1993 (3) TMI 214 - AT - Customs

Summary

Issues Involved:
1. Application of wrong notification for auxiliary duty.
2. Admissibility of additional grounds at the appellate stage.
3. Classification of imported goods.

Issue-wise Detailed Analysis:

1. Application of Wrong Notification for Auxiliary Duty:
The appellants contested the levy of auxiliary duty at 45% under Notification 85/88, arguing that the correct Notification 88/88 should have been applied. They claimed a refund based on this exemption notification, which the Assistant Collector and Collector (Appeals) failed to consider. The appellants referenced their written submissions dated 25-4-1989, highlighting that a wrong notification was applied to Bills of Entry Nos. 908, 909, and 910.

2. Admissibility of Additional Grounds at the Appellate Stage:
The appellants argued that a purely legal question can be raised at the appellate stage, even if not agitated before lower authorities. They cited case laws, including Assistant Collector of Central Excise v. Ramdev Tobacco Company and Hindustan Platinum Pvt. Ltd. v. Collector of Central Excise, to support their claim. The respondent opposed this, linking the issue to previously decided appeals and arguing that the appellants failed to prove their goods were "wood in the rough" as required for exemption under Notification 88/88. The Tribunal, considering both sides, noted the endorsement on the Bills of Entry and the adjudication order classifying the goods as sawn timber, not wood in the rough. This led to the rejection of the appellants' plea for additional grounds by one member.

3. Classification of Imported Goods:
The adjudication order by the Additional Collector of Customs classified the goods as sawn timber under heading 44.07 CTA'75, overruling the appellants' claim for classification under heading 44.03. The appellants were required to substantiate their claim for auxiliary duty exemption under Notification 88/88, which they failed to do. The adjudication order noted the importer's admission that the goods were scantlings, not wood in the rough, thus disqualifying them from the claimed exemption.

Separate Judgments:

Member (Technical):
The Member (Technical) rejected the additional grounds, stating that the appellants failed to substantiate their claim for exemption under Notification 88/88. The adjudication order's classification of the goods as sawn timber was upheld, and the plea for additional grounds was deemed without substance.

Member (Judicial):
The Member (Judicial) disagreed, emphasizing that the additional grounds raised were legal in nature and could be decided based on existing evidence. The failure of the Collector (Appeals) to consider the specific plea regarding the wrong notification was highlighted. The Member (Judicial) allowed the appellants to raise the additional grounds, citing several case laws supporting this approach.

Third Member (Judicial):
The Third Member (Judicial) agreed with the Member (Judicial), allowing the additional grounds to be raised. It was noted that the adjudication order itself was under challenge, and the question of levying auxiliary duty was not a concluded issue. The additional ground was deemed a legal question that could be decided on the existing record.

Conclusion:
The majority decision allowed the appellants to raise additional grounds in their appeals. The appeals were to be posted for hearing on merits, considering the newly permitted grounds.