TMI Blog2013 (9) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... to imported molybdenum concentrate even without awaiting for the test report of the chemical examiner. If the lower appellate authority mis-read and mis-understood the order of the Tribunal, the appellant cannot place any reliance on such orders. In any case, the order of the lower appellate authority is not binding on this Tribunal and this Tribunal can independently arrive at a decision on the matter based on the facts placed before it. Limitation period - Whether the demand of CVD is barred by limitation of time - Held that:- The time period for issue of demand in a case where the duty is short levied or short paid, not levied or not paid or erroneously refunded is one year from the relevant date, which , in the present case, is the date of clearance of the goods. The bills of entry were filed during 6-4-2011 to 6-9-2011 in respect of the previous imports and the show cause notice was issued on 9-3-2012, that is, within a period of one year. Whether confiscation of the impugned goods with an option to redeem the same on payment of fine and imposition of penalty is warranted - Held that:- No reason for confiscation of the goods under section 111(d) which is for violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were seized on 26-9-11 under the provisions of Section 110 of the Customs Act, 1962, on the reasonable belief that they are liable to confiscation under Section 111 of the said Act. 2.1 The test report received from Chemical Examiner, Vadodara, vide report dated 28-9-11 confirmed that the goods were Molybdenum Ore Concentrate containing Molybdenum 61.6% as MoO3 in respect of B/E No. 456746 . In respect of B/E No. 4551981, the test report dated 27/9/11 confirmed that the goods composed of Oxides of Molybdenum and Mo was 62.36% and the MoO3 was 93.54%. The samples thus tested confirmed the goods to be Molybdenum Concentrates. 2.2 Statement of Shri. Babu Khandelwal, Partner of the appellant firm was recorded under section 108 of the Customs Act, wherein, he, inter alia, admitted that the goods under import were Roasted Molybdenum Ore concentrates which they procure from M/s Glencore, Switzerland and M/s Thompson Creek Metals, USA. He further admitted that natural ores and ore concentrates are distinct commodities in terms of composition and concentrates are value added products and the Molybdenum content in the roasted molybdenum ore is in the range of 56% to 65%. He further st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly were confiscated under the provisions of section 111(d) and (m) of the Customs Act with an option to redeem the same on payment of fine of ₹ 1 crore under Section 125 ibid and those imported earlier were held liable for confiscation under section 111(d) and (m). The differential duty demands of ₹ 66,61,664/- and ₹ 3,10,73,035/- were confirmed under section 28(1) by denying the benefit of CVD exemption along with interest under 28AA. A penalty of equivalent amount was imposed on the appellant under section 114A. It is against this order that the appellant is before us. 3. The ld. Counsel for the appellant makes the following submissions:- (a) Ores and concentrates are one and the same. Hence exemption to ores will apply equally to concentrates. As per HSN Explanatory Notes, the term concentrates applies to ores which have had part or all of the foreign matter removed by special treatments, either because such foreign matter hamper subsequent metallurgical operations or with a view to economical transport.. Thus concentrate is nothing but enriched and prepared ore. By converting ores to concentrates no new product emerges. The term Ore is the genus of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand itself is not sustainable. He relies on a few decisions in this regard such as India Pistons Ltd. [2008 (221) ELT 295], Savita Polymers Ltd. [2009 (240) ELT 616] and SRF Ltd. [2007 (220) ELT 201]. (g) There is no willful mis-statement or mis-representation that can be attributed to the appellants and hence extended period of time cannot be invoked to confirm the duty demand. Therefore, the demands for the period March, 2011 to July 2011 is time barred. (h) The honble CESTAT, Delhi and Commissioner (Appeals), JNCH, Nhava Sheva, in appellants own case have upheld the contention of the appellant that ore and its concentrate are one and the same and exemption as envisaged for ores would be available. (i) The goods are not liable to confiscation under section 111(d) as they are freely importable. As regards confiscation under section 111(m), there is no mis-declaration of value as the department has not made any such allegation. Merely because the appellant has declared the goods as molybdenum ore/Roasted Molybdenum ore, instead of Molybdenum Concentrate , the same does not tantamount to mis-declaration of material particulars, especially considering the fact both the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time has been correctly invoked. d) As regards the confiscation of the goods under section 111 and consequent imposition of penalty, the ld. AR submits that by mis-declaring the description of the goods, which is a material particular, contravention envisaged under sub-section (m) of the said section is established and the goods are rightly liable to confiscation. e) The ld. AR further submits that the issue involved herein was examined in a Conference of Chief Commissioners of Customs and allied matters held in May 2011. The conference concluded that the benefit of exemption notification under Sr. no.4 of notification No. 4/2006-CE dated 1-3-2006 will be available only to imported ores and not to imported concentrates. The said decision taken in the conference was approved by the Central Board of Excise Customs and the Board vide circular No. 9/2012-Cus dated 23-3-2012 directed the field formations to complete pending assessments accordingly. The said decision of the Conference and the CBEC should be given due weightage and consideration while considering the classification. Accordingly he pleads for upholding the impugned order. 