TMI Blog1995 (11) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... on basic customs duty. Serial No. 10 of the Table to the notification described the specified goods as Metallic embellishment other than zip fasteners . In all these cases subsequent to the clearance of the goods notices were issued under Section 28 of the Customs Act, 1962 for recovery of the duty short levied on the ground that the exemption under Notification No. 224/85 was not available to the goods as there was no indication in the Bill of Entry that the goods imported were for leather industry and the notices also mentioned that there was no conclusive proof in this regard. The appellants took the general defence that the goods were used in leather industries by them and then they further submitted that they hold SSI Registration Certificate showing leather goods as one of their manufactured product. In all these cases, the Assistant Collector held that mere SSI registration was not sufficient and the appellants should produce some conclusive proof to show that the goods imported by them were used in leather industry to justify the exemption since they did not produce any such conclusive proof, the Assistant Collector confirmed the demand. These orders of the Assistant Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi) and Bombay High Court judgment in the case of Union of India v. Popular Dyechem - 1987 (28) E.L.T. 63 (Bom.) = 1988 (18) ECR 48 were cited in this context. It was further argued by the learned Consultant that there was no requirement in the notification for production of end-use certificate. The learned Consultant referred to the wording of Notification No. 224/85 which grants the exemption to specified goods when imported into India for use in the leather industries. The term for use has been interpretated by the Supreme Court in the case of the State of Haryana v. Dalmia Dadri Cement Ltd. reported in 1988 (14) ECR 292 (S.C.) wherein the Supreme Court held that the term would mean intended use and the Court held that in the context of such a wording in a notification, the exemption cannot be denied if some part of the goods is not actually used. Such an exemption cannot be interpretated to mean that it is available only on the actual use being established, held the Supreme Court. The Supreme Court decision has been followed by the Tribunal in a similar situation in the case of Asean Trading Agency v. Collector of Customs, reported in 1991 (55) E.L.T. 253 (Tribunal). While i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers v. Collector of Customs, Bombay by the Tribunal Larger Bench by [contending] in that case it was held that PVC leather cloth is not ordinarily used as embellishment and hence cannot be granted exemption against Serial No. 10 of Notification No. 29/79 which covered Buckles and other embellishment for footwear. The Tribunal emphasised when there [were] varied uses for the material, it has to be shown that the essential function is of embellishment that is to decorate. The learned Senior Departmental Representative further relied upon the Tribunal decision in the case of Collector of Customs v. Sha Maggaji Manoharmal, reported in 1991 (56) E.L.T. 634 (Tribunal) in which the Tribunal followed the Larger Bench decision while considering the same notification and that mere import of any goods is not included in the expression used in the leather industry. Reliance here also placed by learned Senior Departmental Representative in this regard the case law reported in 1987 (27) E.L.T. 758 (Tribunal) in the case of Hiralal Gulabchand v. Collector of Customs, Bombay. The learned Senior Departmental Representative urged that the exemption must be directly applicable to the goods imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/79 as above is narrower than entry at Serial No. 10 of Notification No. 224/85 covering Metallic embellishments other than zip fasteners imported into India for use in leather industry. Secondly, the supporting evidence produced by the appellants therein from the Officiating Regional Officer, Export Promotion Council was not found reliable whereas in the present case the Department has not questioned the reliability of the S.S.I. Registration Certificates produced by the appellants herein. Thirdy, it is also seen that the Supreme Court decision in the case of Dalmia Dadri Cement case (Supra);, laying down the scope of the expression, for use , rendered in November, 1987 was not available before the Larger Bench whose decision was given earlier in March 1986. The later Supreme Court decision, we have seen, had been followed by the Tribunal while interpreting the very same Notification No. 224/85 in its decision in the case of Asean Trading Agency (Supra). Fourthly, it is noted that in the Larger Bench decision also the Tribunal distringuished and did not disagree with the decision of the Tribunal in Allibhoy Mohamed case (Supra) which had held that stamping foils imported in ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which shows that they have registered for the manufacture of leather goods. The Department s case is that the goods imported are capable of being used in finished product other than leather goods. However, the question will have to be determined with reference to the terms of the exemption notification. The notification says that the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Column 2 of the Table hereto annexed, when impored into India for use in the leather industry". The expression `for use came up for interpretation by the Supreme Court in the case of The State of Haryana v. Dalmia Dadri Cement Ltd. wherein the Supreme Court held that the expression `for use should be construed to mean intended use and not actual use. It is further found that in interpretating the same Notification No. 224/85 in the case of Asean Trading Agency (Supra) the Tribunal followed the Supreme Court judgment. The Tribunal has done so while considering the claim of Glyoxal as tanning agent as being covered by a description penetrators at Serial No. 1 of Notification No. 225/85. The Department had denied the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission on behalf of the State of Haryana was that in order to get the benefit of the exemption, it was required that it should be established before the tax authorities that the cement supplied by the assessee was actually used by the Board (State Electricity Board) in an activity directly connected with the generation or distribution of electrical energy. Repelling this submission, the Court observed as follows in para 10 of the Report : 10. We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be shown that the goods in question, namely, the cement supplied by the assessee in this case was actually used in the generation or distribution of electrical energy. It must be noted that the important words used in the relevant provisions are goods for use by it in the generation or distribution of such energy (emphasis supplied by us). On a plain reading of the relevant clause it is clear that the expression for use" must mean intended for use . If the intention of the legislature was to limit the exemption only to such goods sold as were actually used by the undertaking in the generation and distribution of electrical energy, the phraseolog ..... X X X X Extracts X X X X X X X X Extracts X X X X
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