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1985 (11) TMI 171
The judgment pertains to an application for dispensing with a deposit of Rs. 2,44,737 under Section 35(F) of the Central Excises and Salt Act, 1944. The adjudication order did not demand any specified amount of money as duty. The penalty was recovered through a Bank Guarantee. As no duty was demanded in the order under appeal, no deposit is required. Recovery of duty from the applicant is stayed until the appeal is heard and disposed of.
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1985 (11) TMI 167
Issues Involved:
1. Validity of Notifications No. 101-Customs dated 1-7-1964 and G.S.R. 37 dated 3-1-1969.
2. Legality of the seizure of silver bars and subsequent proceedings.
3. Validity of the order passed by the Collector of Central Excise.
4. Imposition of penalty under Section 114 of the Customs Act, 1962.
5. Jurisdiction and authority of Customs Preventive Officers in conducting search and seizure.
6. Reasonableness of the belief held by Preventive Officers regarding the liability of confiscation of goods.
Issue-wise Detailed Analysis:
1. Validity of Notifications No. 101-Customs dated 1-7-1964 and G.S.R. 37 dated 3-1-1969:
The petitioner challenged the notifications on the grounds that they conferred absolute and excessive powers of revision without safeguards against misuse. The court observed that the power of revision was exercised under Section 130 of the Customs Act, 1962, which included checks and balances, thus preventing arbitrary or unbridled use of power. The court further noted that Notification No. 101-Customs was no longer in force due to amendments introduced by the Finance Act 2 of 1980, rendering the challenge to this notification redundant. Regarding Notification G.S.R. 37, the court upheld its validity, stating that the restrictions imposed under Sections 11-J, K, L, and M of the Act were reasonable and aimed at preventing illegal export of silver bullion and coins, thus serving public interest.
2. Legality of the Seizure of Silver Bars and Subsequent Proceedings:
The petitioner claimed ownership of the seized silver bars, contending that they were purchased in 1971 and thus did not contravene Sections 11-J, K, and L of the Act. The court found that the value of the silver at the time of seizure in 1974 was Rs. 19,948.82, and the petitioner failed to provide evidence to support a lower valuation. The court also held that the seizure was valid as the Customs Preventive Officers were designated as proper officers under Section 110 of the Act, and the seizure was conducted in compliance with the law.
3. Validity of the Order Passed by the Collector of Central Excise:
The petitioner challenged the order of the Collector of Central Excise, which maintained the confiscation of the seized silver and imposed a penalty. The court found that the Collector acted within his jurisdiction and that the order was based on available materials. The court rejected the petitioner's contention that the order was void and based on conjectures and surmises.
4. Imposition of Penalty under Section 114 of the Customs Act, 1962:
The petitioner argued that the penalty under Section 114 was not sustainable as it required an overt act. The court held that the petitioner's failure to comply with Sections 11-J, K, and L, such as not obtaining a transfer voucher and not maintaining accounts, constituted sufficient grounds for imposing a penalty. The court noted that the value of the seized silver exceeded Rs. 15,000, making it subject to the specified goods regulations under the Act.
5. Jurisdiction and Authority of Customs Preventive Officers in Conducting Search and Seizure:
The petitioner argued that the Customs Preventive Officers were not proper officers for conducting the search and seizure. The court referred to Section 2(34) and Section 110 of the Act, along with the relevant standing orders, and concluded that the Preventive Officers were duly designated as proper officers for the purpose of seizure under Section 110. Therefore, the search and seizure conducted by them were valid.
6. Reasonableness of the Belief Held by Preventive Officers Regarding the Liability of Confiscation of Goods:
The petitioner contended that the Preventive Officers did not have a reasonable belief that the silver was liable to confiscation. The court examined the circumstances of the seizure, including the lack of ownership documents and the storage of silver in an unnotified place. The court concluded that the Preventive Officers had bona fide and honestly entertained a reasonable belief that the silver was liable to confiscation, thus justifying the seizure.
Conclusion:
The court dismissed the writ petitions, upholding the validity of the notifications, the legality of the seizure, the order of the Collector of Central Excise, and the imposition of penalty. The court found that the Preventive Officers acted within their jurisdiction and had reasonable grounds for the seizure. The rule nisi was discharged, and the writ petitions were dismissed with costs.
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1985 (11) TMI 163
Issues:
Confiscation of goods for non-entry in R.G.1 register, Redemption fine, Penalty under Rule 173Q of Central Excise Rules, 1944.
Analysis:
The judgment involved the confiscation of goods and imposition of a redemption fine and penalty on the appellants for not entering the goods in the R.G.1 register as per Central Excise Rules. The seized goods were writing and printing paper confiscated by the Additional Collector of Central Excise, Meerut. The appellants argued that the goods did not reach the R.G.1 stage and cited a Trade Notice to support their claim. They explained that due to the factory's three-shift operation, the production of the previous day was accounted for on the next day, leading to a delay in entry. However, the Tribunal found that there was a contravention of Rule 53 read with Rule 173G as the goods were required to be entered in the R.G.1 register once they reached an identifiable form, irrespective of being saleable or undergoing finishing processes.
The Trade Notice issued by the Collector of Central Excise clearly outlined the principles for determining the R.G.1 stage for various commodities, including paper and paper board. The notice emphasized that goods, even in loose condition, should be entered in the R.G.1 register once they assume an identifiable form. The Tribunal noted that the seized goods were duly packed in unit packing suitable for marketing, indicating they had reached the R.G.1 stage and should have been entered in the register. The failure to do so constituted a violation of the Central Excise Rules.
The Tribunal acknowledged the practical difficulties faced by the factory in making entries on the same day due to the three-shift operation but highlighted the importance of timely and accurate entries in the R.G.1 register to prevent clandestine removal of goods. The judgment upheld the confiscation of the goods but reduced the redemption fine, considering the absence of evidence indicating an intention to remove the goods without duty payment. The penalty was set aside due to the lack of intent for clandestine removal, and the appeal was partly allowed with a reduced redemption fine.
