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TMI Blog1984 (4) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... or potassic and other fertilizers. 1. * * * 2. * * * 3. Mono-Ammonium and di-ammonium ortho-phosphate, whether or not pure, and mixtures, thereof. The rate of duty applicable to this sub-heading is 60% ad valorem. In auxiliary duty of Customs at 15% ad valorem was also applicable at the relevant time. 4. In exercise of the powers conferred by sub-section (1) of Section 25 of Customs Act, 1962, Central Government issued a Notification No. 178/76-Cus., dated 2-8-1976 exempting ammonium phosphate when imported into India for use as manure from the whole of duty of Customs leviable thereon which is specified in the aforesaid 1st Schedule. Pursuant to this exemption, the rate of auxiliary duty of Customs was reduced to 5% ad valorem. 5. The appellants wrote to the Assistant Collector of Customs, Visakhapatnam an 14-5-1979 setting out their intention to import 5000 to 6000 metric tonnes of MAP for use as a raw material for the production of complex fertilizers. They also set out their understanding that in terms of the tariff heading and the notification referred to above, MAP used in the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lorem. Though it is not expressly set out in the show cause notice, these percentages would respectively refer to basic, auxiliary and Additional (Countervailing) duties of Custom. The appellants wrote back to say that they had taken up the matter with the Ministry of Finance and requested that the case might be kept pending till the Ministry s decision was received. However, the Assistant Collector, by his order dated 20-2-1980 confirmed the notice of demand. Against this, they, went in appeal to the Collector of Customs (Appeals), Madras before whom also the appellants made a request that the appeal might be kept pending till receipt of orders from the Government of India. However, the Collector (Appeals) passed the impugned order dated 1-7-1982 rejecting the appeal, holding that, as the imported MAP had not been used as manure directly, the exemption under Notification No. 178/76 was correctly denied. It is this order of the Collector (Appeals) that is under challenge before us. 8. Before we set out the rival contentions, it is expedient to notice at this stage certain intervening events brought on record by the Respondent. On 23-5-1980, the Secretary to the Department of Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of Entry for a consignment of MAP cleared from the Cochin Port was produced. (iv) In order to make sure of the position, the appellants had imported the goods only after getting a confirmation from the Assistant Collector of Customs of their understanding that imported MAP would be entitled to the exemption. 10. The following propositions were formulated by the learned Counsel for the appellants :- (i) The expression Ammonium phosphate occurring in Notification No. 178/76 is generic and covers both mono and di-ammonium phosphates. Since the Departmental Representative agreed with this proposition and sub-heading 3 of heading 31.02/05 specified mono-ammonium and di-ammonium phosphates, this proposition is self-evident and does not need to be discussed. (ii) The Notification only requires that imported ammonium phosphate should be used as a manure. It does not require that the substance should be used as such, by itself, to the exclusion of all other ingredients. This would be clear from the usage of the expression whether or not pure and mixture thereof in the sub-heading referred to above. Despite the fact that imported MAP was not used directly as manure but u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellants, and it is a settled principle that there is no estoppel in law against fiscal statutes, we are not required to discuss these citations. (ii) The real question is whether, in fact, there is any misinterpretation of the notification. In this connection, our attention was drawn to a letter dated 20-7-1979 from the Assistant Collector, Visakhapatnam to the appellants setting out clearly that MAP imported not for use as manure in the form it is imported but for production of complex fertilizers was not eligible for the concessional rate of duty in terms of Notification No. 178/76. The Asstt. Collector s earlier letter of 19-5-1979 on which much reliance has been placed by the appellants, did not say that MAP imported for production of complex fertilizers would be entitled to the benefit; it only said that if the imported MAP is for use as manure, the benefit would accrue. (iii) Notification No. 178/76 clearly set out the condition that the imported MAP should be for use as manure. By contrast, Notification No. 177/76, also issued on 2-8-1976, required that di-ammonium phosphate (D.A.P, for short) should be for use as manure or in the production of complex fertilizer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that order set out the ideal specifications or standards. That is not the question here. (iii) Even granting that MAP could be manufactured in granular form, the present import has been used, after conversion into complex fertilizer as manure. The form in which the substance is imported is not material. Reference to Notification No. 180/76 exempting muriate of potash and Notification 179/76 exempting urea and contrasting them with Notification No. 178/76 exempting MAP would show that, according to the principle of contemporary understanding, the last mentioned notification did not prohibit the use of MAP in admixture and did not require its direct use as manure. (iv) Attention was drawn to Notification No. 181/76 exempting kyanite imported in a form indicative of use as manure . These very words occurring in item No. 35 of the 1934 Customs Tariff Schedule were interpreted by the Gujarat High Court in the GSFC case (already referred to) and the ratio of this decision would apply to the present case. (v) The exchange of correspondence between the Department of Chemicals Fertilizers and the Central Board of Excise Customs and the supersession of Notification No. 178/76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that this notification was superseded by Notification 164/80, dated 19-8-1980 exempting ammonium phosphate imported for use as manure or in the production of complex fertilizers amply supports this view. 17. The exchange of correspondence between the Department of Chemicals and Fertilizers and the Central Board of Excise and Customs goes to show that imports effected by Rashtrya Chemicals Fertilizers of MAP for use in the production of complex fertilizers ran into difficulties with the Customs authorities. A case was apparently made out for exempting MAP imported for such use and the Ministry notified the exemption on 19-8-1980. This only shows that the Customs, for some time, were apparently proceeding on a misreading of Notification No. 178/76 that it conferred exemption on MAP imported for such use. That would not sanctify the erroneous assessments and entitle the appellants to the benefit of a similar erroneous assessment. We think, the principle of contemporanea cxpositio does not help the appellants in the present case. They have not produced any documents notified or published by the exemption giving authority in support of their stand. On the other hand, the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion notifications. We do not think it necessary to refer to and discuss the decisions relied upon by the Departmental Representative in this regard. 21. The appellant have relied upon the Gujarat High Court decision in the GSFC case (Special Petition CA No. 668/74). The dispute in that case was whether rock phosphate in all forms imported into India for use as or in the manufacture of fertilizers was eligible to be assessed as manure, under item No. 35 of the Customs Tariff Schedule of 1934. The Department s case was that GSFC was not importing rock phosphate powder form but in the form of pebbles and that, therefore, it could not be said to be imported in a form indicative of their was for manurial purpose as laid down in the said item No. 35. It was not the case of the Department that rock phosphate, if imported in pebble form and later mechanically converted into powder form, changed character of the rock phosphate or that it becomes a new substance or a new chemical. The Court held that rock phosphate, even if imported in pebbles, would not lease to be rock phosphate and item No. 35 would be attracted provided it was used for manurial purposes. Although there is a referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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