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TMI Blog1986 (11) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of imported HDPE had already paid the appropriate amount of excise duty leviable under the Central Excises Salt Act, 1944 and had thus not fulfilled one of the conditions of the notification. 3. At the hearing of the appeals there was no dispute between the parties about basic Customs classification under Heading 39.01/06 of the First Schedule to Customs Tariff Act, 1975 in respect of imported HDPE. There is also no dispute that the imported HDPE is manufactured out of raw naphtha or any chemical derived therefrom and would thus fulfil the first condition, about source of manufacture, of the notification. 4. Shri S.D. Nankani, the learned Advocate for the appellants appearing with Mrs. Kanta Iyer of v.A. Phadke Co. submitted that the Bombay High Court in a very recent decision Pan Asia Commercial Enterprises Another v. Union of India Another reported in 1986 (25) E.L.T. 508 (Born.) had held that HDPE is exempt from excise duty under notification dated 4-12-1979 and it is not permissible to levy countervailing duty thereon under Section 3 of the Customs Tariff Act, 1975. In. doing so the High Court had followed their earlier decision in Century Enka Ltd. Ors. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that an Administrative Tribunal cannot ignore the law declared by the highest Court in the State. It is implicit in the power of supervision conferred on the High Court that all the Tribunals subject to its supervision should conform to the law laid down by it. Relying on Mamleshwar Prasad Another v. Kanahaiya Lal AIR 1975 S.C. 907 paras 7 and 8 he submitted that a decision once rendered must later bind live cases and the prior decision of the Court on identical facts and law binds the Court on the same points in a later case. Relying on Ambika Prasad Mishra v. State of U.P. Ors. AIR 1980 S.C. 1762 a Five Member bench decision of the Supreme Court he submitted that every new discovery of argumentative novelty cannot undo or compel reconsideration of a binding precedent. He reiterated that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned. About the presidential force of High Court decision he also relied on Arabs Ltd. v. A.K. Bandyopadhyay [1981 E.L.T. 684 (Bom.), Godrej Boyce Manufacturing Co. Pvt. Ltd., Bombay Another v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that it is used in the manufacture of nylon yarn in the factory of production. According to Shri Sundar Rajan this was a matter of procedure whereas conditions imposed under Notification No. 302/79, dated 4-12-1979 were substantive in nature. The two notifications were not pari materia. Non-fulfilment of the two conditions under the notification would disentitle a manufacturer of the concession under the notification. He submitted that the Tribunal in a number of decisions had followed the Bombay High court decision in Century Enka s case where matters of procedure were concerned and there was substantial compliance with the requirement of the procedure. Such was not the case in the present appeals. He emphasised that Century Enka s case and Pan Asia s case were concerned with two different notifications not pari materia with one another. The presidential force of the decisions was shaken due to subsequent pronouncements of the Supreme Court. For this submission he referred to two decisions - (1) Khandelwal Metal Engineering Works Another v. Union of India Ors. 1985 (20) E.L.T. 222 (S.C.), where the Supreme Court held that additional duty under Section 3(3) of Customs Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concession under the Notification 302/79 was conditional and not absolute or unconditional. One could visualise the position where the conditions of the notification were not fulfilled and in such an event HDPE would not get the concession and would be subject, to standard rate of duty and on the conditions of the notification being fulfilled to the concessional rate of duty. Looking to this position as there were different rates of duty the highest duty was applicable under the Explanation. This aspect besides the Supreme Court decision in Khandelwal s case (supra) were not noticed by the Bombay High Court, the decision in Pan Asia s case was thus per incurium. For the argument that when different rates of duty are in force, the rate of duty applicable would be the highest rate of duty, Shri Sundar Rajan relied on two decisions of the Tribunal Final order No. 143 to 172/86-C M/s. Parekh Dyechem Industries (P) Limited v. Collector of Customs, Bombay and M/s. Radhika India (P) Ltd. v. Collector of Customs, Bombay Order No. 619/1986. In the first decision the Tribunal, inter alia, following the decision of the Tribunal in Collector of Customs, Bombay v. M/s. Parekh Dye Chem Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the High Court]. Shri Sundar Rajan also relied on M/s. Amar Nath Om Prakash Ors. v. State of Punjab Ors. (AIR 1985 S.C. 218). 8. Shri Sundar Rajan also placed reliance on Salmond s jurisprudence Twelfth Edition (Tripathi) para 27 Circumstances destroying or weakening the binding force of precedent and submitted that :- (1) The ratio of the decision(s) has been over-ruled by the Supreme Court by the doctrine of implied overruling it is not binding; (2) The judgment is per incuriam, being in ignorance of statutory provisions; (3) The judgment was arrived at sub silentio; (4) It is inconsistent with the earlier and later decisions of the Supreme Court; and (5) In view of the conflicting decision of the Karnataka and Bombay High Courts Tribunal is free to follow any decision. 