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Issues:
1. Whether raw greasy wool should be charged to countervailing duty. 2. Interpretation of Notification 50/87-C.E. 3. Extending the benefit of C.V. duty to raw and greasy wool. 4. Anomalous situation regarding the duty on scoured wool. Analysis: 1. The primary issue in this case is whether raw greasy wool imported by the respondents should be subject to countervailing duty (C.V. duty). The lower appellate authority accepted the respondents' plea, considering that raw wool, in its unscoured state, is not excisable in the Central Excise Tariff. The authority reasoned that scoured wool is essentially raw wool after the cleaning process, and therefore, raw greasy wool should be exempt from C.V. duty under Notification 50/87. 2. The interpretation of Notification 50/87-C.E. was crucial in determining whether the imported raw and greasy wool qualified for exemption from duty. The Revenue argued that the exemption applied only to wool that had been scoured, not carded or combed. However, the lower appellate authority and the respondents contended that the intention behind the notification was to prevent anomalies in the duty structure and to support the initial stages of wool processing. 3. The crux of the dispute revolved around extending the benefit of countervailing duty to raw and greasy wool, which the Revenue opposed. The lower appellate authority's decision to grant this benefit was based on the understanding that raw greasy wool, being at the first stage of scoured wool, fell within the description of scoured wool under the Central Excise Tariff Act and Notification 50/87. This decision was challenged by the Revenue in the appeal. 4. An important aspect addressed in the judgment was the potential anomalous situation that could arise if countervailing duty was not charged on scoured wool but was imposed on raw and greasy wool. The Tribunal agreed with the lower appellate authority's reasoning, emphasizing that the interpretation should avoid creating anomalies in the duty structure. The Tribunal dismissed the Revenue's argument that imposing a higher duty on raw and greasy wool would address pollution concerns, stating that pollution control should be managed through fumigation rather than differential duty rates. In conclusion, the Tribunal upheld the lower appellate authority's decision and rejected the Revenue's appeal, emphasizing the well-reasoned interpretation that prevented anomalies and supported the initial stages of wool processing under the relevant notification.
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