TMI Blog1995 (2) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... ended by Notification No. 233/90, dated 3-8-1990 at the rate of 20% ad valorem (basic Customs Duty) plus auxiliary duty at the rate of 40% as per Notification No. 108/91, dated 25-7-1991. The goods were duly examined and assessed as above and allowed clearance. However, the department had issued show cause notices dated 20th, 21st December, 1991 under Section 28 of the Customs Act, 1962 raising demands in respect of C.V. duty at the rate of 10% CVD + 10% SED in respect of the said Bill of Entries. This was resisted by the importer on the ground that no Notifications or any other specific levying clause of this duty had been quoted in the said notification to enable them to interpret and reply to the same. They had also stated that earlier no such duty has been imposed in respect of said goods. They had stated that in the absence of any specific levying clauses, they have inferred that such charged demand has been issued in the face of interpretation of Notification No. 143/91-Cus., dated 1-11-1991 were under Additional Customs Duty on the goods falling under Chapter 26 of the First Schedule to the Customs Tariff Act, 1975 has been exempted. They have stated that this notification h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to the benefit of the Notification in question. He submitted that the ratio of Ashoka Traders is inapplicable to the facts of the present case. He submitted that the issue is covered by the ruling rendered by the Hon ble Supreme Court in the case of Thermax Private Limited v. Collector of Customs as reported in 1992 (62) E.L.T. 352. He submitted that the Madras High Court has also followed the ratio of the Hon ble Supreme Court s ruling in the case of Mysore Petro Chemicals Ltd. v. Assistant Collector of Central Excise as reported in 1994 (73) E.L.T. 33. There is also a judgment of Bombay High Court in the case of Century Enka Ltd. and Others v. Union of India Two Others as reported in 1982 (10) E.L.T. 64 and another in the case of Collector of Customs v. Hindustan Electrographite Ltd. as reported in 1993 (65) E.L.T. 46 (Tri.)=1993 (46) ECR 120. The Tribunal s Larger Bench judgment in the case of Collector of Customs v. Carborandum Universal as reported in 1988 (34) E.L.T. 300 is also applicable to the facts of the case. 6. Replying to the arguments of the ld. advocate, Shri V.C. Bhartiya, the ld. JDR submitted that the ratio of the Supreme Court s judgment rendered in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Notification cannot be denied, otherwise there will be disparity between the rate of duty in respect of imported goods and the indigenous goods and that would result in escalation of prices. This would also create difficulties for the importers and genuine manufacturers and the Government does not have any such intention to create disparity between imported goods and indigenous goods. It is also pleaded that the Hon ble Bombay High Court s judgment in the case of Ashok Traders inapplicable in the light of earlier judgment of the Bombay High Court as rendered in the case of Century Enka Ltd. Others v. Union of India Two Others as well as the judgment of the same Bombay High Court s judgment rendered in the case of Paragon Textile Mills (P) Ltd. v. Union of India. It is their submission that the later judgment of the Bombay High Court in the case of Paragon Textile Mills (P) Ltd. would apply. It has also been submitted that the Larger Bench of the Tribunal in the case of Carborandum Universal has noted about the Bombay High Court in Ashok Traders case had not noticed the judgment of Century Enka Ltd. It is also pleaded that the judgment of the Larger Bench of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional duty of Customs if the benefit of Central Excise exemption Notification is available to it. The Apex Court has also taken the same view in the case of Thermax Private Limited v. Collector of Customs, supra, wherein repelling the contention advanced by the Revenue that the procedures of Chapter X is designed to facilitate clearances only for the purposes of Central Excise and that the said procedure cannot be fulfilled at all in the case of an Importer, it observed as follows :- It will at once be seen that there is nothing in the scheme of the rule which makes it inapplicable to an importer of goods. The assessee here has imported the goods and is selling them for use in a factory, a use which qualifies for the concession under the S. 8 notifications. The types of use specified in the concessions notified could be of any kind and, even in the notifications under our consideration, they are many and varied. In respect of items falling under S. Nos. 3 and 8, in particular, the actual users may be private individuals or authorities and need not necessarily be manufacturers using the goods in question in an industrial process" in a narrow sense of that term. For instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that exemption of additional customs duty (CVD) available under a notification to Excise duty cannot be denied merely because of certain proviso in a notification. In the light of ratios rendered in these cases, the contention taken by the appellant is well founded and in that view of the matter, the appeal is allowed. [Contra per : S.K. Bhatnagar, Vice President]. - With due respects to Hon ble Member (J), my views and orders in the matter are as follows :- 10. First and foremost, I observe that the demand notices in question do not indicate the grounds/reasons or the basis on which they have been issued and the amounts in question are being demanded. The appellants had protested about this fact and specifically mentioned in the reply to the show cause notices addressed to the Asstt. Collector that `no notification or any other specific levying clause has been quoted. However, neither the Asstt. Collector has dealt with this aspect nor the Ld. Collector (Appeals). It was however, an important point as non-mention of any ground or reasons results into a handi- cap for the assessee or the defendant. It makes it difficult for him to effectively defend himself and give a suitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of iron and steel in Heading No. 26.20. 17 The HSN note on 26.19 explicitly refers to the slabs obtained during smelting of iron ore (blast furnace slags), the refining of the iron or the manufacture of steel (converter slag). 18 Similarly, HSN Note on 26.20 also mentions, while referring to `ash and `residues covered by this heading that the result from the treatment of ores of intermediate metallurgical products (such as matts or from electrolytic chemical or other processes which do not involve the mechanical working of metal". While indicating what this Heading includes, various processes including galvanisation have been mentioned but the main thing to be seen is that while for customs purposes (that is the basic duty purposes), it is immaterial whether the item being imported is a manufactured or an unmanufactured product, but, for additional customs duty (C.V.D. and S.E.D. purposes) we have to see whether the item in question is a manufactured product in the normal sense or one deemed to be a manufactured product under some legal fiction created by Central Excise Act that is to say an excisable product. This was important because only an excisable product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers produced by the Ld. Counsel, it is evident that galvanisers dross settles there in a somewhat party condition and it is taken out of the galvanising bath in the form of lumps . Usually it is moulded and cast as slabs which are called `hard zinc or `hard spelter ; Whereas the Bill of Entry description is zinc dross (ball-milled) approximately 29% pebbles. This requires an explanation. 25. It is interesting to note in this connection that HSN notes on 26.20 mention that the Heading include (1) Mattes and slags or dross, for e.g. those which in zinc and (2) hard zinc spelter residue from galvanisation by dipping in molten zinc and rsidues from electrolytic metal refining. 26. In view of the above position, I hold that the departmental action suffers from violation of principles of natural justice. The authorities below have not passed a speaking order inasmuch as they are silent over the question of excisability (in case the material was found to be excisable) and the classification thereof which was basic to the determination of liability, if any. 27. Both the sides have not produced sufficient technical and commercial literature which could clinch the issue at this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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