1997 (7) TMI 117 - SC - Customs

Whether the animal feed supplement' would fall under the Exemption Notification dated 1-11-1982? Held that - It must be noted that presumably the amendment to exemption Notification No. 234/82 by a subsequent Notification No. 6/84-C.E., dated 15-2-1984 was not before the Court for consideration. The majority view also failed to take note of the subsequent amendment to the main exemption Notification as well as the effect of the amendment The appellant is entitled to the refund under the relevant Exemption Notification. However, it is for the concerned authority to further look into the refund applications and pass orders in the light of the ratio laid down by this Court in Mafatlal Industries Ltd. v. Union of India (1996 (12) TMI 50 - SUPREME COURT OF INDIA). The appeals are accordingly allowed.

Summary

Issues:
Classification of imported goods for duty assessment under Customs Tariff Act and Central Excise Tariff Act; Entitlement to exemption under Notification No. 234/82-C.E. for refund of countervailing duty; Interpretation of the term "animal feed supplements" under the exemption notification.

Analysis:
The case involved the classification of imported goods for duty assessment under the Customs Tariff Act and Central Excise Tariff Act, along with the entitlement to exemption under Notification No. 234/82-C.E. for the refund of countervailing duty. The appellant imported goods assessed under Heading 29.01/45(17) and claimed exemption under Item 23.01/07 as "Animal Feed" based on Notification No. 234/82-C.E. The Assistant Collector rejected the claim, leading to separate appeals before the appellate authorities at Bombay and Calcutta, resulting in conflicting decisions.

The Tribunal unanimously classified the goods under Heading 29.01/45(17) but differed on the exemption claimed. The minority view favored the appellant's entitlement to exemption, citing a Bombay High Court judgment supporting the classification of "animal feed supplements" under the exemption notification. In contrast, the majority view denied the exemption, influenced by a previous Tribunal decision challenged in the Supreme Court. The appellant argued for the Bombay High Court's interpretation, emphasizing the need to prefer the view favorable to the assessee in taxation matters.

The Supreme Court analyzed the Tribunal's minority and majority views, noting the minority's consideration of relevant precedents and subsequent amendment to the exemption notification. The majority's decision failed to account for the amendment's clarificatory nature and the Bombay High Court's interpretation of "animal feed supplements" falling under the exemption. Therefore, the Court held in favor of the appellant's entitlement to the refund under the relevant exemption notification, directing the concerned authority to process the refund applications accordingly, citing the precedent in Mafatlal Industries Ltd. v. Union of India.

In conclusion, the Supreme Court allowed the appeals, emphasizing the importance of interpreting tax laws favorably for the assessee and directing the concerned authority to process the refund applications in line with the Court's decision.