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Showing 501 to 520 of 3414 Records
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1990 (11) TMI 174
Issues Involved:
1. Classification of 'Green Pack' under TI 15A(1) or TI 68.
2. Eligibility for exemption under Notification No. 182/82, dated 11-5-1982.
3. Whether mixing epoxy resin with fillers constitutes manufacture.
Detailed Analysis:
1. Classification of 'Green Pack' under TI 15A(1) or TI 68:
The Revenue contended that 'Green Pack,' a product consisting of epoxy resin mixed with organic fillers, should be classified under TI 15A(1) of the Central Excise Tariff Schedule, as it remains a resin. They argued that the product does not qualify as an article of plastic because it lacks a permanent and durable shape. The respondents, however, argued that the epoxy resin mixed with fillers does not result in a new product, and thus, it should not be reclassified or subjected to additional duty.
The Tribunal examined the process and found that mixing epoxy resin with fillers does not bring about any chemical change or result in a new product. The epoxy resin retains its original properties and functions. Therefore, the Tribunal concluded that 'Green Pack' should not be classified under TI 15A(1) as a new product.
2. Eligibility for exemption under Notification No. 182/82, dated 11-5-1982:
The Revenue argued that since 'Green Pack' should be classified under TI 15A(1), it should not be eligible for exemption under Notification No. 182/82. The respondents, however, contended that the product, being merely a mixture of duty-paid epoxy resin and fillers, should be exempt from further duty.
The Tribunal upheld the respondents' argument, stating that no new product emerged from the mixing process. Therefore, 'Green Pack' is entitled to the exemption under Notification No. 182/82, as the process did not constitute manufacture resulting in a new product.
3. Whether mixing epoxy resin with fillers constitutes manufacture:
The Revenue cited Supreme Court cases, including Shaw Wallace & Co. Ltd. v. State of Tamilnadu and Devidass Gopalkrishan v. State of Punjab, to argue that homogenization by mixing fillers should be considered a manufacturing process resulting in a new product. The respondents countered by citing various rulings and technical literature, asserting that the mixing process does not chemically alter the epoxy resin or create a new product.
The Tribunal examined the evidence and found that the mixing of epoxy resin with fillers did not result in a new product with a different name, character, or use. The Board's circulars and cited rulings supported this view, indicating that such mixing does not amount to manufacture. Consequently, the Tribunal decided that the process does not constitute manufacture, and no additional duty can be levied.
Separate Judgments:
The President of the Tribunal differed from the majority opinion, referencing a prior Tribunal decision (Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd.) that classified a similar product under Item No. 15A(1). The President argued that the principle from the Bakelite Hylam case should apply, and 'Green Pack' should be considered a new product subject to duty under TI 15A(1).
However, the majority opinion, supported by Members Ms. Jyoti Balasundaram, D.C. Mandal, and P.C. Jain, concluded that the mixing process did not result in the emergence of a new commercial product. They agreed with the original decision that 'Green Pack' should not be reclassified or subjected to additional duty.
Final Order:
In accordance with the majority opinion, the appeal was dismissed, and the original order by the Collector of Central Excise (A) was upheld.
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1990 (11) TMI 173
The petitioner challenged the legality of excise duty on Electric Overhead Travelling Cranes they fabricated. The cranes were valued at Rs. 53,91,379, and excise duty assessed was Rs. 5,39,252.16. Previous similar case judgment favored the petitioner. The High Court allowed the writ petition and set aside the order levying excise duty.
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1990 (11) TMI 172
Issues:
Prosecution launched against the petitioner and refusal to release gold and penalty.
Analysis:
The petitioner was aggrieved by the prosecution launched against him and the refusal of the respondents to release 1571.500 gms of gold in the form of chains and a penalty of Rs. 3,000. Gold articles were recovered from the petitioner's possession, and the department initiated adjudicatory proceedings under the Gold (Control) Act, 1968. The Collector of Central Excise ordered confiscation of the gold articles, but the Customs, Excise & Gold (Control) Appellate Tribunal concluded that the gold ornaments were fully finished and not primary gold as per the Act. The Tribunal exonerated the petitioner, leading to a complaint lodged before the Chief Judicial Magistrate, which the Tribunal's findings deemed unnecessary to continue. The departmental adjudicatory body's finding favored the petitioner, making it improper to continue the prosecution. The Supreme Court's decision in Uttam Chand & Others v. ITO supported this view.
The department's counsel argued that the Tribunal's decision was not binding on the criminal court, citing the Supreme Court's decision in P. Jayappan v. S.K. Perumal. However, the Supreme Court clarified that a finding favorable to the assessee recorded by an authority under the Act can lead to quashing the prosecution, but it is not binding on the criminal court. In this case, the complaint focused on whether the gold articles seized were primary gold, and since the Tribunal's finding contradicted this, it was deemed unnecessary to continue the proceedings. The pending reference application before the Court was not sufficient grounds to continue the prosecution, as mere chance of success does not justify it.
Considering the facts and circumstances, the prosecution was deemed inexpedient. The Court quashed the prosecution, directed the authorities to return the seized gold articles to the petitioner, and refund the penalty. The respondents were instructed to comply with the order within a fortnight. As a result, the petition was allowed, and the rule was made absolute.
