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TMI Blog1995 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 18,859.50p being the duty paid by them on Light Diesel Oil (LDO) supplied as ship's stores for foreign going ships. The supplies were made on seven different occasions during the period from 15-2-1977 to 20-4-1978. The LDO so supplied was charged to basic excise duty, that is, the duty payable under the First Schedule to the Act read with any notification in force at Rs. 36.21 per kilolitre at 15 centigrade in terms of Central Excise Notification No. 349/77, dated 16-12-1977. The refund claim was made with respect to Rule 13 of the rules. It is the case of the appellants that no duty whatsoever was payable in respect of LDO and Furnace Oil supplied from bonded stock as ship's stores going to foreign countries in terms of Central Excise Rule 13. That they are therefore entitled to refund of excise duty paid on these goods. 4.After holding adjudication proceedings the Assistant Collector rejected the claim. According to the Assistant Collector in the light of various notifications issued in connection with Rule 12 in respect of such supplies, additional excise duty was payable at the concessional rates in terms of Notification No. 232/67, dated 9-10-1967. In short, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal dated 2-5-1985. Facts leading to Civil Appeal Nos. 971-72/86 :III. 8.The appellants supplied Light Diesel Oil (LDO) and furnace oil during the period 26-12-1977 to 22-8-1978 from their bonded tanks in bunkers to foreign going vessels. According to the appellants the said export of the aforesaid oil was covered by Rule 13 of the rules. On 29-4-1978 the appellants paid the duty under protest because of the demand of the Superintendent, Central Excise, Calcutta-II Division. Thereafter, on 5-4-1979 the appellants preferred refund claims for the duty paid under protest. The Assistant Collector of Central Excise, Calcutta-II Division by order dated 8-9-1990 rejected the refund claims. The appellants preferred two appeals being Nos. 1524 & 1525 of 1981, against the adjudication order of the Assistant Collector to the Appellate Collector. The Appellate Collector by order dated 6-11-1981 allowed the claim of the appellants. The Appellate Collector held that the refund claims were admissible as per Rule 13 of the rules. On 27th August, 1982, respondent No. 1, Govt. of India issued a show cause notice under Section 36(2) of the Act calling upon the appellants to show cause why t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently exported outside India. That in all these cases, therefore, the duty paid under protest by the appellants was liable to be refunded. It was submitted by Shri Sorabjee, learned senior counsel for the appellants, that in the case of Indian Aluminium Company Limited v. Union of India, 1988 (36) E.L.T. 435 the High Court of Calcutta has taken the view that Rule 13 is independent of Rule 12 and a manufacturer exporter who has followed the provisions of Rule 13 was not liable to pay any duty on such goods and that the decision to the contrary rendered by Delhi High Court was rightly dissented from by the Calcutta High Court. In short, placing reliance on the said decision it was submitted that the appeals should be allowed. The learned standing counsel for revenue, on the other hand contended that the view propounded by the Delhi High Court in Hindustan Aluminium Corporation Ltd. v. Superintendent of Central Excise, Mirzapur and Ors. (supra) is a correct view and the decision rendered by Calcutta High Court does not lay down correct law. That the Tribunal was justified in rejecting all these claims of the appellants following the decision of the Delhi High Court. 11.In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat export is made in accordance with the procedure set out in the relevant provisions of Chapter IX of these Rules and the owner enters into a bond in the proper Form, with such surety or sufficient security, and under such conditions as the Collector approves, in a sum equal at least to the duty chargeable on the goods, for the due arrival thereof at the place of export and their export therefrom under Customs or Postal supervision as the case may be, within the period prescribed for goods exported under Rule 12, and such bond shall not be discharged unless the goods are duly exported, to the satisfaction of the Collector, within the time allowed for such export, or are otherwise accounted for to the satisfaction of such officer, nor until the full duty due upon any deficiency of goods, not so accounted for, has been paid. Explanation. - For the purpose of this rule as well as Rules 14, 14A and 14B, (i) the term "Collector" includes the Collector of Central Excise at Bombay, Madras and Calcutta and (ii) the term `goods' includes excisable goods used in the manufacture of the goods which are exported." 12.A mere look at Rule 12 shows that it will cover those excisable goods whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable goods manufactured in India which have ultimately been exported outside India. It is also pertinent to note that even for applicability of Rule 13 the excisable goods stored in the bonded warehouse have to be exported in the like manner meaning thereby under similar circumstances as mentioned in Rule 12 which is immediately preceding Rule 13 and which deals with similar special concessional payment of duty on excisable goods manufactured in India and which are ultimately exported and which bring foreign exchange to the country. It is not as if under Rule 13 excisable goods which are subjected to export directly from the warehouse of licenced factory do not incur any excise duty. That is contra indicated by the requirement of Rule 13 itself calling upon the exporter to enter into a bond for payment of requisite full duty in case the situation arises for the same and that bond is not to be discharged and the obligation under the bond has to continue for the benefit of revenue till proof of export is made available to the satisfaction of the Collector. The appellants' contention that Rule 13 is independent of Rule 12, therefore, cannot be accepted. 