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1989 (9) TMI 120
Issues Involved:
1. Classification of HDPE woven sacks under the Central Excise Tariff Act, 1985.
2. Availability of alternative remedy and jurisdiction of the High Court to entertain the writ petition.
3. Applicability of previous judgments and circulars in the context of the new Tariff Act, 1985.
Summary:
1. Classification of HDPE woven sacks under the Central Excise Tariff Act, 1985:
The petitioners, limited companies manufacturing HDPE woven sacks, contended that their products should be classified under Chapter 39 of the Central Excise Tariff Act, 1985, as articles of plastic. The Assistant Collector, Central Excise, classified the HDPE strips under sub-heading 5406.11 and Polypropylene under sub-heading 5406.90, with fabrics thereof under heading 5408.00, thus requiring duty payment under Chapter 63.01 at 12% ad valorem. The petitioners argued that HDPE tapes fall under Heading 39.20, HDPE fabrics under Heading 39.26, and HDPE sacks under Heading 39.23 sub-heading 3923.90. They cited differences between HDPE and textile materials, supported by various reports and expert opinions, and argued that in common parlance, HDPE woven sacks are known as plastic sacks. The court held that HDPE strips or tapes fall under Heading 39.20, sub-heading 3920.32, and HDPE sacks under Heading 39.23, sub-heading 3923.90, thus quashing the orders of the Assistant Collector and Collector (CE) Appeals.
2. Availability of alternative remedy and jurisdiction of the High Court to entertain the writ petition:
The respondents argued that the petitioners should have exhausted alternative remedies available under the Central Excise Law, specifically by appealing to the Central Excise Gold Appellate Tribunal. The petitioners countered that the impugned order was manifestly illegal and based on an incorrect interpretation of the tariff entry, making it challengeable directly before the High Court. The court, referencing the Supreme Court judgment in A.V. Venkateswaran, held that the availability of an alternative remedy does not bar the High Court from exercising its jurisdiction under Art. 226/227 of the Constitution, especially when the order is manifestly illegal.
3. Applicability of previous judgments and circulars in the context of the new Tariff Act, 1985:
The petitioners cited previous judgments of the Central Excise Gold Appellate Tribunal, which classified HDPE woven sacks as articles of plastic, a finding upheld by the Supreme Court. They argued that these judgments should be binding despite the introduction of the new Tariff Act, 1985. The respondents contended that the new Tariff Act, based on the harmonized system of nomenclature, necessitated a different classification. The court found that the judgments and circulars issued under the old tariff were still relevant and that the HDPE woven sacks should be classified as articles of plastic under the new tariff as well.
Conclusion:
The court allowed the petition, quashing the orders of the Assistant Collector and Collector (CE) Appeals, and directed the respondents to classify the HDPE woven sacks under Chapter 39 of the Central Excise Tariff Act, 1985. No other points pertaining to other issues were raised during the course of the arguments. There was no order as to costs.
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1989 (9) TMI 119
Issues Involved:
1. Applicability of the doctrine of promissory estoppel against the government.
2. Whether the Central Government could issue Notification No. 159/85-CE withdrawing the concession granted to the company.
3. Whether Notification No. 88/84-CE was applicable to the petitioner company after 11-1-1985 due to the expiration of the seven-year period.
Detailed Analysis:
1. Applicability of the Doctrine of Promissory Estoppel Against the Government:
The court analyzed whether the principle of promissory estoppel could be applied against the government when it exercises its legislative functions. The appellant argued that the government's legislative actions, including issuing and rescinding notifications under Rule 8(1) of the Central Excise Rules, 1944, were legislative in character and thus not subject to promissory estoppel. The court referred to several Supreme Court decisions, including M/s Jitram Shiv Kumar v. State of Haryana and Union of India v. Godfrey Philips India Ltd., which held that promissory estoppel cannot be invoked against the government in the exercise of its legislative powers. However, the court distinguished between legislative actions and subordinate legislation, concluding that promissory estoppel could apply to the latter. The court cited Motilal Sugar Mills v. State of U.P. and Pournami Oil Mills v. State of Kerala, emphasizing that the government could be held to its promises if the promisee had altered their position based on the promise. The court concluded that the government was bound by the doctrine of promissory estoppel in this case.
2. Whether the Central Government Could Issue Notification No. 159/85-CE Withdrawing the Concession:
The court examined whether the government could unilaterally withdraw the excise duty concessions granted under Notification No. 88/84-CE by issuing Notification No. 159/85-CE. The petitioner argued that the government was estopped from rescinding the notification due to the principle of promissory estoppel. The court noted that the petitioner had taken significant steps, including obtaining financial assistance and setting up a new factory, based on the government's assurances and notifications. The court emphasized that the petitioner had altered its position in reliance on the government's promise, which invoked the doctrine of promissory estoppel. The court rejected the appellant's argument that no detrimental action had been taken by the petitioner after the issuance of Notification No. 88/84-CE, stating that the petitioner had indeed altered its position in reliance on the government's assurances. The court also dismissed the appellant's contention that the principle of estoppel does not operate at the level of government policy, citing the Supreme Court's decision in M.P. Sugar Mills case, which required the government to provide compelling reasons for policy changes that would override public interest.
