1981 (11) TMI 176 - Commissioner - Central Excise

Summary

Issues:
Levy of C.V. duty on copper scrap, interpretation of Notification No. 33/81-CE, misinterpretation of clauses (a) and (b) of the notification, applicability of Supreme Court decision in M/s. Ahura Chemical Products Pvt. Ltd. v. Union of India, denial of benefit of the notification by lower authority, historical acceptance of interpretation by Appellate Authority and Custom House.

Analysis:
The appeal challenges the imposition of C.V. duty on imported copper scrap invoiced as per NARI Specification 'Berry'. The appellants argue that the goods should be exempt from duty under Notification 33/81-CE. They claim misinterpretation of the notification by the lower authority, particularly regarding the phrase "the said copper" in clause (b). The appellants assert that the conditions in clauses (a) and (b) are disjunctive, citing the Supreme Court decision in M/s. Ahura Chemical Products Pvt. Ltd. v. Union of India to support their argument that either condition suffices for exemption.

The appellants further contend that the notification should be read as a whole, and the phrase "the said copper" refers to duty-paid copper, not specifically to copper mentioned in clause (a). They emphasize that previous appeals involving similar goods were allowed by the Appellate Authority in Bombay, indicating a consistent interpretation of the notification. The appellants stress that the wording and structure of the notification support their position that the imported copper scrap should be exempt from C.V. duty.

During the hearing, the representative reiterated the arguments presented in the appeal memorandum, highlighting the importance of considering both clauses (a) and (b) of Notification No. 33/81-CE. The representative referenced legal opinions and previous rulings to support the contention that the lower authority erred in denying the benefit of the notification. The representative emphasized historical acceptance of the interpretation that copper scrap of Nari Specifications is exempt from C.V. duty, as evidenced by past practices of the Custom House.

In delivering the judgment, the Collector of Customs (Appeals) analyzed the notification and the nature of the imported copper scrap. The Collector noted that the scrap had arisen from wire, which is not dutiable under item 26-A CET, suggesting that it falls under a different item of the Central Excise Tariff. The Collector found merit in the appellants' argument that the word "or" after clause (a) supports interpreting "the said copper" in clause (b) as referring to the opening part of the notification, not specifically to clause (a). Additionally, the Collector acknowledged the historical acceptance of exempting similar goods from C.V. duty, leading to the decision to set aside the levy of duty on the copper scrap 'Berry' of Nari Specification and allow the appeal.