1986 (4) TMI 227 - AT - Customs

Summary

Issues:
- Interpretation of Customs Act provisions regarding export duty calculation
- Application of Indian Standards Specification in determining weight for export duty purposes

Interpretation of Customs Act provisions regarding export duty calculation:
The case involved the export of carpet backing cloth by an appellant, which was initially charged export duty at Rs. 300 per metric tonne based on the exporters' declaration. Subsequently, Customs authorities claimed the goods should have been charged at Rs. 700 per metric tonne as the weight was below 9 oz. per sq. yd. Two show cause notices were issued for the recovery of the differential duty. The exporters argued that the goods were sold and contracted as 9 oz., even though calculations based on A.R. 4 forms showed a weight slightly below 9 oz. The Appellate Collector upheld the duty demand. However, the Tribunal considered the Indian Standards Specification for jute carpet backing fabric, which allowed a tolerance of +/- 0.045 oz per sq. yd. The Tribunal concluded that applying this tolerance, the weight of 8.999 oz should be rounded up to 9 oz, making the duty calculation at Rs. 300 per metric tonne correct. The demand for differential duty was deemed unsustainable, and the appeal was allowed in favor of the appellants.

Application of Indian Standards Specification in determining weight for export duty purposes:
The Tribunal analyzed the Indian Standards Specification for jute carpet backing fabric, specifically focusing on the permitted tolerance of +/- 0.045 oz per sq. yd. The appellants argued that considering this tolerance, the weight of 8.999 oz should be rounded up to 9 oz, aligning with the contractual and selling weight of the goods. The Departmental Representative suggested leaving the application of tolerance and weight recalculation to the Collector. However, the Tribunal determined that since the Indian Standards Specification allowed for a tolerance of +/- 0.45 oz per sq. yd, there was no need to refer the matter back to the Collector for a fresh determination. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellants and providing consequential relief.

This judgment highlights the importance of interpreting statutory provisions in conjunction with relevant industry standards to determine the correct application of export duty calculations. The Tribunal's analysis of the Indian Standards Specification played a pivotal role in resolving the dispute and providing clarity on the appropriate weight calculation for duty assessment purposes.