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1990 (11) TMI 171
Issues:
Determining the levy of export duty on goods with shipping bills presented on the same day as the notification, interpretation of Section 16 of the Customs Act for rate of duty and tariff valuation, relevance of the date of presentation of shipping bill or entry outwards of the vessel, applicability of the judgment in Gangadhar Narsinghdas Agarwal v. P.S. Thrivikraman, constitutional validity of export duty levy under Articles 19(1)(g), 31, and 265.
Analysis:
The judgment in question addresses the issue of whether export duty could be levied on goods for which shipping bills were submitted on the same day as the notification of the duty. The petitioners argued that since the shipping bills were presented on the same day as the notification, no export duty was required to be paid. However, the court referred to Section 16 of the Customs Act, which determines the rate of duty and tariff valuation based on the date of presentation of the shipping bill or the date of entry outwards of the vessel for export goods. The court emphasized that the relevant date for fixing the rate of duty is either the date of presenting the shipping bill or the date of entry outwards of the vessel, as per the provisions of Section 16(1) of the Customs Act.
The court also cited the judgment in Gangadhar Narsinghdas Agarwal v. P.S. Thrivikraman, which clarified that the date of presentation of the shipping bill is crucial for determining the rate of duty and tariff valuation for export goods. The judgment highlighted that the proviso to Section 16 introduces a fictional date for determining the duty, which is the date of entry outwards of the vessel. This date is determined by the proper officer granting permission for the vessel to depart.
Furthermore, the court addressed the constitutional validity of the export duty levy under Articles 19(1)(g), 31, and 265. It concluded that the levy of export duty under Section 12 of the Customs Act and the publication of the notification in advance did not violate the constitutional provisions mentioned. Therefore, the court dismissed the petitions, stating that there was no substance in the arguments raised and ordered the rule to be discharged with costs, vacating any interim relief granted.
In summary, the judgment clarifies the application of Section 16 of the Customs Act for determining the rate of duty on export goods based on the date of shipping bill presentation or entry outwards of the vessel. It also upholds the constitutional validity of the export duty levy and dismisses the petitions challenging the duty imposition.
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1990 (11) TMI 170
Whether the notice dated 22-5-1982 issued by the Collector of Central Excise is barred by time under the provisions of Section 35A(3)(b) of the Act?
Held that:- The final conclusion of the Allahabad High Court in the judgment under appeal has to be upheld without going into all possible different interpretations of Section 35A. On those aspects of the matter, we express no opinion. We confine ourselves to the question whether, in a case like the present where fraud, collusion etc. are alleged, the initiation of proceedings within one year is valid and answer that question in the affirmative. In the result, this appeal stands dismissed.
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1990 (11) TMI 169
Issues Involved:
1. Suppression of material facts and evasion of excise duty.
2. Liability of petitioners to pay excise duty on goods supplied by job-workers.
3. Validity of the show-cause notice under the proviso to Section 11A of the Central Excise Act.
4. Prima facie case for levying duty on goods manufactured through sub-contractors.
5. Allegations of job-workers being sham or bogus entities.
6. Limitation period for issuing the show-cause notice.
Issue-wise Detailed Analysis:
1. Suppression of Material Facts and Evasion of Excise Duty:
The petitioners were accused of getting excisable goods manufactured from small-scale manufacturers (job-workers) using raw materials supplied by them, thus evading excise duty on the value of the articles manufactured and supplied by job-workers between 1-4-1981 and 28-2-1986. The Department alleged that the petitioners adopted this method to avoid payment of excise duty, and the value of the total clearances during the period was estimated at Rs. 9,25,96,498/-, with a differential duty of Rs. 73,42,587.37ps. demanded.
2. Liability of Petitioners to Pay Excise Duty on Goods Supplied by Job-Workers:
The petitioners argued that they are not liable to pay excise duty on the value of goods supplied by independent job-workers, who are recognized as small-scale units and pay excise duty on their manufacture under the Act. The petitioners contended that the job-workers are independent manufacturers and not mere agents of the petitioners.
3. Validity of the Show-Cause Notice under the Proviso to Section 11A:
The petitioners challenged the validity of the show-cause notice on the grounds that it was barred by time and the proviso to Section 11A was not applicable since no fraud, suppression, or misstatement was alleged in the notice. The petitioners also argued that the notice was vague and lacked particulars, making it unsustainable in law.
4. Prima Facie Case for Levying Duty on Goods Manufactured through Sub-Contractors:
The Department argued that the petitioners got manufactured certain completed equipment through sub-contractors, which were despatched directly to the work-site, and there was suppression of the value of those excisable goods. The Department contended that these goods should be considered as goods manufactured by the petitioners themselves, as the petitioners supplied raw materials, design, and specifications to the sub-contractors and cleared the goods directly to the site under petitioners' invoices.
5. Allegations of Job-Workers Being Sham or Bogus Entities:
The petitioners contended that the show-cause notice did not contain any allegations that the job-workers were sham or bogus entities. They argued that the Department cannot initiate proceedings to treat the value of goods supplied by the job-workers as the petitioners' clearances in the absence of such allegations.
6. Limitation Period for Issuing the Show-Cause Notice:
The petitioners argued that the show-cause notice was barred by limitation, as it did not satisfy the ingredients to invoke the extended period of limitation under the proviso to Section 11A, which requires allegations of fraud, collusion, or wilful misstatement of facts.
