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Showing 61 to 80 of 195 Records
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1987 (12) TMI 223
Issues:
1. Classification of imported items under the Policy.
2. Eligibility for import under OGL.
3. Confiscation and fine imposed by the Addl. Collector.
4. Interpretation of relevant entries in Appendices 5 and 9 of the Policy.
Analysis:
Issue 1: The appellants imported ink additive and ink concentrate seeking clearance under OGL. Customs objected, stating the ink additive was a silicone grease under Appendix 9 and ink concentrate was akin to ball pen ink under Appendix 5.
Issue 2: The Addl. Collector ordered confiscation but allowed redemption on payment of a fine. Appellants contended the ink additive was not a petroleum product and the ink concentrate was not ball pen ink, supported by supplier letters, manufacturing processes, and expert opinions.
Issue 3: The Addl. Collector's order was based on the Dy. Chief Chemist's report, classifying the items as per Appendices 5 and 9. The fine imposed was challenged as excessive, while past import approvals were cited as precedents.
Issue 4: The judgment scrutinized the Addl. Collector's reliance on the Dy. C.C.'s opinion without independent examination. It highlighted discrepancies in classifying the ink additive as a petroleum product and the ink concentrate as ball pen ink, emphasizing the need for specific evidence.
The judgment emphasized the necessity of establishing the nature of imported items accurately for proper classification under the Policy. It critiqued the Addl. Collector's failure to address appellants' contentions and past practices. Ultimately, the appeal was allowed, setting aside the confiscation and fine, emphasizing the appellants' eligibility as industrial users under the Policy.
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1987 (12) TMI 222
Issues:
Appeal against order of Collector of Customs; Validity of import licences for defective sheets; Confiscation of goods under banned list; Interpretation of import policy; Validity of REP licences for import of defective sheets.
Detailed Analysis:
The appeal was filed before the Central Board of Excise and Customs against an order by the Collector of Customs, Bombay, regarding the import of defective sheets. The appellants imported 84 coils of G.P. sheets and sought clearance against 8 import licences, out of which 4 were deemed invalid by the Customs House. The Collector ordered confiscation of goods valued at Rs. 2,62,205.00 but allowed redemption upon payment of a fine of Rs. 1,00,000.00. The main issue was the validity of the import licences for the defective sheets.
During the appeal hearing, the appellant's representative argued that the import policy permitted the import of defective sheets under certain conditions. He highlighted specific paragraphs in the policy that supported his contention. On the other hand, the JDR for the Collector supported the order, stating that the policy only allowed the import of prime quality sheets and that defective sheets were banned items unless specifically permitted.
The Tribunal analyzed the relevant provisions of the import policy, particularly focusing on the definitions of prime quality items and banned items in Appendices 6 and 7. It was noted that the policy required all iron and steel items to be of prime quality unless specified otherwise. The specific entry in Appendix 6 listed defective sheets as banned items.
The appellant's argument that the REP licences were valid for importing packing materials, including defective sheets, was rejected by the Tribunal. It was emphasized that the policy did not explicitly permit the import of banned items, and the licences did not specify the import of defective sheets. The Tribunal concluded that since the defective sheets were listed as banned items in Appendix 6, the Collector's decision to confiscate the goods was justified.
In light of the above analysis, the Tribunal rejected the appeal, upholding the Collector's order of confiscation. The decision was based on the interpretation of the import policy and the specific provisions regarding banned items and REP licences.
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1987 (12) TMI 213
Issues Involved:
1. Entitlement to import rapeseed under REP licences.
2. Canalisation of rapeseed as per Import & Export Policy.
3. Compliance with the conditions of REP licences and Import Policy.
4. Past practice of Customs authorities in clearing similar consignments.
5. Validity of the clarification issued by the Joint Chief Controller of Imports and Exports.
Summary of Judgment:
1. Entitlement to Import Rapeseed under REP Licences:
The petitioner, operating under the name M.B. Impex, obtained several REP licences permitting the importation of "seeds/bulbs/mother plant/germ plasm." The petitioner entered into a contract for importing approximately 1410 M.T. of rapeseed and obtained the necessary permit from the Ministry of Agriculture & Rural Development. The petitioner submitted 15 Bills of Entry for the consignments, but the Customs Authorities verbally intimated that the rapeseed would not be cleared under the REP licences, claiming rapeseed is a canalised item.
2. Canalisation of Rapeseed as per Import & Export Policy:
The Customs authorities contended that rapeseed falls under Appendix 5, Part B of the Import & Export Policy (April 1985 - March 1988), which states that items like rapeseed oil/seeds are to be imported by the State Trading Corporation of India (STC) or Hindustan Vegetable Oils Corporation under Open General Licence. However, the court noted that Chapter IV of the Policy allows REP Licence holders to import canalised items if they appear in the licence or can be imported under specific provisions of the policy.
3. Compliance with the Conditions of REP Licences and Import Policy:
The court highlighted that REP licences are freely transferable and not subject to 'Actual User' conditions unless specified. The petitioner, as a transferee, did not claim any import facilities restricted to registered exporters. The licences specifically permitted the importation of "seeds/bulbs/mother plant/germ plasm," and there were no restrictive conditions in Column 5 of Appendix 17 against these items. The petitioner also complied with paragraph 197(1) by furnishing particulars to the Canalising Agency.
4. Past Practice of Customs Authorities in Clearing Similar Consignments:
The court noted that in April 1987, similar consignments of rapeseed imported by other entities were cleared by Calcutta Customs under similar REP licences. The Customs authorities claimed these clearances were mistakes but provided no details on how the mistakes were detected. The court emphasized that the Customs authorities cannot ignore past practices and adopt different standards arbitrarily.
