Madras High Court
Maruti Udyog Limited vs Commissioner Of Customs on 14 June, 2016
Author: S.Manikumar
Bench: S.Manikumar
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on: 10/07/2018
Pronounced on: 09/10/2018
CORAM
THE HON'BLE Mr.JUSTICE S.MANIKUMAR
AND
THE HON'BLE Mr.JUSTICE SUBRAMONIUM PRASAD
Civil Miscellaneous Appeal No.2461 of 2016
Maruti Udyog Limited
Palam-Gurgaon Road
Gurgaon
Haryana 122 015. ... Appellant
Vs
1. Commissioner of Customs
Chennai (Sea Port)/Import
Custom House
33 Rajaji Salai
Chennai 600 001.
2. Customs, Excise and
Service Tax Appellate Tribunal
Shasthri Bhawan
Haddows Road
Chennai 600 006. ... Respondents
Appeal filed under Section 130 (1) of the Customs Act, against
the Final Order No.40947 of 2016, dated 14/6/2016, on the file of the
http://www.judis.nic.in
Customs, Excise and Service Tax Appellate Tribunal, Chennai.
2
For Appellant ... Mr.Vijay Nair
For Respondent ... Mr.A.P.Srinivas
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JUDGMENT
(Judgment of the Court was made by Subramonium Prasad,J) This appeal is directed against the Final Order No.40947 of 2016, dated 14/6/2016, on the file of the Customs, Excise and Service Tax Appellate Tribunal, Chennai.
2. Brief facts of the case are as follows:-
Appellant exported Fuel Injection Pups on FOC basis under bond, without payment of excise duty, for fitting the same, on the engines imported to India. Appellant claimed benefit of exemption Notification No.94 of 1996 dated 16.12.1996. Conditions appended to the said Notification are as under:-
“Provided that the Assistant Commissioner of Customs is satisfied that,
(a) The goods (other the goods exported under the Duty Exception Scheme (DEEC) or the Export http://www.judis.nic.in Promotion capital Goods Scheme (EPCG) or Duty Entitlement Passbook Scheme are re imported within 3 three year after the exportation or within such extended period, not exceeding two years, the Commissioner of Customs may on sufficient cause being shown for the delay .. allow, and in the case of goods exported under the Duty Exemption Scheme (DEEC) or the Export Promotion Capital Goods Scheme (DEPCG), or Duty Entitlement Passbook Scheme (DEPB). Reimportation of such goods takes place within one year of exportation or such extended period not exceeding one more year as may be allowed by the Commissioner of Customs on sufficient cause being shown.
(b). The goods are the same which were exported.
(c). In the case of goods falling under Sr.No.2 of the Table, there has been no change in ownership of the goods between the time of export of such goods and re import thereof.
Provided further nothing contained in this notification shall apply to re imported goods, which had been exported
(a). By a hundred percent export – oriented undertaking or a unit in a free Tade Zone as defined under Section 3 of the Central Excise Act 1944 (1 of 1944);
(b). From a public warehouse or a private warehouse appointed or licensed, as the case may http://www.judis.nic.in be under Section 57 or Section 58 of the Customs Act, 1962 (52 of 1962).
4Explanation – For the purpose of this notification, the goods shall not be deemed to be the same if these are re imported after being subjected to re manufacturing or reprocessing through melting, recycling or recasting abroad.”
3. Petitioners were served with twelve show cause notices, stating that condition (b) extracted supra, stipulated that the goods for availing the Notification the goods imported should be “the same as exported”. Since the Fuel Engine Pumps could not be considered as “the same as exported” because what has been imported are engines fitted with fuel engine pump, under 94-96.
4. Appellant gave a reply to the demand notice. Personal hearing was given. Adjudicating Authority held that Fuel Injection pumps were originally exported to be fitted, on the Engine Assembly to be imported. Fuel Injection pumps and fuel injectors are manufactured in India and the same were sourced from the local ancillary unit. The components are from abroad where they are assembled with other components that go into the manufacture of a complete Engine Assembly. The Adjudicating Authority held that if the Fuel Injectors and Pumps were reimported as such without fitment http://www.judis.nic.in on engine, then and only then they are the same as exported.