3. Whether Notification No. 88/84-CE Was Applicable to the Petitioner Company After 11-1-1985:
The court noted that the question of whether Notification No. 88/84-CE was still applicable to the petitioner company after 11-1-1985, due to the expiration of the seven-year period, was left open by the learned single judge and was to be decided by the Delhi High Court in a pending writ petition. During the appeal, the parties agreed that this question would be decided by the Delhi High Court, and the court did not address this issue in its judgment.
Conclusion:
The court upheld the learned single judge's decision, concluding that the government was bound by the doctrine of promissory estoppel and could not unilaterally revoke the benefits granted under Notification No. 88/84-CE through Notification No. 159/85-CE. The court dismissed the special appeal and left the question of the continued applicability of Notification No. 88/84-CE to the petitioner company open for determination by the Delhi High Court.
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1989 (9) TMI 118
Issues Involved:
1. Inclusion of cost of packing materials supplied by buyers in the value of goods for excise duty.
2. Entitlement to refund of excise duty paid on such value.
3. Sustainability of the refund order rejecting part of the claim.
4. Jurisdiction to issue show cause notice on unjust enrichment.
5. Justifiability of the Assistant Collector's order dated 22-2-1989.
Summary:
Issue (i): Inclusion of cost of packing materials supplied by buyers in the value of goods for excise duty.
The court held that the cost of packing materials supplied by the buyer should not be included in the value of excisable goods for the purpose of excise duty. This decision was based on the Supreme Court ruling in Union of India & Ors. v. Bombay Tyre International Ltd. & Ors. (AIR 1984 SC 420) and reiterated in Alembic Glass Industries v. Union of India (1986) (24) E.L.T. 23 and Mangalore Chemicals v. Asst. Collector (1986) - (23) E.L.T. 48. The court emphasized that the cost of packing materials, whether primary or secondary, supplied by the buyer should not be included in the assessable value of the goods.
Issue (ii): Entitlement to refund of excise duty paid on such value.
The petitioner was entitled to a refund of the excise duty paid on the cost of packing materials supplied by the buyers for the period from 2-12-1975 to 14-5-1985. The court found that the entire claim of Rs. 42,78,947.07 represented the duty paid on such packing materials, and the rejection of Rs. 14,80,663.98 out of this amount was unjustified.
Issue (iii): Sustainability of the refund order rejecting part of the claim.
The court found that the rejection of part of the refund claim by the Assistant Collector on the ground that the petitioner had not passed on the benefit to the customers was contrary to the law. The court cited the decision in Mangalore Chemicals v. Assistant Collector (1986) (23) E.L.T. 48 and the Supreme Court decision in Bombay Tyre International Case (1984 S.C. 420), which clarified that such a ground was not permissible for rejecting the refund.
Issue (iv): Jurisdiction to issue show cause notice on unjust enrichment.
The court held that the Assistant Collector did not have the jurisdiction to issue a show cause notice on the ground of unjust enrichment. The doctrine of unjust enrichment is a principle in equity that can be invoked only by courts and not by authorities under the Act. The Assistant Collector's action was found to be beyond the scope of the statutory provisions.
Issue (v): Justifiability of the Assistant Collector's order dated 22-2-1989.
The court quashed the impugned order dated 22-2-1989, finding it contrary to the law and the previous judgment of the court. The Assistant Collector's order was deemed unjustifiable as it ignored the settled legal position and the directions given by the court in W.P. No. 5995/75. The court ordered the refund of Rs. 14,80,663.98 with interest at 12% from 23-1-1985 to the date of refund and awarded costs of Rs. 5,000 to the petitioner.
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1989 (9) TMI 117
Issues Involved:
1. Classification of imported manganese dioxide ore under the Indian Tariff Act.
2. Validity of customs duty levied based on the classification.
3. Breach of principles of natural justice.
4. Entitlement to refund of customs duty paid.
Detailed Analysis:
1. Classification of Imported Manganese Dioxide Ore:
The primary issue revolves around whether the imported manganese dioxide ore should be classified under Entry 26 or Entry 28 of the Indian Tariff Act. The petitioners argued that the commodity should be classified under Entry 26, which covers "metallic ores of all sorts except achres and other pigment ores and antimony ores." This classification would exempt the commodity from customs duty. The Customs Authorities, however, classified it under Entry 28, which pertains to "chemical drugs and medicines all sorts not otherwise specified," subjecting it to a 40% ad valorem duty. The Assistant Collector relied on the physical appearance of the goods and a high percentage of manganese dioxide (95%) to classify it under Entry 28. However, subsequent tests, including one by Italab Private Limited and a supplementary test by the Customs House, showed a lower percentage (around 83-85%), supporting the petitioners' claim that the commodity was a natural ore subjected to only physical treatment.
