1992 (7) TMI 164 - AT - Customs

Issues Involved:

1. Classification of Polyester Chips as Polyester Resins.
2. Applicability of Notification No. 36/83-Cus. and Notification No. 219/83-Cus.
3. Entitlement to concessional import duty under Notification No. 341/76.
4. Relevance of previous High Court judgments.

Issue-Wise Detailed Analysis:

1. Classification of Polyester Chips as Polyester Resins:

The appellants argued that Polyester Chips should be classified as Polyester Resins, citing the Bombay High Court's decision in Chemicals and Fibres India Limited v. Union of India, which held that Polyester Chips are covered by the item "Artificial or Synthetic Resins." The appellants contended that despite the specific exclusion of Polyester Chips from Serial No. 4 of Notification No. 36/83-Cus., they should still be eligible for exemption under Serial No. 1(iv) as Polyester Resins. The Department, however, maintained that Polyester Chips and Polyester Resins are distinct items, supported by their separate listing in Notification No. 36/83-Cus. and subsequent amendments.

2. Applicability of Notification No. 36/83-Cus. and Notification No. 219/83-Cus.:

Notification No. 36/83-Cus. exempted certain goods from customs duty, including Polyester Resins under Serial No. 1(iv). However, Polyester Chips were specifically excluded from the concessional rate of duty. The appellants claimed that the deletion of Polyester Chips from Serial No. 3 and their exclusion from Serial No. 4 in the amended Notification No. 219/83-Cus. did not affect their classification as Polyester Resins. The Department argued that the amendment clearly indicated that Polyester Chips were not eligible for the concessional rate.

3. Entitlement to Concessional Import Duty under Notification No. 341/76:

The appellants sought a refund of customs duty, asserting that Polyester Chips imported from Yugoslavia should attract a concessional duty rate of 75% under Notification No. 341/76, which provided a reduced duty rate for goods of Yugoslav origin. They argued that Polyester Chips, being a type of Polyester Resin, should benefit from this concessional rate. The Department contended that the specific exclusion of Polyester Chips from the amended notification precluded them from this benefit.

4. Relevance of Previous High Court Judgments:

The appellants relied on the Bombay High Court's judgment in Chemicals and Fibres India Limited v. Union of India, which classified Polyester Chips as Synthetic Resins. They also referenced a Delhi High Court judgment in their own case, which held that Polyester Chips were covered by Item 15A(iii) of the Central Excise Tariff. The Department argued that these judgments were not relevant to the issue at hand, as the classification and duty implications under the notifications were distinct considerations.

Judgment:

The Tribunal examined the records and submissions, focusing on whether Polyester Chips imported by the appellants could be deemed covered by the entry "Polyester Resins" in Notification No. 36/83-Cus. as amended. The Tribunal noted that the Bombay High Court had held that Polyester Chips are covered by "Artificial or Synthetic Resins." Despite the amendments to Notification No. 36/83-Cus., the Tribunal concluded that Polyester Chips should still be deemed as Polyester Resins under Serial No. 1(iv). The deletion of Polyester Chips from Serial No. 3 and their exclusion from Serial No. 4 only withdrew the larger concession but did not alter their classification as Polyester Resins.

The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellants.

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