TMI Blog1990 (2) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with dimensions indicated, as per Chapter note (n) of Chapter 73, vide Customs Notification No. 34/82, dated 28-2-1982 as amended by Notification No. 186/84 at 60% + 40% of basic and auxiliary duty, respectively. The respondents had filed ex-bond bill of entry No. 683/6-5-1986,1.M. No. 908/85 Line No. 2 for removal of warehouse hot rolled coils. The said ex-bond bill of entry has been assessed under sub-heading 7208.24 at 80% of basic and 40% auxiliary duty vide Customs Notification No. 89/86, dated 17-2-1986 and 186/86, respectively, with countervailing duty of Rs. 500.00 per metric tonne under CET Items 7212.50. The importers filed the bill of entry for re-assessment requesting classification of hot rolled coils as coils for re-rolling claiming the benefit of Customs Notification No. 86/86, dated 17-2-1986 [serial No. 3(c)], The adjudicating authority had asked the importer to produce the industrial licence indicating that they were engaged in the activity of re-rolling and the respondents had produced Industrial Licence No. ILS:108 (75), New Delhi dated 31-3-1975 issued by the Ministry of Industry and Civil Supplies, New Delhi and it did not indicate that they were engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of Customs (Appeals) the respondent contended that according to Serial No. 3(c) of the table attached to Notification No. 86/86-Cus., dated 17-2-1986, coils for re-rolling of iron or non-alloy steel (containing less than 0.6% carbon) and entitled for assessment at the concessional rate of duty of 40% . Explanation No. (1) appearing at the foot of the notification defines coils for re-rolling as coiled, semi-finished, hot-rolled products of a rectangular section not less than 1.5 mm thick of a width exceeding 500 mm and of a weight of not less than 500 kgs. per piece. The respondent was of the view that the goods impugned fully satisfy the conditions laid down in the notification and the notification did not define what is re-rolling nor does it stipulate that only such of the importers who were engaged in the activity of re-rolling were eligible for the concessional assessment and the lower authority had gone into question not relevant to the conditions in the notification by referring to their industrial licence and coming to the erroneous conclusion that manufacture of pipes and tubes from the impugned goods did not involve re-rolling. The respondent further stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r semi-finished products as given in the Note 1(ii) to Chapter 72 would apply only to goods falling under Heading 72.07 and not to coils for re-rolling which fall under the category of flat-rolled products. Even though the adjudicating authority has dealt with the issue of semi-finished in the context of Customs Notification No. 61/86, dated 17-2-1986 only, the issue is relevant so far as Notification No. 86/86-Cus., dated 17-2-1986 also. The definition of semi-finished coils has not been given either in the notification or section/Chapter Notes. Hence, the issue has to be decided taking into account the nature of the goods as they are as per the Mills Test Certificate unpickled, with mill edges and fish tails. The Collector (Appeals) further observed that in all processes employed for manufacturing welded tubes and pipes, the raw material was a flat semi-finished product, which was made into a tubular shape and the edges were then welded. This position has been reiterated in CCCN Explanatory Notes Vol. 3 page 1009, para (II) under the Heading 73.18. The Collector (Appeals) had relied on the certificate of M/s. M.N. Dastur Co. (P) Ltd., Bombay who were a firm of consulting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llaneous application No. 71/89 he has pleaded that for the proper disposal of the appeal, the admission of these documents is very essential and these have been filed keeping in view the additional grounds of appeal raised by the appellant. 7. Shri A.S.R. Nair, the learned SDR has got no objection but states that he would like to refer to the documents in reply. After hearing both the sides, necessary permission for the withdrawal of miscellaneous application No. 450/88 is granted and miscellaneous application No. 71/89-B2 is being allowed. 8. Shri A.S.R. Nair, the learned SDR who has appeared on behalf of the appellant, has reiterated the facts. Shri Nair has stated that the goods imported are hot rolled coils of size 2.5 mm x 1025 mm x coil. Shri Nair stated that ex-bond bill of entry was filed and the goods were classified under Heading 73.13 (old Tariff) and the shipment was made on 5th October, 1985 of 1399.00 metric tonnes of hot rolled coils and the bill of entry was filed on 31st January, 1986. The goods were cleared into bond after 28th of February, 1986 in five or six instalments. The importers had warehoused the goods. The adjudicating authority had assessed the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nickel steel contaming 3% nickel (2.75 to 3.25) and 0.50 carbon (0.45 to 0.55). The manganese steels, with manganese from 1.60 to 1.90%, are designated by the letter T before the initial I. Thus SAE T1350 steel contains 0.45 to 0.55% carbon and 1.60 to 1.90 manganese. The SAE steels are made to close specifications of manganese, sulfur, and phosphorus content, and since they are very uniform in quality and usually carried in stock, they have been widely adopted for use in all kinds of products." Shri Agarwal, the learned advocate, objected that in the grounds of appeal there was no plea as to semi-finished products. To this Shri Nair requested