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2017 (5) TMI 1324 - AT - CustomsRefund claim - CVD/cess on imported rubber - whether appellants are liable to pay at the time of import additional duty of customs under Section 3 (1) of Customs Tariff Act, 1975 equal to such duty of excise levied as cess under Rubber Act? Held that - circular dt. 2.2.97 and 29.9.97 clarifying that for imported goods equivalent amount of cess leviable as duty of excise has to be collected as additional duty of customs and that even though Rubber Act, 1947 would provide for collection of cess on imports, additional duty of customs is payable on imported rubber by virtue of Section 3 of CTA, 1975. The additional duty of customs is very much leviable under Section 3 (1) of the CETA in respect of imported rubber equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947. Rejection of refund claim justified - appeal dismissed - decided against appellant.
Issues Involved:
1. Whether cess leviable on domestically produced rubber under the Rubber Act, 1947 is also leviable on imported rubber. 2. Whether additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975, equal to cess levied under the Rubber Act, can be levied on imported rubber. Issue-Wise Detailed Analysis: 1. Levy of Cess on Imported Rubber: The appellant argued that cess at ?1.50/kg is not leviable on imported rubber either as additional Customs duty (CVD) or as cess. They contended that under Section 12 of the Rubber Act, 1947, the cess is levied as a duty of excise on all rubber produced in India and is to be collected by the Rubber Board. The additional Customs duty is levied under Section 3(1) of the Customs Tariff Act, 1975, which authorizes the collection of duty equal to the excise duty leviable on a like article if produced or manufactured in India. The appellants filed refund applications for the cess paid on imported rubber, which were rejected by the adjudicating authority and upheld by the Commissioner (Appeals). 2. Applicability of Additional Duty of Customs: The primary issue for consideration was whether the appellants are liable to pay additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975, equal to the cess levied under the Rubber Act. The Tribunal analyzed various judgments and circulars to resolve this issue. Judgments and Circulars: - MRF Ltd. vs. CC Madras (1977): The Tribunal held that cess is not leviable on imported rubber, relying on Board's circulars dated 22.07.97 and 30.06.97, which clarified that cess is leviable only on rubber produced in India. - M.M. Rubber Co. Ltd. vs. CC Chennai (1998): The Tribunal set aside the demand for cess on imported rubber, following the judgment in MRF Ltd. (supra). - Circulars (1997 and 1998): The Circulars dated 02.09.1997 and 29.09.1997 clarified that additional duty of customs equivalent to cess is leviable on imported goods when cess is collected as a duty of excise. The Circular dated 08.10.1998 withdrew earlier circulars, changing the scenario. - London Rubber Co. India Ltd. & Ors. vs. CC Chennai (2003): The Tribunal set aside the demand for cess on imported rubber, following judgments in M.M. Rubber Co. Ltd. and Vikrant Tyres Ltd. The Hon'ble Apex Court dismissed the Revenue's SLP, affirming the Tribunal's order. Larger Bench Decision: - T.T.K-LIG Ltd. vs. CC Chennai/New Delhi (2006): The Larger Bench held that additional duty of customs is leviable under Section 3 of the Customs Tariff Act, 1975, on imported rubber equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947, thus favoring the Revenue. Subsequent Tribunal Decisions: - Vikrant Tyres Ltd. vs. CC Chennai (2007): The Tribunal did not follow the Larger Bench judgment and instead followed the earlier judgments in M.M. Rubber and Vikrant Tyres, holding that cess is not leviable on imported rubber. High Court and Supreme Court Decisions: - The High Court dismissed the appellant's writ petition, upholding the levy of additional duty of customs on imported rubber. - The Supreme Court dismissed appeals filed by the Revenue on the grounds of delay or monetary limits, without addressing the merits. Conclusion: The Tribunal concluded that the issue at hand is covered by the judgment of the Larger Bench in T.T.K. LIG Ltd., which held that additional duty of customs is leviable on imported rubber equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947. The impugned order rejecting the refund claims was sustained, and the appeal was dismissed.
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