Judgment:
After careful consideration of the materials on record, arguments advanced by both sides, and relevant case law, the court concluded:
1. The Department failed to establish that the petitioners suppressed the fact of manufacturing excisable goods through sub-contractors and evaded payment of duty on those goods.
2. There was no tangible basis for the Department's assumption that all goods manufactured through sub-contractors should be treated as the petitioners' manufacture.
3. The Department did not establish that the job-workers were not manufacturers on their own account or that they were mere dummies and bogus concerns.
4. The abstract of figures furnished by the Department lacked a break-up of the exact value of articles manufactured through job-workers, making the basis for the demand vague and uncertain.
5. The mere fact that job-workers delivered components directly to the worksite and the petitioners presented a consolidated invoice to their customers did not automatically imply that the value of all invoices should be deemed as excisable goods manufactured by the petitioners.
6. The show-cause notice did not satisfy the ingredients to invoke the extended period of limitation under the proviso to Section 11A, as there were no allegations of suppression, fraud, or wilful misstatement of facts.
The court held that the Department failed to make out a prima facie case to uphold the show-cause notice and permitted them to continue with further proceedings of adjudication. Therefore, the court quashed the show-cause notice (Annexure-'O') and made the rule absolute.
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1990 (11) TMI 168
Issues:
Interpretation of proceedings under Sec. 110(2) of the Customs Act, 1962
Validity of extension of time for investigation under Section 110(2)
Jurisdiction of the Court under Article 226 of the Constitution
Detailed Analysis:
The judgment involves a reference made by a learned Single Judge regarding the interpretation of proceedings under Section 110(2) of the Customs Act, 1962. The Single Judge observed discrepancies in the views expressed by various High Courts and referred the matter to a Division Bench for clarification. The question raised was whether proceedings under Chapter XIV should end or not be initiated based on the validity of an order made by the Collector under Section 110(2) and the return of goods without an extension of time. The Division Bench found that this question did not arise in the specific case before them, involving exporters of textiles in Bangalore who were issued a notice under Section 110(2) by the Collector of Customs. The petitioners failed to respond adequately to the notice, leading to an ex-parte order by the Collector to extend the investigation period. Subsequently, adjudication proceedings were initiated under Section 124 of the Act, and the petitioners challenged the proceedings before the High Court under Article 226 of the Constitution.
The Court deliberated on whether to interfere with the ongoing proceedings initiated by the Collector of Customs. It noted the lack of cooperation from the petitioners during the investigation period, leading to the extension of time for proceedings. The Court emphasized the importance of approaching the Court with clean hands and in a timely manner when seeking relief under Article 226 of the Constitution. Considering the conduct of the petitioners, the Court concluded that they had not made efforts to expedite the disposal of their petitions. Therefore, the Court declined to exercise its jurisdiction and dismissed the petitions, allowing the adjudication proceedings to continue as initiated by the Collector of Customs under Section 124 of the Act.
The judgment highlighted the principle that relief under Article 226 of the Constitution is granted to litigants who approach the Court with clean hands and in a timely manner. The Court emphasized the need for litigants to actively participate in legal proceedings and not unduly delay the resolution of their cases. The judgment also acknowledged a separate issue in one of the petitions regarding ownership of goods, stating that it was a factual matter to be determined by the Collector of Customs. Ultimately, the Court dismissed the petitions, allowing the Collector to proceed with the adjudication proceedings under Section 124 of the Customs Act, 1962.
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1990 (11) TMI 167
Issues:
1. Determination of export duty on goods with shipping bills submitted on the same day.
2. Interpretation of Section 16 of the Customs Act for fixing the rate of duty and tariff valuation.
3. Relevance of the date of presentation of shipping bills or entry outwards of the vessel for export goods.
4. Precedent set by the case of Gangadhar Narsinghdas Agarwal v. P.S. Thrivikraman regarding the relevant date for determining export duty.
5. Allegation of violation of Constitutional provisions in the levy of export duty.
Analysis:
1. The main issue in this case revolves around the determination of export duty on goods for which shipping bills were submitted on the same day. The petitioners argued that as the shipping bills were presented on the same day as the notification levying export duty was issued, they should not be liable to pay the duty.
2. The court referred to Section 16 of the Customs Act, which specifies that the rate of duty and tariff valuation for export goods is based on the date of presentation of shipping bills or the date of entry outwards of the vessel. The court highlighted that the relevant date for fixing the duty is crucial, regardless of subsequent events like the entry outwards of the vessel.
3. Citing the case of Gangadhar Narsinghdas Agarwal v. P.S. Thrivikraman, the court emphasized that the date of presentation of the shipping bill is significant for determining the duty on export goods. The proviso to Section 16 provides for a fictional date based on the entry outwards of the vessel, as granted by the proper Officer under Section 39 of the Act.
4. The court addressed the contention of the alleged violation of Constitutional provisions, specifically Articles 19(l)(f) and (g), 31, and 265. It ruled that the levy of export duty under Section 12 of the Customs Act or the publication of notifications in advance does not contravene the mentioned Constitutional articles.
5. Ultimately, the court dismissed the petitions, stating that there was no merit in the arguments presented. The rule was discharged with costs, and any interim relief provided was vacated. The judgment reaffirmed the obligation of the petitioners to pay the export duty based on the relevant provisions of the Customs Act and previous legal precedents.
