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TMI Blog2017 (5) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... s is levied as a duty of excise on all rubber produced in India, and it is to be collected by Rubber Board. Whereas, the additional Customs duty is leviable under Section 3(1) of Customs Tariff Act, 1975. This section authorizes for collection of duty equal to the Excise duty leviable on a like article if produced or manufactured in India. The Cess is levied only under Rubber Act, 1947 and is to be collected only by Rubber Board. Appellants were of the view that they are not liable to pay cess on imported rubber and hence filed refund applications. The adjudicating authority rejected the refund applications and the same was upheld by the Commissioner (Appeals). Hence this appeal. 2. The issue that poses for consideration in this case,is whether appellants are liable to pay at the time of import additional duty of customs under Section 3 (1) of Customs Tariff Act, 1975 equal to such duty of excise levied as cess under Rubber Act. 3. The said issue has a chequered history. The arguments put forward by both sides narrow down to the point whether the issue under consideration is covered by the judgement of Hon'ble Apex Court. On behalf of appellant, Ld. Counsel Sh. Karthick Sundaramh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 dated 08.10.1998 the Circular dated 30.06.1997 and 22.07.1997 were withdrawn. In view of this subsequent clarification from the Ministry, the Commissioner (Appeals) held that earlier decision of the Tribunal in MRF Ltd. (supra) was not applicable to the case. However, in appeal the Tribunal, held that the issue that was posing for consideration in the case was whether cess can be levied on imported rubber and not levy of CVD and therefore set aside the demand by following the judgment in MRF Ltd.(supra). It can therefore be discerned that while the adjudication of the Commissioner was on the precise issue of Additional duty of Customs (CVD) under Section 3 (1) of CTA, 1975 equal to cess levied under Rubber Act, 1947 (issue framed in para 5 (b) above), in appeal however, the Tribunal analysed the issue framed in para 5 (a) above. 6.3 At this juncture, for better appreciation, the said Circulars are noticed as under:- "F. No. 345/31/97-TRU Government of India Ministry of Finance Department of Revenue North Block, New Delhi 2nd September, 1997 To All Commissioners of Customs, Sir/Madam, Subject : Levy of additional duty of Customs equivalent in the amount of cess le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods an amount equivalent to the amount of cess leviable is levied as additional duty of Customs. For this purpose, what is required to be considered is whether under the relevant Act enabling levy of cess, cess is levied as a duty of excise. If the enabling legislation provides for levy and collection of cess as a duty of excise, then on imports corresponding amount of additional duty of customs becomes payable under Section 3 of the Customs Tariff Act, 1975. Accordingly, even though the Rubber Act, 1947 may not provide for collection of cess on imports, additional duty of Customs is payable on import of rubber by virtue of Section 3 ibid. 4. This issues with the approval of Chairman, CBEC. Yours faithfully, Sd/- Under Secretary to the Govt. of India. [Emphasis added] "Circular : 75/98-Cus., dated 8 Oct. 1998 Xxxx Cess on imported Rubber Circular No. 75/98-Cus., dated 8-10-98 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Cess on imported rubber. I am directed to refer to Board's letter of even number dated 22-7-1997 circulating Ministry of Commerce's O.M.No. 14(3)97 Plant (B), dated 30-6-1997 on the above subject (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ltd is quoted as under : "7. We have carefully considered the submissions made by both sides and notice that this Bench in the case of TTK LIG Ltd. has clearly held in the light of the earlier Tribunal order rendered in the case of M.M. Rubber Co. Ltd. by Final Order No.2547/98 dated 8.12.98 that CESS is not leviable under Section 12 of the Rubber Act in terms of M.F. (D.R.) circular dated 22.7.97 on the imported rubber. The said circular was withdrawn by another circular dated 8.10.98. A similar order was passed by the Bangalore Bench in the case of Vikrant Tyres Ltd. The matter had been referred to the Larger Bench and the Larger Bench headed by the Hon'ble President clearly held that the Apex Court had dismissed the revenue appeal filed against the order of the Vikrant Tyres and therefore the issue is concluded. The revenue again filed an application seeking modification/clarification of the Apex Court order. The Apex Court did not entertain I.A. No.31-45 in Civil Appeal Nos.1460-1474 of 2003 in the case of Commissioner of Customs, Chennai Vs. M/s. Vikrant Tyres Ltd. and dismissed the I.A. and held that we see no reason to modify/clarify our order dated 17th February, 2003 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Supreme Court Bench comprising Hon'ble Mr. Justice S.N. Variava and Hon'ble Mr. Justice H.K. Sema on 13-10-2003 dismissed the I.A. Nos.31-45 in Civil Appeal Nos. 1460-1474 of 2003 filed by Commissioner of Customs, Chennai against the CEGAT Order No.1761/2001-SRB, dated 29-11-2001(Vikrant Tyres Ltd. vs. Commissioner). While dismissing the I.As., the Supreme Court passed the following order:- "We see no reason to modify/clarify our order dated 17th February, 2003 [2003 (157) E.L.T. A134 (S.C.)]