In conclusion, the judgment focused on the strict adherence to Central Excise Rules regarding the timely entry of goods in the R.G.1 register to prevent evasion of duty. The Trade Notice provided clear guidelines for determining the R.G.1 stage, emphasizing the importance of accurate record-keeping to maintain transparency in excisable goods' movement and prevent illicit activities.
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1985 (11) TMI 159
Issues Involved:
1. Whether the goods imported are consumer goods.
2. Whether the goods cease to be consumer goods because the Policy permits import for stock and sale.
3. Whether the REP licence against which clearance was sought is valid for the import of the goods in question.
4. Whether the goods in question could have been imported as OGL items.
Detailed Analysis:
Issue 1: Whether the goods imported are consumer goods
The tribunal examined the definition of "consumer goods" as provided in the Import Policies for the years 1983-84, 1984-85, and 1985-88. The definition states: "Consumer goods for the purpose of Import Policy, will mean consumption goods which can directly satisfy human needs without further processing, it would include consumer durables also." The tribunal found that the imported items, namely Hard Shell Almonds unselected, Dry Figs Quality No. 3, and Raisins Quality No. 3, are consumer goods as they can directly satisfy human needs without further processing. Thus, the tribunal rejected the appellant's contention that the imported goods are not consumer goods.
Issue 2: Whether the goods cease to be consumer goods because the Policy permits import for stock and sale
The tribunal noted that the Policies allowed the import of dry fruits (excluding Cashew Nuts and Dates) against licences issued to dealers engaged in that trade, but not under Open General Licence (OGL). The tribunal rejected the appellant's argument that the goods cease to be consumer goods for the purpose of import because the Policies permitted stock and sale by dealers. The tribunal emphasized that dry fruits are restricted items and not banned items; hence, they could be imported only against a specific licence.
Issue 3: Whether the REP licence against which clearance was sought is valid for the import of the goods in question
The tribunal examined the REP licence and the relevant provisions of the Import Policies. The licence permitted the import of items permissible under para 138(14) of the Import Export Policy Volume I 1983-84. However, the tribunal found that the imported goods did not appear individually in Appendices 3, 5, 8, and 9 or were not specifically listed for import under OGL. The tribunal concluded that the licence did not confer a greater right or facility than the one conferred on the manufacturer-exporters under the relevant paragraphs. Thus, the tribunal held that the REP licence was not valid for the import of the goods in question.
Issue 4: Whether the goods in question could have been imported as OGL items
The tribunal examined the relevant provisions of the Import Policies and found that neither the Policy AM-1983-84, AM-1984-85, nor AM-1985-88 permitted the import of dry fruits under OGL, except for dates. The tribunal concluded that the goods in question could not have been imported as OGL items during the relevant period.
Conclusion:
The tribunal held that the imported goods are consumer goods and the REP licence was not valid for the import of these goods. The goods in question could not have been imported as OGL items. Consequently, the appeal was rejected.
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1985 (11) TMI 158
Issues Involved:
1. Confiscation of the vessel under Section 115(2) of the Customs Act.
2. Confiscation of 240 bags of wet dates under Section 119 of the Customs Act.
3. Quantum of fine in lieu of confiscation of the vessel.
4. Legal validity of the confiscation order without notice to the owner of the cargo.
Detailed Analysis:
1. Confiscation of the vessel under Section 115(2) of the Customs Act:
The appellants contested the confiscation of their vessel "M.S.V. Faizi Husaini" under Section 115(2) of the Customs Act. The vessel was seized after Customs Officers found ten packages of undeclared goods of foreign origin during a search. The appellants argued that the contraband was not concealed but stored in the hatch, which was open and exposed. The Tindel, who was in charge of the vessel, admitted to smuggling the goods. The Tribunal noted that the vessel was used in smuggling with the Tindel's knowledge and collusion, making the confiscation under Section 115(2) justified. The Tribunal rejected the reliance on previous judgments that did not align with the facts of this case, as the smuggling was done with the knowledge of the person in charge.
2. Confiscation of 240 bags of wet dates under Section 119 of the Customs Act:
The appellants challenged the confiscation of 240 bags of wet dates, arguing that Section 119 was not applicable because the contraband was not concealed among the dates. The Tribunal found that the contraband was hidden beneath the cargo of wet dates, which required shifting 200 bags to uncover the smuggled goods. This indicated that the dates were used to conceal the contraband, making Section 119 applicable. However, the Tribunal noted a significant omission: the owner of the cargo was not given notice before confiscation, as required by Section 124 of the Customs Act. This rendered the confiscation of the wet dates legally invalid.
3. Quantum of fine in lieu of confiscation of the vessel:
The appellants argued that the fine of Rs. 80,000/- for redeeming the vessel was disproportionate to the value of the contraband goods. The Tribunal considered the value of the vessel (Rs. 3,20,000/-) and the contraband (Rs. 86,412/-) and noted that the owner was not directly involved in the smuggling. Given that the crew members had already been penalized and the owner had taken precautions against misuse, the Tribunal found the fine excessive. Consequently, the redemption fine was reduced from Rs. 80,000/- to Rs. 10,000/-.
4. Legal validity of the confiscation order without notice to the owner of the cargo:
The Tribunal found that the Additional Collector of Customs did not issue a notice to the owner of the wet dates before confiscation, as required by Section 124 of the Customs Act. This omission made the confiscation of the 240 bags of wet dates legally invalid. The Tribunal set aside the confiscation order and directed the refund of the fine of Rs. 10,000/- paid by the appellants.
Conclusion:
Except for the modifications regarding the reduction of the redemption fine and the setting aside of the confiscation of the wet dates, the Tribunal confirmed the order of the Additional Collector of Customs and rejected the appeal.
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1985 (11) TMI 152
Issues:
Claim for refund of duty on gunny bags; Compliance with Rule 233-B of Central Excise Rules, 1944; Approval of price list; Lodging refund claim; Payment of duty under protest; Endorsement on R.T.12 returns; Validity of protest letter; Compliance with Rule 173C(8); Non-endorsement of R.T.12 returns; Interpretation of Rule 233B.
