1990 (8) TMI 259 - AT - Customs

Summary

Issues:
Eligibility for exemption from payment of basic customs duty and additional duty under Notification 39/85.

Detailed Analysis:

1. Facts: The case revolves around the eligibility of the appellants for exemption from customs duty under Notification 39/85. The Appellants imported Denatured Ethyl Alcohol and sought clearance under this notification, subject to producing a certificate confirming industrial use.

2. Contentions: The Appellants cleared 2000 kilolitres of Denatured Ethyl Alcohol duty-free under the notification. However, a demand for differential duty arose when it was alleged that not the entire quantity was used for industrial purposes.

3. Legal Argument: The Asst. Collector confirmed the duty demand, leading to the appeal. The appellants argued that some quantity was lost in transit due to an accident and evaporation, which should not attract duty liability.

4. Judgment: The Tribunal analyzed relevant provisions and case laws. It noted that once goods are cleared, duty exemption cannot be claimed for subsequent losses like evaporation. The Tribunal distinguished precedents cited by the appellants, emphasizing the distinction between production impossibility and duty payment.

5. Precedents: The Tribunal clarified that the cited judgments, such as Jagannath Dattatreya Shah and Sarada Plywood Industries Ltd., were inapplicable as they dealt with different scenarios of goods loss within Customs control.

6. Legal Conclusion: Since there was no provision for duty remission post-clearance, the Tribunal upheld the duty demand on the entire quantity of Denatured Ethyl Alcohol. Consequently, the appeal was dismissed, affirming the duty liability on the appellants.

In conclusion, the judgment delves into the intricacies of duty exemption eligibility under Notification 39/85, emphasizing the post-clearance duty liability in cases of subsequent losses. The Tribunal's decision underscores the importance of distinguishing between production impossibility and duty payment obligations, ultimately upholding the duty demand on the appellants.