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1990 (11) TMI 166
Issues:
Challenge against order dated 14th April, 1989 by Assistant Collector under Rule 173C of Central Excise Rules.
Analysis:
The petitioner, a manufacturer of dry battery torches, filed an application under sub-rule (11) of Rule 173C of the Central Excise Rules. The application was rejected by the Assistant Collector through an order dated 14th April, 1989. The petitioner argued that the rejection order lacked reasoning, was issued by the Assistant Collector instead of the Collector, and failed to consider relevant circumstances. The petitioner's contention was based on the requirement of the authority to exercise discretion considering all relevant factors and to provide reasons for the decision, as established by legal precedents such as Bhagat Raja's case and other judgments under the Central Excise Act.
Rule 173C mandates manufacturers to submit a price list of goods chargeable with duty at a value-dependent rate. The rule outlines the approval process for the price list, including situations where prior approval is necessary. Sub-rule (11) of Rule 173C allows the Collector to permit an assessee to declare the price of goods for a specific consignment based on market fluctuations or nature of goods. In this case, the petitioner sought approval under sub-rule (11) due to the variable pricing of scrap obtained during torch manufacturing. The Court emphasized the need for the Collector to evaluate the application under sub-rule (11) and provide a reasoned decision, as failure to do so could lead to revision or judicial intervention.
The Court ruled in favor of the petitioner, quashing the impugned order and directing the Collector to issue a fresh order after considering all relevant circumstances, including any further representations by the petitioner within a specified timeframe. The judgment highlighted the importance of providing reasons for administrative decisions to prevent arbitrariness and ensure accountability. The Court declined to dismiss the writ petition based on alternate remedies, emphasizing the petitioner's right to seek judicial review under the law.
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1990 (11) TMI 165
Issues: Penalty under Customs Act and Gold Control Act, dispensation of pre-deposit, extension of time for depositing penalty, judicial considerations for dispensation of pre-deposit, application of relevant factors in dispensation, exercise of jurisdiction by Tribunal, setting aside of impugned orders, direction to consider appeal on merits.
Analysis:
1. The petitioner was penalized under the Customs Act and Gold Control Act for the seizure of gold, with penalties of Rs. 75,000 and Rs. 50,000 respectively. The petitioner appealed to the Appellate Tribunal seeking dispensation of the pre-deposit requirement due to lack of means to deposit the amounts. The Tribunal reduced the deposit amounts but rejected further extension requests, leading to the dismissal of the appeal.
2. The petitioner's application for an extension to deposit the penalties was denied, and subsequently, the appeal was dismissed due to non-payment. The interconnected nature of the orders led to the challenge in the writ petition before the High Court, highlighting the issue of inter-connectivity of the decisions.
3. Despite the issuance of the rule in 1987, no interim relief was granted by the Court, allowing the respondents to recover the penalties. However, no recovery was made by the respondents in all these years, raising questions about the enforcement of penalties during the pending legal proceedings.
4. The petitioner's counsel argued that dispensation of pre-deposit under Section 129E of the Customs Act should be based on undue hardship to the petitioner, emphasizing the petitioner's unsuccessful attempts to raise funds and the lack of recovery of penalties by the authorities even after the appeal dismissal. The counsel contended that if the petitioner had funds, the penalties would have been promptly recovered.
5. The Supreme Court's interpretation of Section 129E in a previous case highlighted the validity of the pre-deposit condition for appeals, emphasizing the need for judicial consideration in rejecting applications for dispensation. The Court outlined relevant factors such as the prima facie case and the appellant's conduct, which should guide the Tribunal's decision-making process.
6. The High Court observed that while the right of appeal is statutory with imposed conditions, the Tribunal failed to apply the relevant factors in the petitioner's case. The Tribunal's reduction of the deposit amounts did not consider the petitioner's inability to pay, leading to a misdirection regarding the petitioner's means. The Court emphasized the need for a judicial exercise of jurisdiction in such matters.
7. Consequently, the High Court set aside the impugned orders and directed the Appellate Tribunal to reconsider the appeal on its merits after notifying the petitioner's counsel. The Court prioritized the consideration of the appeal's substance over the procedural aspects, aiming to utilize judicial time effectively.
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1990 (11) TMI 164
Issues Involved:
1. Whether the products manufactured and cleared by the plaintiffs prior to 21-5-1976 were not speciality oils exempted from excise duty?
2. Whether the payment of excise duty by the plaintiff for the products cleared prior to 21-5-1976 was not a mistake?
3. Whether the claim for refund by the plaintiff is barred by time?
4. To what relief is the plaintiff entitled?
Issue-Wise Detailed Analysis:
Issue 1: Whether the products manufactured and cleared by the plaintiffs prior to 21-5-1976 were not speciality oils exempted from excise duty?
The court found that the plaintiff had consistently claimed that the products manufactured were speciality oils and not lubricating oils. The Trade Notice No. 175/75 dated 3-10-1975 (Ex. D1) issued by the defendants clarified that certain speciality oils manufactured out of duty-paid base mineral oil were exempt from excise duty, provided their primary function was not lubrication. The court noted that the plaintiff paid excise duty under Tariff Item 11-B by mistake and filed a refund application on 17-5-1977, which was initially rejected but partly allowed upon remand. The court concluded that the products manufactured by the plaintiff were indeed speciality oils exempted from excise duty as per Ex. D1.
