1984 (5) TMI 168 - AT - Customs

Summary

Issues:
1. Dispute over Countervailing Duty on imported unblended and unflavoured Cocoa Powder.
2. Interpretation of the Bombay High Court judgment on Central Excise Duty in relation to Countervailing Duty.
3. Application of Section 3 of the Customs Tariff Act, 1975 on Countervailing Duty.
4. Comparison of Excise Duty and Countervailing Duty on imported goods.

Analysis:

1. The appellant, Sesu Trading Corporation, contested the imposition of Countervailing Duty on imported unblended and unflavoured Cocoa Powder. The appellant's claim for a refund was rejected by the Assistant Collector and the Collector of Customs (Appeals), leading to the filing of Revision Petitions transferred to the Tribunal for resolution.

2. The appellant argued that unblended and unflavoured Cocoa Powder is not commonly recognized as such in trade until blended and flavoured, citing a Bombay High Court decision. The Department contended that international trade standards dictate the classification of the product for Countervailing Duty purposes.

3. The Tribunal examined the Bombay High Court judgment, which held that unblended and unflavoured Cocoa Powder is not liable for Central Excise Duty until processed further. The Tribunal differentiated between Central Excise Duty and Countervailing Duty under Section 3 of the Customs Tariff Act, 1975, emphasizing that Countervailing Duty mirrors Excise Duty.

4. The Department referenced a Tribunal decision to argue that Countervailing Duty is distinct from Excise Duty, even if calculated based on Excise Duty rates. The Tribunal rejected this argument, affirming that if no Excise Duty is leviable on the imported unblended and unflavoured Cocoa Powder, then Countervailing Duty would also be nil.

5. The Tribunal dismissed the Department's reliance on international trade connotations for imposing Countervailing Duty, emphasizing that the absence of Excise Duty domestically precludes the imposition of Countervailing Duty on the imported product.

6. Consequently, the Tribunal concluded that unblended and unflavoured Cocoa Powder, not subject to Excise Duty in India, does not attract Countervailing Duty upon importation.

7. Although the Revision Petitions mistakenly referred to Countervailing Duty instead of Central Excise Duty, the Tribunal's decision to allow the appeals and set aside the lower authorities' orders was based on the Bombay High Court judgment's principles.

8. Both appeals were allowed, and the lower authorities' orders were overturned, granting relief to the appellant in both cases.