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2016 (12) TMI 515 - AT - CustomsDemand of rubber cess - import of rubber under Advance Authorization Scheme - Held that - the matter is squarely covered by CESTAT Chennai decisions in the cases of TTK-LIG Ltd. vs. CC, Chennai 2008 (7) TMI 646 - CESTAT, CHENNAI , where it was specifically held that the demand of cess on imported natural rubber is not sustainable. Appeal dismissed - decided against Appellant-Revenue.
Issues:
- Dispute over the demand of rubber cess on imported consignments under the Advance Authorisation Scheme. - Interpretation of the Rubber Act, 1947, and its applicability to imported natural rubber. - Exemption of rubber cess under the Advance Authorisation Scheme (AA Scheme). Analysis: Issue 1: Dispute over Rubber Cess Demand The appeal was filed by the Revenue against the dropping of the demand of rubber cess amounting to ?7,42,408/- by the Commissioner of Customs (Appeals). The respondent, M/s Malhotra Rubber Limited, imported consignments of rubber under the Advance Authorisation Scheme and claimed exemption from all applicable duties of customs under Notification No. 95/2009. The Revenue contended that rubber cess was payable on the import of natural rubber, irrespective of the exemption claimed under Notification No. 26/2009-Cus. The dispute arose as the respondent did not pay rubber cess for eight consignments, leading to a show cause notice for recovery of ?7,24,408/-. The original adjudicating authority confirmed the demand, but the Commissioner (Appeals) dropped it, prompting the Revenue's appeal. Issue 2: Interpretation of Rubber Act, 1947 The Revenue argued that the levy of rubber cess under Section 12 of the Rubber Act, 1947, was distinct from excise duty and was collected for the allocated purpose of benefiting the rubber industry. They emphasized that the cess did not impose an additional burden on the taxpayer like excise duty. In contrast, the appellant's advocate contended that rubber cess was leviable only on natural rubber produced in India, not on imported natural rubber. This view was supported by a circular issued by the Ministry of Finance and several judicial decisions, indicating that imported natural rubber was exempt from rubber cess under the Rubber Act. Issue 3: Exemption under Advance Authorisation Scheme The appellant's advocate further argued that even if rubber cess was leviable on imported natural rubber, it would be exempt under the Advance Authorisation Scheme (AA Scheme) as per Notification No. 96/2009-Cus. They highlighted that the conditions of the exemption notification were fulfilled by the respondent. The tribunal, after considering the submissions and relevant case laws, found that the matter was covered by previous decisions, such as TTK-LIG Ltd. vs. CC, Chennai, where it was held that the demand of cess on imported natural rubber was not sustainable. Consequently, the tribunal dismissed the Revenue's appeal, upholding the exemption of rubber cess under the AA Scheme. In conclusion, the judgment resolved the dispute regarding the demand of rubber cess on imported consignments under the Advance Authorisation Scheme by interpreting the provisions of the Rubber Act, 1947, and confirming the exemption of rubber cess under the AA Scheme based on relevant legal precedents and notifications.
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