TMI Blog2021 (5) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... he correctness of the order passed by the Adjudicating Authority qua the applicability of the Circular, which explains the intention of the Notification. The Tribunal found fault with the Adjudicating Authority in not granting relief in respect of the imports after 11.07.2014 and while granting the relief to the assessees proceeded on the basis that the earlier Notification No.56/1998 required the imported goods to be sold as such and it had a more stringent condition and there is no such requirement in the Notification No.102/2007 - this finding prima facie appears to be not sustainable as the issue whether the Notification No. 102/2007 was in supersession of Notification No.56/1998 was required to be considered and decided. From the reply given by the assessees to the show cause notice, dated 01.10.2015, it appears that the assessees did not raise the plea that the Notification No.102/2007 was in supersession of the earlier Notification nor there was any argument made by the assessees with regard to the effect of the Circular No.34/2010-Customs, dated 15.09.2010. Thus the matters requires to be re-examined, for which purpose, we are inclined to remand the matter back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties shall be referred to as the Revenue and Assessees . 6. The writ petitions were filed by the assessees praying for issuance of a writ of certiorarified mandamus to quash the order in original dated 29.12.2016 and to direct the Revenue to sanction refund as claimed by the assessees. 7. The order impugned in C.M.A.(MD) No.687 of 2019 is in an appeal, passed by the Tribunal, which accepted the stand taken by the assessees and held that the assessees are entitled to refund of Special Additional Duty of Customs (in short, SAD) and set aside the order passed by the original Authority, namely, Commissioner of Customs, Tuticorin, dated 29.02.2016. 8. We take up the facts, which are subject matter of C.M.A.(MD) No.687 of 2019 and the case of the assesses therein, as the lead case. 9. The assessees imported Latex Gloves in bulk and filed bills of entry for clearance of those goods, which after clearance were packed in pouches, after undergoing a process of sterlization and were sold in the retail markt with the brand name. The assessee filed applications for refund of SAD paid by them by relying on a Notification No.102/2007-Cus, dated 14.09.2007. The origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Further, it was submitted that the notification as amended uses the words subsequent sale , which means the product imported must be resold and it does not state that the goods imported cannot undergo any packing, relabelling etc., before it is subsequently sold. The goods imported are medical examination gloves or surgical gloves and they sell the same as medical examination gloves or surgical gloves, even though they may be packed and sterilized and if the pouch is opened, it will become non-sterile reverting back to the condition at the time of import and hence, the sterilization process of the gloves, which is undertaken, does not result in a different product, what was imported by the assessees is not raw material, but it is a finished product, which they pack and sell or pack, sterile and sell and resell, which meets the requirements as per Notification No.102/2007 as amended. 13. The assessees placed reliance on the decision in the case of Commissioner of Customs vs. Variety Lumbers Pvt. Ltd., [2014 (302) ELT 519 (Guj.) ; the decision of the Delhi Tribunal in Commissioner of Customs, Amritsar vs. Hero Exports 2013 (298) ELT 410 (Tri-Del.) , Agarwalla Timbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acked, relabelled and sterilized and sold subsequently by the assessees with effect from 11.07.2014, have to be treated as goods, which are deemed to be different from what was imported. With regard to the goods imported and sold prior to 11.07.2014, relief was granted to the assessees. Accordingly, partial relief was granted to the assessees in respect of the imports effected prior to 11.07.2014 and the imports subsequent thereto were denied relief. The proposal to impose penalty under Section 117 of the Customs Act was held to be not justified. 20. The assessees challenged the order passed by the Commissioner of Customs by filing appeal before the Tribunal. The Tribunal first took up the issue regarding whether the process undertaken by the assessees amounts to manufacture or not in the ordinary sense. It took note of the decision in the case of M/s.Servo Med Industries Pvt. Ltd. (supra), wherein it was held that process of sterilization does not amount to manufacture. Further, it was held that the process does not convert the gloves to any other product than the gloves except that they are sterilized, which is not a lasting character and when the gloves are opened from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout being subjected to any further process before being put for retail sale. 24. It is further submitted that exemption is given only if the importer fulfills the conditions specified in the Notification and one such condition being the imported goods sold as imported goods without being subjected to any further process, which amounts to manufacture. Repacking, relabelling etc., shall amount to manufacture and the imported goods no more remain the imported goods as required under the Clauses 2(d), 2(e)(ii) of the Notification No.102/2007 and therefore, the order of the Tribunal is incorrect. 25. Further, it is submitted that the assessees have not fulfilled the condition 2(d) of the Notification, inasmuch as the goods have been subjected to the process, which amounted to manufacture. In terms of Section 2(f)(iii) of the Central Excise Act, 1944, packing, repacking, labelling, relabelling, MRP declaration / alteration or treatment of goods rendering them marketable ones shall amount to manufacture. In such situation, as per the condition specified in Notification No.102/2007, the words such goods in clause 2(d) and imported goods in clause 2(e)(ii) implies that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods as imported. Hence, manufacturing activities carried out by the assessees, on the imported goods, render the goods to be sold different from that which was imported subsequently, consequently, the conditions stipulated in Notification No. 102/2007 are not fulfilled. 