5. Validity of the Clarification Issued by the Joint Chief Controller of Imports and Exports:
A telex message from the Joint Chief Controller of Imports and Exports clarified that rapeseed is not covered by the shopping list in Appendix 17. The court ruled that this clarification, being an inter-departmental communication without public notice, does not have the force of law and cannot be relied upon by the Customs authorities. The court also noted that the clarification was issued after the importation of the consignments.
Conclusion:
The court concluded that the Customs authorities cannot withhold the release of the consignments based on the arguments presented. The petitioner is entitled to import rapeseed under the REP licences, and the Customs authorities are directed to release the consignments forthwith. The court also addressed the procedural aspects, including the role of the Receiver and the discharge of duties.
Order:
The application is allowed, and the respondents are directed to release the consignments immediately. The assessment should be completed within a week, and the goods should be released thereafter. The Receiver is instructed to deliver the goods to the petitioner and will be discharged upon completion.
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1987 (12) TMI 212
Issues:
1. Transfer of revision application to the Tribunal for appeal consideration.
2. Alleged violation of Central Excise rules regarding removal of excisable goods.
3. Interpretation of Notification 125 of 1980 and its applicability.
4. Compliance with the Bombay Prohibition Act.
5. Defense arguments regarding the nature of the goods removed.
6. Decision on the appeal and rejection thereof.
Transfer of Revision Application to the Tribunal:
The revision application filed by the appellant against the order passed by the Central Board of Excise and Customs was statutorily transferred to the Tribunal for consideration as an appeal.
Alleged Violation of Central Excise Rules:
The case involved the verification of excisable goods bought by the appellants, leading to the discovery of excess and shortage of certain substances. The Central Excise authorities seized a specific quantity of alcohol and held the appellants liable for differential duty and imposed a penalty for sending goods outside their factory premises without authorization.
Interpretation of Notification 125 of 1980:
The appellants relied on Notification 125 of 1980 to justify the removal of goods for further processing outside the factory premises. However, the notification came into force after the goods were removed, rendering it inapplicable to the situation. The Tribunal noted that the notification allowed removal for necessary industrial processes, but the removal in question predated the notification.
Compliance with the Bombay Prohibition Act:
The appellants argued compliance with the Bombay Prohibition Act regarding the manufacture of denatured spirit. They contended that the goods sent outside the factory were essential raw materials for manufacturing pharmaceuticals and dyes, emphasizing their adherence to legal provisions.
Defense Arguments on Goods Nature:
The appellants claimed that the goods sent outside were not in violation of the rules as they were processed toluene, not raw toluene. However, the Tribunal rejected this argument, stating that processed toluene still falls under the purview of the rules governing excisable goods.
Decision on the Appeal:
The Tribunal considered the submissions and arguments presented by both parties. It concluded that the appellants had admitted to the unauthorized removal of goods, which violated the Central Excise rules. The Tribunal emphasized that compliance with one law does not justify breaching another. As the removal occurred before the relevant notification came into effect, the Tribunal rejected the appeal, upholding the decision of the Central Board of Excise and Customs.
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1987 (12) TMI 207
Issues:
- Challenge of inclusion of mark-up in the assessable value for passenger cars under the Central Excises and Salt Act, 1944.
- Interpretation of Section 4 of the Central Excises and Salt Act regarding the determination of the "normal price."
- Dispute over whether mark-up should be considered as part of the consideration for the sale of the vehicle.
- Application of judgments related to similar cases in determining the outcome of the appeal.
Analysis:
The judgment pertains to an appeal before the Appellate Tribunal CEGAT, New Delhi, regarding the inclusion of mark-up in the assessable value for passenger cars under the Central Excises and Salt Act, 1944. The appellants challenged the Central Board of Excise and Customs' decision, arguing that mark-up should not be considered part of the "normal price" as per Section 4 of the Act. The appellants contended that the net dealer price minus discount should form the basis of the assessable value for passenger cars sold under a rate contract with the DGS&D. The Collector of Central Excise had held that rate contract prices, including mark-up, should constitute the normal price, a decision upheld by the Central Board of Excise and Customs, leading to the appeal before the Tribunal.
In the appeal, the appellants, represented by Shri D.N. Mehta, argued that the mark-up amount should be excluded from the assessable value based on various judgments cited, including those of M/s. S.M. Chemicals & Electronics and Another v. R. Parthasarathy and Others. On the other hand, Shri V.H. Doiphode, representing the respondent, contended that any price charged should constitute the normal price under Section 4 of the Act. He argued against allowing a deduction for mark-up, citing judgments such as the one in the case of Union of India v. Bombay Tyres.
The Tribunal, after considering the arguments and examining the facts, found that the judgments cited by Shri Mehta did not support his position. Referring to the principles outlined in the Bombay Tyres case, the Tribunal concluded that expenses like mark-up and after-sale service costs should not be deducted from the assessable value. The Tribunal highlighted that such expenses contribute to the value and marketability of the article, as observed in the Supreme Court's judgment. Therefore, the Tribunal dismissed the appeal, stating that the mark-up and service charges cannot be allowed as deductions from the assessable value, as they are part of the initial warranty and contribute to the value of the goods.
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1987 (12) TMI 206
The judgment concerns the eligibility of printed PVC Sheets imported by the respondents under Notification No. 342/76. The Bench found no merit in Revenue's argument that the PVC Sheets must be in raw material form to qualify. The appeal by Revenue was dismissed, following a precedent order. The appeal filed by Revenue was also dismissed.