5. We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kg. 10% 5.2 From the tariff description given above, the tariff uses the expression ores and concentrates. Further wherever the tariff wanted to prescribe different classification, separate sub-headings have been provided. For example, in the case of Iron ore, separate sub-headings have been provided for iron ore lumps, iron ore fines and iron ore concentrates. From the above structure, it is clear that the use of the expression ores and concentratesand provision of separate sub-headings for ores and concentrates wherever necessary, implies that the legislature consciously made a distinction between ores on the one hand and concentrates on the other. The preposition and between the two terms is conjunctive. If the legislative intention is that ores and concentrates are one and the same, then the legislature would have used the expression ores or concentrates. 5.3 In the book Principles of Statutory Interpretation, 12th edition 2010, Justice G.P. Singh at pages 477 and 478 has written as under :- 7. Conjunctive and Disjunctive Words 'OR' and 'AND' The word 'or' is normally disjunctive and 'and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rao Shiv Bahadur Singh v. State of U.P.[AIR 1953 SC 394] it was held that it is incumbent on the court to avoid a construction, if reasonably permissible on the language, which render a part of the statue devoid of any meaning or application. Again in the case of J.K. Cotton Spinning Weaving Mills Co. Ltd. v. State of U.P. [AIR 1961 SC1170] it was observed that in the interpretation of statutes, the courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute to have effect. The Legislature is deemed not to waste its words or to say anything in vain [AIR 1920 PC 181] and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons [AIR 1964 SC 766]. 5.6 In Balwant Singh vs. Jagdish Singh[2010 (262) ELT 50 (SC)] while interpreting the provisions of Section 15 of the Haryana Urban Rent (Control of Rent and Eviction) Act, 1973, the apex Court laid down the following principle:- It must be kept in mind that whenever a law is enacted by the legislature, it is intended to be enforced in its proper perspective. It is an equally settled princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the completion of a manufactured product; ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; The purpose of defining a process as manufacture is to bring the goods under central excise levy. In other words, the legislature intends to levy excise duty on concentrates converted from ores. Thus anybody who converts ore into concentrate is liable to discharge excise duty liability on the concentrate. In view of the above legal and factual position, if one accepts the arguments of the appellant that ores and concentrates are one and the same, we will be nullifying or negating the legislative amendment brought in the Central Excise Tariff in the Budget 2011 and in our considered view, such an interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption. Applying the ratio of the above decision to the facts of the present case, the exemption contained in notification No. 4/06-CE applies only to ores and not to concentrates and we hold accordingly. In the present case, as per the chemical test reports, the goods under import are concentratesand this fact has also been admitted by the appellant in the statement recorded under section 108 of the Customs Act. If that is so, the benefit of the said notification shall not be available to the goods under importation. 6. It will be useful at this juncture to examine the object of levy of additional Customs duty (CVD).This issue was examined at great length by the honble Apex Court in the case of Hyderabad Industries Ltd. vs. Union of India [1999 (108) ELT 321 (SC)] and the honble court held as follows:- 15. The Customs Tariff Act, 1975 was preceded by the Indian Tariff Act, 1934. Section 2A of the Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs and the matter was discussed in a conference of the Chief Commissioners of Customs on Tariff and allied matters held in May, 2011. The discussion and the decision taken in the conference was communicated vide Circular No. 9/2012-Cus dated 23-3-2012. The circular reads as follows:- Subject:- Applicability of exemption under Sr. No.4 of the Notification 4/2006-CE dated 1-3-06 on import of Ore Concentrates Regarding. Doubts have been raised whether on imports of Ore Concentrates classifiable under Chapter 26 of the First Schedule to the Customs Tariff Act, 1975, the benefit that is admissible to Ore under serial number 4 of the Notification No. 4/2006-CE dated 1-3-2006 can be granted to the Concentrateof that Ore. The issue was taken up for discussion during the Conference of Chief Commissioners of Customs on Tariff and allied matters held in May 2011. 