Customs, Excise and Gold Tribunal - Delhi
Haryana Distillery vs Collector Of Customs on 16 June, 1992
Equivalent citations: 1992(62)ELT773(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. Appeals No. C/1970 & 1980/88-D arise out of a common order-in-appeal Cus. 131 & 132/88 dated 18-3-1988 passed by the Collector of Customs (Appeals), Madras. Appeal No. 1478/91-D arises out of Order No. 432/90-Cus. dated 28-11-1990 passed by the Collector of Customs & Central Excise (Appeals), Cochin. In respect of two appeals, the facts are that the appellants preferred a claim seeking refund of additional duty collected on a consignment of 3-year old plain British Spirit/Scotch Malt at 62% volume for manufacture alcoholic beverages. The Assistant Collector assessed the goods at Rs. 80/- per litre applicable for compound alcoholic preparations plus Rs. 33.30 per litre under State Excise as additional duty of customs (C.V.D.). After clearance of the goods, the appellants filed a refund claim claiming the refund of duty equal to the State Excise duty levied. This claim was rejected by the Assistant Collector in his order dated 27-5-1987 holding that the goods are liable to additional duty of customs under Section 3 of the Customs Tariff Act, 1975 at the rate at which excise duty is for the time being leviable for like goods if produced or manufactured in India and the Assistant Collector concluded that in the case of alcoholic liquors, the rate at which State Excise duty is leviable is to be applied for the purpose of additional duty of customs under Section 3 CTA, 1975. In their appeal against the Assistant Collector's order, the appellants contested the levy of basic customs duty also saying that it should have been at a lower rate of Rs. 60/- per litre plus Rs. 5/- per litre and that on account of this there has been excess levy to the tune of Rs. 1,80, I8O/- although this aspect was not a ground in their refund claim. They also contended that the State Excise duty will not come within the purview of Section 3(1) of the CTA, 1975 and that the term 'Excise Duty' occurring in Section 3(1) CTA, 1975 would only mean Central Excise Duty. Since there is no Central Excise Duty on compound alcoholic preparation of a kind used for the manufacture of beverage, it was contended that no C.V. duty was payable. The Collector (Appeals), Madras in the impugned order dated 18-3-1988, held that since the aspect of levy of higher customs duty was not agitated at the time of claiming refund, the appeal on this ground was rejected by him. As regards the other ground regarding applicability of State Excise duty for C.V.D. purposes, it was held that only alcoholic liquors, which have been denatured, is excluded.
2. In other appeal No. C/1478/91-D, the facts are that the appellants, there, also filed a refund claim after clearance of the goods, namely, British plain Scotch Malt on the ground that since excise duty on the goods was recovered on the end-products by the State Excise authorities, the same was not liable to additional duty of customs. The claim for refund was rejected in that case by the Assistant Collector in his order dated 13-3-1990. Before the Assistant Collector, during the personal hearing, it was put forth that the ground for refund was that the goods were assessable under sub-heading 2208.10 CTA at Rs. 60/- per litre plus Rs. 5/- per litre as against Rs. 80/- per litre and that no C.V. duty is leviable on the malt spirit under Notification 76/86 and that in an appeal filed against the rejection of their claim, the Collector (Appeals), by an order dated 1-6-1988, held that the goods satisfied by the description of compound alcoholic preparation known as concentrated extracts as given in Notification 76/86, which description would apply to heading 2208.10 CTA also. The Collector (Appeals) had remanded the case for de novo consideration under Notification 76/86 and also classification under heading 2208.10 CTA. On de novo consideration under Notification 76/86, the entire C.V. duty of Rs. 1,71,195/- was refunded. The issue for re-classification of the goods and re-assessment of basic duty at Rs. 60/- per litre was not considered in the absence of a proper claim with the prescribed time limit. It was seen that there was no specific claim, in time, for re-assessment of the goods under heading 2208.10 made in a written representation dated 16-9-1987 produced at the time of personal hearing and that further, even if it was taken as a claim, it had become time-barred as duty was paid on 8-9-1986. The Assistant Collector of Customs, Cochin Customs House therefore, passed his aforesaid order dated 13-3-1990 holding that the only ground on which refund was claimed within time, was regarding refund of C.V. duty only and the claim for re-classification of the goods under heading 2208.10 had been made much later and was time-barred under Section 27 of the Customs Act, 1962. He also pointed that, subsequently, the appellants had claimed that the goods were entitled to the benefit of exemption under Notification 76/86 besides claiming re-classification under heading 2208.10 as against 2208.30 and that thus the claim had undergone a change both qualitatively and quantitatively thereby becoming a totally new claim based on a new set of facts. Therefore, the claim for re-classification of the goods under heading 2208.10 was held as barred by limitation by the Assistant Collector. This order of the Assistant Collector has been disposed of by the order dated 28-11-1990 by the Collector of Customs & Central Excise (Appeals), Cochin. The Collector (Appeals) in this order noted that in the light of the earlier remand order of the Collector (Appeals), the appellants' claim for complete exemption from C.V.D. in terms of Notification 76/86 was accepted and refund of C.V.D. had been ordered. The Collector (Appeals) referred to their refund claim and observed that there is no mention therein regarding re-classification of the imported goods under sub-heading 2208.10 and no mention about the exemption Notification 76/86. He noted that they have raised this issue regarding re-classification for the first time in the written submissions before the Assistant Collector on 16-9-1987. The Collector (Appeals) noted that nothing prevented the appellants from filing another refund claim for re-classification. Therefore, the Collector (Appeals) upheld the order of the Assistant Collector that the claim for re-classification of the goods under sub-heading 2208.10 was barred by limitation.