Issue 2: Whether the payment of excise duty by the plaintiff for the products cleared prior to 21-5-1976 was not a mistake?
The court held that the payment of excise duty by the plaintiff was made under a mistake. The plaintiff became aware of the exemption only in May 1977 and immediately filed for a refund. The court referenced the Appellate Collector's order, which indicated that the products were speciality oils and not compounded lubricating oils. The court found that the plaintiff's payment of excise duty was a mistake of fact and law, falling under Sec. 72 of the Contract Act, which allows for the recovery of money paid under mistake.
Issue 3: Whether the claim for refund by the plaintiff is barred by time?
The court examined the applicability of Rule 11B of the Central Excise Rules and Sec. 14(2) of the Limitation Act. It was determined that the plaintiff filed the refund application within three years from the date of knowledge of the mistake, which was in May 1977. The court also considered the period during which the plaintiff was pursuing legal proceedings for the refund, from 17-5-1977 to 28-11-1980, and held that this period should be excluded under Sec. 14(2) of the Limitation Act. The court concluded that the suit was filed within the limitation period and was not barred by time.
Issue 4: To what relief is the plaintiff entitled?
The court decreed that the plaintiff is entitled to recover Rs. 2,71,754.40 being the excise duty wrongly paid, with interest at 12% p.a. from 17-5-1977 until the date of decree and at 6% p.a. from the date of decree until realization. The court acknowledged that the plaintiff is liable to pay 1% excise duty under Tariff Item 68, amounting to Rs. 2718/-, which should be deducted from the total claim. Thus, the plaintiff is entitled to Rs. 2,69,036.40 after deduction.
Conclusion:
The suit is decreed in favor of the plaintiff for the recovery of Rs. 2,69,036.40 with interest at 12% p.a. from 17-5-1977 till the date of decree and at 6% p.a. from the date of decree till the date of realization, with pro-costs.
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1990 (11) TMI 163
Issues Involved:
1. Jurisdiction of the Additional Collector of Central Excise.
2. Constitutional validity of Sections 33 and 35F of the Central Excises and Salt Act, 1944.
3. Validity of Rules 4 and 5 of the Central Excise Rules, 1944.
4. Exigibility of goods to excise duty.
5. Inclusion of additional fittings in the cost of trailers for excise duty purposes.
Detailed Analysis:
1. Jurisdiction of the Additional Collector of Central Excise:
The petitioners challenged the jurisdiction of the Additional Collector to issue notices and pass orders under Section 11A of the Central Excises and Salt Act, 1944. The court examined the definition of "Collector" under Rule 2(ii) of the Central Excise Rules, which includes an Additional Collector. The court held that the Additional Collector is deemed to be a Collector by virtue of the definition in the Rules and may exercise the powers of a Collector. This interpretation was supported by the Division Bench of the Madras High Court in the case of Asia Tobacco Co. Ltd. v. Union of India and Another. The court concluded that the impugned orders were passed by an authority with competent jurisdiction and did not suffer from want of jurisdiction.
2. Constitutional Validity of Sections 33 and 35F of the Act:
The petitioners contended that Section 33 of the Act was unconstitutional. The court referred to its previous decision in W.P. No. 5892/1986, where it had held that there was no infirmity rendering Section 33 unconstitutional. Regarding Section 35F, Mr. Narayana did not press the issue during arguments. The court reaffirmed the constitutionality of Section 33 and did not find any grounds to declare it unconstitutional.
3. Validity of Rules 4 and 5 of the Central Excise Rules:
The petitioners argued that Rules 4 and 5 of the Central Excise Rules were ultra vires the provisions of the Act and unconstitutional. Rule 4 allows the Central Board of Excise and Customs to appoint Central Excise Officers and confer powers on them. Rule 5 permits the Collector to delegate his powers to subordinate officers. The court found that these rules were necessary for the effective implementation of the Act and did not constitute excessive delegation of authority. The court rejected the contention that these rules were unconstitutional or ultra vires.
4. Exigibility of Goods to Excise Duty:
The court did not delve into the specific facts regarding the exigibility of goods to excise duty, as these involved disputed facts best left to the appropriate appellate authority. The court noted that the petitioners had bypassed the statutory remedies available under the Act and directed them to file appeals before the Appellate Tribunal within 60 days. The Tribunal was instructed to consider the appeals as if filed within the prescribed time and examine the contentions on the exigibility of goods to tax and the quantum of penalties.
5. Inclusion of Additional Fittings in the Cost of Trailers:
The petitioner, Pramod Amberkar, contended that additional fittings secured from the open market and attached to trailers at the customer's request should not be included in the cost of the trailer for excise duty purposes. The court did not address this issue in detail, as it involved disputed facts. The court directed that this issue be considered by the Appellate Tribunal in the appeals to be filed by the petitioners.
Conclusion:
The petitions were dismissed concerning the jurisdiction of the Additional Collector and the constitutional validity of Sections 33, 35F, and Rules 4 and 5 of the Central Excise Rules. The court directed the petitioners to file appeals before the Appellate Tribunal within 60 days, where the issues of exigibility of goods to excise duty and the inclusion of additional fittings in the cost of trailers would be examined. The court emphasized that it could not decide questions of fact based on the material placed before it and left these to be addressed by the appropriate appellate authority.