2. Validity of Customs Duty Levied:
The classification under Entry 28 led to the imposition of customs duty amounting to Rs. 2,79,161/-. The petitioners sought a refund, arguing that the classification was incorrect and the commodity should not have been subjected to such duty. The Assistant Collector and the appellate authorities repeatedly failed to consider the supplementary test reports and the expert opinions provided by the petitioners, which indicated that the commodity was natural manganese ore and not chemically treated.
3. Breach of Principles of Natural Justice:
The petitioners consistently requested re-testing of the commodity by official laboratories in Delhi or Jamshedpur, which was never done. The appellate authority initially set aside the Assistant Collector's order due to a breach of principles of natural justice, as the petitioners were not given a fair opportunity to present their case. Despite repeated remands, the Assistant Collector continued to rely on the initial test report and physical appearance of the goods without considering the supplementary reports or the petitioners' requests for re-testing.
4. Entitlement to Refund of Customs Duty Paid:
The petitioners' claim for a refund was based on the argument that the wrong classification led to the imposition of customs duty. The court found that the classification under Entry 28 was erroneous and that the commodity should have been classified under Entry 26, which would exempt it from duty. The court also noted that the Customs Tariff Act of 1975, which the appellate authority referred to, was not applicable to the consignment in question. The expert report by Shri Suresh Donge supported the petitioners' claim that the commodity was natural manganese ore, which required further processing before being used in dry cell batteries. The court concluded that the petitioners were entitled to a refund of the customs duty paid, subject to the outcome of a decision by a larger bench on a similar matter.
Conclusion:
The court ruled in favor of the petitioners, setting aside the impugned order dated January 18, 1983, and granting the petitioners' claim for a refund of Rs. 2,79,161/-, subject to the decision of a larger bench on the issue of refund of customs duty. The court emphasized that the classification under Entry 28 was incorrect and that the commodity should have been classified under Entry 26 of the Indian Tariff Act. The court also highlighted the breach of principles of natural justice and the failure of the Customs Authorities to consider the supplementary test reports and expert opinions provided by the petitioners.
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1989 (9) TMI 116
Issues:
1. Discriminatory treatment in customs duty exemption between National Dairy Development Board and a private company importing edible oils.
2. Violation of fundamental rights under Article 19(l)(g) and Article 14 of the Constitution.
3. Interpretation of reasonable restrictions under Article 19(6) of the Constitution.
4. Application of recent Supreme Court judgment on customs duty exemptions for edible oils.
Detailed Analysis:
1. The petitioner, a private company, challenged the discriminatory treatment in customs duty exemption between them and the National Dairy Development Board. The petitioner alleged that the exemption granted to the Board was arbitrary and discriminatory. They argued that the impugned notification violated their fundamental rights under Article 19(l)(g) and Article 14 of the Constitution. The Court examined whether there was unfair competition and discriminatory treatment in the matter of importing edible oils.
2. The Court considered the interpretation of reasonable restrictions under Article 19(6) of the Constitution. It was argued that the respondent Board did not fall under the categories mentioned in Article 19(6), and therefore, the alleged discriminatory treatment towards the petitioners was in violation of their fundamental rights guaranteed under Article 19(l)(g). The Court analyzed the substance of the legislation and emphasized that restrictions on fundamental rights should not be arbitrary or excessive.
3. The judgment referred to a recent Supreme Court decision regarding customs duty exemptions for edible oils. The Court discussed the justification for the differential treatment between private importers and entities like the State Trading Corporation. It was highlighted that exemptions must be based on relevant and reasonable grounds to serve the public interest. The Court distinguished the circumstances of the present case from the Supreme Court decision, emphasizing the specific policy considerations involved in granting exemptions.
4. Ultimately, the Court dismissed the writ petition, ruling that the exemptions provided to the respondent Board were not applicable to the items being imported by the petitioners. It was concluded that the petitioners could not challenge the impugned notifications on grounds of irregularity or illegality. The Court found no merit in the petitioners' claims and discharged the Rule, allowing the respondents to enforce the arrear dues in accordance with the law. The judgment also granted a stay of operation for one week after the long vacation.
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1989 (9) TMI 115
Issues Involved:
1. Validity of the complaint filed by a public servant under Section 200 of the Code of Criminal Procedure.
2. Requirement for the complainant to attend in person for filing the complaint.
3. Necessity of examining the complainant and witnesses before issuing process.
4. Sufficiency of the Magistrate's order issuing process.
5. Ambiguity and sufficiency of the allegations in the complaint.
6. Impact of the adjudication order on the criminal proceedings.
7. Jurisdiction of the High Court in quashing proceedings under Section 482 of the Criminal Procedure Code.
Issue-wise Detailed Analysis:
1. Validity of the complaint filed by a public servant under Section 200 of the Code of Criminal Procedure:
The court examined whether the complaint filed by the Assistant Collector of Central Excises was valid under the proviso to Section 200 of the Code of Criminal Procedure. The court noted that the complainant was a public servant acting in the discharge of his official duties and was authorized under the Central Excise and Salt Act to file a complaint. The court found that the hierarchy of Central Excise Officers and their powers, including the power to file complaints, supported the validity of the complaint. Therefore, the Magistrate was not required to examine the complainant and witnesses before issuing process.