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1987 (12) TMI 205
Issues Involved:
1. Legality of the Additional Sessions Judge's order granting bail.
2. Nature and seriousness of the offense.
3. Likelihood of the accused absconding.
4. Possibility of tampering with evidence.
5. Consideration of the accused being a woman and the health of a minor child.
6. Application of Section 437(1) and 437(6) of the Cr.P.C.
Detailed Analysis:
1. Legality of the Additional Sessions Judge's order granting bail:
The petitioner challenged the order dated 7th November 1987, by the Additional Sessions Judge, Greater Bombay, which granted bail to the respondents. The petitioner argued that the order was improper and incorrect, and the High Court stayed the order pending admission. The High Court emphasized that this was not an application for cancellation of bail but a challenge to the order granting bail on the grounds of impropriety and injustice.
2. Nature and seriousness of the offense:
The respondents were involved in smuggling a large quantity of gold into India, which is considered an economic offense. The court noted that such offenses endanger the economy of the country. The involvement of the respondents was evident from the material on record, including the recovery of gold bars and their statements.
3. Likelihood of the accused absconding:
The court highlighted that foreign nationals involved in similar offenses often abscond after obtaining bail. The Customs Department's affidavit showed that out of 97 foreign nationals arrested for similar offenses, 84 absconded after being granted bail. The court found a high probability that the respondents would abscond if released on bail, given the large-scale smuggling involved and the absconding of co-accused Mr. & Mrs. Maturgo.
4. Possibility of tampering with evidence:
The court considered the possibility of the accused tampering with evidence. The respondents had previously admitted to smuggling gold and had retracted their statements. However, the court noted that this was not the stage to assess the admissibility or value of the evidence but to determine the likelihood of the accused being available for trial.
5. Consideration of the accused being a woman and the health of a minor child:
Respondent No. 2 argued for bail under the first proviso to Section 437(1) of the Cr.P.C., which allows for bail to women, minors, or the infirm. The court, however, stated that all other considerations must be weighed, and the mere fact of being a woman does not obligate the court to grant bail. The court also addressed the health concerns of the minor child, noting that the child had been examined by a pediatrician and found to be receiving proper treatment while in custody.
6. Application of Section 437(1) and 437(6) of the Cr.P.C.:
The court examined the application of Section 437(1) and 437(6) of the Cr.P.C., which pertains to the release of accused on bail if the trial is not concluded within 60 days from the first date fixed for taking evidence. The court agreed with the Delhi High Court's interpretation that the 60-day period starts from the date after the accused is charge-sheeted and the prosecution is given notice for recording evidence.
Conclusion:
The High Court quashed and set aside the order of the Additional Sessions Judge granting bail to the respondents. It directed the trial court to conduct and complete the trial with utmost dispatch and on a day-to-day basis, considering the prolonged custody of the accused and the minor child. The court emphasized the importance of ensuring the accused's availability for trial, especially in cases involving serious economic offenses like smuggling.
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1987 (12) TMI 204
Issues:
- Imposition of fine and penalty under the Gold (Control) Act, 1968
- Seizure of gold ornaments from appellant Peter
- Validity of appellant Peter's statement and evidence
- Violation of principles of natural justice
- Examination of witnesses and relevant records
- Remand of the case for re-consideration
Analysis:
The judgment involves four appeals challenging the order of the Collector of Central Excise, Cochin, imposing a fine and penalty under the Gold (Control) Act, 1968. The main appellant, Peter, a licensed gold dealer, was intercepted with new gold ornaments, leading to seizure and subsequent proceedings. The appellants, as claimants of the seized gold, contested the rejection of their claims. The central issue revolved around the validity of Peter's statement, the evidence presented, and the imposition of fines and penalties under the Act.
Appellant Peter's consultant argued that his statement lacked evidentiary value due to retraction, attributing it to intoxication. The defense highlighted discrepancies in the authorities' findings and emphasized the statutory registers and documentary evidence supporting Peter's claims. The defense further contended that the exoneration of Thankappan Achari, the alleged seller, undermined the reliance on Peter's statement. The defense also raised concerns about the denial of examining key witnesses and the violation of natural justice principles.
The respondent, represented by the D.R., acknowledged the lack of reference to the defense's contentions in the impugned order. The respondent suggested a remittance of the issue for reconsideration based on discrepancies in the Repair register entries and Peter's responses to the charges. The judge, after careful consideration, noted the importance of the Repair register entries and the denial of corrections by Peter. The judge highlighted the appellant's requests to examine crucial witnesses and their records, which were not addressed in the impugned order.
Consequently, the judge set aside the impugned order and remitted the case to the Collector of Central Excise for re-consideration. The judge stressed the necessity of allowing the appellant to present evidence through witnesses and statutory records to substantiate his defense. Failure to produce witnesses within a reasonable time would empower the adjudicating authority to proceed without their testimony. The judge also remanded the appeals of the claimants for joint consideration with Peter's main appeal, emphasizing the interconnected nature of the cases.
In conclusion, the judgment focused on the procedural fairness, evidentiary support, and the right to present a defense in cases involving the seizure of gold ornaments and the imposition of fines and penalties under the Gold (Control) Act, 1968. The remand of the case aimed at ensuring a thorough examination of the evidence and witnesses to uphold the principles of natural justice and fair adjudication.