30. Further, it is submitted that in CBEC Circular No.34/2010- Cus, dated 15.09.2010 emphasis has been laid for the sale of goods as such to be eligible for the benefit of exemption from SAD provided under the Notification No.102/2007. 31. It is further submitted that Notification No.102/2007 is independent and it is not an amending notification to the earlier notification and the observations of the Tribunal that the words as such have been omitted is not correct as it gives a different meaning. It is further submitted that merely because the words as such are not found place, it does not mean that the assessees can claim refund as Special CVD on sale of goods, other than the imported goods or any other goods manufactured out of the imported goods which is not the interntion of the legislature. In this regard, the learned counsel has invited out attention to Circular No.34/2010-Customs, dated 15.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main as same commodity and consequently, the definition of deemed manufacture with effect from 11.07.2014 is not applicable and allowed the writ petitions. The learned counsel appearing for the assessees / writ petitioners submitted that the reasons assigned by the learned Writ Court are valid and prayed for sustaining the said order. 35. Mr.B.Vijay Karthikeyan, learned counsel appearing for the Revenue, submitted that the writ petitions ought to have been dismissed as not maintainable, since the assessees had an avenue of appeal before the Commissioner (Appeals), Trichy, which is to be filed within 60 days from the date of communication of the order and if aggrieved, further appeal to the Tribunal and the writ petitions were filed nearly three years after the order in original was passed and the same is not maintainable. In support of such contention, the learned counsel placed reliance on the decision in the case of Raj Kumar Shiv Hare vs. Directorate of Enforcement [(2010) 4 SCC 772] . 36. Further, it is submitted that though it was brought to the notice of the Writ Court about the pendency of the civil miscellaneous appeal, the Court ought to have awaited the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n can never be disputed by the assessees and therefore, the explanation offered by them that they submitted representations to the Assistant Commissioner of Customs to reconsider his earlier order based on the order passed by the Tribunal is an argument, which needs to be outrightly rejected. If that is so, the resultant consequence would be to hold that the writ petitions are not maintainable. 41. Furthermore, as held by the Honourable Supreme Court in the case of Raj Kumar Shiv Hare (supra), a writ petition will not be entertained ignoring when statutory forum created by law for redressal of grievance, particularly, in a fiscal statute is available and statutory provisioins get defeated if writ petition allowed to be filed despite existence of efficacious remedy of appeal under the statute. Furthermore, the writ petitions were filed three years after the order in original was passed. Therefore, the learned Writ Court ought not to have entertained the writ petitions and adjudicated the correctness of the order in original. Therefore, we have to necessarily allow the writ appeals filed by the Revenue and set aside the orders passed in the writ petitions, consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reads as follows: Special CVD is one of the duties specified under sub-rule (1) of rule 3 of the CENVAT Credit Rules, 2004. Credit of this duty, when paid on inputs (imported) used in or in or in relation to the manufacture of excisable goods, is available. This credit can be used for payment of duty on the final product. Hence, a textile manufacturer who opts to pay excise duty on his final produce can avail of CENVAT credit of 4% Special CVD paid on his inputs. But, this benefit obviously cannot be extended to a manufacturer who opts to avail of full exemption (and hence not pay excise duty) on his final product. Further, if the imported inputs on which 4% Special CVD has been paid are used by such a manufacturer for the manufacture of final products, the benefit of exemption (by way of refund) under Notification No.102/2007-Customs, dated 14th September, 2007 would also not be available. This is because the condition regarding payment of State VAT on imported inputs cannot be fulfilled in this situation where inputs are consumed and not sold as such. 46. The effect of Circular No.34/2010 has not been considered by the Tribunal. The learned Senior Standing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order in original No.1/2016, dated 19.04.2016, which is to be set aside and the matter to be remanded back to the file of the Commissioner of Customs for fresh decision. In such circumstances, we are of the considered view that the writ petitioners should not be left without any remedy and since we are remanding the matter back to the file of the Commissioner of Customs for reconsideration, after setting aside the order passed by the Tribunal, we deem it appropriate that the orders passed by the Assistant Commissioner of Customers rejecting the refund applications are required to be set aside and the refund applications should stand restored to the file of the Assistant Commissioner of Customs to be taken up for fresh consideration after the Commissioner of Customs completes de novo adjudication based on the order of remand in this appeal. (i) C.M.A.(MD) No.687 of 2019 is allowed and for the reasons assigned by us, the order passed by the Tribunal and the order in original No.1/2016, dated 19.04.2016, is set aside and the matter is remanded to the Commissioner of Customs, Tuticorin, to consider the issue afresh, after affording opportunity to the assessees. The substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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