1989 (7) TMI 265 - AT - Customs

Summary

Issues Involved:
1. Applicability of Central Excise Notification No. 179/77 for exemption from additional duty of Customs.
2. Validity of the Appellate Collector's ruling on the Assistant Collector's finding without an appeal by the Revenue.
3. Entitlement to refund based on reduction in value due to goods being under-grade.

Issue-wise Detailed Analysis:

1. Applicability of Central Excise Notification No. 179/77 for exemption from additional duty of Customs:
The appellants claimed a refund of the additional duty of Customs under Section 3 of the Customs Tariff Act, 1975, arguing that the imported corkwood was produced without the use of power, thus qualifying for exemption under Notification No. 179/77. The Assistant Collector initially found that no power was used in the production of the corkwood, but the Appellate Collector dismissed this finding, questioning the sufficiency of the evidence. The Tribunal referred to the decision in C.C; Madras v. Carborundum Universal, which held that excise exemption notifications are applicable to additional duty of Customs on imported goods. The Tribunal concluded that the conditions of Notification No. 179/77 were satisfied, as the evidence showed that the corkwood was produced manually without the use of power.

2. Validity of the Appellate Collector's ruling on the Assistant Collector's finding without an appeal by the Revenue:
The Tribunal noted that the Assistant Collector's finding that no power was used in the production of corkwood was not challenged by the Revenue in an appeal. The Appellate Collector, therefore, should not have overruled this finding. The Tribunal emphasized that the Appellate Collector could not place the appellants in a more disadvantageous position than before the appeal. The Tribunal agreed with the appellants' counsel that the Appellate Collector's ruling was erroneous in the absence of an appeal by the Revenue.

3. Entitlement to refund based on reduction in value due to goods being under-grade:
The appellants sought a refund of duty based on a reduction in the value of the goods, which were found to be under-grade after clearance. The Collector (Appeals) accepted the reduction in value but rejected the refund claim, stating that the defect was noticed post-clearance. The Tribunal examined Section 22 of the Customs Act, which deals with abatement of duty on damaged or deteriorated goods, and concluded that the reduction in value was due to the goods being sub-standard, not due to damage or deterioration as envisaged in Section 22. The Tribunal found that the appellants failed to satisfactorily establish their refund claim based on the reduction in value. However, the Tribunal allowed relief for exemption from additional duty of Customs, consistent with their finding on the applicability of Notification No. 179/77.

Conclusion:
The Tribunal allowed Appeal No. 598/82 and Supplementary Appeal No. 3733/88, granting exemption from additional duty of Customs. Appeal No. 1466/84 was partially allowed for relief in payment of additional duty of Customs but dismissed regarding the refund claim based on reduction in value.