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1987 (12) TMI 203
Issues Involved:
1. Demand of duty on 2645 drums of electric wire and cable.
2. Confiscation of the seized 330 coils of electric wire and cable.
3. Imposition of personal penalty.
Issue-Wise Detailed Analysis:
1. Demand of Duty on 2645 Drums of Electric Wire and Cable:
The appellants were found to have manufactured and cleared 2645 drums of electric wires and cables without payment of Central Excise duty and without a license. The appellants argued that they only processed the wires for M/s. Krishna Electrical Industries, who supplied the raw materials and paid the necessary duty. The Collector rejected this defense, citing the lack of evidence that M/s. Krishna Electrical Industries accounted for these drums in their records. The Member (Judicial) disagreed, stating that the appellants were not the manufacturers since they only performed job work on raw materials supplied by M/s. Krishna Electrical Industries, who shouldered the duty liability. The Member (Technical) maintained that the appellants were liable for duty as they engaged in manufacturing without a license. The third Member (Judicial) concurred with the Member (Judicial), emphasizing that the appellants were job workers and not manufacturers, thus not liable for duty. Consequently, the majority view set aside the demand for duty on the 2645 drums.
2. Confiscation of the Seized 330 Coils of Electric Wire and Cable:
The 330 coils were found unaccounted for in the RG-1 register and were seized. The appellants contended that these coils were waste materials from trial runs and not fully manufactured goods. The Collector found that these coils were in pre-measured lengths and tagged, indicating they were fully manufactured and should have been entered in the RG-1 register. The Member (Judicial) argued that the coils were not complete as they had not undergone necessary tests required by the P&T Department. However, the Member (Technical) and the third Member (Judicial) disagreed, stating that the coils were fully manufactured and should have been accounted for. The majority view upheld the confiscation of the 330 coils.
3. Imposition of Personal Penalty:
The Collector imposed a composite penalty of Rs. 1,00,000 for both the clandestine removal of 2645 drums and the non-accountal of 330 coils. Given the majority view that the demand for duty on the 2645 drums was not justified, the penalty was reconsidered. The third Member (Judicial) held that a personal penalty was warranted only for the non-accountal of the 330 coils. The final order reduced the personal penalty to Rs. 10,000, considering the circumstances and the value of the goods involved.
Conclusion:
The appeal was partly allowed. The demand for duty on the 2645 drums of electric wires and cables was set aside. The confiscation of the 330 coils was upheld with a redemption fine of Rs. 5,000. The personal penalty was reduced to Rs. 10,000.
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1987 (12) TMI 192
Issues Involved:
1. Adducing additional grounds.
2. Stay of proceedings.
3. Jurisdiction of the Collector to issue Show Cause Notice.
4. Validity of the Show Cause Notice based on limitation and suppression.
Summary:
1. Adducing Additional Grounds:
The petition filed to adduce additional grounds was allowed.
2. Stay of Proceedings:
The petition seeking a stay of proceedings before the Collector was dismissed as the appeal against the Collector's order was taken up for disposal on merits.
3. Jurisdiction of the Collector to Issue Show Cause Notice:
The appeal was directed against the order dated 24-4-1987 by the Collector of Central Excise, Madurai, which held that the Collector had jurisdiction to issue the Show Cause Notice demanding duty from the appellants for the period March 1979 to May 1981, and the same was not hit by limitation.
- The appellants contended that the Show Cause Notice for the period 1-3-1979 to 31-5-1981 was previously addressed by the Superintendent of Central Excise, Tiruchendur Range, and settled by the Assistant Collector's letter dated 3-2-1982. They argued that this letter constituted an adjudication order, thus barring the Collector from issuing a new Show Cause Notice for the same period.
- The respondents argued that the second Show Cause Notice issued on 12-5-1983 alleged new grounds of suppression and mis-statement not addressed in the first Show Cause Notice, justifying a new adjudication by the Collector.
4. Validity of the Show Cause Notice Based on Limitation and Suppression:
The appellants argued that the second Show Cause Notice was barred by constructive res judicata and that the Collector had no jurisdiction to issue it under Section 11A as the "Proper Officer" was the Assistant Collector. They also contended that the Show Cause Notice was invalid as it was not signed by the Collector personally.
- The respondents countered that the second Show Cause Notice detailed new grounds of suppression and mis-statement, which were not part of the first Show Cause Notice. They also argued that the Collector had the authority to issue the Show Cause Notice under Rule 6 of the Central Excise Rules and that the amendment to Section 11A effective from 27-12-1985 empowered the Collector to issue such notices.
- The Tribunal held that the Assistant Collector's letter dated 3-2-1982 had certain attributes of a decision but the second Show Cause Notice disclosed new material justifying a fresh adjudication by the Collector. It was also held that the Collector had jurisdiction to issue the Show Cause Notice under Rule 6 of the Central Excise Rules, even prior to the amendment of Section 11A.
- The Tribunal further noted that the amendment to Section 11A in December 1985 clarified the Collector's authority to issue Show Cause Notices for longer periods and that the pending proceedings were deemed to be transferred to the Collector.
Conclusion:
The Tribunal concluded that the Collector of Central Excise, Madurai, had jurisdiction to issue the Show Cause Notice dated 12-5-1983. The appeal was disposed of, allowing the appellants to pursue their case before the Collector as per the law.
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1987 (12) TMI 191
Issues:
1. Whether the demand for Central Excise Duty was time-barred under Section 11A of the Central Excises and Salt Act, 1944.
Analysis:
The case involved a dispute regarding the time-barring of a demand for Central Excise Duty. The applicant was called upon to show cause as to why Central Excise duty amounting to Rs. 60,160.12 should not be recovered from them due to woollen fabrics found short during stocktaking. The Additional Collector found the appellants guilty of non-maintenance of Central Excise Records and imposed a penalty. The appellants challenged the demand on the grounds of being time-barred. The Additional Collector held that the demand was not time-barred, leading to the appeal.