Analysis:
The appellant's claim for a refund of duty on gunny bags was rejected by the Assistant Collector due to non-compliance with Rule 233-B of the Central Excise Rules, 1944. The Assistant Collector emphasized that duty had not been paid under protest as required by the rule. The claim was considered time-barred under Sec. 11B of the Act due to procedural discrepancies, including the form of the claim and the absence of endorsement on R.T.12 returns.
Upon appeal, the Collector of Central Excise (Appeals) upheld the rejection, noting the failure to follow the proviso to Rule 233B and lack of acceptable evidence regarding the refund claim. The Collector emphasized that the price list approval without modification necessitated lodging a refund claim rather than paying duty under protest.
In the subsequent appeal, the appellant argued the existence of a valid protest, citing discrepancies in the Assistant Collector's timeline and highlighting the importance of the protest in claiming a refund under Sec. 11B. The appellant referenced legal precedents such as 'Bawa Potteries v. Union of India' to support their position on the protest's significance.
The Tribunal analyzed the arguments from both sides and found merit in the appellant's contentions. The Tribunal concluded that duty had indeed been paid under protest, despite minor procedural omissions. The Tribunal emphasized the importance of the protest letter and the endorsement on gate passes as evidence of payment under protest.
Regarding the non-endorsement of R.T.12 returns, the Tribunal deemed it a procedural issue rather than a substantive requirement. The Tribunal interpreted Rule 233B as directory rather than mandatory, given the endorsement on gate passes and the notice provided to the officer completing the returns.
Ultimately, the Tribunal set aside the previous orders and remanded the case to the Assistant Collector for a determination of the refund claim on its merits, considering the observations made during the proceedings.
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1985 (11) TMI 151
Issues:
1. Interpretation of Central Excises and Salt Act, 1944 regarding refund claim for duty rebate.
2. Application of notification No. 198/76-CE for concession on batteries manufactured by the respondent.
3. Rejection of refund claim by Assistant Collector based on limitation under rule 11 of Central Excise Rules.
4. Appeal by the respondents allowed by Collector of Central Excise (Appeals) on the grounds of excess duty collection.
5. Tribunal's dismissal of the appeal against the Collector (Appeals) order.
6. Reference application by the applicant to the High Court on specific questions.
Analysis:
The case involved a dispute regarding a refund claim for duty rebate under the Central Excises and Salt Act, 1944. The respondent, a manufacturer of electric batteries, filed a refund claim for a concession on duty as per notification No. 198/76-CE. The claim was rejected by the Assistant Collector citing the limitation under rule 11 of the Central Excise Rules, as it was received after six months from the duty payment date. However, the Collector of Central Excise (Appeals) allowed the appeal, stating that excess duty collection not authorized by law should not be retained by the Department. The Tribunal dismissed the appeal against the Collector (Appeals) order, citing a previous decision related to the interpretation of Sec. 11B of the Act in a similar case.
The Tribunal, in its findings, highlighted that a declaration filed within the six-month period specified under Sec. 11B could be considered as a claim for refund of duty as per Notification No. 198/76. The Tribunal referred to a previous decision to support this interpretation and dismissed the present appeal based on that reasoning. The Tribunal addressed specific questions raised during the proceedings, including the relevance of the declaration date for the refund claim under Rule 11 of the Central Excise Rules. The Tribunal agreed to refer a consolidated question to the High Court regarding the interpretation of the relevant date for the refund claim in the given circumstances.
In conclusion, the judgment revolved around the interpretation of statutory provisions for refund claims under the Central Excises and Salt Act, 1944, specifically in relation to a concession notification for batteries. The decision emphasized the importance of timely filing of refund claims and the applicability of previous rulings in similar cases to determine the outcome of the appeal. The reference application to the High Court sought clarity on the relevant date for the refund claim process, adding another layer of complexity to the legal dispute.
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1985 (11) TMI 150
Issues Involved:
1. Application of Section 11B of the Central Excises & Salt Act, 1944.
2. Provisional vs. Final Assessment under the Self Removal Procedure (SRP).
3. Relevant Date for Computing Time Limit for Refund Claims.
4. Interpretation of Rules 173B, 173C, 173F, 173G, and 173-I under the Central Excise Rules, 1944.
5. Judicial Precedents on Provisional Payments and Assessments.
Issue-wise Detailed Analysis:
1. Application of Section 11B of the Central Excises & Salt Act, 1944:
The appellant sought a refund of Rs. 57,941.56 for duty paid on burnt lime and cyclone dust. The Assistant Collector limited the refund to payments made within six months of the claim date, citing Section 11B of the Act. The appellant's explanation for the delay due to clerical work was not accepted. The Collector of Central Excise (Appeals) upheld this decision, emphasizing that the time limit should be computed from the date of duty payment, not the completion of the assessment memo.
2. Provisional vs. Final Assessment under the Self Removal Procedure (SRP):
The appellant argued that payments made under the SRP were provisional until the R.T. 12 return was approved and finalized. The appellant's advocate referred to Section 3 and Section 11A of the Act, and various judicial precedents to support the claim that payments under the SRP were provisional. However, the SDR countered that Rule 9B specifically provides for provisional assessment, and payments under SRP were final, subject to corrections under Rule 173-I.
3. Relevant Date for Computing Time Limit for Refund Claims:
The appellant contended that the relevant date for computing the time limit for refund claims should be the date of final assessment of the R.T. 12 return by the proper officer, as per Rule 173-I. The SDR argued that the payment made under SRP was final, and the relevant date should be the date of duty payment. The tribunal held that the process of assessment under SRP, which includes the approval of classification and price lists by proper officers, constitutes a final assessment, and the relevant date for refund claims is the date of duty payment.
