9911796707
TMI Blog1995 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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. It must therefore be held that when the rule 13 refers to the export to be made in the like manner, it would necessarily mean subject to the same conditions and requirements as laid down by the preceding Rule 12 which refers to the same topic, namely, export of excisable commodities and excise duty payable on them whether the manufacturer of articles has exported them after payment of duty or before payment of duty would make no difference on these aspects. It must therefore be held that the decision of Calcutta High Court cannot be treated to be laying down correct law. On the contrary as seen earlier the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 claim for refund was adjudicated in the light of Rule 12 and not under Rule 13. 5.Aggrieved by this order the appellants went in appeal. The Appellate Collector turned down the claim of the appellants that the case was governed by Rule 13 without reference to rule 12. The appellants' claim for refund in connection with another item, namely, furnace oil also came to be rejected by the Assistant Collector and the appeal regarding the same was also dismissed by the appellate authority. Under these circumstances, the appellants moved two further appeals before the Customs, Excise Gold (Control) Tribunal (hereinafter referred to as `the Tribunal'). The Tribunal by its common order dismissed these appeals following the Delhi High Court's judgment in the case of Hindustan Aluminium Corporation Ltd. v. Superintendent of Central Excise, Mirzapur and Ors., 1981 (8) E.L.T. 642. Against this judgment of the Tribunal the present two appeals are moved. Facts leading to Civil Appeal Nos. 5396-5398/85 :II. 6.The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the order of the Appellate Collector should not be set aside. The appellants filed their reply to the show cause notice on 29th September, 1982. The said proceedings were transferred to the Tribunal and were registered as Appeal No. ED(SB)(T) 1470/82-C. The said appeal was allowed by the Tribunal on 19-2-1985. The order of the Appellate Collector was set aside and the order of the Assistant Collector was restored. That is how the appellants preferred these appeals under Section 35(2) of the Act against the said decision of the Tribunal. Facts leading to Civil Appeal Nos. 4176-96/86 :IV. 9.The appellants supplied Aviation Turbine Fuel (ATF) during the period from 1-1-1978 to 30-6-1981 from bonded stock to foreign bound aircraft from the Palam depot. The abovesaid supplies were made under Rule 13 of the rules. According to the appellants no excise duty was payable on these goods. However, the duty was paid under protest. The appellants filed twenty-one claims for refund of duty paid during that period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tta 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 of these rival contentions, it becomes clear that the fate of these proceedings hinges round the correct interpretation of Rules 12 and 13 of the rules. These rules are part and parcel of the Central Excise Rules, 1944 made by the Central Government in exercise of its powers conferred by Section 36(2) of the Act. It will be appropriate to reproduce Rules 12 and 13 as they existed on the statute book at the material time for resolving the controversy between the parties. "Rule 12.Rebate of duty on goods exported. - The Central Government may, from time to time, by notification in the(1) Official Gazette, grant rebate of duty paid on excisable goods, if exported outside India, to such extent, and subject to such safeguards, conditions and limitations as regards the class of goods, destination, mode of transport, and other allied matters as may be specified therein : Provided that if the Collector is satisfied that the goods have in fact been exported, he may, for reasons to be recorded in writing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utta 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 which have already been subjected to payment of excise duty but which are subsequently exported outside India. On proof of fulfilment of conditions laid down by Rule 12, the concerned exporter of such goods will be able to get rebate as per the terms and conditions laid down by the notification issued by Central Govt. under sub-rule (1) of Rule 12. So far as Rule 13 is concerned, other excisable goods mentioned in the rule may in the like manner meaning thereby as prescribed by Rule 12, can be exported without payment of duty from warehouse or licensed factory, provided that 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 under such conditions in the sum equivalent to that chargeable on the goods for the due arrival at the port of the export. And such bond shall not be discharged unless the goods are duly exported to the satisfaction of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by the Delhi High Court in the case of Hindustan Aluminium Corporation Ltd. v. Superintendent of Excise, Mirzapur and Ors. (supra). An identical question was