During the appeal, the contention that the demand was time-barred was raised again. The argument was based on the completion date of the annual stocktaking and the subsequent issuance of the demand notice. The appellant's counsel argued that the demand was time-barred as it was issued after six months from the completion of stocktaking. However, the tribunal rejected this contention, emphasizing the importance of the proper officer's involvement in ascertaining deficiencies after stocktaking. The tribunal held that the demand was not time-barred based on the sequence of events and the involvement of the proper officer in verifying shortages.
The tribunal further analyzed Rule 223A of the Central Excise Rules, 1944, which outlines the process of stocktaking and deficiency ascertainment. It highlighted that the deficiency is ascertained by the proper officer after considering various factors, not solely based on the initial stocktaking findings. The tribunal concluded that the deficiency was ascertained by the proper officer after the final stocktaking report was submitted, not solely based on the initial stocktaking completion date. The tribunal rejected the argument that the deficiency was ascertained at the time of stocktaking, emphasizing the role of the proper officer in the process.
In the final decision, the tribunal rejected the application, affirming that the demand for Central Excise Duty was not time-barred. The tribunal noted the change in argument presented during the appeal compared to the initial hearing but emphasized the proper disposal of the matter based on the presented facts and legal analysis. The tribunal concluded that no question of law requiring a reference to the High Court arose in the case, ultimately rejecting the application.
This detailed analysis of the judgment highlights the intricacies of the dispute regarding the time-barring of the Central Excise Duty demand and the tribunal's thorough examination of the legal provisions and factual circumstances involved in reaching its decision.
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1987 (12) TMI 190
Issues Involved:
1. Eligibility of Amegyl Suspension for exemption of central excise duty under Notification No. 116/69-C.E.
2. Whether the demand for duty raised by the Department was barred by limitation.
Issue-wise Detailed Analysis:
1. Eligibility for Exemption:
The primary issue was whether Amegyl Suspension, a product manufactured by the respondents, qualified for central excise duty exemption under Notification No. 116/69-C.E. dated 3-5-1969, as amended. The notification exempts Patent or Proprietary medicines falling under Central Excise Tariff Item 14E if they contain specified ingredients or pharmaceutical necessities that are therapeutically inert.
The respondents claimed exemption for Amegyl Suspension, which contained Metronidazole Benzoate and Di-Iodo Hydroxy Quinoline. The Assistant Collector held that Metronidazole Benzoate was not specified in the notification, and thus the product did not qualify for the exemption. The Collector (Appeals) overturned this decision, stating that Metronidazole Benzoate, despite not being explicitly mentioned, should not deprive the product of the exemption as it was used to make Metronidazole palatable without altering its therapeutic properties.
Upon review, it was determined that Metronidazole Benzoate and Metronidazole are chemically distinct, with different molecular formulas and weights. The Tribunal concluded that Metronidazole Benzoate is a substitute for Metronidazole but not the same, thus not qualifying for the exemption under Notification No. 116/69-C.E.
2. Limitation on Duty Demand:
The second issue was whether the demand for duty was barred by limitation. The Assistant Collector demanded duty for the period from 15.11.1979 to 29.10.1982 under Rule 9-B of the Central Excise Rules, 1914, claiming the classification lists were provisionally approved. The Collector (Appeals) limited the demand to six months, citing the absence of findings invoking the proviso to sub-section (1) of Section 11-A of the Central Excises and Salt Act, 1944.
The Tribunal examined the approval process of the classification lists and R.T. 12 returns. It was found that while some lists were approved "subject to chemical test," there was no evidence of actual chemical testing or provisional assessment formalities being followed. The Tribunal determined that the assessments were not provisional and thus, the demand for duty should be restricted to six months prior to the issue of the show cause notice, as per Section 11-A of the Central Excises and Salt Act, 1944.
Conclusion:
The Tribunal allowed the Revenue's appeal on the merits, concluding that Amegyl Suspension did not qualify for the exemption under Notification No. 116/69-C.E. However, it restricted the demand for duty to the period of six months prior to the issue of the show cause notice, as the longer limitation period was not applicable. The order of the Collector (Appeals) was thus partly set aside, and the appeal was partly allowed in these terms.
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1987 (12) TMI 189
Issues:
1. Challenge to setting aside of penalty and redemption fine
2. Classification of Micronutrient Zinc Sulphate under Tariff Item 68 or 14HH
3. Benefit of exemption under Notification 89/79-C.E.
4. Moulding relief and duty payment on excess clearance value
Analysis:
1. The appellant Collector of Central Excise challenged the setting aside of penalty and redemption fine by the Collector (Appeals) New Delhi. The respondents were engaged in the manufacture of Micronutrient Zinc Sulphate, initially classified under Item 14HH and exempt from duty. However, a trade notice later classified it under Tariff Item 68. The Deputy Collector found the respondents cleared Micronutrients without paying duty exceeding the exemption limit, leading to penalties and confiscation. The Collector (Appeals) upheld the duty payment but set aside the penalty and redemption fine.
2. The main issue revolved around the classification of Micronutrient Zinc Sulphate under Tariff Item 68 or 14HH. The Tribunal's decision in Radhika Vitamalt Pvt. Ltd. held it as Fertilizer under Tariff Item 14HH, contradicting the Revenue's classification under Tariff Item 68. The appellant argued that the benefit of exemption under Notification 89/79-C.E. should not apply if classified under 14HH, while the respondents contended that the demand under Tariff Item 68 should be set aside.