3. The Ld. Consultant, Shri Sunder Rajan, contended that the goods imported are over 62% proof which is a concentrate and not portable whisky because no portable liquor can exceed 49% proof. He also referred to the certificate from the State Excise authorities to show that the imported goods were used in blending of whisky at their factory. The additional duty in this case has been levied under Notification 144/76. It was contended that even if the duty so leviable, it will be attracted if it is shown that it is portable whisky as known in the market. In this case, the imported goods, being concentrate, is not whisky at all. Therefore, it will not fall under the category of whisky occurring at Sl. No. 1 of the Notification 144/76. The Ld. Consultant cited and relied upon the Tribunal's decision in the case of Premier Tyres v. Collector of Customs reported in 1984 (16) E.L.T. 419 for the proposition that the ground for refund can be amended even at the appellate stage before the Collector (Appeals). He also relied upon the case law cited in 1992 (59) E.L.T. 75 (Tri.) : 1991 (32) ECC 246 to say that a claim once made need not specify all the grounds for it. It was emphasised that the goods imported is concentrate and not portable whisky and the Bombay High Court decision in the Mc Dowel v. Union of India -1988 (38) E.L.T. 454 was cited. It was, further, argued that the goods imported, being alcohol, it was outside the purview of Central Excise and, therefore, no additional duty of customs can be levied at all. It was, further, submitted that since all the materials required for re-classification are on record, the Tribunal will be well within its competence to consider the claim for re-classification. Reliance was also placed on the case of Bussa Overseas and Properties (Pvt.) Ltd. v. Union of India -1991 (53) E.L.T. 165 (Bombay High Court) that the goods, being not portable whisky but concentrate, cannot be subjected to Central Excise duty as also in the case of Raman Kantilal Bhandari v. Union of India and Ors. reported in 1987 (27) E.L.T. 617 (Bom.) that no duty of central excise is leviable on alcohol of all sorts which is excluded from Item 68 CET. Therefore, the Ld. Consultant urged that the goods, being alcohol not subject to central excise duty at all, there is no question of applying Notification 144/76 because when the levy itself is outside the purview of the Central Excise, there is no question of applying exemption notification. Relying on the Supreme Court decision in the case of Union of India v. Modi Rubber - 1986 (25) E.L.T. 849 , it was contended by the Ld. Consultant that duty of excise must refer to basic duty only, under Rule 8(1) and special excise and auxiliary duty of excise are not covered. On this basis also, the additional duty under Section 3 CTA, 1975 cannot extend to cover State Excise rates of duty. In the Appeal No. 1478/91-D, it was pointed out that the Assistant Collector, in his order dated 13-3-1990 in the de novo proceedings has gone contrary to the finding in the remand order of the Collector (Appeals) holding that the goods are concentrate compound alcoholic preparations. Therefore, no C.V.D. should have been levied thereon and their claim for reclassification should have been accepted.
