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TMI Blog1992 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... van Reddy, JJ. REPRESENTED BY : S/Shri V. Sridharan, R. Madhava Rao and V. Balachandran, Advocates, for the Appellant. Shri A.K. Ganguli, Sr. Advocate, Shri Dilip Tandon and Shri P. Parmeshwaran, Advocates, for the Respondent. [Judgment per : Ranganathan, J.]. - These two appeals by Thermax (Pvt.) Ltd. (hereinafter referred to as `the assessee') raise a question of interpretation of two similar notifications issued under Section 8 (This may be understood to refer to Rule 8 of the Central Excise Rules, 1944 -- Ed.) of the Central Excises & Salt Act, 1944 (`the Act', for short). 2. The assessee imported goods described as "Sanyo Single Effect Chiller" from Japan for the purpose of using the same for refrigeration/air-conditioning of the factories of Indian Rayon Corporation at Veraval and Nirlon Synthetics Fibre and Chemicals Ltd. It paid the custom duty leviable thereon at the appropriate rate under the relevant entry of the customs tariff but claimed exemption from the additional duty of customs leviable under Section 3(1) of the Customs Tariff Act, 1975 (C.T. Act, in short). The relevant portion of the said section reads thus :-- "3(1). Any article which is import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 25-2-1985 but his successor-in-office, who dealt with the appeal from the later order of 30-4-1985, took a different view and dismissed the assessee's appeal. The assessee as well as the department preferred appeals from the respective order which went against them. The Tribunal accepted the department's appeal but dismissed the assessee's appeal. Hence these two appeals by the assessee. 6. It is common ground that customs duty is payable and has been paid on the imported goods under Customs Tariff Item No. 84.17(1) at 40% of the value of the imported goods plus a surcharge of 25% thereon. The rate of CVD, however has to be determined on the basis of Item No. 29A of the Central Excise Tariff. It is common ground that "chillers" fall under sub-item (3) of Item 29A and that the basic excise duty payable thereon was at 80% of the value of the goods under the above item read with Notification 42/84-C.E., dated 1-3-1984. 7. However, the Section 8 notifications referred to earlier provide a further concession. Notification No. 93/76-C.E. is relevant for the purposes of the first appeal while Notification No. 63/85-C.E. is relevant for the purposes of the second. The n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad valorem If -- the said goods are so used;(i) the said goods are not resold within a period of five(ii) years from the date of installation; and (iii) the procedure specified in Chapter X of the Central Excise Rules, 1944, is followed. (1) (2) (3) (4) (5) (xiii) Any factory. (xiv) Electricity load despatch Centres. (xv) Indian Naval Ships. 4. (3) Parts of refrigerating and air-conditioning appliances and machinery, all sorts, the following, namely :- (i) Cooling coils or evaporator. (ii) Compressor. (iii) Condenser. (iv) Thermostat. (v) Cooling unit (excluding the room unit of split unit air-conditioner), and in the case of absorption types of refrigerators in which there is no compressor, heater including burners and baffles in a kerosene operated absorption type refrigerator. (vi) Starting relay controls (including expansion valve and solenoid valves) and pressure switches. (vii) Overload protection/thermal relay. (viii) Cabinet. Eighty per cent ad valorem. 5. (3) Parts of refrigerating and air-conditioning appliances and machinery, all sorts, other than those specified in S. No. 4 above. Nil 6. (3) Parts of refrigerating machinery as specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible to excise duty at the concessional rate of 25% ad valorem provided that they fulfil the conditions set out in column (5) of the above table. It is again common ground that the item of goods presently in question is one of those mentioned in S.No. 8, sub-item No. (3) of the notification and that it also conforms to the description of the said item as set out in column (3) of the above table. Turning to column (5), it requires the fulfilment of two conditions to enable the assessee to get the concession :- (i) that the said parts should be so used i.e. used in refrigerating or air-conditioning appliances or machinery in any one of the places set out as items (i) to (xv) of column (3) against Item 8(3); and (ii) that the procedure specified in Chapter X of the Central Excise Rules, 1944 is followed. Here parties are agreed that the chillers imported by the assessee are used in a factory - vide item (xiii) - and that, therefore the first of these conditions has been fulfilled. 9. The assessee's claim for concession has, however, been rejected not on the ground that the second of the above conditions has not been fulfilled but on the broader ground that the procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or insufficiency of the surety, or where the amount of the bond is inadequate, the Collector may, in his discretion, demand a fresh bond; and may, if the security furnished for a bond is not adequate, demand additional security." Rules 193 to 196BB make provisions for proper packing and transport of the goods in question to the premises of the applicant, their storage in a distinct and separate place under the control of the applicant, the maintenance of proper accounts in respect thereof, controls over their transfer and movement and finally regarding the disposal of such goods where they are found to be in surplus or defective or damaged and even of the refuse resulting from their use in the specified industrial process. It is unnecessary to go into the details of these provisions for our present purposes. Though the latter part of Rule 192 also enables an applicant, where necessary, to obtain a licence in Form L-6 and also prescribes a form of application (Form AL-6) for grant of duty concession on goods purchased for the process of manufacture during the period of currency of the licence, the opening words of the rule are very wide and general. The benefit of Chapter X w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from a manufacturer liable to pay excise duty on the item whereas in regard to a claim for CVD concession, the supplier will be an importer. The latter will be entitled to sell the goods at the concessional rate of duty (or at nil rate if there is an exemption) if the purchaser from him who puts the goods to the specified use (whether a manufacturer or not) fulfills the requirements of Rule 192. Since the concession under Rule 192 turns only on the nature and use to which the goods are put by the user or purchaser thereof and on whether he has gone through the procedure outlined in Chapter X, it would not be correct to deny it to a supplier of such goods on the ground that he is an importer and not a manufacturer. That aspect is provided for by Section 3(1) of C.T. Act which specifically mandates that the CVD will be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. In other words, we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of excise duty that he would have been called upon to pay in that event. Thus, if the person using the goods is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the material can be established by the importer or by other evidence. 13. This conclusion however does not entitle the assessee to the concession claimed in both these appeals. Its entitlement will depend on whether the purchaser is the holder of an L-6 licence (or C.T. 2 certificate) or not. The Tribunal has pointed out that the goods were supplied by the assessee to Indian Rayon Corporation and M/s. Nirlon Synthetics Fibre and Chemicals Ltd., of which the latter was the holder of an L-6 licence. The position in regard to the former is not known. The grant of concession in respect of the former by the Collector (Appeals) in the first appeal is, therefore, correct and is upheld. So far as the other appeal is concerned, the assessee produced no material to show that the "beneficiary" factory was eligible for the concession under Rule 192. The benefit of such concession to the assessee must therefore be held to have been rightly denied in that appeal. 14. Shri A.K. Ganguli, on behalf of the Revenue, raises a contention that, even assuming that the goods fulfil the conditions of the notification referred to earlier, the CVD rate applicable would be 80% by virtue of the E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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