13.This very view was taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that it was not as if goods exported under Rule 13 were exempted from payment of excise duty. In para 14 of the report it was observed that the facility of removing without payment of duty cannot be equated with a substantive right of exemption from payment of duty as was the contention of Mr. Sorabjee. Rule 8 empowers the Central Government by notification in the Official Gazette to exempt subject to such conditions as may be specified in the notification excisable goods from the whole or any part of duty leviable thereon. It was not the case of the appellants that there was any notification issued exempting the goods exported under a bond under Rule 13 from payment of duty. 14.Repelling the arguments of the learned counsel for the petitioner that reference in Rule 13 to the provision regarding the goods being exported in the like manner refers to only the procedure for export as contemplated by Rule 12 and had nothing to do with the rate of excisable duty prescribed under notification issued under Rule 12, it was observed that procedure for exporting such goods was already laid down by Chapter IX of the rules and it was expressly mentioned in Rule 13. Therefore the phrase ` ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharging the liability under the bond and for that purpose linkage with Rule 12 become relevant as per the phrase "may in the like manner be exported" as found in Rule 13. If Rules 12 & 13 are not read in conjunction with each other an anomalous and also discriminatory result will follow. This can be demonstrated by taking a simple example. 16.If an excisable commodity like Sewing Machine is exported from a bonded warehouse under Rule 13 under a bond it may not have to bear excise duty till it is exported. But if the same commodity namely, sewing machine is cleared ex-factory gate on payment of full excise duty and thereafter it is exported and if it is covered by a notification under Rule 12(1) granting rebate then only because the same commodity is first cleared from factory gate on payment of full duty, it will have to bear a reduced excise duty as per the notification on proof of export while the same commodity if placed in a bonded warehouse and then exported may get totally exempted from duty. If say for such a sewing machine the excise duty is Rs. 100 per machine, and on proof of export if 20% rebate is to be available then proof of export of such machine after payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench judgment of the Calcutta High Court, we find that the Calcutta High Court has placed emphasis on the words used in these rules, namely, "rebate on duty of excise paid" as found in Rule 12 as contra distinguished from the words used in Rule 13 to the effect "export under bond of commodities on which duties have not been paid". In our view if the common scheme of both these rules is appreciated in its proper perspective, mere difference of phraseology contained in these rules regarding the time and mode of payment of excise duty would pale into insignificance. It is true as observed by Calcutta High Court that Rule 12 talks of a notification, while Rule 13 does not refer to any notification. But once, it is kept in view that the burden of duty which has to be borne by the concerned commodity, whether it is exported from a bonded warehouse or from open market has to be the same to avoid any inequitable result, the difference in phraseology employed by these rules cannot have any impact on the true construction of these rules. This should be for the simple reason that ultimately the exact burden of the excise duty to be borne by an exported commodity will have to be governed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in local market for home consumption, the exporter under Rule 12 may bear a larger burden of excise duty as compared to the exporter, manufacturer of the same type of goods under Rule 13. Similarly, it is not possible to appreciate the reasoning adopted by the Calcutta High Court in para 28 of the report to the effect that under Rule 13 what is sought to be secured is the proper exportation of goods and not duty to be borne by the exporter. It has to be kept in view that excise duties have nothing to do with the exports as such or with the charging of custom duty on export. They are only concerned with charging and recovery of excise duties which are attached to the manufacture of the goods and their clearance either for home consumption or for export as the case may be. The Calcutta High Court is also in error in taking the view that the words "in the like manner be exported" as found in Rule 13 deal with the procedure for export, as the procedure is already provided in the same rule by making an empress provision that such an export will be made in accordance with the procedure laid down in Chapter IX of these rules. Consequently, the meaning assigned to the phrase, "may in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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