3. The benefit of exemption under Notification 89/79-C.E. was crucial in determining the duty liability. The appellant contended that since the goods were classified under 14HH, the exemption under the notification would not apply. The respondents, however, argued that the demand under Tariff Item 68 should be dropped following the classification under 14HH. The Tribunal held that the benefit granted under the notification should not be disturbed, but duty should be paid on the excess clearance value under Tariff Item 14HH.
4. The Tribunal considered the plea for moulding relief and the duty payment on excess clearance value. It held that the respondents should pay duty on clearance exceeding Rs. 15 lakhs under Tariff Item 14HH, as directed by the Collector (Appeals). The duty amount should not exceed what would have been payable if assessed under Tariff Item 68. The appeal challenging penalties and redemption fine was dismissed, and the respondents were directed to pay duty on excess clearance value under Tariff Item 14HH.
This judgment clarifies the classification of Micronutrient Zinc Sulphate and the implications on duty liability, emphasizing the importance of proper classification under the Central Excise Tariff for determining duty exemptions and payments.
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1987 (12) TMI 188
The Appellate Tribunal CEGAT, New Delhi, in the case of Hindustan Tyres Pvt. Ltd., held that re-rubberisation of old rubberised M.S. Rims does not amount to "manufacture" under the Central Excises and Salt Act. The Tribunal relied on a Supreme Court judgment and allowed the appeals filed by Hindustan Tyres, granting them a refund of duty paid. The Collector of Central Excise's appeal was dismissed.
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1987 (12) TMI 187
Issues:
1. Seizure of excess gold and gold ornaments by Gola (Control) Officers.
2. Discrepancies in the weight of seized gold during assay Panchanama.
3. Explanations provided by the gold dealer regarding excess stock of gold ornaments.
4. Order of confiscation and imposition of penalties by the Deputy Collector.
5. Appeal filed before the Collector of Customs (Appeals) and subsequent setting aside of fine and penalty.
6. Review power exercised by the Government of India under Section 82(2) of the Gold (Control) Act.
7. Arguments presented before the Appellate Tribunal regarding the rejection of defenses by the adjudicating authority.
8. Consideration of defenses by the Collector (Appeals) and findings on discrepancies in the weighment Panchanama.
9. Observations by the Collector (Appeals) on the legality of the seizure and discrepancies in the seized goods.
10. Justification for setting aside the order of confiscation by the Collector (Appeals).
11. Setting aside of penalties by the Collector (Appeals) due to lack of satisfactory proof.
12. Final decision of the Appellate Tribunal rejecting the appeal.
Analysis:
1. The case involved the seizure of excess gold and gold ornaments by Gola (Control) Officers at a licensed gold dealer's premises, leading to discrepancies in the weight of seized items during the assay Panchanama. The gold dealer provided explanations for the excess stock of old and new gold ornaments, attributing them to repairs and differences in recording net and gross weights.
2. The Deputy Collector ordered confiscation of the seized gold and imposed penalties, which were challenged in an appeal before the Collector of Customs (Appeals). The Collector (Appeals) set aside the fine and penalties, prompting the Government of India to exercise its review power under the Gold (Control) Act, transferring the case to the Appellate Tribunal for further proceedings.
3. Arguments before the Tribunal revolved around the rejection of the gold dealer's defenses by the adjudicating authority and the Collector (Appeals). The Tribunal considered discrepancies in the weighment Panchanama and the legality of the seizure, ultimately upholding the Collector (Appeals)' findings on the rejection of the Department's case.
4. The Tribunal agreed with the Collector (Appeals) that the seizure was not in accordance with the law, emphasizing that only gold involved in contravention of the Gold (Control) Act or Rules could be seized. As the seizure did not pertain to contravening gold, the order of confiscation was set aside, along with the penalties due to lack of satisfactory proof.
5. In conclusion, the Appellate Tribunal rejected the appeal, affirming the Collector (Appeals)' decision to set aside the penalties and the order of confiscation. The Tribunal's decision was based on the lack of evidence supporting the charges against the appellant, leading to the dismissal of the appeal.
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1987 (12) TMI 186
Issues Involved:
1. Eligibility for exemption under Notification No. 28/64.
2. Definition and scope of "manufacture" under Section 2(f) of the Central Excises and Salt Act, 1944.
3. Application of Rules 10, 10-A, and 9 of the Central Excise Rules.
4. Departmental circulars and trade notices regarding the use of power in soap manufacturing.
5. Previous case laws cited in support of the arguments.
Detailed Analysis:
1. Eligibility for exemption under Notification No. 28/64:
The appellants manufactured laundry soap, including soap chips, and claimed exemption under Notification No. 28/64, dated 1.3.1964, as they did not use power in the manufacturing process. However, the Revenue raised a duty demand for soap chips manufactured with the aid of power. The appellants argued that the soap chips were made from scraps of soap blocks manufactured without power and that converting these scraps into chips did not create a new variety of soap. The lower authorities held that the process of cutting soap slabs into chips with the aid of power was incidental or ancillary to the completion of the manufacture of soap chips, thus disqualifying the exemption.
2. Definition and scope of "manufacture" under Section 2(f) of the Central Excises and Salt Act, 1944:
The appellants contended that the chips were still household laundry soap and that the cutting process did not bring a new commodity into existence. They cited a departmental circular (Trade Notice No. 107/76, dated 24.8.1976) which stated that cutting soap into chips with power in another factory did not constitute "manufacture" under Section 2(f). The Tribunal examined whether the process of cutting soap into chips could be considered incidental or ancillary to the manufacture of soap. It was concluded that the manufacture of soap was complete when the soap blocks were formed, and the subsequent cutting into chips did not constitute a new manufacturing process.
