9911796707
TMI Blog1994 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of levy(e) of additional customs duty and surcharge thereon. It is acknowledged, however, by the petitioner that the materials that it has imported are chargeable to customs duty under Chapter 39.01/06 of the First Schedule of the Customs Tariff Act. According to him, however, in exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962, read with the relevant rules, the Central Government has exempted the duty on P.V.C. Resins, in these words : "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. 30/82-Customs dated the 28th February, 1982, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods, falling under heading No. 39.01/06 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in column (2) of the Table hereto annexed, when imported into India, from so much of that portion of the duty of Customs leviable thereon which is specified in the said First Schedule as is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty in certain circumstances. Section 12 of this Act reads as follows : "12.Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. The provisions of sub-section (1) shall apply in respect of(2) all goods belonging to Government as they apply in respect of goods not belonging to Government." Duty thus to be levied at such rates, as may be specified in the Customs Tariff Act, are further subjected to a claim under Section 14 of the Act, which reads as follows :- Valuation of pilferred goods. -"14. For the purposes of the Customs Tariff Act, 1975 (51 of(1) 1975), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1) or sub-section (2) in(3) respect of any goods from any part of the duty of customs leviable thereon (the duty of customs leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of customs chargeable on such goods shall in no case exceed the statutory duty. Explanation. - `Form or method', in relation to a rate of duty of customs, means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable." 4.The two relevant provisions in the Customs Tariff Act are Sections 2 and 3 thereof, Section 2 generally as to the rates at which the duty of customs shall be levied under the Customs Act, 1962 as specified in the first and second schedules, and Section 3 as to duty in addition to the prescriptions in the first and second schedules on duties, in these words : Any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf. In making any rules for the purposes of sub-section (3), the(4) Central Government shall have regard to the average quantum of the excise duty payable on the raw materials, components or ingredients used in the production or manufacture of such like article; The duty chargeable under this section shall be in addition(5) to any other duty imposed under this Act or under any other law for the time being in force. The provisions of the Customs Act, 1962, and the rules and(6) regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties, shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act." According to the learned counsel for the petitioner, the duty as envisaged under Section 2 of the Customs Tariff Act as well as the duty in addition to the duty envisaged under Section 2, for which a mention is made in Section 3 of the Customs Tariff Act, are nothing but customs duty on goods identified as dutiable under Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise 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." which has , according to him, deliberately given a meaning to the expression "excise duty for the time being leviable on a like article, if produced or manufactured in India, 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, it would be leviable on the class or description of article, to which the imported article belongs and where such duty is leviable at different rates, the highest duty. His contention in short is that the additional duty, though imposed as a duty on goods identified under Section 12 of the Customs Act, is one, which is determined only on the basis of the excise duty leviable upon l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the taxable event (the import or export of the goods) and it indicates the rate of the levy. The rates are such `as may be specified under the Customs Tariff Act, 1975'. The last ingredient takes us to Section 2 of Tariff Act, which lays down that `the rates at which the duties of customs shall be levied under the Customs Act are specified in the First or Second Schedule'. Nothing more would be ordinarily required to complete the scope of Section 12, Customs Act. The Scheme incorporated in that Section read with Section 2 of the Tariff Act is analogous to the scheme embodied in Section 4, Income Tax Act, read with the relevant provisions of the Finance Act. The levy specified in Section 3(1) of the Tariff Act is a supplementary levy, in enhancement of the levy charged by Section 12 of the Customs Act and with a different base constituting the measure of the impost. In other words, the scheme embodied in Section 12 is amplified by what is provided in Section 3(1). The Customs duty charged under Section 12 is extended by an additional duty confined to imported articles in the measure set forth in Section 3(1). Thus, the additional duty which is mentioned in Section 3(1) of the Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3(1) and provides a clue to its understanding. The