1994 (12) TMI 81 - SC - Central Excise

Whether mutton tallow or beef tallow or any other tallow as covered by these consignments of the appellants did not satisfy condition No. 2 of colour as laid down by Notification 141-Cus./76, dated 2-8-1976? Held that - We concur with the view of the Tribunal that there was no occasion to test the appellant s samples of tallow after bleaching as that was not the method of IS 548 Part I which was holding the field and as such pre-bleaching and refining could not be done pursuant to the American method which was not applicable to the facts of the present case and even by taking one inch cell testing on lovibond IS 548 method would have resulted in the samples showing colour deepening to the extent of 34 to 36 on the basis of Y 5R which would not satisfy condition No. 2. We entirely agree with the view of the Tribunal that even if the Central Government corrected its error about condition No. 2 from 2-9-1978 by issuing a fresh Notification, the earlier colour specification requirement remained operative for imports made by the concerned importers prior to 2-9-1978 when the earlier Notification dated 2-8-1976 was holding the field. The latter Notification cannot be said to be merely clarificatory Notification nor can it have any retros-pective effect. It is a fresh Notification laying down fresh condition deleting the earlier condition No. 2 about the colour specification. Hence this submission is of no avail to the learned counsel for the appellants. Against assessee.

Issues Involved:

1. Validity of Customs, Excise & Gold (Control) Appellate Tribunal's judgment.
2. Compliance with Customs Tariff and exemption notifications.
3. Testing methods for imported tallow.
4. Entitlement to customs duty refund.
5. Applicability of Indian Standards versus American methods.
6. Retrospective effect of amended notifications.

Detailed Analysis:

1. Validity of Customs, Excise & Gold (Control) Appellate Tribunal's judgment:

The appeals challenge the Tribunal's judgment dismissing M/s. Bombay Oil Industries Pvt. Ltd.'s appeals and allowing the Collector of Customs' appeals against other appellants. The Tribunal found that the imported tallow did not meet the colour specification in Notification No. 141-Cus./76, thereby failing to earn a 30% customs duty exemption.

2. Compliance with Customs Tariff and exemption notifications:

The imported tallow was subject to customs duty under the Customs Act, 1962, and the Customs Tariff Act, 1975. Notification No. 141-Cus./76 provided a partial exemption from customs duty if the tallow met specific conditions, including colour specifications. The appellants contended that their imports met these conditions and sought a refund of customs duty paid in excess of 15%.

3. Testing methods for imported tallow:

The Customs House tested the tallow samples using the IS 548 method and found that they did not meet the colour specification of the exemption notification. The appellants argued that the American Oils Chemists' Society method should have been used instead. The Tribunal held that the Indian Standards method was appropriate for testing the imported tallow.

4. Entitlement to customs duty refund:

The appellants claimed a refund based on the exemption notification. The Customs House's tests showed that the tallow did not meet the colour specification, and thus, the exemption was not applicable. The Tribunal upheld this finding, stating that the burden of proof was on the appellants to show compliance with the exemption conditions, which they failed to do.

5. Applicability of Indian Standards versus American methods:

The Tribunal ruled that the Indian Standards method (IS 548) was the correct method for testing the imported tallow. It emphasized that the exemption notification did not specify a testing method, but since the tallow was to be used in India, the Indian method should be applied. The Tribunal rejected the argument that the American method should be used, as the exemption notification was silent on this matter.

6. Retrospective effect of amended notifications:

The appellants argued that the amended notification dated 2-9-1978, which deleted the colour specification, should be treated as clarificatory and applied retrospectively. The Tribunal disagreed, stating that the earlier notification dated 2-8-1976 was operative at the time of the imports, and the amended notification could not have retrospective effect. The Tribunal held that the appellants' imports were subject to the conditions of the earlier notification.

Conclusion:

The Supreme Court upheld the Tribunal's judgment, dismissing the appeals and confirming that the imported tallow did not meet the exemption conditions under Notification No. 141-Cus./76. The Court emphasized the importance of adhering to the specified conditions for claiming exemptions and the applicability of Indian Standards for testing imported goods. The amended notification was not considered retrospective, and the appellants were not entitled to the claimed customs duty refund.

← Previous Next →