4. Shri J.N. Nair, Ld. D.R., contended that the original refund claim of the appellants was confined to claiming refund of additional duty of customs (CVD). The replies by the appellants to the departmental query on their refund claim, which are on record, further, confirmed the scope of their original claim. The Ld. D.R. contended that the appellants are barred from expanding the grounds of refund claim at the appellate stage to cover basic customs duty. The Assistant Collector's order on the refund claim was with reference to the grounds thereof and there are no orders on the reclassification for basic customs duty and as such no enlargement of the scope of the refund claim is permissible. Reliance placed by the appellants on the Premier Tyres case (supra) was misplaced. That decision clearly shows that amending the claim, subsequently, is permissible only on the same set of facts whereas here, the appellants have only challenged levy of C.V.D. and subsequently, totally new basis and new set of facts for reclassification have been raised. The Ld. D.R. relied upon the case of F.C.I. v. Collector of Customs reported in 1984 (15) E.L.T. 417 to say that where a subsequent amendment to refund claim increases the quantum of refund, such amendment was impermissible. Relying the decision in the case of M.R.F. v. Collector of Customs reported in 1984 (18) E.L.T. 390 , the Ld. D.R. submitted that the claim is not to be expanded to cover C.V.D. at the appellate stage. So also in the case of ONGC v. Collector of Customs - 1988 (34) E.L.T. 248 , it was held that change of ground from the refund claim from C.V.D. to preferential duty made beyond six months was time-barred. The Ld. D.R. also cited the Supreme Court decision in the case of 1988 (37) E.L.T. 478 in the case of Doaba Sugar Works v. Collector of Central Excise that the statutory authorities are bound by limitation prescribed in the statute. The Ld. D.R. also referred to certain clarifications issued by the Finance Ministry in its F.No. 3/3/87 dated 7-10-1987 clarifying the question of C.V.D. on goods which are subjected to State Excise duty. Notification 144/76 dated 2-8-1976 has been explained therein and it also shows that the Law Ministry's opinion has been obtained that the term 'Excise Duty' occurring in Section 3 CTA, 1975 is not confined to Excise duty leviable under the Central Excise only. The Ld. D.R., further, relied upon the Supreme Court decision in the case of Khandelwal Metal & Engineering Works and Anr. etc. v. Union of India and Ors. reported in 1985 (20) E.L.T. 222 (S.C.) to say that Excise Duty is referred in CTA, 1975 is a measure of the additional duty of customs. It remains a duty of customs only and the critical event is not manufacture of the goods but the import. The Ld. D.R. also relied upon the decision of the Tribunal in the case of Collector of Customs, Calcutta v. Birla Jute Industries in Order No. C/17-20/92-D dated 14-1-1992 reported in 1992 (61) E.L.T. 100 (Tri.) to say that even other levy like cess are also levied and collected as additional duty of customs under CTA, 1975. Shri Sunder Rajan, Ld. Consultant pointed out that when there is no jurisdiction at all for levy, the question of collecting additional duty of customs will not arise. The Finance Ministry's clarification was also earlier to the Supreme Court decision in the case of M/s. Khandelwal Metal & Engineering Works & Another etc. (supra).
5. The submissions made by both the parties, herein, have been carefully considered. On the question of whether the appellants' claim for refund as a consequence of their claim for reclassification of the imported goods for basic customs duty is valid or not, it is seen that in A.No. 1970 and 1980/88-D, their initial claim for refund was only on the ground that additional duty of custom (C.V. Duty) is not leviable on the goods on the ground that they are paying State Excise duty on the end-product. Before the Collector (Appeals) for the first time, they raised the issue of excess levy of basic customs duty. In the other appeal (A.No.l478/91-D), they had put forth during the personal hearing before the Assistant Collector on 16-9-1987 that the goods should be re-classified under Heading 2208.10 CTA as compound alcoholic preparations of a kind used for manufacture of beverages. The duty had been paid on 8-9-1986 and as such the lower authorities had rejected the claim as barred by limitation under Section 27 Customs Act, 1962 as the original claim there also was confined to refund of C.V. duty only. The ground for the refund was that the imported malt is blended with India made foreign liquor in the distillery and state excise duty is paid on release of their product from the factory and that hence levy of C.V.D. equivalent to State Excise duty is bad in law. It is,. further noted that as a consequence of order dated 1-6-1988 passed by the Collector of Customs (Appeals), Madras, the appellants had been granted refund of C.V.D. Rs. 1,71,195.00 as the Collector (Appeals) found that goods imported were entitled to exemption under Notification 76/86 which exempted, inter alia, compound alcoholic preparations falling under heading 22.08 CTA from additional duty of Customs. In the same order the Collector (Appeals) also directed the Assistant Collector to consider the claim for re-classification of the goods which he found satisfied the description of compound alcoholic preparations known as concentrated extract as given in Notification 76/86 and since the same description applied to heading 22.08 CTA also. The Assistant Collector in respect of this direction, however, found that the claim not having been part of the original refund claim, was barred by limitation. On examining this aspect, it