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TMI Blog2013 (9) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the purpose of breaking - There was a separate entry for this purpose both under the Customs Tariff Act and Central Tariff Act - The product actually imported was the material that can be retrieved from the ship - the structure by itself was of no value and the appellant subjects the vessel to a process to retrieve the material from the structure without the use of power - appeal was allowed to the extent it was challenging the imposition of CVD and not extending the benefit of Notification No.167/1986 to the appellant-applicant - The application for rectification of mistake was disposed off – Decided in favor of Assessee. - Appeal No.C/01/2008 - - - Dated:- 12-3-2013 - Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ. For the Appellant: Shri P.M. Dave, Adv For the Respondent : Shri K.M. Mondal, Special Counsel ORDER Per: M.V. Ravindran: This application for rectification of mistake is filed by the appellant-applicant for rectification of error apparent on the face, in our Final Order No.A/1139-1140/WZB/AHD/2012, dt.06.08.2012. 2. Ld. Counsel would submit that the Final Order dt.06.08.2012, though having disposed the two appeals i.e. Appeal No. C/1783/1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icability of CVD, by claiming exemption under Notification No.167/1986, dt.1.3.1986, the judgment of Hon'ble High Court of Karnataka in the case of Engee Industrial Services Pvt.Ltd. 2004 (164) ELT 242 (Kar.) will apply in its full force. He reads the relevant paragraph from the said judgment. 7. Ld. Special Counsel, on the other hand, would submit that the lower authorities were correct in rejecting the benefit claimed by the appellant. It is his submission since the judgment of Hon'ble High Court of Karnataka was not considered by the lower authorities, the matter may be remanded back to the lower authorities to reconsider the issue afresh. 8. In rejoinder, the ld. Counsel would submit that remanding the matter will be of no consequence as the judgment of Hon'ble High Court of Karnataka is binding on this Bench and that the question of law which has been decided by Hon'ble High Court would cover the issue. He would draw our attention to the copy of Bill of Entry which was filed, wherein they had claimed the benefit of exemption of Notification No.167/1986, dt.01.03.1986 from CVD. 9. We have considered the submissions made by both sides and perused the records. On perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship-breaking industry in India is carried on without the aid of power (electricity) and is largely a manual operation involving semi-skilled and unskilled labourers. It is further stated that the ship-breaking industry is instrumental in supplying a substantial part of the raw material required by mini-steel plants which have set up induction furnaces. Some of the bigger steel plants also utilise the scrap generated by the ship-breaking industry. The steel produced by the ship-breaking industry is utilised for re-rolling by mini-steel plants. It is claimed that on account of the ship-breaking industry, there is a substantial saving of electricity utilisation. 3. The Union Finance Minister in his Budget Speech for the? financial year 1993-1994, delivered on 27-2-1993, stated thus : 91. The ship-breaking industry is employment intensive and an important source of raw materials for the secondary sector of our steel industry. In order to encourage the growth of this industry, I propose to prescribe a lower merged duty of customs at 5% ad valorem. The ferrous materials obtained from breaking up of such ships, etc., which are presently subject to excise duty are being fully e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of vessels M.V. BOUVET/Ex RANA under Bill of Entry No. 6, dated 2-7-1993 and M.V. ARGOS under Bill of Entry No. 001741, dated 8-11-1993 was also rejected by the fourth respondent vide Assessment Order dated 14-7-1993 and Assessment Order dated 13-11-1993 respectively, and those orders were also assailed by the appellant in Writ Petition No. 26685 of 1993 and Writ Petition No. 43567 of 1993 respectively. In all these writ petitions, inter alia, it was contended by the appellants that on all goods imported into the country, duty of customs is levied under the Act; the procedure for calculation of duty and other connected matters is specified in the Customs Act, 1962; the vessels imported by the appellant are classifiable under Chapter 89.08.00 of the Schedule to the Act which reads as follows: DESCRIPTION RATE OF DUTY Vessels and other floating structures for breaking up. 40% + Rs. 1,400/- per light displacement tonnage Under Notification No. 74/93-Cus., dated 28-2-1993, all goods falling under the Heading 8908 of the First Schedule to the Customs Tariff Act, 1975, when imported into India are exempted from so much of the duty of custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal duty. Shri Naganand would also contend that the Finance Minister in his Budget Speech for the financial year 1993-1994 spoke about merged duty of Customs at 5% ad valorem to be imposed on vessels used by ship-breaking industry. According to Shri Naganand, the expression merged duty denotes the merger of the two duties leviable on the product imported under Sections 2 and 3 of the Customs Tariff Act. Shri Naganand would highlight that though two interpretations are possible from the relevant provisions of the Act, the Court should adopt the one which is beneficial to tax-payers and not to the Revenue. Shri Naganand would also contend that the State cannot practice an invidious discrimination in the matter of levy of taxes and the ground of invidious discrimination urged in the writ petition is not at all dealt with by the learned Single Judge. 9. Learned Senior Standing Counsel for Government of? India, on the other hand, contended that an exemption notification granting exemption under Rule 8(2) of the Central Excises and Salt Rules, 1944, does not automatically grant exemption in respect of additional duty leviable under Section 3 of the Act and as such, it is of no avail to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 167/86-C.E., dated 1-3-1986 reads as follows : In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods of the description specified in column (2) of the Table hereto annexed and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon which is specified in the said Schedule : Provided that no process in or in relation to the manufacture of the said goods is ordinarily carried on with the aid of power : Provided further that the exemption contained in this notification shall not apply to sandalwood oil. The Table : Sl.No. Description of goods (1) (2) 1. All goods falling within Chapters 14, 71, 89 and 92. 2. All goods falling under Heading Nos. 30.01, 32.03, 33.01, 33.03, 36.02, 44.01, 44.02, 44.03, 44.04, 44.05, 46.01, 51.05, 62.92, 69.01, 69.02, 69.03, 69.04, 69.05, 83.01, 83.15, 95.01, 95.01, 95.02, 95.03, 95.05, 95.06, 95.07 and 95.08. 12. Chapter 89 of the Central Excise Tariff Act like the? Customs Tariff Act deals with Ships, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has held that the actual product imported is a ship and, therefore, whether the product got from it is exempted from Central Excise or not is of no consequence. In holding so, learned Single Judge has placed reliance on the decision of the Supreme Court in Thermax Pvt. Ltd. v. Collector of Customs - 1992 (61) E.L.T. 352 (S.C.) and Hyderabad Industries Ltd. v. UOI - 1999 (108) E.L.T. 321 (S.C.) 15. The vessels imported by the appellant are not seaworthy and they are admittedly for the purpose of breaking. There is a separate entry for this purpose both under the Customs Tariff Act and Central Tariff Act. The product actually imported is the material that can be retrieved from the ship; the structure by itself is of no value and the appellant subjects the vessel to a process to retrieve the material from the structure without the use of power. 11. It can be seen from the above reproduced paragraphs of judgment of Hon'ble High Court of Karnataka that their Lordship were exactly considering the very same issue which is raised in this appeal before us. Since their Lordship have held against the Revenue and there being no contrary judgment brought to our notice, we find that the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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