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Aidek Tourism Services Pvt. Ltd. Versus Commissioner of Customs, New Delhi

2015 (3) TMI 690 - SUPREME COURT

Eligibility for concessional rate of additional duty - Notification No. 64/93-CE - Refund filed on import of Honda Accord car which was manufactured abroad - In this refund claim the assessee sought refund of 10% of total CVD - Held that:- levy under Section 3 of the Tariff Act is in the nature of a countervailing duty and is with a view to levy additional duty on an import to counter balance the excise duty payable on a like article indigenously manufactured. The Court also adverted to the scop .....

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xemption notification issued under Rule 8 of the Rules, which was the position in Thermax Private Limited (1992 (8) TMI 156 - SUPREME COURT OF INDIA) as well, for the purpose of extending benefit of concession contained in Notification No. 64/93-CE, the principle in Thermax Private Limited (1992 (8) TMI 156 - SUPREME COURT OF INDIA) would clearly become applicable. We may point out that a specific query was put to the learned counsel for the Revenue to the effect that if the importer is not deem .....

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o extend benefits to the importers of saloon cars to use the said cars for tourist taxis. Going by the spirit and the objective behind this Notification, the irresistible conclusion would be to apply the principle of Thermax Private Limited (1992 (8) TMI 156 - SUPREME COURT OF INDIA) in the present case as well. - assessee shall be entitled to refund of 10% CVD paid by him - Decided in favour of assessee. - Civil Appeal No. 2616 of 2001, Civil Appeal Nos. 7786-7787 of 2001, Civil Appeal No. 2271 .....

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h at Mumbai of the Customs, Excise and Signature Not Verified Gold (Control) Appellate Tribunal (for short, 'CEGAT') and they have given conflicting opinions. Insofar as Mumbai Bench of CEGAT is concerned, it has decided the issue in favour of the assessee. However, the Delhi Bench, while taking a contrary view, which is in favour of the Revenue, has not agreed with the Mumbai Bench of CEGAT for the reasons mentioned therein, which shall be noted at the appropriate stage. 2) The issue re .....

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10% of total CVD. The refund claim of the assessee was rejected. Questioning the veracity of this decision of the Assistant Commissioner of Customs, Refund Department, Mumbai, as well as Delhi, the assessee approached the Commissioner (Appeals) at both the places. The Commissioner (Appeals) in Mumbai allowed the appeal of the assessee and granted the benefit of the aforesaid Notification with a direction to the lower authority to sanction the refund to the assessee as claimed. Against this orde .....

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of CEGAT, however, dismissed the appeal of the assessee vide orders dated January 08, 2001. Against these orders it is the assessee which has filed the appeals. 4) These are the reasons to hear all the appeals analogously as the question of law raised by the Revenue as well as the assessee is common. 5) Before we advert to the view taken by the two respective Benches of CEGAT, it would be apposite to take stock of few facts which led to the controversy in issue, along with terms of Notification .....

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.2.1993 as amended by No. 11/94-C.E. dated 1.3.1994: In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise and Salt Act, 1944 (1 of 1944), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under heading No.87.03 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from so much of the duty of excise leviable thereon which is specified in the said Schedule as is in excess .....

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ant Collector of Central Excise a certificate from an officer authorised by the concerned State Transport Authority in this behalf to the effect that such saloon car has been for use solely as a taxi, within three months of the date of clearance of the said saloon car from the factory of manufacture or such extended period as the said Assistant Collector may allow; (iii) the manufacturer had not collected from the person in whose name such saloon car has been registered as a taxi, or in a case h .....

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s the 'Tariff Act'), which is in excess of the amount calculated @ 40% ad valorem. Under Heading 87.03, various kinds of goods are mentioned. However, proviso to this Notification gives exemption of duty of 10% CVD in respect of particular goods, namely, saloon cars, if such saloon cars are used solely as taxis. It is subject to four conditions mentioned in the proviso. 8) Pertinently, this proviso mentions that the entitlement of further exemption of duty of 10% is admissible to 'th .....

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facturer of the said saloon car. This is the short issue that needs determination. 9) Before adverting to the respective arguments of the learned counsel for the Revenue as well as the assessee, we deem it proper to state the reasons given by the two Benches of CEGAT, rendering opposite decisions. In fact, as we take notice of these orders, it would become apparent as to how the two Benches have perceived the language of the same Notification, in the light of the same judgments, differently, and .....

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a & Ors. (1999) 5 SCC 15 and Collector of Central Excise, Jaipur v. J.K. Synthetics (2000) 10 SCC 393 , treating the importer as the manufacturer of such goods for the purpose of giving benefit of such Notification. Reliance was also placed on the judgment of this case in Thermax Private Limited v. Collector of Customs (Bombay), New Customs House (1992) 4 SCC 440 . The Mumbai Bench of CEGAT relied upon and extracted from the judgment of this Court in Thermax Private Limited (supra) and accep .....

