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TMI Blog2013 (11) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed this appeal challenging the judgment of CESTAT dated 24.9.2010 raising following questions for our consideration:- "[a] Whether in the facts and circumstances of the case, transformation of the imported round logs into sawn timber in different sizes and length by the importer before subsequent sale to domestic market would vitiate the condition of subsequent sale prescribed in exemption notification No.102/2007-Customs dated 14.09.2007? [b] Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in deciding issue in appeal by placing sole reliance on decision of Tribunal in case of Vijrom Chem Pvt. Ltd. v. Commr. of Cus., Banglore reported in 2006(199) ELT 751 (Tri.-Bang.) and observing that the respondent is eligible to avail benefit under exemption notification No.102/2007-Customs dated 14.09.2007 ? [c] Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law by not considering the issue of interpretation of exemption notification by applying ratio laid down by the Apex Court in the case of Novopan India Ltd. v. CCE & Cus;, Hyderabad reported in 1994(73) ELT 769(SC)? [d] Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ength in sawn). I find that the description as mentioned is the bill of entry is New Zealand Pine logs. Thus it is very much evident that the claimant has imported Round Logs and sold sawn timber." 6. The Assistant Commissioner was of the opinion that after importing timber, the respondent carried out extensive process, before selling smaller pieces thereof in the local market. He was of the opinion that the goods imported by the respondent, namely, timber was classified under Customs Tariff Heading 44.03 whereas what the respondents sold after detailed sawing and cutting was sawn wood which falls under the Customs Tariff Heading 44.07. He was, therefore, of the opinion that the respondent did not fulfill the conditions of the notification for refund of SCVD. He was further of the opinion that exemption could be granted only to the importer, who had imported the goods for subsequent sale and this subsequent sale means that the goods should be sold in India in the same physical form as they were imported. On this ground, respondent's claim for refund came to be rejected by the Assistant Commissioner. 7. The respondent carried the issue in appeal before the Commissioner (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the case may be, sub-section(3) or not] such additional duty as would counter-balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty at a rate not exceeding four per cent. of the value of the imported article as specified in that notification." 10. In exercise of such powers under Sub-Section(5) of Section 3 of the Customs Tariff Act, Central Government issued Notification No.19 of 2006 dated 1.3.2006 providing for imposition of additional duty of customs at the rate of 4% on all goods specified under the Chapter, heading or sub-heading or tariff item of the First Schedule to the Customs Tariff Act. Notification reads as under:- "G.S.R.(E).- In exercise of powers conferred by sub-section(5) of section 3 of the Customs Tariff Act,1975(51 of 1975), the Central Government, on being satisfied that it is necessary in the public interest so to do, and in supersession of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing documents alongwith the refund claim: (i) document evidencing payment of the said additional duty; (ii) invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed; (iii) documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods. 3. The jurisdictional customs officer shall sanction the refund on satisfying himself that the conditions referred to in para 2 above, are fulfilled. " 12. From the speech of the Hon'ble Finance Minister on the budget session for the year 1998-99, the purpose for which such exemption notification came to be issued, becomes clear. Relevant portion of the speech is extracted below:- " In order to provide a level playing-field to the domestic industry, I propose to impose an additional non-modvatable levy of 8% on imports which is approximately equal to the burden of local taxes on domestic producers. This duty should not be viewed as a protectionist measure but only as a response to a legitimate demand for a level playing-field. The new levy would not apply to crude oil, newsprint, capital goods sector under a specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Counsel also relied on the decision of the Apex Court in the case of State of Orrisa and others vs. Titaghur Paper Mills Company Ltd. and another (surpa) to contend that the denial of exemption to the respondents would not amount to double taxation. 18. Counsel also sought to suggest that decision of Apex Court in Novopan India Ltd. vs. Collector of C.Ex. and Customs, Hyderabad reported in 1994(73) E.L.T.769(S.C.) would not apply in the facts of the present case. He drew our attention to paragraph 18 of the decision, wherein the Apex Court observed that the principle that in case of ambiguity in a taxing statute, the same should be construed in favour of the assessee, cannot be applied in the case of exemption notification, which is required to be viewed strictly. 19. Counsel reiterated that identity of the goods since its import before sale in the local market having changed, the exemption notification would not apply as vital conditions therein were not satisfied. 20. On the other hand, Shri V.S. Nankani appearing with Shri H.P. Modh for the respondent in all the appeals, supported the view of the Tribunal contending that the respondent satisfied all the conditions of Exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, short question that calls for our consideration is whether the respondents fulfilled all the conditions of exemption notification dated 14.9.2007 or not. As already noted by a notification dated 1.3.2006, Central Government levied SCVD on all imported goods covered under different Chapters,headings or sub-headings of the Customs Tariff Act at the rate of 4% ad valorem. Subsequently, however by issuing Exemption Notification dated 14.9.2007, it was decided that in certain cases such SCVD would be refunded to the importers. Such conditions were that when such goods were imported into India for subsequent sale, the whole of the additional duty of customs leviable thereon, would be refunded provided following specific conditions were fulfilled:- (a) Importer of the said goods shall pay all duties including the additional duty of customs leviable thereon as applicable at the time of importation of the goods. (b) Importer, while issuing the invoices for sale of said goods, should indicate that no credit of additional duty of customs levied under sub-Section(3) of Section 5 of the Customs Tariff Act, shall be admissible. (c) Importer shall file a claim of refund of such addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), Karnataka High Court concluded that in order to attract levy as "excisable goods" under the Central Excises Act, the goods must satisfy that they are a result of a manufacture. Applying various tests of the terms manufacture, the Court observed that timber even when sawn and converted into logs of smaller sizes, does not undergo any manufacturing process. 30. In the case of State of Maharashtra vs. M/s.Shiv Datt and Sons and other (supra), the Apex Court observed that definition of the term "manufacture" should not be widely interpreted. In the case on hand, the Apex Court held the dealer entitled to concession on resale of recharge batteries holding that the process of recharging dry batteries purchased would not amount to manufacturing process. 31. In the case of State of Orrisa and others vs. Titaghur Paper Mills Company Ltd. and another (supra) also the Apex Court made certain observations which are useful for our purpose, which may be reproduced as under:- "90. On turning to various dictionaries, we find that the dictionary meaning largely coincides with the statutory meaning of the word ' timber'. While discussing the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming framework of a rood" and the second as " one of the often sloping beams that support a roof". Rafter would also, therefore, be timber or log put to a particular use. A 'plank' is defined in Shorter Oxford English Dictionary as " a long flat piece of smoothed timber, thicker than a board, specially a length of timber sawn to a thickness of from two to six inches, a width of nine inches or more, and eight feet or upwards in length". According to the Concise Oxford Dictionary it is a "long wide piece of timber, a few inches thick" and according to Webster's Third New International Dictionary, it is " a heavy thick board that in technical specifications usually has a thickness of 2 to 4 inches and a width of at least 8 inches". The exact thickness and width of a plank may be of importance in technical specifications but in ordinary parlance planks would be flattened and smoothed timber. Such flatness and smoothness can only be achieved by using a saw and other implements required for that purpose. The same would be the case when timber is rounded or shaped. The statutory definitions of timber extracted above read along with the meaning of the word 'timber' given in different dic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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