Customs, Excise and Gold Tribunal - Delhi
Gupta Trading Co. vs Collector Of Customs on 13 November, 1986
Equivalent citations: 1987(11)ECC4, 1987(27)ELT510(TRI-DEL)
ORDER
S.D. Jha, Vice President
1. The appellants claim for refund based on Notification No. 55/75-CE of additional duty in respect of imported Pyridine Pure 2 degrees was rejected by the Assistant Collector of Customs, Bombay by his order dated 26.3.1983 on The ground that the importers have not mentioned the end product nor shown use of the product as drug-intermediate. The order was upheld in appeal by Collector of Customs (Appeals) Bombay by his order dated 26.8.1983 on the ground that there was no satisfactory evidence to show that the imported goods were drug or drug intermediate. The importers were traders and not manufacturers. There was no guarantee that goods would be used in the manufacture of drugs. If they are not so used, the intention behind the notification is violated. Aggrieved, the appellants filed appeal to the Tribunal.
2. In response to the notice of the date of hearing, the appellants by their communication dated 9.10.1986 received in the Tribunal on 14.10.86, intimated that they do net wish to appear in person or through an authorised Representative for the personal hearing and that their appeal may be decided on merits. Shri Sunder Rajan Departmental Representative for the respondents was heard and papers perused.
3. The appellants have in their written submissions relied on a Single Judge decision of Bombay High Court in Rakesh Enterprises & Another v. Union of India & Another 1986 (25) ELT 906 Bombay for the argument that if the goods are drug and drug intermediate, it is not necessary to establish for the purposes of exemption under notification that they are actually so used. The High Court held that it is not permissible to read additional words in the Notification.
4. A perusal of the Notification No. 55/75-CE dated 1.3.1975 shows that it is issued under Rule 8(1) of Central Excise Rules, 1944. In Khandelwal Metal & Engg. Company v. Union of India 1985 (20) ELT 222, the Supreme Court held that additional duty under section 3 of the Customs Tariff Act, 1975 partakes character of Customs duty and is not countervailing duty. In Union of India and Ors. v. Modi Rubber Ltd. and Ors. 1986 (25) ELT 849 (SC), the Supreme Court held :
"It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of 'duty' contained in Rule 2 clause (v) which according to the well-recognised canons of construction would be projected in Rule 8(1) be read as granting exemption only in respect of duty of excise payable under the Central Excises & Salt Act, 1944."
5. In B.S. Kamath & Others v. Union of India & Others 1986 (2f) ELT 456 (Karnataka), a Division Bench of the Karnataka High Court held -
"The chargeability, assessments, exemptions and recoveries of customs and exports are exclusively regulated by the Customs Act arid the Tariff Acts. Section 25 of the Customs Act empowers Government "to exempt in whole or in part the Customs duty on imports in the public interest. Section 5 of the Tariff Act empowers Central Government to lower- the rates of customs duty to give effect to trade agreements. The exemptions granted under the Excise Act which regulates the levy of excise duty or tax on manufactured goods in the country is a separate and distinct enactment. The exemptions granted under the Excise duty either in whole or in part are for the purpose of that Act only and they cannot on any principle be the basis for claiming exemptions under the Customs Act.".
6. In view of the above pronouncements, the appellants cannot claim refund of the Additional duty which is Customs duty based on a Notification issued under Rule 8(1) of Central Excise Rules, 1944, when the notification has no reference to customs duty. The rejection of the appellants claim for refund must be, therefore, upheld though for reasons different from those found by the lower authorities. The appeal fails and is dismissed.