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o of the said judgments could not be stretched to hold that the importer is to be treated as a manufacturer for the purpose of Notification No. 64/93-CE, which extends further concession of 10% only to the manufacturers. 11) From the aforesaid, it is clear that the entire case hinges upon the ratio laid down in Thermax Private Limited (supra) and followed in Hyderabad Industries Ltd. (supra) as well as in J.K. Synthetics (supra). 12) In Thermax Private Limited (supra), the facts were that the as .....

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additional duty had to be determined on the basis of Item 29-A(3) of the Central Excise Tariff and the basic excise duty payable thereon was at 80 per cent of the value of the goods under the above item read with Notification No. 42 of 1984/C.E. dated March 1, 1984. However, Notifications (No. 93 of 1976/CE and 63 of 1985/CE) provided a further concession of 25 per cent ad valorem provided conditions set out therein was fulfilled. There was no dispute that the assessee was fulfilling other condi .....

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s. Rule 192 in the said Chapter provides that benefit under this Chapter would be claimed by a manufacturer. The primary reason for rejection of concessional duty, therefore, was that the assessee in the said case as importer of goods was not a manufacturer. In this context, the issue arose as to whether assessee could be treated as a manufacturer for the purpose of availing the concession under the Rules. The Court answered the aforesaid question in the affirmative deeming the importer as the m .....

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uty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation. - In this section, the expression 'the excise duty for the time being leviable on a like article if produced or manufactured in India' means the excise duty for .....

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factured in India. However, it is a matter of common knowledge that Notifications of exemptions have been issued by the Excise Department from time to time under Rule 8(1) of the Rules, in the case of imported goods, for determining the leviability of additional duty under Section 3(1) of the Act. In that case, Notification No. 93/1976 was issued under Rule 8 of the aforesaid Rules, which provides for a concession of 25% ad valorem, as already noted above. As per this Notification, one of the co .....

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er the concession notification, the importer shall be treated as manufacturer. The Court gave the following rationale for holding so: "10...The benefit of Chapter X will no doubt generally be claimed by a manufacturer in which event he will have to make the application, get the licence and give the assurances, bond or guarantee required by the Rules but it can also be claimed by other persons. The language of the Rule applies to any person, not necessarily a manufacturer, wishing to obtain .....

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he notifications under our consideration, there are many and varied. In respect of items falling under serial 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 instance, any computer room, hospital or factory purchasing parts of refrigerating and air-conditioning appliances and machinery for use in the computer room, .....

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aser from him who puts the goods to the specified use (whether a manufacturer or not) fulfils the requirements of Rule 192. Since the concession under Rule 192 turns only on the nature and use to which the goods ar eput by the user or purchaser thereof and on whether he has gone through the procedure outlined in Chapter X, it would not be correct to deny it to a supplier of such goods on the ground that he is an importer and not a manufacturer. That aspect is provided for by Section 3(1) of C.T. .....

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D should only be the amount of concessional duty and, if he has paid more, will be entitled to ask for a refund. In our opinion, the Tribunal was in error in holding that the assessees could not get a refund because the procedure of Chapter X of the Rules is inapplicable to importers as such. (emphasis supplied)" 15) The ratio of the aforesaid judgment in Thermax Private Limited (supra) was relied upon by this Court in Hyderabad Industries Ltd. (supra) while interpreting Section 3(1) of the .....

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rgeable under Section 3(1) would be the excise duty for the time being leviable on a like article if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation is tht the article is produced or manufactured in India. The second limb to the explanation deals with the situation where 'a like article is not so produced or manufactured'. The use of the word 'so' implies that the production or manufacture referred to in .....

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uced in India. For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary. For quantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon. It is thus clear from the reading of this judgment that the Court held that the .....

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1 of the Report) "The words "if produced or manufactured in India" do not mean that the like article should be actually produced or manufactured in India. As per the explanation if an imported article is one which has been manufactured or produced then it must be presumed, for the purpose of Section 3(1), that such an article can likewise be manufactured or produced in India. For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced .....

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uty for the time being leviable on a like article if produced or manufactured in India. In other words, we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of excise duty that he would have been called upon to pay in that event". To our mind the genesis of Section 3(1) of the Customs Tariff Act has been brought out in the aforesaid observations of this Court, namely, that for the purpose of saying what amount, .....

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C 735 In fact, in Lohia Sheets and Malwa Industries cases (supra), this Court was considering exemption notifications envisaging use of certain material within a "factory" and still held that an importer would be entitled to the benefit of the exemption notifications in view of Section 3 of the Tariff Act and the decisions in Hyderabad Industries and Thermal cases. As such, it is now settled that the rate of duty would be only that which an Indian manufacturer would pay under the Excis .....

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ntained in Thermax Private Limited (supra) as well as in J.K. Synthetics (supra) and referred the matter to a larger Bench. Reference order is reported as (2005) 8 SCC 164. The Constitution Bench decided the said case, which is reported as (2011) 1 SCC 236. From the reading of para 39 to 41 of the said judgment it becomes clear that though these cases were held not applicable to the fact situation and were distinguished, the Court did not say that the aforesaid judgments were incorrectly decided .....

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