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TMI Blog1992 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... extending the benefit under Customs Notification No. 115/73 dated 11-8-1973. 3. The test result indicated that the goods had failed in the test with regard to the specification mentioned in the said Notification in respect of particular size. One of the specification mentioned in the said notification was regarding particular size according to which minimum 90% of the material should pass tyler sieve No. 16. According to the test report, 67.6% was retained on the tyler sieve 16. Therefore, the Bill of Entry was finalised without the grant of exemption under the said notification and goods were charged to duty at the rate of 60% plus 15% plus 15% additional duty. The appellants paid the differential duty of Rs. 81,86,815.16 P. 4. Their claim was rejected in the first instance. On appeal to the Tribunal, the matter was remanded for de novo decision, to furnish them with copy of the test report and to readjudicate the matter. The lower authorities had followed the said direction and after rehearing, have rejected their case on the same ground. 5. The Collector (Appeals) in the impugned order has held that the appellants were aware of the results of test report even before they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the principles of natural justice in this case also. Sh. Mehta had urged that if the Department had given them opportunity, they would have got a crusher and would have reduced the size of the materials to enable it to pass the sieve 16 test. The results revealed that the sieve had retained to an extent of 67.6% while the requirement is that of 90% shall pass tyler sieve 16. What can be gathered is that the size was big and hence 67.6% had been retained on the tyler sieve 16. The size of the item could have been reduced with a crusher also. It is not such an infirmity as to change the ingredient of the item itself. The next contention raised was that the Chemical Examiner may not have followed the procedure as per the Fertilizer Control Order in carrying out the test. There is no dispute with regard to the identity of the goods. The test results confirm the goods to be Ammonium Nitro Phosphate, hence the question of retest to conform the identity of the goods or to cross-examine the Chemical Examiner to find out the correctness of the test done does not arise. Shri Mehta next contended that the samples were not representative one and if proper procedure was followed, then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said First Schedule on such quantity, but for this exemption. TABLE PART A DI-AMMONIUM PHOSPHATE (18-46-0) (i) Moisture per cent by weight maximum 1.5 (ii) Total nitrogen all in ammoniacal form per cent by weight maximum 18.0 (iii) Total phosphate (as P 2 O 5 ) per cent by weight minimum 46.0 (iv) Water soluble phosphates (as P 2 O 5 ) per cent by weight minimum (85 per cent of item (iii) above. 40.0 Particle Size : Not less than 90 per cent of the material shall pass Tyler Sieve 6 (equivalent to BS Sieve 5 ASTM Sieve 6) and be retained on Tyler S over 16 (equivalent to BS Sieve 16 and Sieve 18). PARTB Ammonium Nitro Phosphate (20-20-0) (i) Moisture per cent by weight maximum 1.50 (ii) Total nitrogen content per cent by weight minimum 10 per cent minimum by weight shall be in ammoniacal form and the balance nitrogen per cent weight in nitrate form 20.00 (iii) Phosphate (as P 2 O 5 ) in citrate to soluble form plus water soluble form per cent by weight, minimum 20.00 (iv) Phosphate (as P 2 O 5 ) in water soluble form per cent by weight minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particle size would lose its significance. It is also not the case of the Department that the appellants have not utilised the imported goods as a manure or in the production of complex fertilizer. Admittedly, the imported goods have been used for the purpose for which it is imported and as such, the benefit of the notification has to be extended to the appellants. 14. The case law on the aspect of the matter also supports the appellants contention. The same is discussed below. (a) In Union of India Others v. Tata Iron Steel Co. Ltd., Jamshedpur [1977 (1) E.L.T. (J 61)], the Supreme Court has upheld the High Court s finding that the notification would have to be interpreted in a manner that the Statute would not cast a burden twice over the payment of tax on the tax payer unless the language of the Statute is so compellingly certain to the effect. The Supreme Court further upheld the High Court s finding - that the notification does not say that exemption is granted only when duty paid pig iron is used and that the exemption would not be available if duty paid pig iron is mixed with other non-duty paid materials. If the intention of the Govt. were to exclude the exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done as a matter of necessity for-its use in the manufacture of soap. Thus even a factory which consumes rice bran oil in the manufacture of soap in its factory first converts the oil into hydrogenated oil or fatty acid and then manufactures soap out of the latter. So far as (a) is concerned, the object of the notification - as even [the Tribunal finds - is to grant a concession to a manufacturer of soap who manufactures ..... sic] the soap from rice bran oil to a substantial extent and thus discourage the use of edible oils in the manufacture. If these two aspects are considered together, it is clear that the emphasis in the notification is not that rice bran oil should be used as raw material in the very factory which produces the soap. The requirement is that the soap manufacture should, to a prescribed extent, be from rice bran oil as contracted with other types of oil. The contrast is not between the use of rice bran oil as opposed to rice bran fatty acid or hydrogenated rice bran oil; the contrast is between the use of rice bran oil as opposed to other oils. That is the ordinary meaning of the words used. These words may be construed literally but should be given their fulles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could have crushed the material to the requisite particle size because the goods had to conform to the prescribed specifications in the form they were imported. 