1990 (8) TMI 245 - AT - Customs

Summary

Issues Involved:
1. Entitlement to the benefit of Notification No. 311/86 for auxiliary duty exemption.
2. Applicability of multiple exemption notifications simultaneously.
3. Classification of imported goods under different headings for basic and auxiliary duties.

Issue-wise Detailed Analysis:

1. Entitlement to the benefit of Notification No. 311/86 for auxiliary duty exemption:

The appellants imported a Colour Scanner and sought the benefit of Notification No. 311/86, which exempts goods from the whole of auxiliary duty of Customs provided they are specified in Column No. 3 of the Table. The Colour Scanner is listed under Sr. No. 46 against Chapter No. 90 of the Customs Tariff in the Table attached to Notification No. 311/86. The Collector of Customs denied this benefit, stating that once the goods are classified under Heading 98.01 for basic duty, they cannot be reclassified under Chapter 90 for auxiliary duty purposes. The Tribunal upheld this view, stating, "there cannot be and should not be two classifications under different heads of the same goods."

2. Applicability of multiple exemption notifications simultaneously:

The appellants argued that under the law, an importer can avail the benefit of more than one Exemption Notification. They cited several case laws to support this argument, including Collector of Customs, Madras v. M/s. Bharat Heavy Electricals Ltd., M/s. Chowgule Matrix Hobs Ltd. v. Collector of Customs, and Auto Tractors Ltd. v. Collector of Customs. The Tribunal acknowledged that there is no bar in law to availing of more than one benefit under the Exemption Notifications unless categorically barred. However, it concluded that the said case law does not apply to the current controversy because the appellants sought to claim both notifications simultaneously, which is not permissible once the goods are classified under Heading 98.01.

3. Classification of imported goods under different headings for basic and auxiliary duties:

The Tribunal's majority opinion was that once the appellants opted for assessment under Heading 98.01, the goods, i.e., Colour Scanner, go out of the scope of Chapter 90. Therefore, the appellants cannot claim the benefit of Notification No. 311/86 for auxiliary duty. The dissenting opinion, however, argued that the two classifications sought are for two separate purposes-basic Customs duty and auxiliary duty-and the Tariff itself provides for this distinction. The dissenting member opined that the classification under Heading 98.01 for basic duty does not debar the goods from being classified under Chapter 90 for auxiliary duty purposes. This view was supported by statutory note 1 to Chapter 98, which states that goods satisfying the conditions prescribed therein would also fall under the relevant heading in Chapter 98, even if covered by a more specific heading elsewhere in the Schedule.

Majority Opinion:

The majority of the Tribunal upheld the Collector's decision, stating that once the goods are classified under Heading 98.01, they cannot be reclassified under Chapter 90 for auxiliary duty purposes. Therefore, the appeal was rejected.

Dissenting Opinion:

The dissenting member argued that the classification under Heading 98.01 for basic duty does not preclude the goods from being classified under Chapter 90 for auxiliary duty purposes. The member set aside the impugned order and allowed the appeal, stating that the two notifications are independent of each other and there is no clause in either of them that would debar an article from getting the benefit of one notification if the benefit of the other notification is also claimed.

Final Order:

In view of the majority opinion, the impugned order passed by the Collector of Customs denying the benefit of Notification No. 311/86 in respect of auxiliary duty was set aside, and the appeal was allowed with consequential relief to the appellants.