2. Requirement for the complainant to attend in person for filing the complaint:
The court addressed the contention that the complainant was required to attend the Magistrate's Court in person for filing the complaint. It was held that there is no provision in the Code of Criminal Procedure mandating personal attendance of the complainant for filing the complaint. The court cited precedents to support the view that the complaint could be validly filed by an advocate on behalf of the complainant.
3. Necessity of examining the complainant and witnesses before issuing process:
The court discussed whether it was obligatory to examine the complainant and witnesses before issuing process when the complaint was filed by a public servant. The court emphasized that the proviso to Section 200 exempts the examination of the complainant and witnesses if the complaint is filed by a public servant acting in the discharge of his official duties. The court rejected the argument that the allegations in the complaint needed to be within the personal knowledge of the complainant.
4. Sufficiency of the Magistrate's order issuing process:
The court considered whether the Magistrate's order issuing process was valid despite being brief and not providing detailed reasons. It was noted that Section 204 of the Code of Criminal Procedure does not require a reasoned order for issuing process. The court found that the Magistrate's order indicated a prima facie ground for initiating proceedings, which was sufficient at that stage. The absence of an elaborate order did not vitiate the process issued.
5. Ambiguity and sufficiency of the allegations in the complaint:
The court examined the allegations in the complaint and found that sufficient details were provided regarding the involvement of the accused. The complaint described the roles and responsibilities of the accused, including the two companies and their functionaries. The court held that the allegations were adequate to support the issuance of process.
6. Impact of the adjudication order on the criminal proceedings:
The court addressed the argument that the adjudication order, which held only the Bombay-based company liable, should lead to the dropping of criminal proceedings against the other accused. The court clarified that adjudication proceedings are not equivalent to a criminal trial and do not bar subsequent criminal proceedings. The court cited Section 9-AA and Section 9-C of the Central Excises and Salt Act, which provide for the criminal liability of individuals in charge of the company. The court concluded that the criminal proceedings could continue despite the adjudication order.
7. Jurisdiction of the High Court in quashing proceedings under Section 482 of the Criminal Procedure Code:
The court reiterated the limited scope of the High Court's jurisdiction under Section 482 of the Criminal Procedure Code to quash proceedings. It emphasized that at the stage of issuing process, the Magistrate is only concerned with the prima facie sufficiency of the allegations. The court found no grounds to quash the Magistrate's order issuing process and discharged the rule, vacating the stay.
In conclusion, the court upheld the validity of the complaint filed by the Assistant Collector of Central Excises, confirmed that the personal attendance of the complainant was not required, and found that the Magistrate's order issuing process was valid despite its brevity. The court also held that the criminal proceedings could continue despite the adjudication order and that the High Court's jurisdiction to quash proceedings was limited.
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1989 (9) TMI 114
Issues Involved
1. Central Government's power to enhance the penalty beyond what was done by the Assistant Collector.
2. The purported exercise of the power of penalty being perverse in the circumstances of the case.
3. Recovery of short levy of duty after goods have been lawfully cleared from the factory (this issue was given up by the petitioner).
Detailed Analysis
1. Central Government's Power to Enhance the Penalty:
The main question was whether the Central Government had the authority to enhance the penalty beyond what was decided by the Assistant Collector. The relevant statutory provisions examined were Section 36(1) and Section 36(2) of the Central Excises and Salt Act, 1944.
- Section 36(1): This section allows the Central Government to reverse or modify any decision or order passed under the Act or the rules made thereunder by any Central Excise Officer or the Central Board of Excise & Customs, provided no appeal lies against that decision or order.
- Section 36(2): This section gives the Central Government suo motu jurisdiction to revise orders passed under Section 35 or Section 35A of the Act to ensure their correctness, legality, or propriety.
The Court observed that the Central Government's revisional power under Section 36(2) is limited to orders passed under Section 35 or Section 35A. The Assistant Collector's order had merged with the Collector's order, which had reduced the penalty from Rs. 250/- to Rs. 100/-. The Central Government could not enhance the penalty beyond what the Collector had decided, i.e., Rs. 100/-. The Central Government's action of enhancing the penalty to Rs. 50,000/- was beyond its jurisdiction.
The Court cited the Supreme Court's judgment in A.St. Arunachalam Pillai v. M/s. Southern Roadways Ltd., which held that revisional powers could not be exercised to pass an order that the original authority had no jurisdiction to pass. The Court concluded that the Central Government had overstepped its revisional authority by enhancing the penalty beyond what was decided by the Collector.
