TMI Blog1985 (12) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collectors concerned. Their appeal against the said orders were rejected by the Collector (Appeals) under order dated 27-5-1985. It is against the said order that these 11 appeals have been filed. Apart from claiming that no special excise duty was payable as demanded, it is further contended that in any event the demand in respect of several of the instances was barred by time also. 3. We have heard Shri N.V. Raghavan Iyer, Adviser, (Excise and Customs), Indian Oil Corporation on behalf of the Appellant and Shri P.K. Ajwani, Sr. Departmental Representative for the respondent Collector. 4. Raghavan Iyer contended that the words without payment of duty in rule 13(2) (in terms of which Notification No. 151/81 had been issued) meant without payment of any excise duty under whatever name it may be called. He contended that there was no provision for assessment proceedings in respect of such exports and that itself would support his contention. He referred to the decision of the Delhi High Court in the case of Modi Rubber Limited (1983 E.L.T. 24 Delhi) and further submitted, with reference to the provisions of the Central Excise Laws (Amendment and Validation) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Government may, from time to time, by notification in the official gazette, permit export of specified excisable goods under bond, without payment of duty from a warehouse or licensed factory, to Nepal or Bhutan, subject to such conditions or limitations as regards the class of goods, destination, mode of transport and other matters as may be specified therein . 8. There is no dispute that in all the instances in question the appellants (Indian Oil Corporation) had stored the concerned petroleum products in their bonded warehouse and therefrom had exported them to Nepal after complying with the necessary statutory formalities, including execution of a bond. No duty had been paid by them in respect of such exports. They claimed that they were entitled to do so in terms of notification No. 151/81-C.E., dated 29-7-1981 issued under rule 13(2) of the Central Excise Rules. The Department concedes that by virtue of the notification the appellants were absolved of the liability to pay basic excise duty. But while the appellants claimed that they were absolved from payment of the special excise duty payable under the Finance Act of the respective years the department contests the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 of 1982 was promulgated which was then replaced by Act No. 58 of 1982. Section 2(3) of the said Act read as follows: Where any Central law providing for the levy and collection of any duty of excise makes the provisions of the Central Excises Act and the rules made thereunder applicable by reference to the levy and collection of the duty of excise under such Central law, then,- (a) it shall be necessary for the purpose of granting, by any notification or order, any exemption from any duty of excise, or fixing, by any notification or order, any rate of duty, leviable under such Central law to expressly refer to the provisions of the said Central law in the preamble to such notification or order, or to state by express words in such notification or order that the exemption provided for, or the rate of duty fixed, by such notification or order is an exemption from or the rate of duty under, such Central law; (b) no notification or order issued or made under the Central Excises Act or the said rules (whether issued or made before, on or after the 24th day of September, 1982 and whether or not in force on such date) granting any exemption from any duty of excise or fixing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion would be whether this provision would amount to an exemption from duty of excise. From the words of the rule it would appear that the goods have not been exempted from liability to duty but that the export of the said goods was being permitted without payment of duty. It may be noted that the bond to be executed in connection with such export without payment of duty provides for collection of duty in case the export is not carried out or there is a deficiency in the export. This provision is also suggestive that the goods have not become exempt from duty but that the collection of duty is waived on the condition of export being fulfilled. 14. In this connection we may take note of the provisions of Section 25 of the Customs Act which are as follows : Power to grant exemption from duty ;-(1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the duty leviable on certain goods, customs duty itself is not leviable on such imported goods, no question of calculating the customs duty leviable at any particular rate specified either under the Customs Tariff Act or any other law for the time being in force arises". Again in para 42 (page 673) it is observed as follows :- A notification under section 25 (1) of the Customs Act exempts the goods themselves from the levy of duty under section 12 A, notification under sub-section (2) of Section 25 does not exempt goods from the levy of the tariff, A notification thereunder only exempts under special order in each case from payment of duty under circumstances of exceptional nature. While under sub-section (1) of Section 25 goods themselves are exempt from the levy of duty, under sub-section (2) of Section 25 the goods continue to be chargeable to duty but the importer is only exempted from payment of such duty . 