TMI Blog2023 (3) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... he importer admits that the goods imported required in the process of manufacturing copper. They admit that they are not involved in manufacturing fertilizer nor holder of any license to manufacture fertilizers. At the time of import, they declared that the goods is covered under Tariff 25101010 and the name of the product is natural calcium Phosphate . It is admitted by the importer that no permission obtained under FCO, since the product 'rock phosphate' imported does not require such permission being not within the specification for rock phosphate to be qualified as 'fertiliser' under FCO. It is well settled principle of law that in case of exemptions, law should be strictly interpreted and liberal interpretation detrimental to revenue is not advocated. In the present case, the impugned order due to the infirmities noted has caused injury to the revenue hence to be redressed. The order of the Customes Department declining to grant SAD exemption is upheld - Appeal allowed. - THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN And THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN For the Appellants : Mr.N.Dilipkumar For the Respondent : Mr.V.Raghavachari Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing imported, it is the duty of the importer as per Clause 35 (4) of the Fertilizer Control Order (FCO) to inform the Director of Agriculture of the State in which he intends to discharge the imported fertilizer, with intimation to Central Government, before the import is made or within a period of 15 days after the intend for import is placed. Further the importer should also specify whether the product is for sale or for its own consumption. Since, M/s.Sterlite Industries(I) Ltd., has not informed about the import of Rock Phosphate (fertilizer grade) from Egypt, the cargo may not be of Rock Phosphate fertilizer grade, proceed to treat the product imported without exemption from collecting CAD. 2.4. For the import of 84000 MT Rock Phosphate from Egypt during the period April to August 2012, the Customs Department levied Custom duty as below :- Sl. No In-Bond Bill of Entry No. Date Qty (In MT) Ex-Bond Bill of Entry No. Date Qty (In MT) Ass.Value (in Rs.) Rate of Duty Total Duty Paid 1 66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax regime. 3. According to the appellant, Tariff Head Chapter 25 deals with mineral products. The import of Natural calcium phosphate as No: 2510 attracts 5% standard custom duty. Whereas Chapter 31 deals with fertilizers. The import of Mineral or chemical fertilizer, phosphate as No: 3103 attracts 10% Standard Custom Duty. The importer after declaring the goods as minerals under Chapter 25 Heading 25101010 for paying lesser Basic Customs Duty, now claims the product should be treated as fertilizer under Chapter 31 for the sake of CAD exemption. This request cannot legally sustain. If the importer claims that rock phosphate imported by him is used for manufacturing fertilizers, then should have got permission from the authorities mentioned in Clause 35(4) of Fertilzer Control Order. Without permission under Fertiliser Control Order, the importer has cleared the goods claiming it as mineral under custom tariff head 2510, after import turn around and claim it is fertilizer falling under Chapter 31. This has to be viewed as smuggling a goods by making false or misdeclaration. The Learned Single Judge failed to see the modus operandi conceived by the importer to wrongfully evade dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .25mm IS-sieve. The Rock Phosphate imported by the respondent in the form of pebbles, which admittedly do not meet with the size specification set out in the Fertiliser Control Order, 1985, consequently, the said Fertiliser Control Order, 1985 does not apply to the imports in question. Also clause 22(b) of the Fertiliser Control Order, 1985 stipulates that notwithstanding anything contained in the said order, a manufacturer/importer may sell the fertilizer manufactured/ imported by him in bulk to a manufacture of mixture of fertiliser, compounds/complex fertilizers or special mixture of fertilizers. It was contended that since Rock Phosphate, which is a fertilizer, was imported in bulk and was used to manufacture of Phosphoric Acid, which in turn was sold to manufacturers of fertilisers, the import of Rock Phosphate was covered under the clause 22(b) of the Fertiliser Control Order, 1985. As a consequence, the rigours of the Fertiliser Control Order,1985, were inapplicable to import of such Rock Phosphate. 8. It is also contended, that under the exemption notification 12/2012 while in serial No:202, there is reference about the FCO, no such reference is found in serial No: 48, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is necessary in the public interest so to do, exempt the goods of the description specified in column (3) of the Table and falling within the Chapter, heading, sub- heading or tariff item of the First Schedule of the Customs Tariff Act, 1975 as are specified in the corresponding entry in column (2) of the table, when imported into India from so much of duty of customs leviable thereon under the First Schedule as in excess of the amount calculated at the Standard Rate specified in the corresponding entry in Column (4) of the Table, from so much of additional duty leviable under Section 3(1) of the Custom Tariff Act, 1975 as in excess of the additional duty rate specified in the corresponding entry in column (5) of the Table, subject to any of the condition, specified in the Annexure to the notification. 12. In other words, goods mentioned in column (3) relatable to chapter, heading etc., mentioned in column (2) shall be entitle for exemption from additional custom duty spelt out in column (5). Such exemption is subject to the conditions which is referred in column (6). While column (4) specifies the Standard rate of duty, column (5) specifies the Additional rate of duty and colu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred is prior to the notification 12/2012 dated 17.03.2012. The grant of exemption based on the terms found in earlier notification and mere declaring 'rock phosphate' a fertiliser in the said context, cannot be perpetually applied even after the earlier exemption supersede. We are bound to test the decision of granting exemption or refusal to grant exemption in the light of the notification in force. Further, granting exemption from levy of duty is an executive order subject to judicial review. Court cannot fail to note that when a class of goods is exempted from levy of Special Additional Duty, the purpose for which such exemption granted also matters. In the instant case, exemption from SAD is granted for import of fertilizer or raw materials for fertilizers since the Government had satisfied that it is necessary in the interest of public. What the public interest is not difficult to infer and obvious. It is duty of the Court to ensure the concession given for a targeted group not abused. 17. By exempting Special Additional Duty on fertiliser or raw material used for manufacturing fertilizers, the end user namely the farmers will be getting the benefit of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... colourable request. b) The earlier order of CESTAT , ought not to have been weighed the learned Single Judge mind, since it was delivered based on a different exemption notification, much prior to the notification under consideration. The case of the importer ought to have been considered in the light of the current notification, the declared intention of the importer and usage of the goods imported. c) The end use may not be the fertilizer, but at least the substantive portion of the goods imported ought to have been used as fertilizer. The exemption for entire goods imported for a different purpose cannot be granted duty exemption on the hypothetical claim that a portion of the goods imported also used for manufacturing fertilizer. d) The notes attached to Chapter 31 of the First Schedule while clearly indicate that natural phosphate of heading 2510 , calcined or further heat treated than for the removal of impurities alone is entitle for exemption from SAD, the importer having claimed that the goods he imported falls under heading 2510, cannot get the benefit of concession without satisfying the conditions mentioned above in the notes. e) The case of duty exemption i ..... 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