2007 (6) TMI 16 - AT - Customs

Exemption Appellant had imported rock phosphate were captively consumed in the manufacture of phosphoric acid a chemical which found varied uses such as fertiliser industry, dentistry and food processing industry Held benefit of Notification No. 20/2006-Cus. for exemption for SAD

Summary

Issues:
- Claim of exemption from Special Additional Duty (SAD) under Notification No. 20/06-Cus.
- Interpretation of the Table annexed to the Notification regarding duty rates.
- Consideration of alternative claims under different sections of the Notification.
- Classification of 'rock phosphate' under Chapter 31 of the Customs Tariff Act.
- Applicability of the Notification to goods used in the manufacture of fertilizers.

Analysis:

1. The appellants imported 'rock phosphate' and claimed exemption from Special Additional Duty (SAD) under Notification No. 20/06-Cus. The dispute arose regarding the interpretation of the Table annexed to the Notification, specifically under S. No. 1 and S. No. 4. The authorities denied the exemption as the goods were cleared on payment of Basic Customs Duty. The appellants raised a new claim under S. No. 4, which was contested by the authorities. The Tribunal noted that the appellants failed to raise the alternative claim earlier and dismissed Appeal No. C/497/2006.

2. In Appeal No. C/172/2007, the appellants raised a claim under S. No. 4 as an alternative to their claim under S. No. 1. The authorities rejected this claim stating that 'rock phosphate' did not fall under Chapter 31 of the Customs Tariff Act, thus not eligible for the 'nil' rate of duty under SAD. However, the Tribunal observed that the Table in the Notification included '31 or any other Chapter' against S. No. 4. The Tribunal considered the goods as fertilizers, supported by decisions of the Bombay High Court. The claim under S. No. 4 was upheld, and the appeal was allowed in favor of the appellants.

3. The Tribunal emphasized the importance of raising all relevant claims at the appropriate time and upheld the claim under S. No. 4 based on the broad interpretation of the Notification's Table. The classification of 'rock phosphate' as a fertilizer and its use in the manufacture of fertilizers were crucial factors in determining the applicability of the Notification. The Tribunal's decision in Appeal No. C/172/2007 highlighted the significance of correctly applying legal provisions to specific goods to determine their eligibility for duty exemptions.

4. The Tribunal's analysis focused on the specific provisions of the Notification and the classification of goods under the Customs Tariff Act. By considering the nature and use of 'rock phosphate' in the context of fertilizers, the Tribunal clarified the eligibility criteria for duty exemptions under the Notification. The detailed examination of the legal arguments and precedents, particularly the decisions of the Bombay High Court, contributed to the Tribunal's decision in favor of the appellants.