time for amendment of grounds of appeal and also made an oral request to this effect. Shri Agarwal did not object to the request of the learned SDR. 9. Shri Nair had referred to HSN Notes pages 979 and 980. Page 979 describes what is semi-finished and 980 describes production of finished goods and on page 981 further manufacture and finished sheets are described as finished products. Shri Nair has argued that if an item is marketed as a finished product, it cannot be called as semi finished. Shri Nair has relied on the following aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 61/86-Cus., dated 17th February, 1986. He has referred to the Heading 73.08 of the erstwhile Tariff and stated that there was earlier Notification No. 38/84, dated 1st March, 1984 prescribing the rate of duty at 40%. Shri Agarwal has referred to pages 47,48 and 49 of the additional paper book filed by the respondent and has staled that the same are bills of entry and has argued that these are copies of bills of entry in other cases where the goods were cleared on payment of lesser duty under Heading 73.08. He has also referred to the order passed by the Collector (Appeals). Shri Agarwal has stated that here the dispute is as to the classification of the goods. He has referred to page 10 of the additional paper book filed by the appellant which is the Steel Making Flow Sheet. This shows how steel rolled coils and sheets are made. He has referred to page 3 of the Additional Paper Book which is Government of India s letter dated 19th December, 1986 and in terms of this letter, it was observed that the definition incorporated for semi-finished products applied only to goods falling under Heading 72.07 of the Customs Tariff and would not apply to the coils for re-rolling which fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Coromondal Fertilizers Ltd. v. Union of India reported in 1984 E.C.R. 1853 (S.C.) para-10 that explanation added to the notification also forms part of the notification. Shri Agarwal further stated that when an explanation is given no recourse to any implied meaning. Shri Agarwal has further argued that the end use of the goods is not relevant. In support of his argument he has referred to the following judgments :- 1. 1988 (15) E.C.R. 1 (S.C.) = 1988 (34) E.L.T. 8 (S.C.) - Nat Steel Equipment (P) Ltd. v. Collector of Central Excise 2. 1988 (33) E.L.T. 89 (Cal.) = 1987 (13) E.C.R. 229 (Calcutta) - Neeraj News Paper Association (P) Ltd. v. Asstt. Collector of Customs Shri Agarwal has also referred to the certificate issued by M.N. Dastur Company (P) Ltd. which appears in page-11 and stated that the same has been relied on by the Collector (Appeals). He has also referred to an adjudication order dated 2.9th January, 1987 and order-in-original dated 17th October, 1986. Lastly Shri Agarwal has pleaded that the coils imported by the respondents has to be classified as semi-finished goods. He has pleaded for the rejection of the appeals. 12. Shri A.S.R. Nair, the learned SDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., dated 17th February, 1986 the rate of duty is 80% and in terms of Notification No. 61/86-Cus., dated 17th February, 1986 the rate of duty is 60% and in terms of Notification No. 86/86-Cus., dated 17th February, 1986 the rate of duty is 40%. For the proper appreciation of the correct position the relevant extract from the said notifications are reproduced below :- Effective rates of duty for iron and non-alloy steel products. - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts iron and non-alloy steel products containing less than 0.6% of carbon in the forms described in column(2) of the Table below and falling within Chapter 72 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in- the corresponding entry in column (3) of the said Table. Sl.No. Description of article Rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 kgs. per piece; This notification shall come into force from the 28th day of February, 1986. [Notification No. 86/86-Cus., dated [17-2-1986] A simple perusal of Notification No. 86/86-Cus., dated 17th February, 1986, shows that the benefit of the notification can be extended only if the coils are imported for re-rolling and explanation for coils to re-rolling further explains that coiled, semi finished hot rolled products of a rectangular section not less than 1.5 mm thick and of a width exceeding 500 mm and of a weight of not less than 500 kgs. per piece. The goods imported in the matter before us are 2.5 mm thickness X 1025 mm width are in the form of a coil in manufactured form. The terms of the notification shows that the coils for re-rolling should be coils, coiled, semi-finished, hot rolled product of a rectangular section. Notification No. 61/86-Cus., dated 17th February, 1986 provides that this should be coiled, semi-finished, hot rolled product of iron and steel, (having carbon content of less than 0.6%) of a rectangular section not less than 1.5 mm thick and of a width exceeding 500 mm and of a weight not less than 500 kg. per piece and Notification No. 89/86-Cus., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finished products Continuous cast products of solid sections, which have not been further worked than subjected to primary hot-rolling or roughly shaped by forging including blanks for angles, shapes or sections. These products are not presented in coils." A simple perusal of Chapter Note 72(l)(ij) shows that the products are not presented in coils. In the matter before us the goods imported are coils. We have also perused the Bill of Entry and other invoices etc. The description has been given as hot rolled