1984 (1) TMI 316 - AT - Customs

Issues Involved:

1. Maintainability of appeal against the order of the Appellate Collector, Hyderabad.
2. Classification of rock-phosphate under the Indian Customs Tariff.
3. Applicability of auxiliary duty on rock-phosphate in lumpy form.
4. Jurisdiction and authority of the Appellate Collector and Collector of Customs.

Issue-wise Detailed Analysis:

1. Maintainability of Appeal Against the Order of the Appellate Collector, Hyderabad:

The primary issue raised by Shri Sundar Rajan was whether an appeal or revision is maintainable against the order of the Appellate Collector, Hyderabad, concerning the classification of goods related to Bill of Entry No. 008/2-9-1975. The argument was that the Appellate Collector did not pass any independent order but merely reiterated the decision of the Collector of Customs, Madras. The Tribunal noted that even an order passed without delving into the merits of the case on a preliminary point is appealable. It was observed that the Appellate Collector had categorically ordered that the auxiliary duty should be charged at the rate of 15% as per the order of the Collector of Customs, Madras. Therefore, the Tribunal concluded that this constituted an order by the Appellate Collector, making it appealable under Section 129(A) of the Customs Act, 1962.

2. Classification of Rock-Phosphate Under the Indian Customs Tariff:

The core issue on merits was whether the rock-phosphate imported in lumpy form should be classified under Item No. 35 or Item No. 87 of the Indian Customs Tariff. The Assistant Collector of Customs, Visakhapatnam, had initially classified the rock-phosphate under Item No. 35, attracting an auxiliary duty of 5%. However, upon final assessment, it was reclassified under Item No. 87, attracting a higher auxiliary duty of 15%. The Tribunal referred to a decision by the Gujarat High Court, which held that rock-phosphate, irrespective of its form, is primarily used for manurial purposes and should be classified under Item No. 35. The Tribunal agreed with this view, stating that the form in which rock-phosphate is imported (lumpy or powder) is immaterial, as long as it is used for manurial purposes.

3. Applicability of Auxiliary Duty on Rock-Phosphate in Lumpy Form:

The Tribunal examined whether rock-phosphate in lumpy form is subject to a higher auxiliary duty of 15% or the lower rate of 5%. The notification dated 15-4-1972 exempted rock-phosphate from auxiliary duty when imported for use as or in the manufacture of fertilizers. The Tribunal concluded that the form of the rock-phosphate (lumpy or powder) does not affect its classification for duty purposes. Since the department failed to prove that rock-phosphate in lumpy form cannot be used as manure, the Tribunal set aside the order of the Appellate Collector and allowed the appeal, thereby applying the auxiliary duty at the rate of 5%.

4. Jurisdiction and Authority of the Appellate Collector and Collector of Customs:

The Tribunal discussed the jurisdictional aspects, noting that the appellants had approached both the Collector of Customs, Madras, and the Appellate Collector, Hyderabad, for redress. The Collector of Customs, Madras, had the authority to review the order under Section 130 of the Customs Act, 1962, while the Appellate Collector had jurisdiction under Section 128. The Tribunal emphasized that the order of the Collector of Customs, Madras, had not attained finality, and the appellants were within their rights to seek an appeal. The Tribunal dismissed the argument that the Appellate Collector's order was not appealable, stating that the order was indeed an appealable order under Section 129(A) of the Customs Act, 1962.

Separate Judgment by H.R. Syiem, Member (T):

H.R. Syiem, Member (T), delivered a separate judgment, emphasizing that the Appellate Collector did not pass an independent order regarding the consignment related to Bill of Entry No. 008/2-9-1975. He argued that the Appellate Collector merely reiterated the decision of the Collector of Customs, Madras, and therefore, no appeal lay against the Appellate Collector's observation. He concluded that the appeal should be rejected as there was no independent order by the Appellate Collector that could be appealed.

Conclusion:

The Tribunal, by majority, allowed the appeal, set aside the order of the Appellate Collector, and ruled that the auxiliary duty on the imported rock-phosphate should be charged at the rate of 5%, providing consequential relief to the appellants.

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