4. Interpretation of Rules 173B, 173C, 173F, 173G, and 173-I under the Central Excise Rules, 1944:
The tribunal examined the provisions of Chapter VII-A, including Rules 173B, 173C, 173F, 173G, and 173-I. It was noted that these rules enable self-assessment by the manufacturer, guided by proper officers' approvals of classification and price lists. The tribunal concluded that the process of assessment and levy is complete when the manufacturer debits the duty to the PLA based on approved lists. The submission of the monthly return and its verification is a secondary check, not a provisional assessment.
5. Judicial Precedents on Provisional Payments and Assessments:
The appellant cited several judicial precedents, including decisions from the Madras High Court, Delhi High Court, Calcutta High Court, and the Supreme Court, to argue that payments under SRP were provisional. The tribunal distinguished these cases, noting that they dealt with different contexts or did not directly address the nature of payments under SRP. The tribunal emphasized that the approval of classification and price lists by proper officers is a crucial part of the assessment process, making the payments final, not provisional.
Conclusion:
The tribunal concluded that the provisions of Rule 11B were correctly applied to the appellant's refund claim. The duty payments made under the Self Removal Procedure were final, not provisional, and the relevant date for computing the time limit for refund claims is the date of duty payment. Consequently, the appeal was dismissed.
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1985 (11) TMI 149
Issues: Implementation of order for release of confiscated currency, credit of currency in Reserve Bank of India, property vesting in the Central Government upon confiscation, availability of currency to the applicant, exchange rate considerations, payment of interest.
Analysis:
The case involved the implementation of an order by the Appellate Tribunal CEGAT, Madras for the release of US $6200 in foreign currency confiscated by the Additional Collector of Customs, Madras. The applicant had petitioned for the return of the currency following the Tribunal's order, citing delays and the production of a permit from the RBI authorizing the repatriation of the funds. The Tribunal noted that the currency had been credited to the Reserve Bank of India before their order, and only the equivalent of Rs. 59520 in US $ was available for repatriation. The delay in finalizing the refund claim was attributed to fluctuating exchange rates and correspondence with the RBI for a permit. The Tribunal expressed regret for not being informed earlier about the conversion of the currency into Indian rupees, which might have influenced their order. However, the Tribunal decided to address the implementation of the existing order.
The Tribunal acknowledged that the currency had been confiscated and credited to the RBI before their order, as per the practice of the Custom House. It was highlighted that the property in the currency vested in the Central Government upon confiscation, and there was no impropriety in crediting it to the Government account. The Tribunal emphasized that the conversion took place before the Custom House was aware of the appeal to the Tribunal, and there was no stay on the confiscation order at that time. Referring to Section 126 of the Customs Act, the Tribunal justified the credit to the Government account.
In light of the circumstances, the Tribunal deemed it just to make the US $6200 available to the applicant based on the exchange rate prevalent on the date of the Tribunal's order receipt by the Custom House. Any subsequent exchange rate variations impacting the currency quantum would be the responsibility of either the Department or the applicant. The Tribunal issued an order accordingly, addressing the availability of the currency to the applicant.
Regarding the applicant's request for interest payment due to the delay, the Tribunal clarified that there was no provision in the Act for interest payment on sums due to an assessee or the Department. Interest was not charged in either direction, leading the Tribunal to deny the applicant's interest request. Lastly, the Tribunal set a timeline for the resolution of the issue within eight weeks from the date of their order, emphasizing the need for a prompt decision.
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1985 (11) TMI 140
Issues:
Appeal against mis-declaration of cotton fabrics as "rags" for duty evasion, interpretation of Notification No. 70/69-Central Excises, demand for duty, penalties, and confiscation of goods.
Detailed Analysis:
1. Mis-declaration and Duty Evasion:
The appeals contested the Collector and Board's findings that the appellants mis-declared superfine cotton fabric cut pieces as "rags" to evade duty. The authorities concluded that the goods were not bona fide rags but sound fabrics cut to fit exemption criteria. The Collector demanded duty, imposed penalties, and confiscated goods, which the Board upheld.
2. Interpretation of Notification:
The appellants argued that the fabric length criterion in the Notification for rags was the only requirement, citing a Bombay High Court judgment. They claimed that even if the pieces were sub-standard, 85% should still qualify for exemption. They contended that the Notification allowed two interpretations, hence no basis for penalties.
3. Judicial Interpretation and Exemption Criteria:
The Tribunal analyzed the Notification's description of damaged or sub-standard cotton fabrics as "rags." It clarified that the rule on fabric length differed from the Notification's conditions, emphasizing the need for both specified length and sub-standard quality. The Tribunal held that deliberately cutting sound fabrics into rag sizes did not qualify for exemption.
4. Comparison and Price Realization:
The Collector demonstrated that the appellants and dealers earned higher prices from "rags" than fresh fabrics, benefiting at the expense of duty evasion. Data showed a significant increase in "rags" production, indicating intentional misclassification for duty avoidance.
5. Inspection and Rebuttal:
The Collector refuted the appellants' claim of 85% damaged pieces based on inspection, stating that the prices obtained for the goods indicated quality comparable to fresh fabrics. The Tribunal upheld the lower authorities' findings on duty liability.
6. Penalties and Confiscation:
While acknowledging the seriousness of the contravention, the Collector hinted at potential misinterpretation of the Notification by the mills, leading to reduced penalties. The Tribunal agreed that the ambiguity in the Notification justified setting aside confiscation and penalties.
7. Final Decision:
The Tribunal upheld duty liability but overturned confiscation and penalties, recognizing the possibility of differing interpretations of the Notification. The appeals were rejected, except for the confiscation and penalties, which were set aside.