coils. There is no mention of word semi-finished anywhere. We have also perused the Materials Handbook by George S. Brady page 756 SAE. A simple reading of the same shows that SAE steel is the designation for the standard grade of steel approved by the Steel Automotive Engineers. These steels are made regularly by the various mills and are known by their designating numbers. Shri G.S. Agarwal, the learned Advocate for the respondents had pleaded before us that before the harmonised system the coils for re-rolling were assessed under Heading 73.08 and the rate of duty was 40% read with Notification No. 38/84-Cus., dated 1st March, 1984 and 73.13 described sheets and plates, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a provision of this nature the expression used in the context or the statute must be looked into and mere grammatical meaning or dictionary meaning of one particular expression divorced from the context or the scope of the notification or the statute should not be adhered to and in this context the context and the purpose and the entire scheme was much more important than grammar as, he stressed, was emphasised by Sur Thomas Moore as indicated in Craies Law, on Statute 7th Edition, page 159 to 160. There is, however, in my opinion, no dispute on this proposition and now it is well settled that an expression of this nature in a particular fiscal or in any other legislation must be construed in the context and the meaning should not be confined only to its grammatical meaning. There is also no dispute on the proposition that an ambiguity, if there be any, in the expression used should be resolved in favour of the assessee or tax-payer. Counsel also drew my attention to three affidavits of Bhupendra Singh Boid, Mangal Singh and S.K. Guin filed in support of this rule claiming to be the dealers in these types of goods and who have alleged that acrylic fibre is not known in the trade a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ROLLING. Chapter Note 1(k) defines coils for re-rolling. These semi-finished products are coiled lengths of hot-rolled sheet steel weighing upto several tons. They are obtained by the hot-rolling of slabs and are generally converted into thin sheets by cold reduction in modern continuous rolling processes. These coils therefore tend to replace sheet bars (Heading 73.07) as used for the manufacture of sheets by the other process." 20. In HSN, introduced w.e.f. 28-2-1986, there is no separate heading for coils for re-rolling . Coils, under consideration, being flat rolled product have been classified rightly under Heading 72.08 HSN. Department s case is that the classification being correct, the product does not satisfy the characteristic semi-finished given in Explanation to Notification 86/86, dated 17-2-1986. It is admitted by both sides that semi-finished has not been defined in the Notification 86/86, nor in the CCCN from where the Explanation was lifted. However, the term semi-finished products is defined in Note 1(ij) of Chapter 72 HSN. It is worth noting that the expression semi-finished product defined in Note 1(ij) of Chapter 72 HSN clearly mentions that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, but in another sense, it may mean sending goods from one country to another. Often, the latter involves a commercial transaction but not necessarily. The country to which the goods are thus sent is said to import them and the words export and import in this sense are complementary. An illustration will express this difference vividly. Goods cannot be said to be exported if they are ordered by the health authorities to be destroyed by dumping them in the sea, and for that purpose are taken out of the territories of India and beyond the territorial waters and dumped in the open sea. Conversely, goods put on board a steamer bound for a foreign country but jettisoned can still be said to have been exported even though they do not reach their destination. In the one case, there is no export, and in the other, there is, though in either case the goods go to the bottom of the sea. The first would not be within the exemption even if a sale was involved, while any sale in the course of the second taking out would be. In both, the goods were taken out of the country. The difference lies in the fact that whereas the goods, in the first example, had no foreign destination, the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, relies on a certificate of well-known firm of Consulting Engineers M.N. Dastur Co, Credibility of this certificate is sought to be struck at by the department on that no sample was sent to M.N. Dastur Co. This, in our view, is not a good ground when the description of the product, namely, unpickled, with mill edges, fish tail and unskin-passed is not challenged and it is on the basis of that description that a certificate has been given to the effect that the product is semi-finished. 26. Department s attempt to rely on the symbols SAE 1008/1010 in confirmation letter dated September 12, 1985 from the Indentor to the respondent and Analysis Certificate of the manufacturer is also not a decisive test of a finished product in the face of the description of the product as unpickled, unskin passed with mill-edges and fish tails . 27. Another argument of the department is that it is for the assessee, who claims exemption, to prove that he qualifies for the exemption. The invoice or other related documents, according to the learned SDR, do not describe the product as semi-finished and, therefore, the respondent/assessee has failed to discharge the burden cast ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
