1987 (3) TMI 243 - AT - Customs

Issues Involved:
1. Entitlement to preferential rate of duty under Notification No. 352/76-Cus.
2. Claim for refund of additional duty under Section 3 of the Customs Tariff Act, 1975.
3. Relevance and applicability of Notification No. 342/76-Cus. and Notification No. 33/63-CE.

Issue-wise Detailed Analysis:

1. Entitlement to Preferential Rate of Duty under Notification No. 352/76-Cus.:

The appellants imported a consignment of Crude Coconut Oil from Singapore and claimed a preferential rate of duty under Notification No. 352/76-Cus., dated 2-8-1976. The Assistant Collector of Customs (Refund) initially rejected the claim, stating that Singapore was not included in the relevant schedule. However, the Collector (Appeals) corrected this, confirming that Singapore was indeed included in the notification. Despite this, the appeal was rejected on the grounds that coconut oil was not included in Notification No. 342/76-Cus., dated 2-8-1976.

Upon review, it was found that Notification No. 342/76-Cus. was not relevant to this case. The Tribunal held that the appellants were entitled to the preferential rate of duty under Notification No. 352/76-Cus., as Singapore was listed at Sl. No. 19 of the said notification. The goods should be reassessed at the preferential rate of duty, subject to verification of their origin.

2. Claim for Refund of Additional Duty under Section 3 of the Customs Tariff Act, 1975:

The appellants also sought a refund of additional duty, arguing that Crude Coconut Oil was exempted from Central Excise Duty under Notification No. 33/63-CE, dated 1-3-1963. The Assistant Collector and the Collector (Appeals) did not address this claim. The Tribunal noted that the Karnataka High Court and this Tribunal in previous cases had held that exemptions under the Central Excise Act cannot be used to claim exemptions under the Customs Act. The Tribunal cited the Supreme Court's decision in Khandelwal Metal & Engineering Works and Modi Rubber Limited, which clarified that additional duty under Section 3 of the Customs Tariff Act is akin to customs duty and not countervailing duty. Therefore, specific exemption notifications under Section 25 of the Customs Act are required to exempt additional duty.

The Tribunal concluded that the appellants could not claim a refund of additional duty based on Notification No. 33/63-CE, as it did not pertain to customs duty. Additionally, the imported crude coconut oil did not meet the criteria for exemption under this notification, as there was no evidence that it had not undergone the specified processes.

3. Relevance and Applicability of Notification No. 342/76-Cus. and Notification No. 33/63-CE:

The Tribunal found that Notification No. 342/76-Cus. was incorrectly applied by the Assistant Collector and the Collector (Appeals). The relevant notification for the preferential rate of duty was Notification No. 352/76-Cus., which included Singapore. Regarding Notification No. 33/63-CE, the Tribunal held that it could not exempt the imported goods from additional duty under Section 3 of the Customs Tariff Act, 1975. The exemption under the Central Excise Act is distinct and cannot be the basis for claiming exemptions under the Customs Act.

Conclusion:

The Tribunal ordered that the goods should be reassessed at the preferential rate of duty under Notification No. 352/76-Cus., subject to verification of their origin. The claim for a refund of additional duty was correctly rejected, as the exemption under Notification No. 33/63-CE did not apply to customs duty. The appeal was thus partly allowed.

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