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1985 (11) TMI 139
Issues:
1. Application to amend an earlier order under Section 35C(2) of the Central Excises and Salt Act, 1944.
2. Claim for refund of special excise duty paid on goods manufactured before the imposition of the duty.
3. Reference application dismissed by the Tribunal.
4. Appeal filed before the Supreme Court against the earlier order.
5. Request for rectification based on a subsequent decision by a Five Member Bench of the Tribunal.
6. Interpretation of Section 35C(2) of the Act and the power to rectify mistakes apparent from the record.
Analysis:
The case involved an application under Section 35C(2) of the Central Excises and Salt Act, 1944, by a paper manufacturing company seeking to amend an earlier order regarding the imposition of special excise duty on goods manufactured before the duty was imposed. The company had cleared the goods post the duty imposition and subsequently claimed a refund of the special excise duty paid. The Tribunal had earlier dismissed the company's appeal, leading to a reference application also being dismissed. The company then filed an appeal before the Supreme Court, which was pending at the time of this application.
The company contended that a subsequent decision by a Five Member Bench of the Tribunal supported their claim that special excise duty should not be levied on goods manufactured before the duty imposition. They sought rectification of the earlier order based on this new interpretation. However, the Tribunal noted that the power to rectify under Section 35C(2) is limited to correcting mistakes apparent from the record. The Tribunal emphasized that a mistake should be evident from a reading of the proceedings and not require detailed arguments to unravel.
The Tribunal found that the company's request essentially sought a review of the earlier decision in light of the subsequent ruling, which was not available when the original appeal was decided. The Tribunal clarified that the power to rectify is not meant for reviewing past decisions based on subsequent developments. The Tribunal cited legal precedents to differentiate cases where retrospective amendments influenced the validity of orders, which was not the situation in this case.
Furthermore, the Tribunal distinguished another case where a Bench modified its order based on a High Court decision, highlighting the lack of similarity with the present matter. Ultimately, the Tribunal concluded that there was no mistake apparent in the earlier order and, therefore, dismissed the company's application for rectification under Section 35C(2) of the Act.
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1985 (11) TMI 138
Issues Involved:
1. Rejection of refund claims by the Assistant Collector of Central Excise.
2. Applicability of exemption Notification No. 195/76-C.E.
3. Compliance with Chapter X procedure of Central Excise Rules, 1944.
4. Locus standi of the appellants to claim refund of duty paid by the manufacturer (I.O.C.).
Detailed Analysis:
1. Rejection of Refund Claims by the Assistant Collector of Central Excise:
The appellants filed two refund claims totaling Rs. 14,68,257, which were rejected by the Assistant Collector of Central Excise, Burdwan. The appellants' subsequent appeal to the Appellate Collector of Central Excise, Calcutta, was also rejected, leading to the current appeal before the Tribunal. The Assistant Collector's order dated 30-7-1981 noted that the appellants did not follow the Chapter X procedure and did not produce documents evidencing payment of duty, deeming the claims time-barred.
2. Applicability of Exemption Notification No. 195/76-C.E.:
The refund claims pertained to the exemption Notification No. 195/76-C.E. dated 10-6-1976, which exempted furnace oil from duty in excess of forty rupees per kilolitre, provided it was used otherwise than as feedstock in the manufacture of fertilizers and the Chapter X procedure was followed. The appellants argued that the exemption was intended for the benefit of the buyers of the furnace oil and that the failure to follow Chapter X procedure should not bar their refund claims.
3. Compliance with Chapter X Procedure of Central Excise Rules, 1944:
The appellants purchased furnace oil from I.O.C. during the period 10-6-1976 to 9-10-1979, with excise duty paid at the normal rate by I.O.C. The procedure in Chapter X of the Central Excise Rules was not followed, as the CT-2 certificate required under the Chapter X procedure was not obtained until 2-5-1979. The Assistant Collector observed that furnace oil was received in violation of Notification No. 195/76, and even after obtaining the CT-2 certificate, other requirements of Chapter X procedure were not met.
4. Locus Standi of the Appellants to Claim Refund of Duty Paid by the Manufacturer (I.O.C.):
The Department raised a preliminary objection regarding the appellants' locus standi to claim a refund of the duty paid by I.O.C. The Department argued that only the person who paid the duty (I.O.C.) could claim the refund, citing several judicial decisions, including Union of India v. Silchar Electric Supply Company Ltd., Akhil Bandhav Chemical Industries v. Union of India, and Mahindra and Mahindra Ltd. v. Collector of Central Excise, Bombay. The Tribunal noted that these decisions supported the view that only the person who paid the duty could claim a refund.
The appellants contended that Notification No. 195/76 linked the exemption to the end-use of the furnace oil, implying that the exemption was intended for the buyers. They argued that Rule 11, relating to claims for refund of duty, applied to "any person" and not only to a manufacturer. However, the Tribunal found that the judgments cited by the appellants related to the question of unjust enrichment and were not directly relevant to the present case.
The Tribunal concluded that the appellants, being a corporation functioning on commercial lines and not the ultimate consumers of the furnace oil, could not claim the refund. The ultimate consumers, such as farmers, who bore the burden of the duty, would be entitled to any remission or refund. The Tribunal held that the appellants had no locus standi to make the refund claim or to file further appeals, and accordingly dismissed the appeal as not maintainable.
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1985 (11) TMI 137
Issues Involved:
1. Effect of repeal of Rules 10 and 10-A of the Central Excise Rules, 1944.
2. True scope and construction of Clause 6 of Notification No. 189/73.C.E., dated 4th October, 1973.
3. Entitlement of the petitioners to rebate under Notification No. 189/73.
4. Jurisdiction and applicability of Section 6 of the General Clauses Act to the repeal of statutory rules.
Summary:
1. Effect of repeal of Rules 10 and 10-A:
The petitioners argued that the substitution of old Rules 10 and 10-A by new Rule 10 u/s 6th August 1977 rendered the old rules non-existent. They contended that further proceedings were without jurisdiction as the Notification did not contain a saving clause, and Section 6 of the General Clauses Act was inapplicable because it does not apply to the repeal of statutory rules. The court held that the principles of Section 6 of the General Clauses Act are applicable even to the repeal of statutory rules and that the rights and obligations under the old rules continue unless a different intention appears in the new rule.
