decision in Khandelwal Metal & Engineering Works v. U.O.I., which clarified that the charging section for customs duty is Section 12 of the Customs Act, and the measure of the tax does not determine its nature. Therefore, the measure of additional duty could include State Excise duty.
4. Limitation Period for Filing Refund Claims:
The Tribunal considered whether the appellants could amend their refund claims to include reclassification and refund of basic customs duty after the statutory time limit. It was noted that the original claim was only for refund of CVD and not for reclassification. The Tribunal cited several precedents, including the Supreme Court decision in Miles India Ltd. v. Assistant Collector of Customs, which held that statutory authorities are bound by the limitation period prescribed in the statute. Therefore, the subsequent claim for reclassification was deemed a fresh claim and barred by limitation.
Conclusion:
The Tribunal rejected the appeals, upholding the lower authorities' decisions. The claims for refund of additional duty of customs (CVD) were not valid as the term "Excise Duty" under Section 3 of the CTA, 1975, includes State Excise Duty. The claims for reclassification were barred by limitation as they were not part of the original refund claims and were filed beyond the statutory time limit. The Tribunal emphasized that statutory authorities cannot transgress the limitation period prescribed in the statute.
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1992 (6) TMI 119
Issues:
- Appeal against rejection of refund application as time-barred under Section 35 of the Central Excises & Salt Act, 1944.
- Interpretation of speaking order requirement for filing an appeal.
- Determining the date of communication of refund order for appeal purposes.
Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras was against the rejection of a refund application by the Collector of Central Excise (Appeals), Madras, claiming it was barred by time under Section 35 of the Central Excises & Salt Act, 1944. The appellant had filed a provisional price list initially and later a final price list seeking a refund of excess amounts paid for transport and insurance charges. The Assistant Collector issued cheques for lesser amounts without providing reasons, prompting the appellant to seek clarification. The Assistant Collector's explanation on 23-2-1988 was considered the legal basis for filing an appeal, as it constituted a speaking order, necessary for appeal initiation.
The Tribunal noted that the communication on 23-2-1988, explaining why the full refund was not granted, served as the cause of action for the appellant to appeal. A speaking order is essential for appealability, and the letter dated 23-2-1988 fulfilled this requirement. The Tribunal held that the lower appellate authority's dismissal of the appeal as time-barred was incorrect. Consequently, the impugned order was set aside, and the matter was remanded for reconsideration on merits in accordance with the law.
In a separate opinion, another Member of the Tribunal concurred with the decision. It was highlighted that the appellant was not informed about the sanctioning of lesser amounts before receiving the cheques, and no reasons were provided for the reduced refunds. The date of receipt of cheques was not considered the date of communication of the refund order. It was emphasized that for an order to be appealable, it must provide reasons and be passed after due process of law. The subsequent letter explaining the lesser amount sanctioned was deemed the appealable order as it informed the appellant of the reasons for the reduced refunds.
Additionally, it was clarified that the dispatch date of cheques was relevant from the Department's perspective for potential excess sanction recovery. The date of the cheque issue was determined as crucial for any future recovery actions, as per the provisions of Section 11A. This interpretation was supported by a previous order in the case of Collector of Central Excise, Cochin v. M/s. B.P.L. Systems & Projects Ltd. dated 28-4-1992.
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1992 (6) TMI 118
Issues:
Interpretation of Rules 9 and 49 for duty on waste arising during yarn manufacturing process, whether duty payable on single ply yarn before doubling, classification of yarn varieties, and the completion of manufacture at the single ply yarn stage.
Analysis:
The appeal pertains to the duty payable on waste arising during the manufacturing process of yarn falling under specific CET categories. The key issue is whether duty is chargeable on single ply yarn before doubling, invoking Rules 9 and 49. The Tribunal has previously held that doubling constitutes manufacturing, rejecting an over-emphasis on Rule 9's explanation. The duty is technically payable on single ply yarn even before doubling, as per Notification 49/85, implying that doubling results in the manufacture of another commodity.
The main contention revolves around whether manufacture is complete at the single ply yarn stage for duty assessment. The respondents argue that single ply yarn, before being used in doubling, is not assessable as it undergoes continuous processing without changing its characteristics. They distinguish their case from previous rulings, emphasizing that doubling the same variety does not create a new type of yarn.
