2001 (8) TMI 568 - AT - Central Excise

Summary

Issues Involved:
1. Whether additional duty (Countervailing Duty or CVD) is chargeable on re-imported goods after repair/re-conditioning under Section 3(1) of the Customs Tariff Act (CTA), 1975.
2. Interpretation of "like article produced or manufactured in India" as per the Explanation to Section 3(1) of CTA.
3. Consideration of double taxation in the context of re-imported goods.

Detailed Analysis:

Issue 1: Chargeability of Additional Duty on Re-imported Goods
The main question is whether additional duty of customs is chargeable on re-imported goods under Section 3(1) of the Customs Tariff Act, 1975. The appellants argued that the goods, being repaired and re-conditioned, do not fall under the category of "produced" or "manufactured" goods and thus should not attract additional duty. They relied on the Punjab and Haryana High Court decision in Saraswati Industrial Syndicate v. Union of India, which held that repairing and re-conditioning do not amount to manufacture. The Tribunal's decision in Collector of Customs v. Im Kemex India Ltd. was also cited, supporting the non-liability of additional duty on repaired goods.

The respondent argued that Notification No. 204/76 was the only applicable notification and that the goods remain the same for purposes of Section 3 of CTA, thus making additional duty chargeable.

The Tribunal, after considering both sides, held that even if the imported articles do not strictly fall under "produced or manufactured" articles, they still belong to a "class or description" of articles on which duty is leviable. Therefore, the goods covered by Bills of Entry 109401 and 109402 were liable to additional duty under Section 3(1) of CTA.

Issue 2: Interpretation of "Like Article Produced or Manufactured in India"
The appellants contended that the re-imported goods do not fit the description of "like articles produced or manufactured in India" due to their status as repaired and re-conditioned goods. The Tribunal clarified that the Explanation to Section 3(1) includes two categories: (a) "like articles" produced or manufactured in India and (b) articles of a "class or description" on which duty is leviable. The Tribunal concluded that the repaired/re-conditioned articles fall under the second category, thus making them liable for additional duty.

Issue 3: Consideration of Double Taxation
The Vice President, in his separate judgment, opined that CVD is chargeable only once at the time of original importation. Re-importation of repaired/re-conditioned goods should not attract additional duty again, as it would amount to double taxation. He emphasized that the identity of the goods remained unchanged, and no evidence was provided to suggest otherwise. The Vice President also highlighted the need to read Section 20 of the Customs Act along with Section 3 of CTA in the context of re-imported goods.

Majority Decision:
The majority decision, led by Member (J), agreed with the Vice President that the matter required reconsideration in light of the Supreme Court's decision in Hyderabad Industries Ltd. v. Union of India. The Supreme Court held that additional duty can only be levied if a like article is produced or manufactured in India. The case was remanded to the adjudicating authority for de novo consideration, allowing both parties to present further evidence.

Conclusion:
The Tribunal's majority order set aside the impugned order and remanded the matter for reconsideration, emphasizing the need to address the issue of double taxation and the applicability of additional duty on re-imported goods in light of relevant legal precedents.