2. True scope and construction of Clause 6 of Notification No. 189/73.C.E.:
The court examined Clause 6 of the Notification, which provided for a rebate on sugar produced by a factory that commenced production for the first time on or after 1st October 1973. The petitioners claimed entitlement to this rebate, arguing that their factory should be considered new due to the issuance of a fresh L-4 licence. The court rejected this claim, stating that the factory had been in existence since 1933-34 and merely underwent a change in ownership. The factory could not be considered new for the purposes of the Notification.
3. Entitlement to rebate under Notification No. 189/73:
The petitioners initially applied for a rebate as an old factory under Notification No. 146/74, which was denied. They then applied as a new factory under Notification No. 189/73 and were erroneously granted a rebate of Rs. 61,14,930. The court held that the rebate was erroneously granted as the factory did not meet the criteria of commencing production for the first time on or after 1st October 1973. The petitioners' factory was not new and hence not entitled to the rebate.
4. Jurisdiction and applicability of Section 6 of the General Clauses Act:
The petitioners argued that the repeal of Rules 10 and 10-A without a saving clause rendered the proceedings void. The court applied the principles of Section 6 of the General Clauses Act, stating that the repeal does not affect any right, privilege, obligation, or liability acquired under the repealed enactment. The court held that the proceedings initiated under the old rules could continue under the new rule, and the erroneous rebate granted could be recovered.
Conclusion:
The court dismissed the petition, holding that the petitioners were not entitled to the rebate under Notification No. 189/73, and the principles of Section 6 of the General Clauses Act allowed the continuation of proceedings initiated under the old rules. The erroneous rebate granted was recoverable, and the substitution of the old rules by the new rule did not obliterate the obligations and liabilities incurred under the old rules.
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1985 (11) TMI 129
Issues Involved:
1. Levy of additional duty of customs (Countervailing Duty or C.V.D.) on imported viscose rayon staple fibre.
2. Application of the principle of promissory estoppel.
3. Interpretation and applicability of Section 15 of the Customs Act.
4. Validity and effect of amending Notification No. 208/79.
Detailed Analysis:
1. Levy of Additional Duty of Customs (C.V.D.) on Imported Viscose Rayon Staple Fibre:
The appellants imported viscose rayon staple fibre and were assessed to C.V.D. at the rate of Rs. 2.37 per kg as per Notification No. 208/79. They claimed a refund of the duty in excess of Rs. 1.32 per kg, the rate specified in Notification No. 8/79 prior to its amendment. This claim was rejected by the Assistant Collector and upheld by the Appellate Collector of Customs, Calcutta.
2. Application of the Principle of Promissory Estoppel:
Miss Anjali Bahl, representing the appellants, argued that the principle of promissory estoppel should apply, asserting that the concessional rate of Rs. 1.32 per kg should be deemed in force until 31-12-1979. She cited the Supreme Court's judgment in Union of India and Others v. Godfrey Philips India Ltd. and Others, which overruled the earlier decision in Jeet Ram Shivkumar v. State of Haryana. However, the respondent's counsel, Shri Tripathi, contended that no estoppel could be pleaded against a statute, referencing several High Court judgments including Fenoplast Pvt. Ltd. v. Union of India and Hindustan Spinning and Weaving Mills v. Union of India, which rejected the application of promissory estoppel in similar circumstances.
3. Interpretation and Applicability of Section 15 of the Customs Act:
Shri Tripathi emphasized that Section 15 of the Customs Act mandates that the rate of duty applicable to imported goods is the rate in force on the date the Bill of Entry is presented. Since the Bill of Entry in this case was presented after the issuance of Notification No. 208/79, the applicable rate was Rs. 2.37 per kg. The Tribunal agreed with this interpretation, noting that it could not pass an order contrary to this specific provision of law.
4. Validity and Effect of Amending Notification No. 208/79:
The Tribunal examined whether the amending Notification No. 208/79, which modified the concessional rate of C.V.D., was valid. It concluded that the notification was issued in the public interest under Section 25 of the Customs Act and could not be challenged on the grounds of promissory estoppel. The Tribunal noted that the appellants did not demonstrate any specific representation or assurance from the Government that would justify applying the earlier rate of Rs. 1.32 per kg. The Tribunal also highlighted that the issue of an exemption notification is a legislative function and cannot be subject to promissory estoppel.
Conclusion:
The Tribunal found no merit in the appellants' plea of promissory estoppel and confirmed the order of the Appellate Collector. The additional duty of customs was correctly levied at the rate prescribed by the amended notification, and the appeal was rejected.
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1985 (11) TMI 126
The appeal was filed by the Collector of Central Excise, Belgaum against the order of the Collector (Appeals), Madras. The Collector (Appeals) set aside the adjudication order due to improper proceedings. The Assistant Collector had no power to cancel his own order, leading to the appeal being rejected by the Appellate Tribunal CEGAT, New Delhi.
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1985 (11) TMI 125
Issues:
Classification of imported cellulose powder for levy of additional duty of customs under the Central Excise Tariff Schedule.
Analysis:
The appeals revolved around the classification of "Arbocel FDY 600 Cellulose Powder" for the levy of additional duty of customs. The primary issue was whether the goods should be classified under Item No. 15-A of the Central Excise Tariff Schedule or under Item 68 of the same Schedule as contended by the appellants. The Customs Authorities had assessed the goods under Heading No. 39.01/06 of the Imports Customs Tariff Schedule, while the appellants argued for classification under Chapter 47 of the same Schedule.
The Collector (Appeals) upheld the assessment under Heading 39.01/06 and the levy of additional duty of customs under Item 15A(1), C.E.T. The appellants challenged this decision, arguing that the goods were not synthetic wood pulp but were wrongly classified as regenerated cellulose. They contended that cellulose powder did not meet the criteria of being a "high polymer" as required for classification under the relevant headings.
The appellants relied on various sources, including the Explanatory Notes to the Customs Co-operation Council Nomenclature and the Glossary of Chemical Terms, to support their argument that cellulose powder should be classified differently. They emphasized that the imported goods were not capable of being formed like synthetic resins and plastics, and therefore, should not be classified under the headings chosen by the Customs Authorities.
