1992 (8) TMI 172 - AT - Customs

Summary

Issues:
Classification of goods for duty purposes under Notification 68/87 and Central Excise Notification 71/86, applicability of exemptions, interpretation of Section 3(1) of the Customs Tariff Act, determination of additional duty of customs based on excise duty leviable on a like article in India.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the classification of imported goods for duty purposes under Notification 68/87 and Central Excise Notification 71/86. The Collector of Customs, Madras, filed an appeal against the order rejecting a refund claim by the respondents for exemption from Additional Customs Duty (CVD) on a consignment of projection lens. The Assistant Collector of Customs, Air Cargo, Madras, initially rejected the refund claim, citing that Notification 68/87 granted exemption to goods under Heading 9806 CTA from excess customs duty and CVD, and that the specific exemption under Central Excise Notification 71/86 was not applicable. However, the Collector (Appeals) overturned this decision, holding that the Central Excise Notification exemption should apply to the goods.

The arguments presented by both sides focused on the interpretation of the notifications in question. The Appellant Collector contended that Notification 68/87 specifically exempted goods from duty exceeding 15% under Section 3 of the Customs Tariff Act for CVD purposes. On the other hand, the respondents' representative argued that the nil duty exemption under Central Excise Notification 71/86 should be applied to goods assessed under Chapter 90, precluding the levy of CVD. The Tribunal carefully considered these submissions and analyzed Section 3(1) of the Customs Tariff Act, which mandates additional duty equal to the excise duty on a like article manufactured in India. The Tribunal referenced legal precedents, including the Supreme Court and Bombay High Court judgments, to interpret the interplay between customs and excise duties.

The Tribunal concluded that the measure of additional duty should be determined based on the excise duty leviable on a like article under the Central Excise Tariff, not merely by reference to notifications under the Customs Act. In the present case, the goods were classified under Chapter 90 and covered by the nil duty exemption in Central Excise Notification 71/86, without any conditions attached. Therefore, the Tribunal held that the department's view, favoring the application of the CVD-specific Notification 68/87 over the Central Excise Notification, was not sustainable. Consequently, the Tribunal upheld the Collector (Appeals) decision, rejecting the appeal and affirming the extension of the Central Excise duty exemption to the imported goods.