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1990 (11) TMI 162
The High Court of Bombay rejected the petition for refund of duty as the price of goods already included excise duty, citing a previous full bench decision. The court preferred to follow the established law despite other cases being distinguishable on facts. The petition was dismissed.
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1990 (11) TMI 161
Issues Involved:
1. Whether printed cartons manufactured by the respondent-Company are products of the printing industry and thus exempt from excise duty under Notification No. 55/75.
2. Whether the end use of the printed cartons is relevant in determining their classification.
3. Whether the cost factor associated with printing affects the classification of printed cartons.
4. Whether the issuance of show cause notices to the respondent-Company was justified.
Issue-wise Detailed Analysis:
1. Classification of Printed Cartons:
The main issue was whether printed cartons are products of the printing industry, exempt from excise duty under Notification No. 55/75. The respondent-Company argued that printed cartons are understood in the trade as products of the printing industry, supported by various references and text books. The process of manufacturing printed cartons involves several stages, including designing, printing, cutting, creasing, and sometimes gluing. The dominant activity in this process is printing, making the final product a product of the printing industry.
The appellants contended that printed cartons are products of the packaging industry and not entitled to the exemption. They argued that the mere fact that something is printed on a carton does not change its essential nature or use as a packaging product.
The learned single Judge allowed the writ petition, holding that printed cartons must be understood in common parlance and not in any technical sense. He referred to literature establishing that printed cartons should be treated as products of the printing industry. However, the appellate court disagreed, stating that a carton remains a carton regardless of printing, and its primary function is packaging. The court concluded that printed cartons are products of the packaging industry.
2. Relevance of End Use:
The learned single Judge observed that the end use of the article was irrelevant in the context of the exemption notification or the tariff item. However, the appellate court held that for cartons, the question of end use does not arise as they have only one use-packaging. The court emphasized that the essential function of a carton is its capacity to contain, which is not altered by printing.
3. Cost Factor:
The respondent-Company argued that the cost involved in printing a carton could be more than the price of the paper or other material used. The learned single Judge considered this factor significant. However, the appellate court held that the cost factor is not determinative. The classification should be based on the primary function and common parlance understanding of the product, not the relative cost of printing.
4. Issuance of Show Cause Notices:
The respondent-Company challenged the show cause notices issued by the appellants, arguing that printed cartons are products of the printing industry and entitled to exemption. The learned single Judge quashed the show cause notices and directed a refund of the excise duty collected.
The appellate court, however, held that the issuance of show cause notices was justified. The court reasoned that the existence of an alternative remedy does not affect the jurisdiction of the court to grant relief in appropriate cases. Since the court found that printed cartons are not products of the printing industry, the issuance of show cause notices was warranted.
Conclusion:
The appellate court allowed the appeal, setting aside the judgment and order of the learned single Judge. The court dismissed the writ petition, holding that printed cartons are products of the packaging industry and not entitled to exemption from excise duty under Notification No. 55/75. The court also upheld the issuance of show cause notices to the respondent-Company.
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1990 (11) TMI 160
Issues:
1. Delay in consideration of the representation made by the detenu against his detention.
2. Whether the delay in considering the representation renders the detention impermissible and invalid under Article 22(5) of the Constitution of India.
Detailed Analysis:
1. The judgment deals with a Writ Petition challenging the detention of the petitioner under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The detenu had made a representation against his detention under Article 22(5) of the Constitution of India. The primary issue raised was the delay in the consideration and disposal of this representation, which the detenu argued vitiated his continued detention.
2. The detenu's representation was made on 29th March, 1990, but it was considered and rejected by the Competent Authority only on 22nd May, 1990, resulting in a delay of about 1 month and 24 days. The respondents attempted to explain this delay by stating that comments were sought from the Sponsoring Authority, leading to a chain of delays in obtaining necessary feedback. However, the specific delay of 19 days on the part of the Sponsoring Authority in providing comments was left unexplained.
3. The court emphasized the importance of expeditiously considering detenus' representations, citing a Supreme Court ruling that highlighted the need to explain any delays satisfactorily. The court referenced a similar case where the Supreme Court ruled that unexplained delays in considering representations render continued detention impermissible and invalid under Article 22(5) of the Constitution.
4. Given the unexplained delay of 19 days in this case, similar to the precedent cited, the court concluded that the detenu's constitutional right under Article 22(5) had been infringed. Consequently, the court accepted the petition, quashed the detention order, and ordered the detenu's immediate release if not required in any other case.
5. The judgment underscores the significance of promptly addressing detenus' representations to uphold their constitutional rights and avoid invalidating detention orders due to unexplained delays in the review process.
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1990 (11) TMI 159
Issues Involved:
1. Whether Phosphoric Acid imported for the manufacture of fertilizer was liable to pay auxiliary duty of customs at the rate of 15% or 5% under Notification No. 14 dated 1st March, 1974.
2. The maintainability of the petitions in light of preliminary objections raised by the respondents.
3. The interpretation of the expression "rate of duty of customs specified in the said First Schedule read with any relevant notification of the Government of India."