3. Application of Rules 10, 10-A, and 9 of the Central Excise Rules:
The appellants argued that a demand could only be raised under Rule 10, read with 173J, and not beyond six months. They also contended that Rule 10-A could not be invoked in their case and that Rule 9 was inapplicable due to their prior declaration of soap manufacturing. The Tribunal did not find sufficient grounds to invoke these rules against the appellants, given the established practice and prior departmental clarifications.
4. Departmental circulars and trade notices regarding the use of power in soap manufacturing:
The appellants referred to several departmental communications and trade notices which clarified that the use of power for cutting soap into chips did not constitute "manufacture" if the soap was initially produced without power. These notices indicated that soap chips made in a separate factory from the soap blocks did not require a Central Excise license or render the products dutiable. The Tribunal found these departmental positions consistent with the appellants' arguments.
5. Previous case laws cited in support of the arguments:
The appellants cited multiple case laws to support their position, including:
- Guardian Plasticote Ltd. v. Collector of Central Excise, Calcutta (1986)
- Adreena Industries v. Collector of Central Excise, Chandigarh (1987)
- Standard Fireworks Industries Sivakasi v. Collector of Central Excise, Madras (1987)
- Fram & Co. v. Collector of Central Excise, Bombay (1987)
- Swastik Packaging, Bombay v. Collector of Central Excise, Bombay (1986)
The Tribunal applied the rationale from these cases, particularly the Adreena Industries case, which defined "incidental or ancillary process" and held that the manufacture of a product is complete before any additional processes like drying or cutting. The Tribunal concluded that the cutting of soap blocks into chips did not constitute a new manufacturing process.
Conclusion:
The Tribunal held that the process of cutting soap blocks into chips with the aid of power did not constitute a new manufacturing process and thus did not disqualify the appellants from the exemption under Notification No. 28/64. The appeal was allowed, and the lower authority's order was set aside, granting the appellants consequential relief.
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1987 (12) TMI 185
Issues:
1. Interpretation of the term "undue hardship" in Section 35F of the Central Excises and Salt Act, 1944.
2. Consideration of factors like prima facie case and balance of convenience for dispensing with deposit under Section 35F.
3. Minority view on the interpretation of "undue hardship" in Section 35F.
4. Consideration of prima facie case while deciding on dispensing with pre-deposit under Section 35F.
5. Maintainability of Reference Application against an interim order.
6. Tribunal's power to review its own acts.
7. Whether rectification or recall of an order is necessary in this case.
8. Applicability of inherent powers of the Tribunal.
Analysis:
The applicants raised questions regarding the interpretation of "undue hardship" in Section 35F of the Central Excises and Salt Act, 1944. They questioned whether undue hardship was limited to financial or immediate pecuniary hardship and whether liquidity of the firm was the sole factor in determining undue hardship. Additionally, they challenged the Tribunal's stance on factors like prima facie case and balance of convenience for dispensing with the deposit under Section 35F.
During the hearing, the applicants cited precedents to support their contentions, including decisions from the Hon'ble High Court of Delhi and the Tribunal. They argued that the Tribunal had erred in its order and requested an amendment under Section 35C(2) of the Act to rectify the mistake. However, the Bench clarified that the current proceedings were for a Reference Application under Section 35G(1) and not for rectification.
The learned Counsel emphasized the Tribunal's inherent power to review its own acts, citing legal precedents that supported this notion. They contended that even without an express statutory provision for review, the Tribunal could rectify its errors if they caused prejudice to a party. The Counsel also highlighted cases where Tribunals had the authority to recall their orders, further supporting the argument for rectification in this case.
The Tribunal deliberated on the maintainability of the Reference Application against an interim order. The S.D.R. argued that a Reference Application should be based on a final order under Section 35C, and interlocutory orders did not warrant a reference. The S.D.R. also opposed the oral prayer for rectification, suggesting that a written application under Section 35C(2) would be more appropriate.
Ultimately, the Tribunal dismissed the application, stating that the Interim Order in question did not determine the parties' rights directly and did not fall under Section 35C. The Tribunal emphasized the need to adhere to the express provisions of the Central Excise Act and Section 35F regarding pre-deposit requirements. Additionally, the Tribunal noted that the points of law raised had already been settled by court judgments and Tribunal orders cited by the applicants, further justifying the dismissal of the application.
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1987 (12) TMI 184
Issues:
1. Classification of laminated jute bags under item 68 CET or item 22A CET.
2. Barred by limitation under Section 11A - whether the demand for duty is time-barred.
Classification Issue Analysis:
The case involved a dispute regarding the classification of laminated jute bags manufactured by the appellants. The Department contended that the bags were classifiable under item 68 CET and became duty exempt only from a specific date. On the other hand, the appellants argued that the bags fell under item 22A CET and were exempt from duty under a different notification. The appellants cited various tribunal decisions and a recent judgment of the Andhra Pradesh High Court supporting their classification stance. However, the Department insisted on following earlier decisions upholding classification under item 68 CET. The Tribunal noted the conflicting views but deemed it unnecessary to resolve the classification issue due to other submissions raised by the appellants.
Limitation Issue Analysis:
The primary contention raised by the appellants was that the demand for duty was barred by limitation under Section 11A. The show cause notice was issued after a significant period following the relevant period for duty demand. The notice did not allege fraud, collusion, willful misstatement, or suppression of facts by the appellants. The appellants highlighted correspondence with the Department indicating transparency in their manufacturing activities and approvals obtained for the same. The Tribunal found that the Department had prior knowledge of the manufacturing operations and no evidence of suppression was established. Therefore, the Tribunal held that the demand for duty was time-barred and set aside the orders of the lower authorities.
