1999 (10) TMI 75 - SC - Central Excise

Summary

Issues Involved:
Customs authorities appealing against judgment of Customs, Excise and Gold (Control) Appellate Tribunal regarding exemption from additional duty of Customs on imported Mono-Ethylene Glycol (MEG) used in manufacturing polyester products.

Judgment Summary:

Issue 1: Claim of Exemption under Notification
The respondents imported MEG for manufacturing polyester products and claimed exemption from additional duty of Customs based on a notification exempting MEG from excise duty if used for specific manufacturing purposes. Customs authorities rejected the claim, but the Tribunal upheld it, finding substantial compliance with the required procedure under Chapter X of the Central Excise Rules.

Issue 2: Interpretation of Customs Tariff Act
Section 3 of the Customs Tariff Act, 1975 imposes additional duty on imported articles equivalent to excise duty on similar domestically manufactured goods. The exemption notification for MEG from excise duty implies no additional duty is applicable, as there is no excise duty leviable on MEG. Citing relevant case law, the Court dismissed the appeal, emphasizing the specific provisions of the Customs Tariff Act over previous judgments related to excise duty under different enactments.

The appeal by Customs authorities was dismissed, as the exemption from excise duty on MEG precludes the imposition of additional duty of Customs, as per Section 3 of the Customs Tariff Act, 1975. The Court upheld the Tribunal's finding of substantial compliance with the required procedure for claiming exemption, emphasizing the specific provisions of the Customs Tariff Act in determining the applicability of additional duty on imported goods.