Detailed Analysis:
Issue 1: Rate of Auxiliary Duty on Phosphoric Acid
The primary issue was whether the auxiliary duty on Phosphoric Acid imported for the manufacture of fertilizer should be 15% under Serial No. 1 or 5% under Serial No. 2 of the Notification No. 14 dated 1st March, 1974. The court examined the relevant provisions of the Indian Tariff Act, 1934, and the Customs Act, 1962. The standard rate of duty for Phosphoric Acid under Item 28(16) was 60% ad valorem, with a preferential rate of 10% if imported from Burma and 30% if imported for the manufacture of fertilizer. The court noted that Section 25 of the Customs Act allows the Central Government to exempt goods from customs duty, and such exemptions do not change the nature of the goods.
The court concluded that the highest rate of duty specified in the First Schedule for Phosphoric Acid was 60%. Therefore, under the Explanation to the Table in the notification, the auxiliary duty should be 15% as per Serial No. 1. The court rejected the petitioner's contention that the duty should be 5% under Serial No. 2, stating that the nature of the goods does not change due to the exemption.
Issue 2: Maintainability of the Petitions
The respondents initially raised several preliminary objections regarding the maintainability of the petitions, including:
- The petitions abated due to the Constitution (Forty-Second Amendment) Act, 1976.
- The petitions were not maintainable due to the availability of an efficacious remedy under the Customs Act.
- The petitions were barred by principles analogous to those in Order 23 Rule 1 of the CPC, 1908, as the petitioners had withdrawn an earlier petition on the same cause of action.
- The conduct of the petitioners in filing a revision application during the pendency of the petitions was questionable.
However, during the hearing, the respondents did not press these preliminary objections, and the court proceeded to consider the main issue regarding the auxiliary duty.
Issue 3: Interpretation of Relevant Notification
The court examined the interpretation of the expression "rate of duty of customs specified in the said First Schedule read with any relevant notification of the Government of India." The petitioner argued that due to the exemption notification, the rate of duty should be considered as 30%, falling under Serial No. 2 of the Table. However, the court held that the goods (Phosphoric Acid) remain the same irrespective of the exemption, and the highest rate of duty (60%) should be considered for determining the auxiliary duty. The court emphasized that exemptions granted under Section 25 of the Customs Act do not create a new item in the First Schedule of the Indian Tariff Act.
Conclusion:
The court agreed with the reasoning of Ahmadi J. in the earlier judgment and concluded that the auxiliary duty on Phosphoric Acid imported for the manufacture of fertilizer should be 15% under Serial No. 1 of the Table in Notification No. 14 dated 1st March, 1974. Both petitions were rejected, and the rule was discharged with costs quantified at Rs. 2500/- in each matter.
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1990 (11) TMI 158
Issues Involved:
1. Whether "steam" generated by the petitioner is liable to excise duty under the Central Excises and Salt Act, 1944.
2. Applicability of Exemption Notification No. 118/75-Central Excises.
3. Determination of "steam" as "goods" under excise law.
4. Whether the demand for excise duty is time-barred.
Detailed Analysis:
1. Liability of "Steam" to Excise Duty:
The petitioner contended that the "steam" generated and shared by four contributing units was not liable to excise duty as it was not "goods" within the meaning of Entry 68 of the Central Excises and Salt Act, 1944. The Assistant Collector, Central Excise, Baroda, concluded that "steam" is "goods" for the purpose of levy of Central Excise duty, as it involves conversion of water into gas/vapour, creating a new substance, similar to the process of making ice.
2. Applicability of Exemption Notification No. 118/75-Central Excises:
The petitioner argued that even if "steam" is considered "goods," it is exempt from excise duty under Notification No. 118/75-Central Excises, as it was manufactured in a factory and intended for use in the same factory. The Court found this contention without substance, stating that Sarabhai Common Services was producing "steam" and distributing it to various companies, thus not qualifying for the exemption.
3. Determination of "Steam" as "Goods":
The Court examined whether "steam" qualifies as "goods" under excise law. The Supreme Court's decision in Union of India v. Delhi Cloth and General Mills was referenced, which held that "goods" must be a new substance known to the market. The Court concluded that "steam" is marketable and known in the market as a source of power and for manufacturing purposes, thus qualifying as "goods."
4. Time-Barred Demand for Excise Duty:
The petitioner contended that the demand for excise duty from 30th April 1975 to 31st March 1980 was time-barred. However, the Court noted that there was an interim order preventing the authority from taking action against the petitioner under the Central Excises and Salt Act, 1944. Hence, the demand was not time-barred as the authority was restrained from issuing a show cause notice during the interim period.
Conclusion:
The Court held that "steam" is "goods" liable to excise duty under Entry 68 of the Central Excises and Salt Act, 1944. The exemption under Notification No. 118/75-Central Excises was not applicable as the steam was not used within the same factory. The demand for excise duty was not time-barred due to the interim order. The petitioner was directed to pay excise duty with 12% interest. The request for a stay on the order was rejected.
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1990 (11) TMI 157
Issues:
1. Determination of export duty for raw wool based on the date of presentation of shipping bills.
2. Interpretation of Section 16 of the Customs Act regarding the relevant date for fixing the rate of duty and tariff valuation.