5However, when they are fitted to all the engines, they become the integral part of the engine and have no individual identity and therefore, goods which are reimported are not the same goods, which are exported.
5. The Demands were confirmed by the Adjudicating Authority in the order, dated 18/2/2004.
6. Appeal was taken before the Commissioner of Appeals.
Commissioner of Appeals and vide, order, dated 18/2/2005, the Commissioner of Customs (Appeals) upheld the order of the Adjudicating Authority.
7. Matter was further taken up before the Customs, Excise and Service Tax Appellate Authority, in Appeal No.C/121/2008-DB (Appeals were initially filed before the Customs Excise and Service Tax Appellate Tribunal, New Delhi and was later transferred to Chennai).
8. Tribunal by the impugned order, dismissed the appeal, on the ground that the same issue is covered by an earlier decision of the http://www.judis.nic.in Tribunal in Ford India Private Limited Vs. Commissioner of 6 Customs, Chennai {2008 (228)ELT – 71 (TRI-Chennai). In the abovementioned judgment, Tribunal has observed as under:-
“We have given careful consideration to the submissions. The essential facts are not in dispute. Fuel Injection Pumps (with injectors) classifiable under SH 8413.81 of the CTA Schedule were exported by M/s.Ford India for fitment to engines abroad. The goods imported by them were not fuel injection pumps (with injectors) but engine assemblies in which the pumps and injectors were in a condition of having been fitted to, or assembled with, the engines. The relevant show cause notices proposed to deny the benefit of Customs Notification No.94/96 to the imported on the ground that the imported goods were not the same as the exported goods. The lower Appellate Authority upheld the decision of the original authority against the assessee. They reasoned that as the fuel injection pumps and injectors had, when fitted to engine, become integral part of the engine thereby losing their identity, it could not be said that the goods imported were the same as those exported. We find no valid reason to take a different view. Learned counsel has argued, with reference to the Explanation to the Notification, that the http://www.judis.nic.in pumps and injectors, though imported in a condition of having been fitted to engines, should 7 be deemed to be the same as the goods which were exported. It is his submission that only those goods which are re imported after being subjected to remanufacturing or reprocessing through melting, recycling or recasting abroad cannot be deemed to be the same as the goods exported. In the present case, the pumps and injectors were fitted to engines without melting, recycling or recasting and, therefore, according to counsel, they should be deemed to be the same as the goods exported. We find it difficult to be persuaded to accept this argument. We have already extracted the text of the Explanation in an earlier part of this order. The processes of melting, recycling and recasting mentioned in the Explanation are obviously relatable to the exported items only and not to extraneous goods like the engine in the present case. There is no denial of the fact that the pumps and injectors were not melted, recycled or recast into a different product, but these items classified by the appellants themselves under SH 841.81 and engines classified by them under SH 8408.20 were assembled into a new product classifiable under Heading 87.08. It was this product which was presented for clearance under the subject bills of entry. On these fats we have http://www.judis.nic.in no hesitation to hold that, for purposes of Customs Notification No.94/96 ibid, these 8 imports do not merit consideration as “reimports” of the fuel injection pumps and injectors exported by the party. The benefit of the Notification has been rightly denied to the appellants on the ground of non-fulfilment of one of the substantive conditions stipulated under the first proviso to the Notification.”
9. Tribunal also relied on a Board's Circular No.1/05 dated 11/1/2005, issued by the Central Board of Excise and Customs, to the effect that Fuel Injection Pumps and Injectors exported and reimported after fitment into engines are not covered under Notification No.94/96-Cus. Dated 16/12/1996.
10. Aggrieved against the above said order, the appellant has come forward with the present Civil Miscellaneous Appeal, for the relief stated supra.
11. The short issue which arises for consideration is “Whether the appellant would be entitled to exemption under Notification No.94/96-Cus., dated 16/12/1996 or not?” http://www.judis.nic.in
12. The learned counsel for the revenue raised a preliminary 9 objection, regarding maintainability of the appeal on the ground that, it relates to the question of applicability of notification which is a question having a relation to the rate of duty of Customs for the purpose of assessment.