2. Purported Exercise of the Power of Penalty:
The second issue was whether the exercise of the power to impose a higher penalty by the Central Government was perverse. However, the Court found it unnecessary to delve into this issue in detail because the first point regarding the jurisdiction of the Central Government was sufficient to decide the case.
The Court mentioned the reliance on the Supreme Court's judgment in M/s. Hindustan Steel Ltd. v. The State of Orissa, but chose not to examine this point further.
3. Recovery of Short Levy of Duty:
The third issue concerning the recovery of short levy of duty after the goods had been lawfully cleared from the factory was not pressed by the petitioner during the arguments. Therefore, the Court did not make any order regarding this issue.
Conclusion
The petition succeeded partially. The Court set aside the impugned order passed by the Central Government and restored the order passed by the Collector in Appeal. There was no order as to costs. The Court clarified that their interpretation of Section 36(2) related to the unamended section, acknowledging that it had undergone amendments thereafter.
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1989 (9) TMI 113
Issues Involved:
1. Whether the International Airports Authority of India (IAAI) can charge demurrage on baggage detained by Customs.
2. Whether a mandamus can be issued to trace a missing packet of the petitioner's computer or provide equivalent items or compensation.
Issue-wise Detailed Analysis:
1. Demurrage Charges on Baggage:
The primary question was whether IAAI could charge demurrage on the petitioner's baggage, which was detained by Customs. The petitioner argued that demurrage is not chargeable on "baggage" as per the statute, rules, and regulations. The relevant regulations, including the International Airports Authority of India (Storage & Processing) Regulations, 1980, define "cargo" to exclude "baggage," and demurrage is chargeable only on "cargo." Regulation 2(b) defines "cargo" as excluding "mail, stores, and baggages," and Regulation 2(g) defines "demurrage" as charges for not removing "cargo" within the allowed time. Therefore, demurrage is not applicable to "baggage."
The Court examined various provisions, including the Customs Act, 1962, and the Transfer of Residence Rules, 1978, and concluded that demurrage cannot be charged on baggage. The Court noted that the petitioner's computer, imported under the Transfer of Residence Rules, was detained by Customs erroneously, and thus, the petitioner was not liable for demurrage charges. The Court also found that the Chairman of IAAI did not apply his mind properly in refusing to waive 100% of the demurrage charges, considering one of the three packets of the computer was untraceable, making the computer non-functional.
2. Mandamus to Trace Missing Packet:
The second issue was whether a mandamus could be issued to trace the missing packet or provide equivalent items or compensation. The petitioner's computer arrived in three packets, and one packet went missing while in the custody of IAAI. The Court noted that the missing packet issue arose after the writ petition was filed and that the petitioner needed the computer for professional work. The Court observed that the Customs authorities and IAAI, as the custodian, were statutorily liable to account for the goods under Section 45 of the Customs Act, 1962.
Drawing from the Supreme Court's decision in M/s. Oswal Spinning and Weaving Mills Ltd. v. Collector of Customs and Another, the Court held that the Customs authorities and their custodian (IAAI) have a statutory obligation to account for the goods. The Court emphasized that it could exercise its judicial discretion under Article 226 to provide effective relief, especially when a party is aggrieved by the actions of a public body or authority.
Considering the facts and the statutory liability, the Court issued a mandamus directing Customs and IAAI to trace the missing packet and deliver it to the petitioner within one month. If the packet could not be traced, they were to provide the nearest compatible equivalents or their value within three months.
Conclusion:
The Court allowed the writ petition, holding that demurrage is not chargeable on baggage detained by Customs and that the Chairman of IAAI did not properly consider the waiver of demurrage charges. Additionally, the Court issued a mandamus to trace the missing packet or provide equivalent items or compensation, ensuring effective relief to the petitioner. The petition was allowed with costs, and counsel's fee was set at Rs. 2,000/-.
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1989 (9) TMI 112
Issues:
- Interpretation of a Notification regarding customs duty on Zinc import
- Applicability of the Notification to auxiliary duty and additional duty
- Comparison with previous judgments on similar issues
- Claim for refund of excess basic customs duty paid
Analysis:
The judgment involves the interpretation of a Notification related to customs duty on the import of Zinc. The Notification exempts duty of customs over 45%. The main contention in the petitions was whether this exemption applies to auxiliary duty and additional duty as well, in addition to the basic customs duty. The Department argued that the ceiling of 45% only applies to the basic excise duty and not to other duties. This argument was supported by previous judgments, including one by the Kerala High Court and another by the Supreme Court, which affirmed that the circular covers only the basic customs duty. The Calcutta High Court also held a similar view in a separate case. Consequently, the court found that the challenge in the petitions was not sustainable as the circular does not cover auxiliary duty and additional duty.
The petitioners also claimed a refund for the excess basic customs duty paid, contending that they had paid more than 45%. The court noted that if the petitioners apply to the Department and it is found that an excess amount was indeed paid, they would be entitled to a refund. However, as this determination depended on a proper assessment by the Department, the court refrained from issuing any directions at that stage. Therefore, the court decided to dismiss both petitions, ruling that no directions could be given until a proper assessment was conducted by the Department based on the petitioners' application.