16. Similarly, in the present case, also there would be no need for making a provision for export without payment of duty if the same provision would amount to an exemption from the liability for payment of duly itself. Further, as already noted, duty would have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 19. In view of the above conclusion it would be unnecessary to go into the other grounds raised by Shri Iyer except one where, on the above reasoning itself, the argument raised by him will have to be rejected. This is with reference to his last submission that in any event the basic excise duty being nil even according to the department, the special excise duty would also be nil since it is to be quantified at a percentage of the basic excise duty. This argument cannot be accepted since, for the reasons already given, the goods would be chargeable to basic excise duty, though payment thereof is waived by virtue of the notification under rule 13. Hence, the basic excise duty chargeable cannot be said to be nil, though what may be payable may be nil. 20. As mentioned earlier, Shri Iyer had further urged that even if all his other arguments are to fail, the appeals will have to be allowed at least to the extent of the claims having become barred by limitation. He had submitted that all the exports were under bond to the full knowledge of the department and under their supervision. He, therefore, contended that in any event the claim for any period preceding six months before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basic excise duty in these cases being zero, the Special Excise Duty was therefore itself zero. In other words, the goods were correctly allowed to be exported without payment of Special Excise Duty, and there was no legal justification for demanding it later on. 24. My learned brother did not find the appellants argument acceptable because of his finding that the goods in this case remained chargeable to basic excise duty, though payment of that duty had been waived. It is necessary to go into this aspect in some detail. 25. At the outset, I would like to make clear my greatest respect to the Hon ble Bombay High Court, on whose observations in the case of Apar (Private) Limited (of para 15 above) he has placed reliance in coming to his conclusion in para 19 above. There is no question of my taking of view different from that of the Hon ble High Court on any issue decided by it. I would however like to observe that the question before the Hon ble Bombay High Court in that case was quite a different one, namely the interpretation of Section 12 read with Section 15 of the Customs Act, 1962. In the present case we are concerned with the interpretation of another specific provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Government in relation to the duty so chargeable (not being a notification providing for any exemption for giving credit with respect to, or reduction of duty of excise under the said Act on such goods equal to, any duty of excise under the said Act, or the additional duty under Section 3 of the Customs Tariff Act, already paid on the raw material or components parts used in the production or manufacture of such goods), there shall be levied and collected a special duty of excise equal to ten per cent, of the amount so chargeable on such goods. 27. Apart from the words in brackets in the last two years, the provisions are similarly worded. What they provide for is the levy and collection of a special duty of excise. The quantum of this levy is ten per cent of the amount so chargeable on such goods. 28. For the amount so chargeable we have to be guided by the opening words of the sub-section. It is a duty of excise (chargeable) under the Central Excises Act........................ read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable . That is, it is the basic excise duty read with any notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder per : H.R. Syiem Member (T)]. - Duty in the Central Excise Rules means the duty payable under section 3 of Act [Rule 2 (v)]. Hence, the duty levied by the Finance Acts, is not the duty" exempted or foregone by rule 13. Therefore, the Special duty is not affected by Notification No. 151/18. 34. On the other hand, there remains the problem of collecting this Special duty. It is to be collected at 10% of the duty of excise chargeable under the Central Excises Salt Act. The learned counsel for the department argued that the notification only permits the goods to be exported" without payment of duty of excise"; the duty of excise remains chargeable. I do not think this is correct. 35. The noun charge means a load, a burden, weight. As a verb, it means to cause to bear, to place a load upon, to load, to put in or on (a thing) or cause it to receive what it can bear or is adopted to receive. Chargeable is of the nature of a charge or burden; responsible; burdensome; costly, capable of being or liable to be charged. [The Shorter Oxford English Dictionary]. If charge is a load and chargeable is a burden also be liable to be charged, then the petroleum products exported t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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