In conclusion, the Appellate Tribunal allowed the appeal, ruling in favor of the appellants on the grounds of the demand being barred by limitation under Section 11A. The classification issue was not delved into due to the time limitation defense successfully raised by the appellants. The orders of the lower authorities were set aside, providing consequential relief to the appellants.
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1987 (12) TMI 183
Issues:
1. Confiscation of Indian currency under Section 121 of the Customs Act, 1962.
2. Imposition of penalty under Section 112 of the Act.
3. Validity of inculpatory statements and retraction by the appellant.
4. Claim of currency ownership by various individuals.
5. Compliance with procedural requirements in issuing show cause notices.
6. Consideration of redemption of confiscated currency.
7. Reduction of penalty imposed.
Analysis:
1. The judgment pertains to an appeal against the confiscation of Indian currency worth Rs. 1,80,000 under Section 121 of the Customs Act, 1962, and the imposition of a penalty of Rs. 6,000 on the appellant under Section 112 of the Act. The currency was seized from the appellant's possession, with authorities suspecting it to be the sale proceeds of contraband gold.
2. The appellant's counsel argued that the inculpatory statements made by the appellant were not voluntary and true, citing retraction at the earliest opportunity. Additionally, it was contended that the claims of various individuals regarding the currency were not properly investigated, and the penalty imposed lacked specific sub-section references.
3. The Department, represented by the learned D.R., asserted that the appellant's retraction of statements was belated and unsupported. The recovery of a chit mentioning "7 bits" was deemed corroborative evidence of the appellant's involvement in selling gold bars for the seized currency.
4. The Tribunal found that the statements made by the appellant were voluntary and true, dismissing the argument of coercion. The chit recovered supported the connection between the currency and contraband gold. The delayed claims of ownership by other individuals were deemed unreliable, as they surfaced after a significant period post-seizure.
5. The Tribunal determined that the show cause notice adequately outlined the charges against the appellant, despite lacking specific sub-section references. The appellant's participation in the proceedings without objection indicated comprehension of the charges, negating any prejudice due to the omission.
6. Regarding the redemption of the confiscated currency, the Tribunal declined the appellant's request, affirming the currency's link to contraband gold. Citing precedents, the Tribunal reduced the penalty from Rs. 6,000 to Rs. 1,000, maintaining the confiscation but adjusting the penalty amount.
7. The judgment concluded by dismissing the appeal, except for the modified penalty reduction. The decision upheld the confiscation of the currency based on the appellant's statements and the denial of redemption due to the established connection to contraband activities.
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1987 (12) TMI 182
Issues Involved:
1. Confiscation of trucks.
2. Imposition of penalties on appellants Santokh Singh and Rajbir Singh.
3. Adequacy and reliability of evidence.
4. Legal validity of the confessional statements.
5. Compliance with Section 115 of the Customs Act.
Detailed Analysis:
1. Confiscation of Trucks:
The appeals challenged the confiscation of two trucks under the order of the Additional Collector of Customs. The trucks were intercepted carrying textiles of foreign origin, and the goods were seized under the belief that they were liable for confiscation under the Customs Act. The appellant Santokh Singh had purchased the trucks in the names of his son and wife, but he was in control of them and hired them out. The adjudicating authority ordered the confiscation of the trucks but allowed redemption upon payment of a fine.
2. Imposition of Penalties on Appellants:
The Additional Collector imposed a penalty of Rs. 3,00,000 on Santokh Singh and Rs. 1,50,000 on Rajbir Singh. The appellants contested the penalties, arguing a lack of evidence connecting them to the contraband goods. The authority relied on various statements, including those of drivers and cleaners, which implicated Santokh Singh in knowingly using the trucks for smuggling. For Rajbir Singh, the penalty was based on his presence at the loading site and his subsequent abscondence.
3. Adequacy and Reliability of Evidence:
The appellant Santokh Singh argued that the evidence against him was primarily from co-accused or accomplices, which lacked independent corroboration. The tribunal noted that the statements of drivers Manilal and Ram Swaroop, as well as cleaner Kallu, were consistent and credible. Santokh Singh did not seek cross-examination of these witnesses, and their statements were not retracted. The tribunal found this evidence sufficient to establish the guilt of Santokh Singh.
4. Legal Validity of the Confessional Statements:
Santokh Singh retracted his confessional statement, claiming it was obtained under duress. However, the tribunal observed that his initial confession was not retracted, and the retraction of the second statement was delayed and only occurred after the show cause notice was issued. The tribunal found the confessional statements credible and supported by other evidence, thus upholding their validity.
5. Compliance with Section 115 of the Customs Act:
The appellant argued that the confiscation order did not specify the clause under Section 115 under which it was made, rendering it invalid. The tribunal clarified that the confiscation was under Section 115(2), which allows for redemption upon payment of a fine. The tribunal found no merit in the argument that the order was based on assumptions and presumptions, as there was ample evidence to support the finding that Santokh Singh knowingly used the trucks for smuggling.
Conclusion:
The tribunal upheld the confiscation of the trucks and the penalties imposed on both appellants. It found the evidence against Santokh Singh, including the statements of drivers and cleaners and his own confessional statements, to be credible and sufficient. For Rajbir Singh, the tribunal considered his presence at the loading site and his abscondence as significant evidence of his involvement. The appeals were rejected, affirming the order of the Additional Collector of Customs.
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