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TMI Blog1989 (7) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on Notification No. 179/77, dated 18-6-1977 issued under Rule 8(1) of the Central Excise Rules, 1944, which exempted all goods falling under Item No. 68, CET, in or in relation to the manufacture of which, no process was ordinarily carried on with the aid of power. The Assistant Collector found from the evidence produced that the bark imported is a non-power product . However, he held that since, according to the Explanation to Section 3(1) of the Customs Tariff Act, where excise duty was leviable at different rates, imported goods would be leviable to additional duty of Customs at the highest rate, the benefit of the said notification was not admissible in the instant case. Therefore, he rejected the claim. In appeal, the Appellate Collector observed that from the documents produced, it was not possible to verify whether any power had been used in cutting corkwood. The invoice and the Bill of Entry did not bear this out and the appellants declaration that it was a non-power product was not acceptable. On this basis, he dismissed the appeal. It is this order that is challenged in the present appeal (Appeal No. 598/82 with Supplementary A. No. 3733/88) which had been filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the appeal. 7. We have considered the submissions of both sides and perused the record. Before we consider the rival contentions, it is expedient to set out Section 3(1) of the Customs Tariff Act, 1975 and the Explanation thereto :- Section 3. Levy of additional duty equal to excise duty.- (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation. - In this section, the expression the excise duty for the time being leviable on a like article if produced or manufactured in India means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured which would be leviable on the class or description of articles to whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m industrial units, to which it is sent to be worked on at a later date. In the face of all this, and in the absence of any contrary evidence, it is not clear how the Appellate Collector concluded that the appellants declaration was not acceptable. 9. Shri Chakraborty has drawn our attention to the literature (page 14 of the papers submitted with the appeal memorandum in Appeal No. 1466/84-D) on corkwood produced by AMORIM IRMAOS, IDA, Portugal, the suppliers of the subject goods. He points out that though the stripping of the bark of the corkwood tree is done by axe, the bark is thereafter transported to various plants where it is subjected to industrial processing. Therefore, there must be use of power. We are unable to accept this contention. The same literature states that the cork is first soaked in boiling water for approximately an hour, the purpose being to eliminate mineral salts, tannins, fungi and parasites and thus, increase its elasticity and malleability. After boiling, the cork is piled up and left to rest for three weeks before being submitted to a selective quality grading based on thickness. This process requires a skill based on years of daily experience, si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Shri Chakraborty submitted that this concept of factory was not applicable to imported goods. Shri Lakshmi Kumaran s submission was that the subject goods were naturally produced goods, not factory made goods. We are inclined to agree with the DR on the issue because the definition of factory as in Section 2(m) of the Indian Factories Act can obviously have relevance only in the Indian context i.e. to indigenously manufactured goods. But it is not necessary to go further into this aspect because, in the view we have taken the subject goods were eligible for exemption from additional duty of customs by virtue of Central Excise Notification No. 179/77. 13. In Appeal No. 1466/84, there is another issue for determination. The consignment of corkwood in this case covered by the supplier s Invoice No. 2728, dated 23-12-1981 was for US $ 9325/- on the basis of which duty was levied and collected. According to the appellants, the goods supplied were under-grade and, on the matter being taken up with the suppliers they agreed to reduce the price by US $ 1300/- for which they issued a Credit Note No. 206/82, dated 23-6-1982 which was enclosed with their letter of the same date. The Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before us. The basis of computation of the reduction in value at US $ 1300/- has not been explained in the correspondence. The appellants admittedly found that the goods were under-grade only after clearance of the goods from Customs control. The invoice for the goods shows two separate quantities of cargo whose unit prices are different. The only distinguishing feature between the two quantities, as far as we can see, is that one is described as 6th and the other as 5th. What these stand for has not been explained. The order placed by the appellants on the suppliers has also not been produced. In what respect or respects the goods imported did not comply with the specifications set out in the order has not been explained. In this background, though the fact of reduction in value has been accepted by the Collector (Appeals), we cannot say that the claim for refund of duty has been satisfactorily established. Mere reduction in value without a satisfactory explanation therefore cannot be the basis for reduction of duty which apparently was collected correctly on the basis of the declared value. 17. However, in view of our finding that the goods are eligible for exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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