9. Shri Sundar Rajan further submitted that the Karnataka High Court decision in B.S. Kamath Co. Ors. v. Union of India Ors. 1986 (24) E.L.T. 456 and Tribunal decisions in Texplast Engineers Pvt. Ltd., Thane (Order No. 222 to 226/84-C), M/s. Parekh Dye-Chem Industries (P) Ltd., Bombay 1986 (24) E.L.T. 119 and M/s. Radhika India (P) Ltd. (Order No. 619/86) were more to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propose to make this order an Essay or Composition on precedents or to record findings in respect of every conceivable plea advanced by the parties and precedents cited. We will content and confine ourselves in recording findings only in respect of the arguments which appear material for a decision of these set of appeals and would refer only to those decisions that appear necessary for the purpose. For proper appreciation the notifications are reproduced below :- 302/79-C.E., dated 4-12-1979 : In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts artificial or synthetic resins and plastic materials specified in column (2) of the Table below, falling under sub-item (1) of Item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and manufactured from raw naphtha or any chemical derived therefrom, on which the appropriate amount of duty of excise has already been paid, from so much of the duty of excise leviable thereon as is in excess of the duty of excise specified in the corresponding entry in column (3) thereof. THE TABLE Sl. No. Description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification on which reliance is placed in the present case is a conditional one and as the petitioners have not complied with the conditions, the benefit of exemption is not available. 3. ..........Shri Bulchandani submitted that there is no material to indicate that HDPE imported by the petitioners is manufactured from raw naphtha. The submission is entirely misconceived. The petitioners have specifically stated in paragraph 5 of the petition that M/s, Polyolefins Industries Limited is the only Company in India which manufactures HDPE. The HDPE is manufactured only from the excise duty paid raw Naphtha or any chemicals derived therefrom. It is further stated that the excise duty is leviable both on the HDPE manufactured in India. In the affidavit on which Shri Bulchandani relies, the averments in paragraph 5 are not even denied. Shri Bulchandani submits that in paragraph 13 of the affidavit, it is stated that the duty has been levied as the petitioners were not able to satisfy that the goods are not manufactured from raw Naphtha or any chemical derived therefrom. I enquired from Shri Bulchandani as to whether this fact was mentioned on the Bills of Entry while levying the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very subsequent consignments Customs should only examine whether HDPE is manufactured out of raw naphtha and not whether excise duty in respect of the same has been paid and ignore the second condition. It may be pointed out that according to Shri Sundar Raj an HDPE may be made not only from raw naphtha but also from natural gas from which ethylene is manufactured. 17. The above apart, it is seen from the notification that it is issued by the Central Government in exercise of powers conferred by sub-ruled) of Rule 8 of Central Excise Rules, 1944. As already observed in Khandelwal Metal Engineering Works Another v. Union of India Ors. 1985(20) E.L.T. 222 (S.C.), the Supreme Court held that additional duty under Section 3(3) of the Customs Tariff Act is not countervailing duty but partakes of the same character as Customs duty. The notification does not refer to any other statute. The Supreme Court in Union of India Ors. v. Modi Rubber Limited Ors. 1986 (25) E.L.T. 849 (S.C.) held - It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the imported goods had already paid the appropriate amount of excise duty leviable under the Central Excises Salt Act, 1944, so they are not entitled to take the benefit of exemption notification No. 302/79-C.E., dated 4-12-1979. The Tribunal again in another case M/s. Parekh Dyechem Industries (P) Ltd. v. Collector of Customs, Bombay, Final Order No. 142 to 172/86-C, dated 18-3-1986 a case of Polyvinyl Alcohol under Notification No. 185/83-C.E. held that in view of the notification there were two rates of duty, the statutory rate and the concessional rate. Section 3(1) of the Customs Tariff Act makes it abundantly clear that in such an event highest rate which in the case was the statutory rate would be applicable to imported goods for additional duty. The Tribunal in another decision M/s. Radhika India (P) Ltd. s case (Order No. 619/86 Special Bench-B2, a case of zinc ash - following the Karnataka High Court decision (supra) held exemption granted under Central Excises Salt Act, 1944 are for that Act only and could not be the basis for claiming exemption under the Customs Act, 1962. 19. We have looked into Stroud s Judicial Dictionary page 944 for Shri Nankani s argument ..... X X X X Extracts X X X X X X X X Extracts X X X X
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