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TMI Blog2016 (9) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Section 3 of the Customs Tariff Act. The exemption which is sought to be granted by the Budget Notification pertains to the duty leviable under sub-section (1) of Section 3 of the Customs Tariff Act and there is no reference to the additional duty of excise leviable in terms of sub-section (5). The petitioner already accepted before the Settlement Commission regarding the leviability of the additional duty of excise at 8% - the petitioner has not made out any case for interfering with the order passed by the Settlement Commission. Petition disposed off - decided in favor of petitioner. - W.P.Nos.20241 & 29242 of 2005 & W.P.Nos.14999 to 15002 of 2005 W.P.No.16137 of 2005, W.M.P.Nos.16315 & 16317 of 2005, W.M.P.No.16319 & 16321 of 2005, W.M.P.No.17474 & 17475 of 2005, W.P.No.20241 of 2005 - - - Dated:- 12-9-2016 - T. S. Sivagnanam, J. For the Petitioner : Mr. S. Murugappan For the Respondents : Mr. V. Sundareswaran ORDER The petitioner, in all these Writ Petitions, has challenged the order passed by the Customs and Central Excise Settlement Commission, Additional Bench, Chennai (Settlement Commission), dated 19.11.2004. Though there are nine Writ Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as co-applicant filed separate applications before the Settlement Commission, which were admitted on various dates, and as common issues were involved in all the applications, they were heard together. It is not in dispute that the petitioners admitted the violation committed by them in violating condition No.21 of the conditions contained in Notification No.21 of 2002. The contention was that the differential duty liability mentioned in each of the show cause notices has been arrived at by taking into account, the basic customs duty as applicable plus CVD at 16% plus Special Additional Duty (SAD) at 4%. By relying on Section 3A(5) of the Customs Tariff Act, 1975, it was contended that SAD will not apply to the goods chargeable to additional duties levied under Section 3(1) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Therefore, it was contended that the goods imported or covered by the said Additional Duty of Excise Act and SAD is not applicable to the said goods. Reliance was placed on Central Excise Notification No.14 of 2002, dated 01.03.2002, stating that the subject goods are chargeable to excise duties at the consolidated rates at 16% and as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Settlement Commission, they have filed these Writ Petitions challenging the said order. 6. The learned counsel for the Petitioner after referring to the Budget Notification, more particularly, clause (b) therein, submitted that there is an exemption from so much of the additional duty leviable thereon under sub-section (1) of Section 3 of the Customs Tariff Act, as is in excess of the rate specified in the corresponding entry in column 5 of the said table. At this stage, the relevant portion of the Budget Notification is quoted herein below:- BUDGET NOTIFICATIONS CUSTOMS Effective rates of basic and additional duty for specified goods falling under chapters 1 to 99 In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.17/2001-Customs, dated the 1st March 2001 [G.S.R.116(E), dated the 1st March 2001], the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Tariff Act, read with Schedule of the Central Excise Tariff Act, 1985, the excise duty leviable on the subject good is only 16%. By referring to the Additional Duty of Excise Act, it is submitted the duty levied in terms of the first Schedule of the Central Excise Tariff Act are both duties of excise only and as per the notification No.21 of 2002, the additional duty in case of excise duties of 16% is exempt and under law, there is no provision to demand payment of 8% equal to excise duty leviable under the ADE Act, since effective rate of additional duty of customs (equal to excise duties leviable) is only 16% and not 24%. Therefore, it is the contention that the Settlement Commission had gone beyond the notification and imposed additional duty of 8%, which is neither provided by the Notification or under the statute. 9. The learned Senior Standing counsel appearing for the respondent submitted that before the Settlement Commission, the petitioner had conceded to the fact that ADE at 8% is leviable, apart from, Cess, after having conceded before the Commission, they have filed these Writ Petitions challenging the order passed by the Settlement Commission. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff Act as in excess of the rates specified in the corresponding entry in column 5 of the said table. By referring to the said Budget Notification and relying on Section 3(1) of the Customs Tariff Act, it is contended that any article imported into India, shall in addition be liable to a duty referred to as additional duty equal to the excise duty for the same leviable on a like article, if produced or manufactured in India. Further, by referring to Section 3(2), it is submitted that for the purpose of calculating under sub-section (1) of Section 3, the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article, shall, notwithstanding any thing contained in Section 14 of the Customs Act, be the aggregate of the values as mentioned in clauses (i) (ii) to the said sub-section. Therefore, it is contended that the levy and collection of additional duties in terms of the ADE Act, 1957, are duties of excise and therefore, by virtue of the Budget Notification, no more than 16% can be collected as duty. However, one important provision, which needs to be considered to examine the correctness of the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was considering the principles of interpretation of legislation by incorporation or reference. In a case arising under the Kerala General Sales Tax Act, 1963, which granted exemption from sales tax of goods specified in third schedule to the said Act, the question was whether in respect of the relevant assessment years, the exemption given to cotton fabrics should be restricted to cotton fabrics as defined in the Central Excise and Salt Act, 1944, or whether it would also cover goods falling under the said definition after its amendment in 1969. 15. The Central Sales Tax Act under Section 14 declared certain goods to be of special importance interstate trade or commerce and the definition of the goods related to the Central Excise Act, 1944 and at about the same time, the Parliament also enacted the Additional Duty of Excise Act, 1957, with an object to impose Additional Duties of Excise in replacement of Sales Tax by the Union and the States on certain items and to distribute the net proceeds of taxes except for proceeds attributable to Union Territories, to the States. While deciding the question, reference was made to Article 268 of the Constitution of India, which imposed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subjected to additional excise duty. 16. As rightly pointed out by the learned Standing counsel for the Revenue, the additional duty leviable and the power to levy the Additional Duty of Excise is traceable to sub-section (5) of Section 3 of the Customs Tariff Act, 1975, (referred supra), which gives power to the Government to levy such additional duty as would counter balance the sales tax on a like article on its sale in India. 17. Admittedly, the goods which were imported by the petitioner were meant to be used for manufacture and the petitioners availed the benefit of the exemption notification. This condition having been violated and the goods having been cleared to the domestic area and the petitioner having accepted their mistake, the additional duty of excise is leviable in terms of sub-section (5) of Section 3 of the Customs Tariff Act. The exemption which is sought to be granted by the Budget Notification pertains to the duty leviable under sub-section (1) of Section 3 of the Customs Tariff Act and there is no reference to the additional duty of excise leviable in terms of sub-section (5), the object of which has not only been elucidated in the statutory provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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