is found that the appellants say that such subsequent modification of the refund claim is valid as it is according to them but a continuation of the original claim which had been filed in time. They have placed reliance on supportive case law, especially, the Tribunal decision in the case of Premier Tyres v. Collector of Customs, Madras -1984 (16) E.L.T. 419 wherein it had been held that amendment to refund claim could be made even after expiry of limitation period if it is necessary for the purpose of determining the question in controversy. However, it is observed that in a subsequent decision of the Tribunal in the case of O.N.G.C. v. Collector of Customs, Calcutta-1988 (34) E.L.T. 248 , the Tribunal had considered the same Premier Tyres decision. That was a case of a refund claim under Customs Act initially filed in time where the claim was only relating to CVD. Subsequently, it was followed by another claim for lower basic duty on the ground that preferential rate available on the basis of country of origin should have been levied. The appellants therein, also relied upon Premier Tyres case (supra) to say that grounds for refund could be changed without being hit by limitation under Section 27 of the Customs Act, 1962. The Tribunal repelled this contention. Paras 3 to 5 of the Tribunal's order are reproduced below:
"In the case of SAP Industries, Bombay v. Collector of Customs, Bombay [1983 (12) E.L.T. 166] it was held by this Tribunal that filing a refund claim within the prescribed time limit is a statutory requirement under Section 27 of the Customs Act. In Food Corporation of India v. Collector of Customs, Madras [1983 (12) E.L.T. 361] it was held by this Tribunal that the appellants shifted their stand with regard to the inspection charges and that amounted to a fresh claim and was hit by limitation under Section 27 of the Customs Act. Again, in the case of Food Corporation of India v. Collector of Customs, Madras' [1984 (15) E.L.T. 417] , this Tribunal held that grant of refund is governed by Section 27 of the Customs Act and this Section provides a limitation period. The appellants could not claim a higher refund at the stage of appeal before the Tribunal as compared to what they claimed before the Assistant Collector. It was also decided by the Tribunal in 1983 E.C.R. 944 (Indian Telephone Industries Limited, Madras v. Collector of Customs, Madras) that as no claim for re-assessment of basic customs duty was made by the appellants within six months of importation as required under Section 27 of the Customs Act, they could not be allowed to make an entirely new claim at a late stage.
Regarding the judgment of the Tribunal in the case of Premier Tyres Limited, we are to observe that the same does not help the appellants to change the ground of claim for refund after expiry of the period of limitation. In the said case, the Tribunal held that an amendment to the refund claim could be made after expiry of limitation period under Section 27 of the Customs Act, 1962 if there was a change in the classification of the goods. In the present case, there is no change in the classification. The appellants initially claimed refund on account of countervailing duty within the period of limitation. Subsequently, after the expiry of the statutory period of six months prescribed in Section 27 of the Customs Act, they sent another application claiming concessional rate of basic customs duty under Notification No. 342/76-Cus., dated 2-8-1976. In the said case, the Tribunal also held that an amendment in a claim could be made even after expiry of limitation period if it was necessary for, the purpose of determining the question in controversy and if it did not introduce a new cause of action or raise a different case. In the present case, the controversy in the original refund claim was regarding the levy of countervailing duty. The subsequent claim under letter dated 21-9-1981 was not necessary to determine the controversy over countervailing duty. In the second claim, the appellants made out a different case. Further, the Tribunal also held in that case that the Tribunal had no power to waive or relax the period of limitation prescribed under Section 27 of the Act.
The appellants submitted the second claim dated 21-9-1981 on a ground different from that of the first refund claim. This was a fresh claim and it cannot be stated that it was filed in amplification or clarification of the first claim. The second claim was received after expiry of six months from the date of payment of duty. Oil and Natural Gas Commission is not a Government Department. It is also not an educational, research or charitable institution or hospital. The time-limit of six months prescribed in Section 27 of the Customs Act was applicable in this case. As the fresh claim on the ground of concessional rate of duty under Notification No. 342/76-Cus., dated 2-8-1976 was received after expiry of the statutory time-limit of six months, this claim was barred by limitation under Section 27 of the Act. This time-limit is mandatory and could not be relaxed by the customs authorities. In the case of Miles India Ltd. v. Assistant Collector of Customs, reported in 1987 (30) E.L.T. 641 , it was held by the Hon'ble Supreme Court that the customs authorities, acting under the Act, were justified in disallowing the claim for refund as they were barred by the period of limitation provided therefor under Section 27(1) of the Customs Act, 1962. In view of this judgment of the Supreme Court, this Tribunal has been consistently holding that the refund claims not preferred within the statutory period prescribed under Section 27 of the Customs Act should be rejected as barred by limitation under that Section."