In response, the Departmental Representative argued that cellulose powder fell under the category of "high polymers" as per the relevant literature and classification opinions. They maintained that the levy of additional duty of customs under Item 15-A(1) of the C.E.T. was correct based on this classification.
After considering the submissions from both sides, the Tribunal analyzed the nature of cellulose as a high polymer based on the literature provided. They noted that cellulose met the criteria of a high polymer as described in various chemical dictionaries. The Tribunal also highlighted the purity and manufacturing process of the imported cellulose powder, indicating that it was processed to a high degree and no longer in its natural form.
Ultimately, the Tribunal concluded that the imported goods should be classified under Heading No. 39.01/06 of the Customs Tariff Schedule and Item No. 15A(1) of the Central Excise Tariff Schedule. They found support for this classification in the Compendium of Classification Opinions published by the Customs Co-operation Council. The appeals were, therefore, rejected based on this classification analysis.
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1985 (11) TMI 124
Issues: Application for condonation of delay in filing appeal beyond the limitation period.
The judgment dealt with an appeal filed beyond the period of limitation, where the appellant Collector had also submitted an application for condonation of delay. The appeal and the condonation application were received in the Registry on a specific date. The Tribunal decided to dispose of the condonation application before the appeal. The application cited reasons for delay, mentioning that the order appealed against was received late due to internal delays in obtaining the order. The Tribunal noted contradictions in the application's explanation for the delay, especially regarding the examination of legal points in the order-in-appeal.
The application further stated that the Collector had to request a copy of the order-in-appeal from the Collector (Appeals) office, which took several months to obtain. The Tribunal questioned why such delays occurred between two offices within the same Board and why obtaining the order was so challenging. The respondent's counsel opposed the application, arguing it was vague, frivolous, and lacked substance. The counsel emphasized that the appeal was significantly time-barred and referenced previous Tribunal and Supreme Court judgments related to condonation of delay to support the opposition.
During the hearing, the appellant's representative had no substantial grounds to present, requesting more time to provide additional material or file a new application. The Tribunal acknowledged the significant delay in filing the appeal and the lack of compelling reasons detailed in the condonation application. Despite the appellant's request for more time to amend the application, the Tribunal declined, emphasizing the need to present all relevant material at the time of filing.
After careful consideration, the Tribunal rejected the condonation application, finding no sufficient grounds for condonation of delay. Consequently, the appeal itself was dismissed as time-barred. The decision was made based on the lack of substantial reasons provided in the application and the significant delay in filing the appeal.
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1985 (11) TMI 123
Issues:
1. Rejection of refund claim on the ground of time bar of Rule 11 of the Central Excise Rules, 1944.
2. Interpretation of the limitation period for claiming refund under Rule 11.
3. Applicability of Rule 11 to the case and the availability of alternative remedies.
Analysis:
The appellants contested the rejection of their refund claim citing Rule 11 of the Central Excise Rules, 1944, which imposed a time limit for claiming refunds. The dispute arose concerning an exemption Notification related to incentive rebate for higher production. The Assistant Collector rejected the claim as time-barred, considering the limitation from the date the excess duty was paid. However, the Appellate Collector allowed the claim for a specific period but rejected the rest based on the time limit stipulated by Rule 11.
The appellants argued that the limitation period should start from the date their claim was received by the jurisdictional Superintendent, relying on a previous Tribunal order. The Tribunal agreed with this argument, allowing the claim for a further period within the time limit. The appellants also sought acceptance of the remaining claim on the grounds of no error on their part and the principle that the State should not retain money not due to it.
Regarding the applicability of Rule 11, the Tribunal noted that the rule was amended to allow any person claiming a refund to apply within six months from the date of payment of duty. The delay in filing the claim was attributed to the appellants' negligence, and the plea of equity was deemed applicable to higher courts, not quasi-judicial Tribunals. The department contended that Rule 11 did not apply, suggesting a civil suit as the only remedy. However, the Tribunal found no merit in this argument, emphasizing that Rule 11 covered the appellants' case.
In conclusion, the Tribunal allowed the claim for a specific period within the time limit, directing the refund of excess duty paid during that period. The decision clarified the entitlement of the appellants to the refund and rejected the appeal on other grounds. The judgment highlighted the importance of adhering to statutory time limits for refund claims and the scope of Rule 11 in such matters.
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1985 (11) TMI 122
Issues Involved:
1. Applicability of Notification No. 23/55 to precipitated silica.
2. Classification of precipitated silica under the Central Excise Tariff.
3. Determination of whether precipitated silica qualifies as a mineral.
4. Consideration of the manufacturing process of precipitated silica.
5. Relevance of the use of precipitated silica as an extender or filler.
Issue-wise Detailed Analysis:
1. Applicability of Notification No. 23/55 to Precipitated Silica:
The primary issue was whether Notification No. 23/55, which exempts certain minerals used as extenders, fillers, or diluents, applies to precipitated silica. The appellant argued that the notification applies only to mineral silica subjected to physical processing and not to precipitated silica, which is a chemically synthesized product. The respondent contended that precipitated silica should be included under the term "silica" in the notification.
2. Classification of Precipitated Silica Under the Central Excise Tariff:
The appellant argued that precipitated silica should be classified under Item 68 of the Central Excise Tariff (CET) as it is a manufactured product, not a mineral product. The respondent maintained that precipitated silica should fall under Item 14, CET, as it is a processed mineral.
3. Determination of Whether Precipitated Silica Qualifies as a Mineral:
The tribunal had to determine if precipitated silica could be classified as a mineral. The appellant argued that since precipitated silica is a synthetic product, it does not qualify as a mineral. The respondent countered that precipitated silica, being derived from silica sand, should be considered a processed mineral.
