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TMI Blog2007 (11) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... the used rails shall be classified as scrap under chapter heading 7204 as used rails cannot be used as such except as scrap. However, the classification made by the above referred circular was changed vide fresh Circular No. 8 of 2006 dated January 17, 2006, which is impugned in the present petition. It was clarified vide impugned circular that chapter heading 7204 would not cover used rails. It was further opined that the used rails will form part of chapter heading 7302 which specifically covers rails and as such include any used rails. 3. The waste and scrap falling under chapter heading 7204 is subjected to customs duty @ 5% and the rails falling under chapter heading 7302 are subjected to customs duty @ 12.5%. 4. According to the petitioner, the change was made, without any basis and reason therefor. It was further submitted that while issuing impugned Circular No. 8 of 2006, the authorities relied upon Section Note 8(a) to Section XV of the Customs Tariff Act, 1975, which clarified that waste and scrap shall be such goods which are not useable as such because of breakage, cutting up, wear or other reasons. Still further it is submitted that during 2002-2003, rails and par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the petitioner argued that once used rails had been classified under chapter heading 7204 treating the same to be a scrap, there was no good reason with the authorities for reviewing that decision and direct in the impugned circular that the used rails shall be covered under chapter heading 7302. The used rails imported by the petitioner is nothing but a scrap as the same had outlived its life. The same is used only for re-rolling and for no other similar purpose. Reliance has been placed upon the judgment of Madras Steel Re-rollers Association v. Union of India - 2007 (217) E.L.T. 167 (Mad.), where the same circular No. 8 of 2006 dated January 17, 2006 stood quashed. 8. On the other hand, Mr. Sanjeev Kaushik, Advocate, learned counsel for the respondents while reiterating the submissions made in the written statement contended that subsequent use of a product is no criteria to classify the same for the purpose of levy of customs duty at the time of import. Different persons importing the same material may use the same for different purposes. If that is the criteria there would be no uniformity in the levy of customs duty. All what has to be seen was as to what was the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in the form of rails, these bore markings of use and therefore these could not be used again as rails. Hence, suitable classification would be as scrap of CTH 72.04 and not as articles under heading 73.02. It has accordingly been decided by the Board that used steel rails for re-rolling were appropriately classifiable under CTC 72.04 and these were freely importable". xxxx xxxx xxxx Circular No. 8 of 2006 "Subject : Classification of used rails - Reg. I am directed to invite your attention to the Board's Circular No. 1/2005-Cus. dated 11-1-2005 [2005 (179) E.L.T. T22] and the doubts expressed on the issue of appropriate classification of "used steel rails' - whether under CTH 7204 as 'ferrous waste and scrap' or under CTH 7302 as 'used rails'. 2. The issue of classification has been re-examined by the Board with respect to the clarification issued under Central Excise Tariff vide Circular No. 27 of 1989 dated 21-9-1989. The Board decided that heading No. 7204 read with Section Note 8(a) to Section XV of the First Schedule to the Customs Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer following a directive of the Board held that all types of poster paper of whatever colour including white should not be treated as "printing and writing paper" but as a "packing and wrapping paper". Allowing the appeal the Supreme Court held in Para 8 as follows : (AIR at page 51) "If the power exercised by the Collector was a quasi-judicial power - as we hold it to be - that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of a judicial or a quasi judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty and the department. It is true that the assessing authorities as well as the appellate authorities are judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a misnomer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect the basic and elementary postulate of the rule of law, that in exercising their authority and in discharging their quasi-judicial function, the tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgment. It is the essence of fair and objective administration of law that the decision of the Judge or the Tribunal must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State. If the exercise of discretion conferred on a quasi-judicial tribunal is controlled by any such direction, that forges fetters son (sic on) the exercise of quasi-judicial authority and the presence of such fetters would make the exercise of such authority completely inconsistent with the well accepted notion of judicial process. It is true that law can regulate the exercise of judicial powers. It may indicate by specific provisions on what matters the tribunals constituted by it should adjudicate. It may by specific provisions lay down the principles which have to be followed by the tribunals in dealing with the said matters. The scope of the jurisdiction of the Tribunals constituted by statute c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f evidence and should have been left to the Department to establish before the adjudicating authorities the Bombay Bench was also correct in its conclusion that the circular sought to impose a limitation on the exemption notification which the exemption notification itself did not provide. It was not open to the Board to whittle down the exemption notification in such a manner. The exemption notification merely reproduced the language of Entry 8525-20-17 and since the exemption notification merely reproduced the tariff entry, the limitation sought to be imposed by the Board would tantamount also to reading the limitation into the classification itself. Since the issue would be ultimately a question of evidence the onus was on the Department to prove by appropriate evidence that the goods were classifiable under 8525-20-19 being the residuary entry. This the Department could have done by negativing the claim of importers that the goods were classifiable under Tariff Entry 8525-20-17 and by establishing that the imported goods could not reasonably be classified under any other head. In this particular case the onus had not been discharged by the Revenue. The only evidence on record w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax, Gujarat-IV, (1982) 137 Income Tax Reports 635 while considering a similar issue with regard to interpretation of an all India Taxing Statute, opined as under :- "......Secondly, in income-tax matters, which are governed by an all-India statute, when there is a decision of another High Court on the interpretation of a statutory provision, it would be a wise judicial policy and practice not to take a different view (whatever one's own view may be), barring, of course, certain exceptions like where the decision is sub silentio, per incuriam, obiter dicta or based on a concession or takes a view which it is impossible to arrive at or there is another view in the field or there is a subsequent amendment of the statute or reversal or implied overruling of the decision by a higher Court or some such or similar infirmity is manifestly perceivable in the decision." 15. The same view was expressed by a Division Bench of Delhi High Court in Commissioner of Income-tax v. Sae Head Office Monthly Paid Employees Welfare Trust - (2004) 271 Income Tax Reports 159. 16. From the perusal of judgment of Hon'ble the Supreme Court of India in Steel Authority of India's case (supra) and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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