Customs, Excise and Gold Tribunal - Mumbai
Bharat Petroleum Corporation Ltd. vs Cce on 11 November, 1997
Equivalent citations: 1998(75)ECR413(TRI.-MUMBAI)
ORDER
S.K. Bhatnagar, Vice-President
1. This is an appeal filed with reference to the order of the Collector of Central Excise (Appeals), Bombay dated 10.3.1989.
2. Learned Counsel submitted that they have also filed a miscellaneous application for amendment of the grounds of appeal and in this connection drew attention to the reasons given therein. Elaborating the same he said that after the new tariff was introduced in 1986, Government of India introduced an Act known as Central Duties of Excise (Retrospective Exemption)Act, 1986, which was passed and this had the effect of continuing the effective rate of duty in respect of the tariff items covered by the Notification 75/84 as per notification 78/86.
3. In this Notification, Chapter 27 was mentioned in the opening paragraph. But subsequently a Notification was issued viz. 359/86 dated 27.6.1986 substituting Chapter 22 or 27 or 29 for the words "in Chapter 22 or 27". They have filed the application because the statutory provisions contained in the aforesaid Act and the effect thereof are required to be taken into consideration and are relevant for the purpose of application of Notification 359/86 which is the main issue involved in the appeal. He has, therefore, requested that the relevant provisions relating to the tariff items and the concerned Notifications may be allowed to be taken on record.
4. Learned DR objected to the prayer on the ground that this point had not been taken up earlier before the authorities below.
5. We have considered the above submissions. We observe that, prima-facie, the aforesaid Act and the Notifications enclosed with the application and the extract of the Tariff Items were relevant for the purpose of consideration of this appeal and the legal arguments flowing thereupon could be even otherwise advanced; therefore, in the interests of justice, this application is required to be allowed. It is ordered accordingly.
6. In so far as the main appeal is concerned learned Counsel stated that in this case two products viz. Benzene and Toluene are involved. Initially, prior to the introduction of the new Tariff, both the items fell under TI- 6. After the introduction of the new Tariff, they submitted a classification list classifying them under Chapter 27 and the same was approved. But subsequently, they came to know that they were being classified under Chapter 29 in the case of Indian Oil Corporation, Koyali Refinery and, therefore, they requested for reclassification under Chapter 29, but the request was not heeded. Later on, however, the impugned show cause notice was issued on the ground that the aforesaid notification covered only Chapter 27 and not Chapter 29 and, therefore, they were liable to pay the duty demanded.
7. The appellants agreed that the goods were classifiable under Chapter 29, but their contention was that the duty amount in question was still not demand-able.
8. As a matter of fact, at one stage both sides had considered that the goods were classifiable under Chapter 27 whereas they were actually classifiable under Chapter 29. Therefore, both had erred.
9. Subsequently, the Department has erred in not taking cognizance of the statutory provisions of the Central Duties of Excise (Retrospective Exemption) Act, 1986, which had the effect of maintaining the effective rate of duty in respect of items covered by it. Prior to the introduction of new Tariff, Notification 75/84 covered, inter alia, products falling under Chapter 6 including the appellants' products (as amended). After the introduction of the new Tariff, Notification 78/86 was issued indicating the number of old Notification and substituting the old Headings by new Headings. At the time of initial issue of the Notification 78/86, at SI. No. 30 referring to Notification 75/84, the opening paragraph referred only Chapter 27, subsequently, Notification 359/86 dated 27.6.1986 was issued and the net effect was that Chapter 29 also got covered by the provisions of the Retrospective Amendment Act and, therefore, the effective rate of duty which was prevalent before introduction of the new Tariff was required to be continued, hence the demand was not maintainable.