In conclusion, the court discharged the rule in both petitions with no order as to costs, as the main issue regarding the interpretation of the Notification and the applicability of the ceiling of 45% to auxiliary duty and additional duty was settled based on previous judgments and legal principles.
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1989 (9) TMI 111
Issues:
Challenge to order of Assistant Collector of Central Excise, appellate orders of Collector, and revision order by Government of India regarding exemption claim on excise duty for base materials used in manufacturing fertilizers.
Analysis:
The petitioner challenged the order of the Assistant Collector of Central Excise, confirming the show cause notice for payment of excise duty on base materials used in manufacturing fertilizers. The principal issue was whether the petitioner was entitled to claim exemption for duty paid on imported base materials. The petitioner claimed that the base materials were imported by agencies like the Food Corporation of India, who paid countervailing customs duty, and then sold to distributors, from whom the petitioner purchased. However, authorities did not accept the petitioner's claim during the periods covered by the writ petitions.
The Assistant Collector was aware of the relevant provisions and discussed the evidence presented by the petitioner. He noted that the petitioner failed to provide sufficient evidence linking the base materials used with the imports made by the agencies. This finding was upheld in appeal and revision by the Government of India. The court stated that it could not reevaluate the evidence presented or decide on its probative value as it was not within its jurisdiction to act as an appellate court.
In another writ petition, the petitioner tried to rely on the fact that certain demand notices were not proceeded with, indicating that base fertilizers were obtained from dealers dealing in duty-paid materials. However, the court rejected the argument that a different standard of proof was applied by the authorities. It emphasized that the issue of whether duty was paid on the base materials was a matter of fact, not law. The court concluded that none of the challenged orders warranted interference in writ jurisdiction and discharged the rules without costs.
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1989 (9) TMI 110
Issues:
1. Interpretation of exemption notification for excise duty on imported High Density Polyethelene Moulding Powder (H.D.P.E.).
2. Applicability of precedent judgments in similar cases.
3. Validity of conditions imposed under the exemption notification.
4. Challenge based on Article 14 of the Constitution of India regarding discriminatory conditions.
Analysis:
Issue 1: Interpretation of exemption notification
The case involved the interpretation of an exemption notification (No. 302/79-C.E.) for excise duty on imported H.D.P.E. The respondents imported the material and claimed exemption, but the appellants disagreed, leading to a dispute over the duty amount payable.
Issue 2: Applicability of precedent judgments
Initially, the learned Single Judge allowed the petition based on the precedent case of Century Enka Limited. However, the appellants contended that the Century Enka case did not apply to the current situation and cited the Ashok Traders case, where it was held that the importer would not benefit from the exemption notification.
Issue 3: Validity of conditions
The Division Bench in the Ashok Traders case emphasized the conditions for exemption, particularly the requirement for excise duty payment on raw naphtha or chemicals derived therefrom. The argument was made that this condition was discriminatory and violated Article 14 of the Constitution of India. The court rejected this argument, stating that the condition was valid to prevent double taxation on raw materials used in manufacturing H.D.P.E.
Issue 4: Challenge based on Article 14
The respondents challenged the condition requiring the use of duty-paid naphtha for importing H.D.P.E. as discriminatory. However, the court upheld the condition, stating that it was reasonable to ensure fair treatment between imported and locally manufactured H.D.P.E. products.
In conclusion, the court allowed the appeal, set aside the previous order, and dismissed the petition. The respondents were directed to repay the excise duty amount with interest to the appellants. The judgment reaffirmed the validity of the exemption conditions and rejected the argument of discrimination under Article 14.
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1989 (9) TMI 109
Issues:
Challenge to denial of Transfer of Residence (T.R.) benefit for V.C.R. under Transfer of Residence Rules.
Detailed Analysis:
The petitioner arrived in India after a stay abroad and brought household items, including a C.T.V. and a V.C.R. The Assistant Collector granted T.R. benefit for all items except the V.C.R., deeming it new and less than a year old. The petitioner appealed to the Collector of Customs (Appeals), arguing the V.C.R. model was available for three years, supported by a purchase voucher. The appeal was rejected, stating lack of evidence and reliance on the Baggage Officer's decision on the C.T.V.
The petitioner then filed a revision application, reiterating the V.C.R.'s availability and genuineness of the purchase voucher. The Revisional Authority rejected the application, citing lack of evidence disproving the V.C.R.'s newness and recent launch. The petitioner challenged these orders in a writ petition, contesting the decisions made at the appellate and revisional levels.
The respondents contended that the V.C.R. was found to be new upon examination, with no proof of prior use or possession by the petitioner for the required period. Both appellate and revisional authorities denied T.R. benefit for the V.C.R., emphasizing its newness and recent market launch, coupled with the petitioner's failure to provide substantial evidence.
