TMI Blog2009 (2) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Respondent is engaged in the business of textile and manufacturing of textile goods, viz., Dystar Indigo VAT 40 per cent SOL/Indigo Powder 90 per cent Wettable. The said imported goods fell under Tariff Heading 32041559. Additional Duty (CVD) was charged on the assessable value of the goods purported to be in terms of Section 3 of the Customs Tariff Act, 1975 (for short "the Act"). Urging that no excise duty was payable on the said goods in view of the notification dated 1.03.2006, the respondent preferred appeals aggrieved thereby. The said contention was upheld. Appellant approached the Tribunal thereagainst. The said appeal, by reason of the impugned judgment, has been dismissed. 3. Mr. Harish Chandra, learned senior counsel appearing on behalf of the appellant, submitted that :- (i) The appellate authority as also the Tribunal committed a serious error in passing the impugned judgment insofar as they failed to take into consideration that an exemption notification should be construed strictly. (ii) An assessee would be entitled to the benefit of an exemption notification only in the event the conditions precedent therefor are satisfied. (iii) As the raw material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able at different rates, the highest duty." 8. The notification dated 1.03.2006, interpretation whereof falls for our decision, reads, thus: "In exercise of the powers conferred by Sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table below......... as are given in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions specified in the Annexure to this notification, and the Condition number of which is referred to in the corresponding entry in column (5) of the Table aforesaid. …....... Table S. No. Chapter or heading or sub-heading or tariff item of the first schedule Description of excisable goods Rate Condition No. (1) (2) (3) (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual production or manufacture in the said factory itself. There cannot be any doubt whatsoever that if excise duty is not leviable on manufacture of goods, the question of the importer paying any additional duty for import of like goods would not arise. That is principally the question which fell for determination in Thermax Private Ltd. (supra) and answered in the following terms: "6. It is common ground that customs duty is payable and has been paid on the imported goods under customs tariff Item No. 84.17(1) at 40 per cent of the value of the imported goods plus a surcharge of 25 per cent thereon. The rate of CVD, however has to be determined on the basis of Item No. 29-A of the central excise tariff. It is common ground that "chillers" fall under sub-item (3) of Item No. 29-A and that 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. *** *** *** 9. The assessee's claim for concession has, however, been rejected not on the ground that the second of the above conditions has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms but is a countervailing duty." 16. A Bench of the Delhi High Court in Plastic Processors v. Union of India [2002 (143) E.L.T. 521] opined:- "8. As observed in the aforesaid quoted portions by the Apex Court, for the purpose of attracting additional duty under Section 3 of the Tariff Act, on the import of a manufactured or produced article, the actual manufacture or production of a like article in India is not necessary. Said provision specifically mandates that CVD will be equal to the excise duty for the time being livable on a like article if produced or manufactured in India. This position was also elaborated in Thermax Private Limited case (supra)." The special leave petition thereagainst was dismissed by this Court stating: "These Appeals can be disposed of by this common order. Civil Appeal Nos.2578-2583 of 2001 are against the order passed by the High Court of Delhi dated 12 th September, 2000 whereas Civil Appeal No.91 of 2002 is against the order dated 12 th June, 2001 passed by the Customs, Excise Gold (Control) Appellate Tribunal, (in short "CEGAT") New Delhi. The short question involved in these Appeals is regarding the validity of Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty was paid by the appellant at the time of import of waste or scrap. Mere fact that the goods were imported would not make any difference. The intention behind the grant of exemption under the notification was to prevent the duty being paid at two stages." We may notice the relevant extract of the notification dated 23.07.1996 in Lohia Sheet Products (supra), which reads as under: "Reference No. Chapter Heading No. or Subheading No. Description of goods Rate (1) (2) (3) (4) 74.04 Copper waste and scrap used within the factory of production for the manufacture of unrefined or unwrought copper, copper sheets or circles and handicrafts. Nil" 18. A large number of decisions have been cited by Mr. Harish Chandra to show that the exemption notification must be strictly construed. We may, however, notice only a few of them. 19. In Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders [2004 (165) E.L.T. 481 = (2004) 11 SCC 801], it was held: "6. The Tribunal had also held that under the notification the use must be of "such brand name". The Tribunal has held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by reason of "normal use" of the drug. The words "normal use" indicate the possible use whereas the expression "used as such" indicates the actual use." (Emphasis added) Thus, these decisions militate against the submission that the goods must be manufactured in the factory. 20. We, as noticed hereinbefore, have no quarrel with the proposition that exemption notification should be construed strictly which means that benefit thereof should not be granted to one, who is not entitled therefor. But it is also true that those who are entitled to the benefit cannot be deprived therefrom by taking recourse to the doctrine of narrow interpretation simplicitor, although the purpose and object thereof would be defeated thereby. In Kartar Rolling Mills v. Commissioner of Central Excise, New Delhi [2006 (197) E.L.T. 151 = (2006) 4 SCC 772], this Court held: "…It is trite to say that exemption notification has to be construed strictly. Since the notification came into effect from 11-4-1994, the benefit of the notification cannot be extended to the appellants retrospectively w.e.f. 1-3-1994." In Eagle Flask Industries Ltd. v. Commissioner of Central Excise, Pune [2004 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice bran oil in the process of manufacture of soap in preference to various other kinds of oil (mainly edible oils) used in such manufacture and this should not be defeated by an unduly narrow interpretation of the language of the notification even when it is clear that rice bran oil can be used for manufacture of soap only after its conversion into fatty acid or hydrogenated oil." 21. Contention of Mr. Harish Chandra that the decision of Thermax Private Ltd. (supra) on the point urged before us has been doubted is not correct. In Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal [2005 (188) E.L.T. 353], upon taking into consideration various rules and in particular Rule 192 of the Central Excise Rules, 1944, this Court pointed out that conceptually there is a difference between short payment that arises from non-levy or any mistake on the levy, on the one hand, and the short payment arising out of the failure of the buyer/ user of the goods to account for them, on the other. The court opined that the responsibility for the payment of duty on the goods cleared under concession/ exemption having been transferred, it was obligatory on the person wishing to o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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