Explanation, in the words of the Supreme Court, in this judgment, provides in so many words that the expression `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. (emphasis supplied). The Supreme Court has further stated that : "The Explanation even goes further and provides that if a like article is not so produced or manufactured, then, the duty leviable means the duty which would be leviable on the class or description of articles to which the imported article belongs. These provisions leave no doubt that the duty referred to in Section 3(1) of the Tariff Act does not bear any nexus with the nature and quality of goods imported into India." In this case, the Supreme Court has categorically rejected the argument based on the reading of the words implied in Section 3(5) of the Tariff Act that `the duty chargeable under this section, shall be in addition to any other duty imposed under the Act' will mean that Section 3(1) is in the nature of a chargin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain words, which, according to learned counsel for the petitioner, appear to support him. When however, I read the judgment of the Supreme Court, with the understanding I have of the scheme of the law on the subject, do not see any support, to the stand of the learned counsel for the petitioner in this judgment. The Thermax case (supra) involved two notifications issued under Section 8 of the Central Excises and Salt Act and the assessee contended that he was entitled to exemption from the additional duty of customs leviable under Section 3(1) of the Tariff Act. The contention before the Supreme Court was that the notifications of exemption from Central Excise duty issued from time to time, under Section 8(1) of the Act, would be applicable in the case of imported goods for determining the levy of additional duty under Section 3(1) of the Tariff Act. The contention before the Supreme Court was, if any goods are entitled to full or partial exemption from payment of Central Excise under any such notification, the exemption or concession would also extend to the additional duty payable under Section 3(1) of the Customs Tariff Act, subject, of course, to the fulfilment of any cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amount of concessional duty and, if he has paid more, will be entitled to ask for a refund. In our opinion, the Tribunal was in error in holding that the assessee could not get a refund because the procedure of Chapter X of the rules is inapplicable to importers as such. Learned Counsel for the assessee however, contended that, even if the conclusion of the Tribunal that the procedure of Chapter X of the rules cannot be complied with in such cases is correct, the exemption under the Notification cannot be denied. He relied, in support of this submission, on a letter of the Central Board of Excise and Customs (F. No. 332/65/86 TRU dated 27-7-1987) the relevant portion of which runs as under :- "The Board is of the view that it would legally not be correct to levy additional (countervailing) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es at which it has to be taxed. The term `assessment' on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount." It will thus be not difficult to appreciate that the word levy in Section 3(1) of the Tariff Act, has been used to signify the procedure for the determination of the rate of tax called `additional duty' as well as the procedure adopted in fixing the liability to pay the additional duty. 9A.The argument in substance of the learned counsel for the petitioner is based thus on his reading of the additional duty as a customs duty, as imposed fully by Section 12 of the Customs Act and reading accordingly the notification afore-quoted extending exemption from duty of customs leviable on the goods imported by the petitioner. The duty levied, for the reason of the identification of the goods imported into, or, exported from, India, in terms of Section 12 of the Customs Act, cannot, however, make the charge in accordance with Section 2 of the Tariff Act and the charge in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the purpose of Section 3(1) of the Tariff Act is ignored. The view that I have taken takes me to the irresistible conclusion that notwithstanding the exemption by a notification under Section 25 of the Customs Act, unless there is a conscious decision to exempt from the additional duty on par with the exemption given to an Indian manufacturer or producer under Rule 8 of the Central Excise Rules, 1944, otherwise any exemption under Section 25 of the Customs Act shall not touch the additional duty as per Section 3(1) of the Tariff Act. I am supported in my view by the judgment of the Supreme Court in the case of Thermax Pvt. Ltd. (supra) [1992 (61) E.L.T. 352 (SC) = AIR 1993 SC 1339] wherein on the finding that the local manufacturer/producer of the goods enjoyed exemption from excise duty, the Supreme Court has said that the importer would get the benefit of the same in the additional duty under Section 3(1) of the Tariff Act and the judgment of the Supreme Court in the case of Khandelwal Metal Engg. Works (supra) [1985 (20) E.L.T. 222 (SC) = A.I.R. 1985 S.C. 1211], in which it has been clearly indicated that the additional duty shall vary, not on the basis of any variation in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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