13. Section 130 of the Customs Act and Section 130 E of the Customs Act reads as under:-
Section 130: Appeal to High Court (1). An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the first day of July 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial questions of law.
14. Section 130 E of the Customs Act, 1962 reads thus:-
“Appeal to Supreme Court An appeal shall lie to the Supreme Court from http://www.judis.nic.in -
a. any judgment of the High Court delivered
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(i). in an appeal made under Section 130; or
(ii). On a reference made under Section 130 by the Appellate Tribunal befor the 1st day of July 2003.
(iii). On a reference made under Section 130 A, in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or
(b) any order passed before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment.”
15. Learned counsel for the revenue, relied on the judgment of the Hon'ble Supreme Court in Navin Chemicals MFG & Trading Co. Ltd., Vs. Collector of Customs, reported in 1993 (68) ELT (3) SC. Paragraph Nos.7 to 12, which lays down the law, reads as under.
“7. The controversy, therefore, relates to the meaning to be given to the expression 'determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment'. It seems to us that the key lies in the words 'for purposes of assessment' therein. Where the appeal involves the determination of any question that has a relation to the rate of customs duty for the purposes of assessment that appeal mast be heard by a Special Bench. Similarly, where the appeal involves the determination of any question that has a relation to the value of goods for the purposes of assessment, that appeal must be heard by a http://www.judis.nic.in Special Bench. Cases that relate to the rate of customs duty for the purposes of assessment and which relate to the value of goods for the purposes of assessment are advised treated separately and placed 11 before Special Benches for decision because they, more often than not, are of importance not only to the importers who are parties thereto but also to many other importers who import or propose to import the same or similar goods. Since the decisions of CEGAT in such matters would have wide application they are, by the terms of the statute, to be rendered by Special Benches. The phrase 'relation to" is, ordinarily, of wide import but, in the context of its use in the said expression in Section 129-C, it must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment.
8. Before we consider whether the case of the appellant fails within the said expression, we must note that Section 130, Sub-section
(l)and Section 130-E, Clause (b) of the said Act also use the said expression and they refer respectively to the Statement of Case to the High Court on a reference by CEGAT and an appeal to the Supreme Court directly. Section 130(1) states that the Collector of Customs or the other party may require CEGAT to refer to the High Court any question of law arising out of an order under appeal before it provided it is not an order relating among other things to the 'determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment'. Clause (b) of Section 130-E provides that an appeal shall lie to the Supreme Court from 'any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate, of duty of customs or to the value of goods for purposes of assessment'.
9. The importance of the present appeal lies not so much in deciding which appeals can be heard by a member of CEGAT sitting singly and which by a Special Bench thereof as in determining where a reference can be made by CEGAT to the High Court and in which cases an appeal against an order of CEGAT can be filed directly before the Supreme Court. Where an appeal lies to the Supreme Court, the http://www.judis.nic.in necessity of the reference on a question of law to the High Court is obviated. An appeal to this Court is provided where, as aforementioned, the questions in issue, relating to the rates of duty or 12 the value of goods for the purposes of assessment, have relevance not only for the parties there concerned but for other importers as well.
10. Section 129-D deals with the powers of the Central Board of Excise and Customs and the Collector of Customs to call for and examine the record of any proceedings before authorities subordinate thereto and examine the legality or propriety thereof and also to direct such authorities to file appeals. Sub-section 5 was added to Section 129-D by the Customs & Central Excise Laws Amendment Act, 1988 and it reads thus:
(5) The provisions of this section shall not apply to any decision or order in which the determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment of any duty is in issue or is one of the points in issue.