18. The various decisions relied on by the appellants have laid down the proposition that procedural lapses should not stand in the way of substantive justice being done. In the present matter, however, it is not a question of any procedural lapse. The question is one of whether the goods were of the nature which had been clearly spelt out in the notification as eligible for exemption. If the goods did not conform to the specifications, then, they would not be eligible for the exemption. It is not for us to speculate on the rationale behind the particle size prescription. 19. Shri D.N. Mehta, learned counsel, for the appellants put forth a plea that at least that portion of the consignment (as shown by the sample) that complied with the requirements of the notification should be extended the concession. The argument anpears to be that after leaving out the 67% of the material which did not pass the sieve 16 test, the remaining 33% must be given the exemption. This plea, on the face of it, is not acceptable. The purport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty amount involved is Rs. 82 lacs. Shri Mehta, the learned advocate argued that in terms of Notification No. 115/73-Cus., dated 11th August, 1973 that the condition laid down in the notification for the import was that minimum 90% of the material will find tyler sieve 16 which is only for the purposes of fulfilling of the contract with the foreign supplier. In support of his argument, he referred to a decision of the Supreme Court in the case of Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise reported in 1990 (47)E.L.T. 491 (S.C.) 1990 (28) ECC 187. 22. Shri S.K. Roy, the learned SDR has appeared on behalf of the respondent. He pleaded that specific particle size is a substantive requirement of the notification and pleaded that for the correct interpretation of the notification, the actual wording of the notification has to be looked into. He argued that the citations given by the learned advocate are not applicable to the facts and circumstances of the present case. He argued that when a clear specific condition is there for getting the benefit of Notification No. 115/73-Cus., dated 11th August, 1973, the appellants have to satisfy the condition and the goods im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking is given at the time of importation of D-Ammonium Phosphate for production of complex fertilisers, agreeing to pay, on demand, in respect of such quantity of D-Ammonium Phosphate as is proved to the satisfaction of the Asstt. Collector of Customs to have been used for the said purpose an amount equivalent to the duty of customs leviable thereon under the said First Schedule on such quantity, but for this ex emption. TABLE PART A DI-AMMONIUM PHOSPHATE (18-46-0) (i) Moisture per cent by weight maximum 1.5 (ii) Total nitrogen all in ammoniacal form per cent by weight maximum 18.0 (iii) Total phosphate (as P2 Os) per cent by weight minimum 46.0 (iv) Water soluble phosphates (as P 2 O 5 ) per cent by weight minimum (85 per cent of item (iii) above. 40.0 Particle Size : Not less than 90 per cent of the material shall pass Tyler Sieve 6 (equivalent to BS Sieve 5 ASTM Sieve 6) and be retained on Tyler S over 16 (equivalent to BS Sieve 16 and Sieve 18). PARTB Ammonium Nitro Phosphate (20-20-0) (i) Moisture per cent by weight maximum 1.50 (ii) Total nitrogen content per cent by weight minimum 10 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedural lapses. The only question is one : whether the goods are of the nature which had been clearly spelt out in the notification as eligible for exemption. If the goods did not conform with the specifications, then, they would not be eligible for the exemption, and it is not for me to speculate on the rationale behind the particle size prescription. The learned advocate, Shri D.N. Mehta had also argued that after leaving out 67% of the material which did not pass the sieve 16 test, the remaining 33% must be given the exemption. This plea, on the face of it, is not acceptable and the purport of the notification is that material must conform, inter alia, to the particle size specification, that is to say, minimum 90% of the material should pass through sieve 16. The notification clearly does not envisage exemption for that part of the material which passes through the sieve though a representative sample drawn from the consignment may not, as such, pass the test. Even as a third Member, my powers are very much restricted. While disposing of the matter I have to confine myself to the point of difference referred to me which has been reproduced above. So were the observations of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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