The Tribunal has addressed conflicting views within its decisions regarding the classification of yarn varieties and the taxable event in yarn manufacturing. While some orders suggest that different yarn forms are not distinct commodities, others argue that single and multiple yarns differ. The Third Member's recent decision aligns with the view that converting single ply yarn into double or multifold yarn does not result in a new product.
In light of the Third Member's agreement with the Judicial Member's order, the Tribunal opts to follow the majority opinion, dismissing the appeal against the Collector (Appeals) decision. The Tribunal criticizes the department's inconsistent relief claims but upholds the Collector (Appeals) order based on the observations and the latest Tribunal ruling.
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1992 (6) TMI 117
Issues Involved:
1. Eligibility of MODVAT credit for countervailing duty on Lap Film.
2. Classification of Lap Film as an input under Rule 57A of the Central Excise Rules, 1944.
3. Interpretation of the term "input" in the context of MODVAT credit.
4. Relevance of the Certificate from the Department of Electronics.
5. Impact of Customs Notification No. 347/86-Cus. on the eligibility for MODVAT credit.
Detailed Analysis:
1. Eligibility of MODVAT Credit for Countervailing Duty on Lap Film:
The appellants contested the denial of MODVAT credit amounting to Rs. 2,07,858.84 on Lap Film by the Assistant Collector of Central Excise, Udaipur, and the Collector of Central Excise (Appeals), New Delhi. The primary argument was that Lap Film, used in the Burnisher Machine to remove excess magnetic oxide from magnetic diskettes, should be considered an input component in the manufacture of floppy disks. The appellants emphasized that the burnishing process, facilitated by Lap Film, is crucial for the final quality of the floppy disks.
2. Classification of Lap Film as an Input under Rule 57A:
The Assistant Collector argued that Lap Film is not used in or in relation to the manufacture of magnetic disks but is a tool or appliance of the Burnisher Machine. Consequently, it was deemed ineligible for MODVAT credit under Rule 57A. The Collector (Appeals) upheld this view, stating that although burnishing is essential, Lap Film, like the machines used, does not qualify as an input since it does not form part of the final product.
3. Interpretation of the Term "Input" in the Context of MODVAT Credit:
The appellants cited several judicial precedents to argue that an input need not form part of the final product to be eligible for MODVAT credit. They referenced cases like *Collector of Central Excise v. Titaghur Paper Mills* and *Collector of Central Excise v. HMM*, where it was held that a raw material contributes to the quality or character of the final product even if it does not physically form part of it. The Tribunal's decision in *Union Carbide (I) Ltd. v. Collector of Central Excise* was also highlighted, which stated that materials used up in the manufacturing process qualify as inputs.
4. Relevance of the Certificate from the Department of Electronics:
The appellants produced a Certificate from the Joint Director of the Department of Electronics, which clarified that Lap Film is a consumable used to remove excess magnetic material and should be considered an input for MODVAT credit purposes. The learned SDR, Shri Rakesh Bhatia, countered that this certificate was issued after the impugned order and was not considered by the Collector (Appeals).
5. Impact of Customs Notification No. 347/86-Cus. on the Eligibility for MODVAT Credit:
The appellants argued that the exemption of Lap Films from part of the import duty under Customs Notification No. 347/86-Cus. further supports their claim that Lap Films are legitimate inputs for the manufacture of floppy diskettes. The Tribunal observed that the Lap Film, when used, loses its original identity, similar to the BOPP film in the *Weldekar Laminates Pvt. Ltd.* case, and should be regarded as an input under Rule 57A.
Conclusion:
The Tribunal concluded that the lower authorities misinterpreted the MODVAT Scheme and Rule 57A. The explanation to Rule 57A excludes machines, tools, etc., but not materials used in these machines for manufacturing the final product. The argument that Lap Film does not form part of the final product was rejected based on judicial precedents. The Tribunal found that the Lap Film is directly used for finishing the final product, thus qualifying as an input. The appeal was allowed, and the impugned orders were set aside, granting consequential relief to the appellants.
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