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TMI Blog2015 (3) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... of CEGAT for the reasons mentioned therein, which shall be noted at the appropriate stage. 2) The issue relates to the eligibility for concessional rate of additional duty [also known as Counter Vailing Duty (CVD)] in terms of Notification No. 64/93-CE. The assessee is in the business of tourism, which operates taxis to ferry the tourists from one place to another. Way back in the year 1995, it had imported Honda Accord cars and filed refund claim on the ground that it was eligible for concessional rate of CVD in terms of the aforesaid Notification. In this refund claim the assessee sought refund of 10% of total CVD. The refund claim of the assessee was rejected. Questioning the veracity of this decision of the Assistant Commissioner of Customs, Refund Department, Mumbai, as well as Delhi, the assessee approached the Commissioner (Appeals) at both the places. The Commissioner (Appeals) in Mumbai allowed the appeal of the assessee and granted the benefit of the aforesaid Notification with a direction to the lower authority to sanction the refund to the assessee as claimed. Against this order, the Revenue preferred appeal before CEGAT. CEGAT, vide orders dated November 13, 2000 rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collector of Central Excise a certificate from an officer authorised by the concerned State Transport Authority in this behalf to the effect that such saloon car has been for use solely as a taxi, within three months of the date of clearance of the said saloon car from the factory of manufacture or such extended period as the said Assistant Collector may allow; (iii) the manufacturer had not collected from the person in whose name such saloon car has been registered as a taxi, or in a case had collected and has refunded to such person, the amount equivalent of such further exemption of duty, and (iv) the manufacturer files a claim for refund of duty in terms of section 11-B of Central Excise and Salt Act, 1944 (1 of 1944)." 7) What follows from the bare reading of the aforesaid Notification is that exemption from customs duty is provided in respect of goods falling under Heading 87.03 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the 'Tariff Act'), which is in excess of the amount calculated @ 40% ad valorem. Under Heading 87.03, various kinds of goods are mentioned. However, proviso to this Notification give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Bench, on the other hand, though took note of judgments in Thermax Private Limited (supra) and Hyderabad Industries Ltd. (supra), was of the opinion that those judgments did not apply to the facts of this present case. According to the Delhi Bench, the importer was to be treated as manufacturer only to the extent of granting the benefit of levying CVD @ 40% in terms of the Notification and the ratio of the said judgments could not be stretched to hold that the importer is to be treated as a manufacturer for the purpose of Notification No. 64/93-CE, which extends further concession of 10% only to the manufacturers. 11) From the aforesaid, it is clear that the entire case hinges upon the ratio laid down in Thermax Private Limited (supra) and followed in Hyderabad Industries Ltd. (supra) as well as in J.K. Synthetics (supra). 12) In Thermax Private Limited (supra), the facts were that the assessee had imported goods described as "Sanyo Single Effect Chiller" from Japan for the purpose of using the same for refrigeration/air conditioning of two factories. The assessee cleared the goods by paying customs duty as well as additional duty leviable under Section 3(1) of the Tariff Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation. - In this section, the expression 'the excise duty for the time being leviable on a like article if produced or manufactured in India' means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs and where such duty is leviable at different rates, the highest duty." 14) This Section deals with levy of additional duty, i.e. CVD, which is normally equal to the excise duty that is payable on a like article if produced or manufactured in India. However, it is a matter of common knowledge that Notifications of exemptions have been issued by the Excise Department from time to time under Rule 8(1) of the Rules, in the case of imported goods, for determining the leviability of additional duty under Section 3(1) of the Act. In that case, Notification No. 93/1976 was issued under Rule 8 of the aforesaid Rules, which provides for a conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncession, 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) fulfils the requirements of Rule 192. Since the concession under Rule 192 turns only on the nature and use to which the goods ar eput 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 entitled to the remission, the importer will be entitled to say that the CVD should only be the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thus clear from the reading of this judgment that the Court held that the levy under Section 3 of the Tariff Act is in the nature of a countervailing duty and is with a view to levy additional duty on an import to counter balance the excise duty payable on a like article indigenously manufactured. The Court also adverted to the scope/effect of Section 3 of the Tariff Act, particularly the expression, "Excise Duty for the time being leviable on a like article in produced in India" and the explanation thereto. In this regard it observed as follows: (At Para 11 of the Report) "The words "if produced or manufactured in India" do not mean that the like article should be actually produced or manufactured in India. As per the explanation if an imported article is one which has been manufactured or produced then it must be presumed, for the purpose of Section 3(1), that such an article can likewise be manufactured or produced in India. For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary." The Court further referred with approval to the rationale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd referred the matter to a larger Bench. Reference order is reported as (2005) 8 SCC 164. The Constitution Bench decided the said case, which is reported as (2011) 1 SCC 236. From the reading of para 39 to 41 of the said judgment it becomes clear that though these cases were held not applicable to the fact situation and were distinguished, the Court did not say that the aforesaid judgments were incorrectly decided. In fact, by distinguishing the ratio of the said cases, the Constitution Bench impliedly gave its imprimatur to the principle laid down in the aforesaid judgments. 17) We are of the opinion that since we are dealing with exemption notification issued under Rule 8 of the Rules, which was the position in Thermax Private Limited (supra) as well, for the purpose of extending benefit of concession contained in Notification No. 64/93-CE, the principle in Thermax Private Limited (supra) would clearly become applicable. We may point out that a specific query was put to the learned counsel for the Revenue to the effect that if the importer is not deemed as manufacturer for the purpose of applicability of the said notification, then there cannot be a situation where such benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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