1992 (1) TMI 224 - AT - Customs

Summary

Issues Involved:
1. Whether cess under Section 5A of the Textile Committee Act, 1963 is leviable on imported goods.
2. Whether the cess can be equated to additional duty under Section 3(1) of the Customs Tariff Act, 1975.
3. The validity of demand notices issued by the Assistant Collector under Section 28(1) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Whether cess under Section 5A of the Textile Committee Act, 1963 is leviable on imported goods:

The respondents filed bills of entry for the clearance of Polyester Staple fibre, and the department later discovered that cess duty of 0.05% on the landing cost of the goods, as per Section 5A of the Textile Committee (Amendment) Act, 1963 and Cess Rules, 1975, had not been collected. The Assistant Collector confirmed the demands for the cess duty. However, the Collector (Appeals) set aside these demands, holding that "no cess is leviable on the imported goods under the Textile Committee Act." The Collector (Appeals) emphasized that the cess is only applicable to textiles and textile machinery manufactured in India, as per the provisions of the Textile Committee Act and the associated rules and notifications.

2. Whether the cess can be equated to additional duty under Section 3(1) of the Customs Tariff Act, 1975:

The Revenue argued that the cess duty of 0.05% is leviable on imported goods as specified in the Textile Committee (Amendment) Act, 1963, read with Notification No. 55018 (35)/75-Tex (III) CTEG, dated 1-6-1977. They contended that this notification declares the cess to be charged as a duty of excise, and in terms of Section 3(1) of the Customs Tariff Act, 1975, which empowers the levy of additional duty equal to the excise duty. The Revenue's contention was that cess duty at the rate of 0.05% is equivalent to the excise duty and thus should be levied as additional duty (CVD) on imported goods. The tribunal agreed with this contention, stating that "the rate of excise is 0.05% as fixed in this legislation and this rate is also to be recovered as CV duty under the Customs Tariff Act."

3. The validity of demand notices issued by the Assistant Collector under Section 28(1) of the Customs Act, 1962:

The Assistant Collector issued demand notices under Section 28(1) of the Customs Act, 1962, for customs duty amounting to Rs. 7,947.88 in respect of ten bills of entry. The tribunal noted that the printed format for recovery of customs duty was used for demanding CV duty, which is equivalent to the cess chargeable under the Textile Committee (Amendment) Act. The tribunal clarified that the short levy demanded was for CV duty under Section 3 of the Customs Tariff Act and not for cess under the Textile Committee (Amendment) Act, 1963. The tribunal confirmed the demands raised in the orders-in-original.

Conclusion:

The tribunal concluded that the cess under Section 5A of the Textile Committee Act, 1963, is not directly leviable on imported goods. However, the cess rate of 0.05% fixed under this legislation is applicable as additional duty (CVD) under Section 3(1) of the Customs Tariff Act, 1975. The demands raised by the Assistant Collector were confirmed as valid, and the Revenue's appeal was allowed. The tribunal emphasized that the mechanism for collection of the cess under the Textile Committee Act is not relevant for imported goods, as the authority for collecting the cess as a duty of excise in the case of imported goods arises from Section 3(1) of the Customs Tariff Act.