6. In the present case also the original claim before the Assistant Collector was only regarding additional duty paid and the ground for it was also that State Excise duty was being paid on the final product. Even in their further correspondence with the Custom House only CVD was referred. There was no formal subsequent application at all before the Assistant Collector in one case and the claim was made before Collector (Appeals) regarding reclassification for basic customs duty. In the other case the claim was made at the time of personal hearing before the Assistant Collector. The claim related to basic customs duty and the grounds therefore was also different from that for the claim for CVD and was for the reason that the goods are rightly classifiable under heading 2208.10 as compound alcoholic preparations, of a kind used for manufacture of beverages. The subsequent claim is thus neither clarificatory nor in amplification of the original claim but was on different grounds and on separate facts and was received by the competent authority after the expiry of time limit under Section 27 of Customs Act, 1962 and has rightly, therefore, been treated as a fresh claim and as being barred by limitation. Even the Collector (Appeals) could not, as a statutory authority, transgress the limitation prescribed in the statute as already held by the Supreme Court in the case of Miles India (supra) as well as in Collector of Central Excise, Chandigarh v. Doaba Cooperative Sugar Mills (supra).
7. The other contention of the appellants is that the goods being concentrate and not fit for direct human consumption and levy of State Excise duty therein being outside Central Government purview, no additional duty of customs can be levied because Section 3 of CTA would refers to only Central Excise duty and cannot cover State Excise duty. On this aspect a perusal of the Supreme Court decision in the case of Khandelwal Metal & Engg. Works v. U.O.I. -1985 (20) E.L.T. 222 would help to clarify the issue. The Supreme Court laid down therein that the charging Section is Section 12 of the Customs Act and not Section 3(1) of Customs Tariff Act. The levy Section 3(1) of the Tariff Act is a supplementary levy in enhancement of the levy charged under Section 12 of the Customs Act and with a different base constituting the measure of the impost. The Court held that customs duty charged under Section 12 is extended by an additional levy confined to imported article in the measure set forth in Section 3(1). It is also to be noted that the Court had also found that since the charging Section for levy of additional duty is Section 12, which is relatable to Entry 83 in List I of Seventh Schedule to the Constitution and it is not necessary that the imported article should be manufactured one because the taxable event in the case of customs duty is not manufacture. The Supreme Court further, observed "Moreover the measure of a tax or duty cannot determine its nature or character." Viewed in the light of the ratio of the Supreme Court as above, the mere fact that the quantum of State Excise duty is taken as a measure for the purpose of levy of additional duty of customs and that State Excise duty is outside the purview of Central Government will not be material because what is levied is a duty of customs under Section 12 of Customs Act, 1962 as extended by Section 3 of CTA. In this context the interpretatior of the Govt. in issuing Notification 144/76 as given in F. No. 3/3/87 Cus.I dated 7 -10-1987 also acquires relevance for the purpose of determining the issue wherein the Law Ministry had advised that the term Excise duty referred to in Section 3 of Customs Tariff Act, 1975 is not confined to the excise duty leviable under the Central Acts and that it would also apply to levy under various State enactments. The Finance Ministry's clarification goes on to explain how Rs. 33.30 litre as a measure of the levy under the notification had been arrived at on a consideration of the various rates prevalent in the states. Further, this Tribunal also had held in the case of Collector of Customs, Calcutta v. Birla Jute Industries in its order No. C/17-20/92-D dated 14-1-1992 reported in 1992 (61) E.L.T. 100 (Tri.) relating to levy of cess under Section 5A of Textile Committee (Amendment) Act, 1963 and Cess Rules, 1975, that the authority for collecting the cess as a duty of excise in the case of imported goods is not derived only from the Textile Committee Act but also from Section 3(1) of the Customs Tariff Act which provides for liability to duty (as additional duty). The appellants contentions on this aspect are, therefore, not well-founded. In the result, there is no reason to interfere with the order passed by the lower authorities and the appeals are, accordingly, rejected.