The High Court noted the absence of evidence supporting the authorities' conclusion on the V.C.R.'s recent launch, contradicting the lack of evidence for its availability three years back. The petitioner presented a purchase voucher from 1987, establishing possession for the requisite period under T.R. Rules. The Court emphasized that denial of T.R. benefit based solely on the item appearing new lacked valid reasons, especially when supported by a valid purchase voucher. Consequently, the Court set aside the previous orders, directing the release of the V.C.R. with T.R. concession to the petitioner.
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1989 (9) TMI 108
The petitioner sought to quash an order of the Customs, Excise & Gold (Control) Appellate Tribunal for a deposit of Rs. 50,000. The Tribunal's decision was upheld by the High Court of Kerala, granting the petitioner three months to make the deposit and directing consideration of additional evidence.
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1989 (9) TMI 107
Issues Involved:
1. Deduction of interest on distributors' advances.
2. Deduction of carriage and freight costs.
3. Deduction of costs of special packing.
4. Refund of excess excise duty paid.
5. Lawfulness of the assessments made by Respondent No. 6.
Summary:
1. Deduction of Interest on Distributors' Advances:
The Petitioner Company claimed deduction for interest paid on advances received from distributors, arguing these were security deposits to ensure timely payments. Respondent No. 6 rejected this claim, stating the advances were used in the company's operations and were akin to borrowings from financial institutions. The court upheld this decision, noting that the interest payments were not directly related to the determination of the assessable value of goods u/s 4 of the Central Excises and Salt Act, 1944.
2. Deduction of Carriage and Freight Costs:
The Petitioner Company sought deductions for carriage and freight costs, asserting these were included in the price charged to wholesalers. Respondent No. 6 disallowed the claim, finding no evidence that these costs were included in the wholesale price. The court agreed, emphasizing that the Petitioner failed to prove the inclusion of transport charges in the price payable by wholesalers. The court noted that deductions for transportation costs are permissible u/s 4(2) when the price for delivery at the place of removal is unknown, but the Petitioner did not meet the burden of proof.
3. Deduction of Costs of Special Packing:
The Petitioner Company claimed deductions for special packing costs, arguing that certain packings were done at the request of customers. Respondent No. 6 rejected this claim, determining that the packings were necessary for marketing the biscuits and were not special packings. The court upheld this decision, citing the lack of evidence to support the claim that the packings were special and done at the request of wholesalers. The court referenced the Supreme Court's decisions in Union of India v. Bombay Tyre International Ltd. and Union of India v. Godfrey Philips India Ltd., which clarified that only packing necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate can be included in the assessable value.
4. Refund of Excess Excise Duty Paid:
The Petitioner Company sought a refund of excess excise duty paid from 1st October 1975 to 6th August 1980. The court noted that the claim for refund from 1st April 1971 to 30th September 1975 was the subject of another writ petition. The court found no merit in the Petitioner's claim for further deductions and thus no basis for additional refunds beyond what was already allowed by Respondent No. 6.
5. Lawfulness of the Assessments Made by Respondent No. 6:
The court examined whether the assessments made by Respondent No. 6 were lawful. It found that Respondent No. 6 had acted within his jurisdiction and had not committed any error apparent on the face of the record. The court emphasized that the findings of fact by the Assistant Collector regarding the nature of packing and transportation costs were supported by evidence and could not be assailed in a writ court.
Conclusion:
The court dismissed the writ petition with costs, concluding that the Petitioner Company failed to substantiate its claims for deductions and refunds. The assessments made by Respondent No. 6 were upheld as lawful and justified.
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1989 (9) TMI 106
Whether Tribunal right in accepting that at the time of manufacture of the goods in question, the goods were excisable goods and in view of Rule 9A of the Central Excise Rules, 1944, though the taxable event is the manufacture and production, the payment of duty is related to and postponed to the date of removal of articles from the manufactory.?
Held that:- The Tribunal was right. It is well settled by the scheme of the Act as clarified by several decisions that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later stage for administrative convenience. The scheme of the said Act read with the relevant rules framed under the Act particularly Rule 9A of the said rules, reveals that the taxable event is the fact of manufacture of production of an excisable article, the payment of duty is related to the date of removal of such article from the factory. In that view of the matter, the Tribunal dismissed the appeal and rejected the assessee's contention. Appeal dismissed.
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1989 (9) TMI 105
Refund of the excess duty paid rejected - Held that:- Tribunal has erred in its interpretation of the notification No. 265, dated 8-12-1982 and that the assessee's case is clearly covered by the explanation in the notification. It is true that the main part of the notification provides for an auxiliary duty at 40% in cases where the effective rate of basic duty (i.e. the rates set out in the First Schedule read with any relevant notification) is 60% or above and an auxiliary duty at 30% in cases where such effective basic rate is nil or less than 60%. If the notification had stopped here, the assessee would have been perfectly within its rights to claim that the auxiliary duty payable by it would only be 30% because the effective basic rate in its case is nil.