3. Applicability of Constitutional provisions in the context of export duty levy and exemption.
Analysis:
1. The judgment deals with the issue of determining the export duty for raw wool based on the date of presentation of shipping bills. The petitioners argued that as the shipping bills were presented on a specific date, no export duty was required to be paid. However, the court referred to Section 16 of the Customs Act, which specifies that the rate of duty applicable to export goods is determined based on the date of presentation of the shipping bill or the date of payment of duty. In this case, the petitioners were required to pay the export duty as the relevant date for fixing the rate of duty was the date of presentation of the shipping bills, which coincided with the date the export duty notification was issued.
2. The interpretation of Section 16 of the Customs Act was crucial in this judgment. The court emphasized that the relevant date for determining the rate of duty and tariff valuation for export goods is either the date of presentation of the shipping bill or the date of entry outwards of the vessel by which the goods are exported. The court also highlighted the proviso under Section 16, which deems the shipping bill to be presented on the date of entry outwards of the vessel if presented before that date. This interpretation was supported by a previous judgment that clarified the significance of the date of presentation of the shipping bill in determining export duty.
3. The judgment also addressed the contention raised regarding the constitutionality of the export duty levy and exemption under the Customs Act. The petitioners argued that the order of recovery violated certain Constitutional provisions. However, the court held that the levy of export duty and the grant of exemption under the Customs Act did not contravene the specified Constitutional provisions. It was also noted that the publication of the notification regarding export duty in advance was not a requirement. Therefore, the court dismissed the petitions, ruling that there was no substance in the arguments raised and ordered the discharge of the rule with costs, while vacating the interim relief granted.
This comprehensive analysis of the judgment highlights the key issues regarding the determination of export duty, the interpretation of relevant provisions of the Customs Act, and the constitutional aspects related to the levy of export duty and exemptions.
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1990 (11) TMI 156
Issues: Classification of product under Central Excise Tariff Act, 1985; Appeal against classification order; Refund of duty paid; Interpretation of Rule 173B(3) of Central Excise Rules; Show cause notice validity.
Classification of Product: The petitioner Company initially classified its product under sub-heading 4009.92 of the Central Excise Tariff Act, 1985, which was later approved. Subsequently, a new classification under sub-heading 4009.99 was sought but was rejected by the Assistant Collector. The Company appealed, and the Appellate Collector allowed the appeal, classifying the product under sub-heading 4009.99. The Department's appeal to CEGAT was dismissed due to a delay, making the Appellate Collector's decision final.
Refund of Duty Paid: Following the Appellate Collector's decision, the Company applied for a refund of the excess duty paid under the previous classification. However, the Department did not process the refund but instead issued a show cause notice demanding duty payment under the previous classification. The Company filed a petition under Article 226 of the Constitution of India seeking the refund.
Interpretation of Rule 173B(3): The Department argued that refund could only be claimed if duty was paid under protest as per Rule 173B(3) of the Central Excise Rules. The Court held that this rule did not apply retroactively and that the Department had no grounds to deny the refund under Section 11B(3) of the Act, which mandates refund in such cases.
Validity of Show Cause Notice: The Court found the show cause notice issued by the Department to be misconceived and ordered its quashing. It directed the Department to calculate and refund the excess duty paid by the Company from December 17, 1986, onwards by December 31, 1990. Failure to do so would result in interest payment at 15% per annum until the refund is made. Bonds and bank guarantees provided by the petitioners were discharged, and no costs were awarded in the case.
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1990 (11) TMI 155
Issues: Assessment of assessable value for excise duty on cigarettes based on conversion charges only.
Analysis:
The petitioner company, engaged in cigarette manufacturing, sought to have the assessable value of cigarettes assessed based solely on conversion charges received from another company. The Assistant Collector of Central Excise, however, determined the value by considering the selling price declared by the other company for similar brands of cigarettes. The petitioner challenged this assessment, arguing that including post-manufacturing profit of the other company was impermissible. The petitioner relied on the Supreme Court judgment in Ujagar Prints case, emphasizing that assessable value should include only conversion charges, manufacturing profit, and expenses. The respondents, on the other hand, cited the Jammu & Kashmir High Court judgment, asserting that the taxable event under excise law is manufacture, necessitating assessment based on the actual value of the manufactured goods.
The High Court emphasized that excise duty is triggered by the manufacture of taxable goods, obligating the manufacturer to pay duty based on the actual assessable value of the goods. The Court agreed with the Jammu & Kashmir High Court's view that the manufacturer must be assessed on the actual value of the manufactured goods, not just on job or conversion charges. While acknowledging the petitioner's argument regarding the method of calculation for assessing the value, the Court reiterated the importance of considering the actual assessable value of the manufactured goods for excise duty purposes.
Referring to the Supreme Court's decision in Ujagar Prints case, the High Court highlighted the proper method of valuation for excise duty assessment. The Court emphasized that the value for assessment should include the cost of raw materials, job work done, manufacturing profit, and expenses, excluding post-manufacturing profits. The Assistant Collector's decision to determine the taxable value based on the selling price of the other company was deemed incorrect as it included the trader's profit. The Court directed the assessing authority to determine the selling price of the cigarettes manufactured by the petitioner to establish the actual assessable value for excise duty purposes. Consequently, the Court allowed the writ petition, set aside the Assistant Collector's order, and remitted the case for fresh disposal in line with the observations and legal principles discussed.
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