10. In so far as the question whether this Notification 359/86 was prospective or retrospective, in application is concerned, he would like to draw attention to the decision of the Ministry of Finance itself which has issued a list of Notifications covered under the Central Duties of Excise (Retrospective Exemption) Act, 1986 under M.F. (D.R.) letter No. 4/5/87-CX. I dated 11.11.1987. A perusal thereof would show that this letter was issued in pursuance to a meeting of the Advisory Council regarding the Notifications covered by Retrospective Exemption Act and Notification 359/86 dated 27.6.1986 was included at SI. No. 43 and this Notification in turn refers to the Notification No. 75/84 and Notification 75/84 is one of the Notifications mentioned in Notification 78/86.
11. It was his submission that actually, Notification 359/86 was a clarificatory Notification and this has become evident from the letter of the Government.
12. Learned DR drew attention to the impugned order and reiterated the views contained therein. He, however, argued that this point was not raised before the authorities below, therefore, they have not passed any order with reference to the same and this aspect may be kept in view.
13. We have considered the above submissions. We observe that the learned Counsel's pleadings have a strong force. We notice that the Central Duties of Excise (Retrospective Exemption) Act, 1986 was relevant for the purpose of this case.
14. We also observe that the learned Counsel is correct in pointing out that prior to the introduction of new Tariff in 1986, Notification 75/84 was in force and covered, inter alia, the products falling under Chapter 6 of the old Tariff and the headings specified therein including the appellants' products in question. On introduction of the new Tariff, Notification 78/86 was brought in force and this indicated the number and date of the old Notifications and substituted new Headings for the old Headings, one of the Notifications being 75/84 in which in the opening paragraph Chapter 27 was covered but in the table, Chapters 27 and 29 were also mentioned. Subsequently, this opening paragraph was amended by Notification 359/86 by indicating that "in the opening paragraph, for the words and figures falling under Chapter 22 or 27, the words and figures "falling under Chapter 22 or 27 or 29" stand substituted." It is obvious that the Notification in question is a clarificatory Notification in nature and the substitution can only be taken to be effective from the date Notification 78/86 referring to 75/84 came into force. This view is also buttressed by the letter of the Government of India (Ministry of Finance) own letter No. 4/5/87-CX. I dated 11.11.1987, a photocopy of which has been shown to us by the learned Counsel and which incorporates the list of Notifications covered under the aforesaid Act and includes SI. No. 43 in the Notification No. 359/86.
15. The point taken up by the learned DR that this issue was not raised before the authorities below does not make any difference in view of the statutory provisions read with the above Notifications because it is the correct position in law which has to be taken into account.
16. Before parting, however, we may mention that although for the purpose of this particular case, it is enough if the goods were classifiable under Chapter 29 in view of the aforesaid Notifications but we observe that the show cause notice and the orders of the authorities below refer to the Heading and Sub-heading as 2901.90. We find in this connection that Heading 29.01 covers acylic hydrocarbons and their halogenated, sulphonated, nitrated or nitrosated derivatives and, therefore, '2901.90 -others' could cover only 'other' such items (which were acyclic) whereas the products involved in the present case are benzene and toluene, both of which are cyclic hydrocarbons and Heading 2902 covers cyclic hydrocarbons. The HSN also shows these products under Heading 29.02 which covers cyclic hydrocarbons - cyclanes, cyclenes and cycloterpenes as follows:
2902.11 Cyclohexane
2902.19 Others
2902.20 Benzene
2902.30 Toluene
The Condensed Chemical Dictionary, Tenth Edition revised by G. Hawley indicates the two products diagramatically.
This is required to be kept in view.
17. In so far as this case is concerned a reference to the Chapters was enough, hence our decision is with reference to the Chapter only and not with reference to Heading or Sub-heading. However, we have taken the precaution of mentioning the above extracts from the HSN and the Hawley's Condensed Chemical Dictionary as an abundant caution (so that the error apparent in the impugned order does not go unnoticed).
18. In view of the above position, the impugned order is set aside and the appeal is accepted with consequential relief if any due.
Dictated in open court.