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TMI Blog2000 (7) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... would be leviable under Section 12 of the Customs Act, 1962 or any other law applicable. Petitioners are paying duties in respect of goods sold in Domestic Tariff Area. Petitioners are also paying additional duty, which is known as Countervailing Duty (CVD) under Section 3 of the Customs Tariff Act, 1975, which is equivalent to the excise duty for the time being leviable on a like article, if produced or manufactured in India. Petitioners were exempted, however, by Circular No. 38/2000, the Commissioners of Customs were requested to recover short levy by reviewing the D.T.A. clearance made by plastic processors like the petitioners. It is this Circular Annexure 'A' dated 10th May, 2000, which is the subject matter before the Court. 5. Annexure 'A' refers to following aspects :- (i) That a doubt was raised regarding levy of additional duty of customs (CVD) on DTA sale of reprocessed plastic agglomerates/granules (reprocessed out of plastic scrap) by EOU/EPZ units; (ii) Doubt has arisen in relation to exemption of plastic materials falling under Heading Nos. 39.01 to 39.14 under Notification Nos. 5/98-CE dated 2.6.1998 (ref. S. No. 63), 5/99-CE dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). .... ..... ..... 7. Reading Section 3, it becomes very clear that the Revenue is entitled to levy and collect in such manner as prescribed duties of excise on all excisable goods, which are produced or manufactured in India. However, so far as the goods which are produced or manufactured in Kandla Free Trade Zone and are brought to any other place in India are concerned, they are covered by the proviso to Section 3(1) of the Central Excise Act, 1944. It is the case of the petitioners that they are paying customs duty and excise duty for the goods which they are bringing to other parts of India after manufacturing in Kandla Free Trade Zone. On behalf of the Revenue, the same position is accepted. So far as the countervailing duty is concerned, the petitioners have raised their grievances and one will have to refer to Section 3 of the Customs Tariff Act, 1975. Sub-section (1) with Explanation of Section 3, being relevant, is reproduced hereunder :- Section 3. Levy of additional duty equal to excise duty. - (1) Any article which is imported into India shall, in addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. 9. On behalf of the Union of India, it is contended that this exemption could not be claimed by the petitioners, in view of the provisions contained in Section 5A of the Central Excise Act, 1944. The relevant portion of Section 5A with Explanation reads as under :- Section 5A. Power to grant exemption from duty of excise. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon : Provided, that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactured - (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India. Explanation. - In this proviso, free trade zone and hundred per cent export-oriented undertaking shall have the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree Trade Zone of E.P.Z., the Officer has called upon to pay the countervailing duty on the ground that the reprocessing has not been done in India. Except this, there is no other valid reason. As a matter of fact, if article is imported into India, the same shall be liable to duty equal to excise duty for the time being leviable on a like article if produced or manufactured in India. It is an admitted position that on a like article, there is no excise duty, may be because of exemption. Now, turning to the Circular, it appears that the Revenue is of the opinion that two conditions must be fulfilled, viz., reprocessing must have been done in India, and the goods must have been manufactured from scrap. So far as the second condition is concerned, in paragraph 6 of the affidavit of the Deputy Commissioner of Customs, it is stated as under :- .... In the present case, the petitioners are engaged in reprocessing of imported plastics scrap and waste and out of which the goods falling under Chapter 39.01 to 39.14 are produced ..... 13. Thus, now, the only question required to be decided is whether the manufacture has been done in India or outside the territorial limits of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. As observed by this Court in Thermax Private Limited vs. Collector of Customs, Bombay, 1962 (61) E.L.T. 352 (S.C.) = (1992) 4 SCC 440 at page 452-453 that Section 3(1) of the Customs Tariff Act 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. To our mind the genesis of Section 3(1) of Customs Tariff Act has been brought out in the aforesaid observations of this Court, namely, for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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