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Issues Involved:
(A) Whether exemption under Notification No. 97/79-Cus., dated 2-5-1979 is available in respect of CADISACS? (B) Alternatively, whether exemption under Notification No. 150/80-Cus., dated 23-7-1980 is available in respect of CADISACS? (C) Whether the Doctrine of Promissory Estoppel is applicable in the facts and circumstances of the instant case? (D) Whether it was permissible for the Assistant Collector to raise demand contrary to the order passed by the Deputy Collector? (E) Whether the Assistant Collector's order was passed in violation of the principles of natural justice? Detailed Analysis: Issue (A): Exemption under Notification No. 97/79-Cus. The appellants argued that the CADISACS met the conditions of Notification No. 97/79, emphasizing their durability as defined by multiple dictionaries. They highlighted the materials used in the CADISACS and their ability to withstand rough handling during export. The appellants contended that the CBEC Circular's examples of durable items (drums, gas cylinders, bottles) were illustrative, not restrictive. They cited previous cases (FCI, Hindustan Aeronautic Ltd.) to support their claim that they could seek exemption under 97/79 despite initial claims under 150/80. Issue (B): Exemption under Notification No. 150/80-Cus. The appellants alternatively claimed that CADISACS qualified for exemption under Notification No. 150/80, arguing that these were "printed bags" as per the notification. They contended that the materials listed in the notification (polythene, PVC, etc.) were illustrative, not exhaustive. They relied on the Privy Council decision in Commonwealth of Australia v. Bank of New South Wales and the Supreme Court decision in State of Bombay v. RMD Chamar Bagwala to support this interpretation. Issue (C): Doctrine of Promissory Estoppel The appellants argued that the Doctrine of Promissory Estoppel applied, asserting that Customs Authorities could not retract their earlier stance. They cited the Supreme Court decision in Godffrey Philips (India) to support this claim. Issue (D): Authority of Assistant Collector The appellants contended that the Assistant Collector (A.C.) had no authority to demand duty contrary to the Deputy Collector's (D.C.) order, which was endorsed on the Bill of Entry and not appealed against. They cited the Tribunal's decision in Essel Packaging to support the binding nature of the D.C.'s order. Issue (E): Principles of Natural Justice The appellants claimed the A.C.'s order violated principles of natural justice, as they were not provided with a copy of the D.C.'s order or the Board's alleged clarification, despite their requests. Department's Position: The department argued that 97/79 exempts only durable containers, and CADISACS, being paper sacks, did not qualify as durable. They cited the Rajasthan High Court's decision in Ramnagar Cane and Sugar Co. and the Commercial Product case to emphasize durability as related to returnability and re-use. The department also contended that 150/80 exempts only printed bags made of specific materials, which did not include the CADISACS' materials. They argued that the initial assessments were provisional, and the A.C. had the authority to finalize the assessment. Tribunal's Findings: The Tribunal first addressed the A.C.'s jurisdiction, noting that the provisional nature of the assessments and the bond executed by the appellants allowed the A.C. to act under both notifications. They held that the A.C. had the authority to finalize the assessment. On the merits, the Tribunal found the appellants' arguments compelling. They noted that "durable containers" should be interpreted in context, considering advancements in materials and their relative durability. However, they found insufficient evidence to definitively classify CADISACS as durable. Regarding Notification No. 150/80, the Tribunal agreed with the appellants' interpretation that the materials listed were illustrative, not restrictive. They cited the Privy Council and Supreme Court decisions to support this view. Consequently, they held that the appellants were eligible for the benefit of Notification No. 150/80. The Tribunal set aside the impugned order and accepted the appeal.
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