Explanation - For the purposes of this sub-section, the determination of a rate of duty in relation to any goods or valuation of any goods or valuation of any goods for the purposes of assessment of duty includes the determination of a question.-
(a) relating to the rate of duty for the time being in force, whether under the Customs Tariff Act, 1975 (51 of 1975), or under any other Central Act providing for the levy and collection of any duty of customs, in relation to any goods on or after the 28th day of February, 1986; or
(b) relating to the value of goods for the purposes of assessment of any duty in cases where the assessment is made on or after the 28th day of February, 1986; or
(c) whether any goods fall under a particular heading or sub- heading of the First Schedule or the Second Schedule to the Customs Tariff Act, 1975 (51 of 1975), or that any goods are or not covered by a particular notification or order issued by the Central Government granting total or partial exemption from duty; or http://www.judis.nic.in (d) whether the value of any goods for the purposes of assessment of duty shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically 13 provided in this Act.
11. It will be seen that Sub-section 5 uses the said expression 'determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment' and the Explanation thereto provides a definition of it 'for the purposes of this sub-section'. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes/of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation expressly confines the definition of the said expression to Sub-section 5 of Section 129-D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have, given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods.
12. This, then, is the test for the purposes of determining whether or not an appeal should be heard by a Special Bench of CEGAT, whether http://www.judis.nic.in or not a reference by CEGAT lies to the High Court and whether or not an appeal lies directly to the Supreme Court from a decision of CEGAT : does the question that requires determination have a direct and 14 proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods.” (emphasis supplied)
16. The said judgment squarely applicable to the facts of this case. The issue as to whether the appellant would be entitled to the benefit of exemption Notification is a matter, which can be decided only by the Hon'ble Supreme Court.
17. The above said judgment has also been followed by the High Court of Madras in the case of Commissioner of Customs (Exports),Chennai Vs. D.S.Metal (P) Ltd., reported in 2015 (323) ELT –
328. This Court after quoting the judgment in Navin Chemicals in paragraph Nos.5 to 7, observed as under:-
5. The present appeal is filed under Section 130 of the Customs Act and it is apposite to refer to Section 130(1) of the Customs Act, which reads as under :
“130. Appeal to High Court (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purpose of assessment), if the High Court is satisfied that the case involves a substantial question of law” (emphasis supplied)
6. In the present case, the issue that arises for consideration is what will be the rate of duty that is http://www.judis.nic.in payable by the first respondent, but for the notification in question. Therefore, the objection of the learned counsel for the first respondent is 15 sustained.
7. The above said view of this Court is fortified by a decision of the Gujarat High Court in Commissioner of Central Excise V JBF Industries Ltd., 2011 (264) E.L.T. 162 (GUJ), wherein it is held as under :
“10. In the light of the aforesaid judicial pronouncements, it is apparent that the question as to the applicability of a notification or a circular which has a bearing on the determination of the rate of duty is a question which has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. In the circumstances, the present appeal which relates to the applicability of the above referred circulare, relates directly to the determination of rate of duty for the purpose of assessment and as such, in the light of the provisions of Section 35G read with Section 35L of the Act, this Court has no jurisdiction to entertain the appeal.” (emphasis supplied) For the foregoing reasons, we hold this appeal is not maintainable and accordingly, the same is dismissed giving liberty to the appellant to pursue the matter before the appropriate forum. Since the appeal is held not maintainable, we do not propose to go into the merits of the questions of law raised for consideration. No costs.
http://www.judis.nic.in 16
18. In view of the above, instant Civil Miscellaneous Appeal is therefore, not maintainable and the same is dismissed. No costs.
Consequently, the connected Miscellaneous Petition is closed.
(S.M.K.,J) (S.P.,J)
09th October 2018
Index: Yes
website: yes
http://www.judis.nic.in
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To
1. Commissioner of Customs
Chennai (Sea Port)/Import
Custom House
33 Rajaji Salai
Chennai 600 001.
2. Customs, Excise and
Service Tax Appellate Tribunal
Shasthri Bhawan
Haddows Road
Chennai 600 006.
http://www.judis.nic.in
18
S.MANIKUMAR,J
AND
SUBRAMONIUM PRASAD,J
mvs/gsp.
Pre-delivery judgment in
Civil Miscellaneous Appeal No.2461 of 2018 09/10/2018 http://www.judis.nic.in