The auxiliary duty paid by the assessee was perfectly in order and that its refund applications are not maintainable. We therefore, set aside the order of the Tribunal and the Collector (Appeals) and restore the order of the Asstt. Collector refusing refund to the assessee. The appeals are, therefore, allowed.
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1989 (9) TMI 104
Issues:
- Whether the bulb sleeves and tube light sleeves manufactured by the respondent are subject to excise duty or entitled to exemption under specific notifications.
- Whether the respondent wilfully suppressed facts to evade Central Excise duty.
- Whether the products manufactured by the respondent qualify as printed boxes and cartons under the Central Excise Tariff Act.
- Whether the Tribunal's decision to exempt the respondent from excise duty was correct.
Analysis:
1. The primary issue in this case was whether the bulb sleeves and tube light sleeves manufactured by the respondent were classified as printed boxes and cartons subject to excise duty or exempt under specific notifications. The revenue alleged that the respondent manufactured printed cartons for bulbs and tubes, thus attracting excise duty. The respondent argued that the products did not qualify as printed boxes or cartons under the Central Excise Tariff Act.
2. The Additional Collector of Central Excise held that the products were classifiable under Item 17(3) of the Central Excise Tariff Act, making them liable for excise duty. However, the Tribunal disagreed, citing the distinction in Tariff Item 17(4) between various packing containers. The Tribunal found that the products manufactured by the respondent did not meet the definition of boxes or cartons as per the Shorter Oxford English Dictionary, thus exempting them from excise duty.
3. The Tribunal's decision was based on the understanding that the products in question, namely the sleeves for bulbs and tube lights, did not function as traditional boxes or cartons due to their open-ended design. Since these products were primarily used for captive consumption by the respondent and lacked an independent market as corrugated boxes or cartons, the Tribunal concluded that they were not subject to excise duty under the specific notifications.
4. The Supreme Court upheld the Tribunal's decision, stating that the Tribunal correctly interpreted the law and facts of the case. The Court found no error in the Tribunal's approach to determining the classification of the products and their eligibility for exemption from excise duty. As a result, the appeal by the revenue challenging the Tribunal's decision was dismissed, and no costs were awarded.
5. In conclusion, the Supreme Court affirmed the Tribunal's ruling that the bulb sleeves and tube light sleeves manufactured by the respondent were not classified as printed boxes and cartons subject to excise duty. The Court found no grounds to overturn the Tribunal's decision, thereby upholding the exemption from excise duty for the respondent.
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1989 (9) TMI 103
Whether the trade understands the article presently in question as a `film' or whether there is a distinction in trade usage also between `foils' and `films'?
Held that:- As agreeing with the view of the Bombay High Court that, though for certain purposes there is a distinction between `films', `foils' and `sheets', so far as the article presently in question is concerned it is recognised in trade only as `film'. It is difficult to imagine any person going to the market and asking for these films by describing them either as `foils' or as `sheets'. We are therefore of opinion that the goods under consideration cannot be described either as `foils' or as `sheets'.
We are of opinion that the articles are `film' and, as this expression does not find specific mention in the table, the assessee is entitled to exemption under the main part of the notification. The conclusion arrived at by the Tribunal is therefore upheld and these appeals are dismissed.
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1989 (9) TMI 102
Whether in input of Sodium Sulphate in the manufacture of paper would cease to be a "Raw-Material" by reason alone of the fact that in the course of the chemical reactions this ingredient is consumed and burnt-up?
Held that:- One of the valid tests, in our opinion, could be that the ingredient should be so essential for the chemical processes cluminating in the emergence of the desired end-product, that having regard to its importance in and indispensability for the process, it could be said that its very consumption on burning-up is its quality and value as raw-material. In such a case, the relevant test is not its presence in the end-product, but the dependence of the end-product for its essential presence at the delivery end of the process. The ingredient goes into the making of the end-product in the sense that without its absence the presence of the end-product, as such, is rendered impossible. This quality should coalesce with the requirement that its utilisation is in the manufacturing process as distinct from the manufacturing apparatus.
No substance in the contention of Sri Ganguly that the process in which the Sodium Sulphate was used, was anterior to and at one stage removed from the actual manufacture of paper. Thus the Tribunal was right in its conclusion that Sodium Sulphate was used in the manufacture of papers as "Raw-Material" within the meaning of the Notification No. 105/82-C.E., dated 28-1-1982. Appeal dismissed.
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1989 (9) TMI 101
The Supreme Court dismissed the appeal under section 130-E of the Customs Act, 1962. The Tribunal confirmed the penalty imposed on the appellant for undervaluation of goods at US $ 627.27. The Tribunal reduced the penalty from Rs. 4,50,000/- to Rs. 2,50,000/-. The Court upheld the Tribunal's decision, stating that there was no error in accepting the value of US $ 627.27. The appeal was dismissed, and the appellant was ordered to pay the amount within four months.
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