posed for consideration of the Delhi High Court. It was answered by the Division Bench of the Delhi High Court speaking through Sachar, J. The Delhi High Court held that the quantum of duty or rebate has to be determined in the light of the notification issued under Rule 12. Under Rule 13 without first payment of duty goods can be exported but that does not mean that the goods are not liable to pay duty. Since Rule 13 contemplates release of goods under bond the petitioner can claim postponement of payment of duty but cannot claim total exemption. Referring to Rule 9 and Rule 140 of the rules it was held that though Rule 9 provided that no excisable goods shall be removed from where they are manufactured without payment of duty, Rule 13 allows such removal for export without payment of duty. Rule 140 empowers the Collector to approve a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 `may in the like manner be exported' as found in Rule 13 has a clear linkage with the liability to pay duty as laid down by Rule 12 and accordingly the contention of the appellants before the Delhi High Court that Rule 13 was independent of Rule 12 was rejected and it was held that even goods exported from bonded warehouse under Rule 13 under a bond will have to bear duty to the extent indicated by notification issued under Rule 12 as applicable at the relevant time. 15.In our view the aforesaid decision of Delhi High Court correctly laid down the scheme of Rules 12 and 13 in the light of other relevant rules holding the field at the relevant time. All that Rule 13 provides for is a facility given to the concerned manufacturer of excisable goods of not paying excise duty when such goods are taken out of bonded warehouse or licensed factory under a bond duly executed under Rule 13 which defers payment of excise duty but at the same time guarantees to the revenue payment of full excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted 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 of Rs. 100 excise duty would entitle the exporter to get refund of Rs. 20 and such machine may have to bear the excise duty of Rs. 80. While if the same sewing machine which otherwise is liable to pay Rs. 100 excise duty is placed in a bonded warehouse by availing the facility of deferred payment of duty under bond as per Rule 13 and if Rule 13 is to be read independently of Rule 12, then export of such a machine from bonded warehouse would entitle the exporter to claim full exemption of Rs. 100 by way of duty on the same machine. Thus a person who first pays excise duty and then exports the commodity would pay Rs. 80 by way of reduced duty, while a person who enjoys the facility of non-payment of duty at the stage of taking out the commodity from bonded warehouse and getting it exported would enjoy on the same commodity total exemption from duty when it is otherwise liable to bear the same rate of excise duty. Such a result would be discriminatory and arbitrary. To avoid such an anomalous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the notification issued under Rule 12. Equally unjustified is the reasoning adopted by the Calcutta High Court in para 14 of the report that as per Rule 13 the export is made from bonded warehouse and therefore manufacturer may not earn profit which he may earn if first the goods are cleared on payment of excise duty and then they are exported. In our view this distinction is without any real difference. It has to be kept in view that if the excisable goods are first cleared for home consumption and then exported within the time prescribed under Rule 12, refund would be claimed by the exporter who may not be the manufacturer of such commodity. Such a manufacturer when he sells the goods for home consumption may get profit out of the transaction but ultimately the burden of the excise duty paid by him on the cleared commodity will be passed on to the purchaser and such a purchaser if he exports the commodity within the time limit prescribed by Rule 12 can claim refund of duty paid to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the like manner be exported" by the Calcutta High Court as found in Rule 13 would on the reasoning of the High Court become tantologous. It must therefore be held that when the rule 13 refers to the export to be made in the like manner, it would necessarily mean subject to the same conditions and requirements as laid down by the preceding Rule 12 which refers to the same topic, namely, export of excisable commodities and excise duty payable on them whether the manufacturer of articles has exported them after payment of duty or before payment of duty would make no difference on these aspects. The Calcutta High Court has found fault with the reasoning of the Delhi High Court in Hindustan Aluminium Corporation Limited v. Superintendent, Central Excise (supra) by taking the view that the Delhi High Court had wrongly assumed that the exported goods are not exempted from payment of excise duty under Rule 8 and that the provisions of Section 37 of the Act were over-looked by the High Court. Now ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
