2002 (12) TMI 292 - AT - Central Excise

Summary

Issues:
- Whether Special Additional Duty of Customs is payable on the imported goods by M/s. Northern Tannery.

Analysis:
The appeal filed by M/s. Northern Tannery raised the issue of the liability to pay Special Additional Duty of Customs on goods imported by them. The appellant, represented by Shri C.K. Rawal, argued that they had imported Wet Blue Buff Hides from Nepal, which were cleared without duty payment. A subsequent show cause notice demanded the Special Additional Duty, confirmed by the Commissioner (Appeals). The appellant relied on Notification No. 18/2000-Cus., which exempts goods from Special Additional Duty if exempt from basic customs duty and additional customs duty. The appellant cited the case of Golden Paper Udyog Pvt. Ltd. to support their argument that an exemption from levy is meaningless if there was no levy in the first place.

The respondent, represented by Shri A.S. Bedi, contended that while basic customs duty was exempted, there was no exemption for Additional Duty of Customs as the rate of duty was nil. Referring to the case of CCE, Hyderabad v. Vazir Sultan Tobacco Co. Ltd., it was argued that a nil rate of duty is still considered a rate of duty, thus the Additional Duty of Customs was not exempted. The appellant countered this argument by distinguishing the case of Vazir Sultan Tobacco Co. Ltd. as related to central excise duty under the Central Excise Act, not the Customs Act. Citing the case of Associated Cement Cos. Ltd., the appellant argued that the provisions under the Customs Act differ from the Central Excise Act, emphasizing that goods on which no duty is leviable are not considered dutiable goods.

Upon careful consideration, the tribunal found that Notification No. 18/2000-Cus. exempts Special Additional Duty under Section 3A(1) of the Customs Tariff Act. It was noted that the impugned goods were exempt from basic customs duty under Notification No. 37/96-Cus. The tribunal disagreed with the Revenue's argument that the Additional Customs Duty was not exempted due to a nil rate of duty, stating that Notification No. 16/2000-Cus. exempted the impugned goods from payment of Additional Customs Duty under Section 3(1) of the Customs Tariff Act. As both conditions specified in Notification No. 18/2000 were fulfilled, the tribunal held that the appellants were eligible for exemption from Special Additional Duty, setting aside the impugned order and allowing the appeal.