4. Consideration of the Manufacturing Process of Precipitated Silica:
The manufacturing process of precipitated silica involves converting silica sand into sodium silicate, which is then reacted with sulfuric acid to form precipitated silica. The tribunal examined whether this process, which involves both chemical and physical changes, affects the classification of precipitated silica as a mineral.
5. Relevance of the Use of Precipitated Silica as an Extender or Filler:
The tribunal considered whether the use of precipitated silica as an extender or filler qualifies it for the exemption under Notification No. 23/55. The respondent provided evidence, including references to technical literature, that precipitated silica is commonly used as an extender or filler.
Detailed Analysis:
1. Applicability of Notification No. 23/55 to Precipitated Silica:
The tribunal noted that Notification No. 23/55 exempts certain minerals when used as extenders, fillers, or diluents. The notification lists "silica" but does not specifically mention "precipitated silica." The tribunal referred to technical literature, which classifies precipitated silica as a mineral filler, supporting the respondent's claim. The tribunal concluded that precipitated silica falls within the ambit of the notification as it is recognized as a mineral filler.
2. Classification of Precipitated Silica Under the Central Excise Tariff:
The tribunal examined the classification of precipitated silica under the CET. The appellant argued for classification under Item 68, CET, while the respondent argued for Item 14, CET. The tribunal noted that Notification No. 23/55 does not specify a CET item for eligibility, focusing instead on the use of the product. The tribunal concluded that the classification under Item 68, CET, does not preclude eligibility for the exemption under the notification.
3. Determination of Whether Precipitated Silica Qualifies as a Mineral:
The tribunal considered various definitions and technical literature to determine if precipitated silica qualifies as a mineral. The "Handbook of Fillers and Reinforcements for Plastics" and the "Glossary of Chemical Terms" describe precipitated silica as a mineral filler. The tribunal concluded that precipitated silica, despite being synthetically produced, qualifies as a mineral for the purposes of Notification No. 23/55.
4. Consideration of the Manufacturing Process of Precipitated Silica:
The tribunal reviewed the manufacturing process, noting that it involves both chemical and physical changes. Despite these changes, the final product, precipitated silica, retains the chemical formula SiO2, similar to natural silica. The tribunal concluded that the manufacturing process does not disqualify precipitated silica from being considered a mineral.
5. Relevance of the Use of Precipitated Silica as an Extender or Filler:
The tribunal considered evidence that precipitated silica is commonly used as an extender or filler. References to technical literature, including the "Pigment Handbook" and the "Handbook of Fillers & Reinforcements for Plastics," supported this use. The tribunal concluded that the use of precipitated silica as an extender or filler qualifies it for the exemption under Notification No. 23/55.
Conclusion:
The tribunal upheld the respondent's claim that precipitated silica is eligible for the exemption under Notification No. 23/55. The tribunal dismissed the appeal, affirming the order of the Collector (Appeals).
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1985 (11) TMI 121
Issues Involved:
1. Eligibility for duty-free clearance of clinical samples under Notification No. 48/77-C.E.
2. Compliance with the conditions of Notification No. 48/77-C.E.
3. Validity and impact of the Gujarat High Court judgment in M/s. Suhrid Geigy Ltd. v. Union of India.
4. Scope of review proceedings under Section 36(2) of the Central Excises & Salt Act, 1944.
Detailed Analysis:
1. Eligibility for Duty-Free Clearance of Clinical Samples Under Notification No. 48/77-C.E.:
The primary issue was whether M/s. E. Merck India (P) Ltd. was entitled to the benefit of duty-free clearance of clinical samples under Notification No. 48/77-C.E., dated 1st April 1977. The Assistant Collector of Central Excise denied this benefit, asserting that the company did not meet the conditions specified in the notification, particularly due to foreign interest in the company. However, the Appellate Collector of Central Excise overturned this decision, referencing the Gujarat High Court's judgment in M/s. Suhrid Geigy Ltd. v. Union of India, which deemed such discriminatory provisions as lacking rational nexus to the objective of the notification and thus invalid under Article 14.
2. Compliance with the Conditions of Notification No. 48/77-C.E.:
The Assistant Collector's decision was based on the belief that M/s. E. Merck India (P) Ltd. did not comply with sub-clauses (1) & (2) of Clause B of the explanation below the second proviso to the Notification. However, the respondent argued that the review show cause notice did not mention any non-compliance with other conditions of the notification, implying that the Department had no other objections. The Tribunal agreed, stating that it was not fair to demand evidence of compliance at the review stage for conditions not previously contested.
3. Validity and Impact of the Gujarat High Court Judgment:
The Gujarat High Court in M/s. Suhrid Geigy Ltd. v. Union of India had ruled that the discriminatory provisions in the notification were ultra vires Rule 8 of the Central Excise Rules, 1944, and Article 14. The Tribunal upheld this judgment, emphasizing that the mere pendency of a Special Leave Petition (SLP) against the Gujarat High Court's decision could not deprive the respondent of its benefits. The Tribunal cited the Supreme Court's stance in Shri Baradakanta Mishra v. Shri Bhimsen Dixit, which held that failing to follow a High Court decision, even if under appeal, constituted contempt of court.
4. Scope of Review Proceedings Under Section 36(2) of the Central Excises & Salt Act, 1944:
The Tribunal scrutinized the review proceedings initiated by the Government of India under Section 36(2) of the Central Excises & Salt Act, 1944. It was noted that the review show cause notice only raised the issue of the pending SLP and did not allege any non-compliance with the notification's conditions. The Tribunal concluded that the Department could not expand the scope of the review beyond what was originally specified in the show cause notice. Consequently, the Tribunal quashed the review proceedings and upheld the Appellate Collector's decision, thereby rejecting the appeal.
Conclusion:
The Tribunal's judgment reaffirmed the respondent's eligibility for duty-free clearance of clinical samples under Notification No. 48/77-C.E., dated 1st April 1977, in line with the Gujarat High Court's ruling. It emphasized the importance of adhering to judicial precedents and the limitations on expanding the scope of review proceedings. The appeal was ultimately dismissed.
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