. I.A. Nos.31-45 stands dismissed. The Appellate Tribunal in its impugned order had held that cess under Section 12 of the Rubber Act read with Section 3 of Customs Tariff Act, 1975 is not leviable on the imported rubber as held by Tribunal earlier in the case of TTK Ltd. v. Collector [1999(111) E.L.T.52]. The Civil Appeal No.D19381 of 2002 was dismissed as not pressed on 17-2-2003 as reported in 2003 (157) E.L.T. A134 (S.C.)." 6.8 Thus it is seen that the Tribunal in the case of London Rubber Co.India Ltd. has in fact followed the judgment in the case of M.M. Rubber Co. Ltd. and Vikrant Tyres. Against the said order, the Revenue filed S.L.P (Civil) No.9312 to 9341/2004 before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in this section referred to as the additional duty) equal to the excise duty 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". The Explanation to the said Section 3(1) further says that the expression the excise duty for the time being leviable on a like article if produced or manufactured in Indiameans "the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India". The Hon'ble Tribunal failed to appreciate that Cess leviable on rubber manufactured in India under Section 12 (1) of the Rubber Act, 1947 is a part of the Central Excise Duty. Consequently, an equal amount is liable to be collected as Additional duty of Customs under Section 3 (1) of the Customs Tariff Act, 1975, on the rubber imported into India." 11. Against this, the contention of Ld. A.R, ShriVeerabhadra Reddy (J.C), appearing for Revenue is that in the case of London Rubber Co.India Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. 16. The confusion arose thereafter when the Tribunal, Chennai in a subsequent appeal filed by Vikrant TyresLtd. Vs. CC Chennai - 2007 (218) ELT 219 (Tri.-Chennai) did not follow the above judgement passed by the Larger Bench. Instead, the then Bench followed judgement passed in M.M. Rubber and Vikrant Tyres. The same Bench took a similar view in another appeal filed by TTK-LIG Ltd.Vs CC Chennai- 2008 (231) ELT 452 (Tri.-Chennai). 17. Though Revenue filed appeal against the said order passed by Tribunal in above case of Vikrant Tyres Ltd. Vs. CC Chennai 2007 (218) ELT 219 (Tri.-Chennai), the same was dismissed by the Hon'ble Apex Court on the ground of delay. 18. The earlier Bench of the Tribunal in para-2,3 of the above stated orders in which they have refused to follow judgment of the Larger Bench seem to have relied upon a judgement passed in the case of Vikrant Tyres which travelled upto the Hon'ble Apex Court. The said appeal in the case of Vikrant Tyres filed by Revenue was dismissed by Hon'ble Supreme Court being not pressed as already discussed. The earlier Bench of the Tribunal for this reason has relied upon the judgement passed in M.M. Rubber and Vikrant Tyres and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view taken by this Bench on the said issue in the case of M.M. Rubber Co. 3. The Apex Court's orders in the cases of Vikrant Tyres Ltd. and M.M. Rubber Co. were, apparently, not cited before the Tribunals Larger Bench. We have got to follow the view taken by the Apex Court in preference to that taken by the Tribunals Larger Bench. In the impugned order, learned Commissioner (Appeals) rejected the appellants claim for refund of an amount of Cess paid on imported rubber towards a demand raised under Section 3 of the Customs Tariff Act, by holding the view that the party was liable to pay such duty. Hence there was no occasion for the appellate authority to enter into any enquiry on the aspects of time-bar and unjust enrichment. Now that we have held that the appellants had no liability to pay any duty of the above kind in respect of the rubber imported by them, their refund claim requires to be examined in further detail. For this purpose, we set aside the orders of the lower authorities and remand the case to the original authority which shall examine the question whether the claim was filed in time as also whether it was hit by the bar of unjust enrichment. The party shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst CESTAT Final Order No.716/2008, dated 17-7-2008 as reported in 2008 (231) E.L.T. 452 (Tri.- Chennai) (TTK-LIG Ltd. v. Commissioner). While dismissing the appeal, the Supreme Court passed the following order : "Delay condoned. Since the amount involved is only Rs. 80,000/-, keeping the question of law open, Civil Appeal is dismissed." The Appellate Tribunal in its impugned order had held that demand on imported rubber under Section 3 of Customs Tariff Act, 1975 is not sustainable. [Commissioner v. TTK-LIG Ltd. - 2012 (277) E.L.T. A85 (S.C.)]" (emphasis supplied) We therefore are able to see that merely because the appeals filed by Revenue were dismissed by Hon'ble Supreme Court, the Tribunal has preferred not to follow the Larger Bench judgement. It can be clearly seen that appeals filed by Revenue were dismissed by the Hon'ble Supreme Court without going into the merits of the case. 20. It is also noteworthy to mention the fact that a co-ordinate Bench of the Tribunal at Bangalore in Ceat Ltd. Vs CC Cochin - 2007 (208) ELT 443 (Tri.-Bang.) had applied the judgment of the Larger Bench and held the issue in favour of Revenue. 21. From the above narration, it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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