2. The matter related to: a) whether the term Ore includes Concentrate, and b) whether insertion of Chapter Note 4 in the Chapter 26 will have any impact on the admissibility of notification benefit to Concentrates, was examined. The Conference noted the HS definitions of Ore and Concentrate are as follows: The term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interpretation that courts in construing a statue will give much weight to the interpretation put upon, it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it. 6.4 In the case of Collector of Central Excise, Guntur vs. Andhra Sugar Ltd. 1988 (38) ELT 564 (SC), the honble apex Court re-iterated the same as follows: It is well settled that the meaning ascribed by the authority issuing the Notification, is a good guide of a contemporaneous exposition of the position of law. Reference may be made to the observations of this Court in K.P. Varghese v. The Income Tax Officer, Ernakulam, [1982] 1 SCR 629. It is a well settled principle of interpretation that courts in construing a Statute will give much weight to the interpretation put upon it at the time of its enactment and since, by those whose duty has been to construe, execute and apply the same enactment. Thus even applying the principles of contemporaneous exposition and administrative construction, the imported concentrates will not be eligible for CVD exemption under notification No. 4/2006-CE. 6.5An argument has been advanced stating that since the appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant claimed classification under Item 26, Revenue chose to classify the goods under Item 87. The honble apex court held as follows:- 8.It is common ground that the wolfram ore which was imported by the appellants were never subjected to any process of roasting or treatment with chemicals to remove the impurities. It thus remained wolfram ore concentrate containing 65% WO3 which was of the merchantable quality and was known commercially as such and imported as ore. Apart from all this it must be remembered that in interpreting Items in Taxing statutes resort should be had not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in their commercial sense. There can, therefore, be no manner of doubt that the goods imported by the appellants fell within Item 26 of the Import Tariff and no duty was leviable on them. The appellants were entitled to the refund of the amounts which were paid by them by way of duty.. This decision of the honble apex Court was followed by this Tribunal in the case Hindustan Gas Industries Ltd. and Electro Ferro Alloys Pvt. Ltd. while considering CVD exemption to molybdenum concentrate for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Standard Pencils vs. Collector of Central Excise, Madras (supra) relating to classification of kumkum, this decision is also not relevant. The tariff in the case of kumkum did not differentiate between various varieties of kumkum and hence it was held that all varieties of kumkum will be eligible for the duty exemption. As noted earlier, in the case of ores and concentrates, the tariff recognizes their distinct identities and the conversion of ore to concentrate also amounts to manufacture. Therefore to compare the present case with the kumkum case is akin to comparing chalk with cheese. The appellant has also relied on a decision of the apex court in the case of Laminated Packaging (P) Ltd. [1990 (49) ELT 326 (SC)]. The issue for decision in the said case was whether lamination of kraft paper with polyethylene would amount to manufacture since both the products fell under the same entry and the honble court held that the process amounts to manufacture and the appellant is liable to pay excise duty and the ground urged that both the products fell in the same entry is not relevant. We do not understand how this decision can help the case of the appellant. On the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re filed during 6-4-2011 to 6-9-2011 in respect of the previous imports and the show cause notice was issued on 9-3-2012, that is, within a period of one year. Thus the notice for recovery of duty has been issued within the normal period of limitation and therefore, the question of time bar does not arise. Thus in the present case, as the goods under import are molybdenum ore concentrate and not molybdenum ore, as revealed by the test reports and as admitted by the appellant, the appellant is not eligible for CVD exemption under notification No. 4/2006-CE. Thus the entire demand of duty, that is, ₹ 66,61,664/- in respect of B/E s 4551981 dated 5-9-11 and 4567406 dated 6-9-11 and ₹ 3,10,73,035/- in respect of 14 bills of entry for the earlier imports during April to July, 2011 is sustainable in law and we hold accordingly. Once the duty demand is sustainable, the demand for interest thereon is automatic and consequential and therefore, we uphold the demand for interest as well. 7.5 The last issue for consideration is whether in the facts and circumstances of the case, confiscation of the impugned goods with an option to redeem the same on payment of fine and impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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