Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Printer House Ltd. on 11 September, 1998
Equivalent citations: 1998(104)ELT632(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Briefly stated the facts of the case are as follows: The respondents herein cleared certain goods manufactured by them under Central Excise Bond in terms of Rule 13 of the Central Excise Rules, 1944. Later on, the same goods were reimported by them within three years of the date of exportation. Customs duty equivalent to the excise duty payable on the goods was charged by the Customs Authority at the time of reimportation. The said duty was to the tune of Rs. 2,70,375/-.
2. On reconsideration the respondents filed the refund claim for the said amount of duty. They were of the view that no duty was chargeable on the goods exported under Central Excise Bond. They were entitled to duty free clearance of the goods at the time of reimportation in terms of Clause (b) of proviso to Section 20 of the Customs Act, 1962 as it stood at that time. However, the refund claim was rejected by the Assistant Collector of Customs (Refund).
3. On appeal, the respondents succeeded. Reasoning of the lower authority in giving the benefit to the respondents is as follows :
"... The Assistant Collectors' order does not discuss the interpretation of the word "Bond" nor has it actually distinguished the facts of the above quoted judgment of the Madras High Court. From the facts of the present case, having failed to discuss the applicability of the ratio of the Madras High Court judgment he has gone on to say "I find that full facts and circumstances of that case is not produced by the claimant and hence it will not be considered while deciding this particular case which is different from that. Therefore, the claim merits rejection". This kind of finding hardly deserves studied consideration in the appellate forum, as the manner in which the whole issue has been dealt with, can be said to be both callous and cavalier."
4. We observe from the aforesaid finding of the lower appellate authority that judgment of the Madras High Court in the case of Polisettly Somasundaram (P) Ltd. v. Government of India reported in 1983 (14) E.L.T. 2313 (Mad.) has been relied upon.
5. Hence this appeal by the Revenue.
6. Sum and substance of the Revenue's argument given by the ld. JDR is that expression 'bond' referred to in Clause (c) of Section 20 means bond under Customs Act or under any other act. This will further be cleared from said clause itself when Clause (c) touches upon not only customs duty leviable on the importer but also talks of excise duty leviable on the indigenous goods, if used in the manufacture of goods which were originally exported and later reimported. Ld. JDR submits that no customs bond would be taken for waiver of excise duty leviable on the individual materials used in manufacture of export goods. It can only be 'excise bond' for excise duty. He further submits that it not only refer to the Central Excise duty but also any other state excise duty as is apparent from the earlier clause. Therefore, it is for this reason that the expression 'bond' referred in Clause (c) is not qualified by 'excise' or 'customs'. He therefore, submits that since the goods in the present case had been exported under Central Excise bond, therefore the provisions of Clause (c) would apply and duty had been rightly charged on reimportation of the goods by the lower appellate authority. Reliance placed on the basis of Madras High Court judgment mentioned (supra), he submits is not correct in the facts and circumstances of this case as also the legal position now explained. He draws our attention to the judgment of the Madras High Court wherein it has been stated after recording the submissions of the petitioner and observed as under :
"... On the other hand, ld. Counsel for the respondents (Government of India) is not in a position to demonstrate and sustain any convincing reason to construe the expression 'in bond' occurring in Clause (c) of the proviso to sub section (1) of Section 20 of the Customs Act, so as to denote, connote and include the Central Excise Bond. This obliges me to interfere in writ proceedings."
7. Ld. JDR has submitted that it is for lack of convincing reasoning advanced by the Counsel for Government of India that Madras High Court judgment came to be pronounced but he submits that the reasons as advanced now, in his view, are convincing. He further submits that this interpretation if not accepted, would lead to large scale evasion of Central Excise Duty. It would be easy for any manufacturer of excisable goods to first export under the bond and reimport them back without payment of any duty equal to the excise duty and thus enjoy total exemption. This will lead to large scale evasion of Central Excise Duty. Therefore, interpretation placed by Revenue is correct and should be accepted.
8. Opposing the contention, ld. Advocate Shri D.K. Jain submits that he fully relies on the judgment of the Madras High Court. This judgment, he further submits, is binding on this Tribunal. He relies on the Bombay High Court judgment in the case of CIT v. Smt.Godavari Devi Saraf reported in 1978 (2) E.L.T. (J 624). Ld Advocate, therefore submits that the lower appellate authority has rightly relied upon the judgment of the Bombay High Court (supra) and Tribunal should also rely upon the same inasmuch as there is no contrary judgment of any High Court.
9. We have carefully considered the pleas advanced from both sides. We observe, after carefully going through the judgment of the Madras High Court and as rightly pointed out by the ld. JDR that the said judgment was delivered for lack of any convincing reason from the Counsel of Government of India. We are, therefore, of the view that this judgment in a way, is a judgment on concession by the Government of India, although strictly speaking it was not a concession and it had been contended by the ld. Advocate to the Government of India that expression 'bond' would also include Central Excise Bond. But no reason could be advanced by him and this is what led the Hon'ble High Court of Madras to pronounce judgment in the case of Polisettly Somasundaram (supra).
10. On the other hand, we have now considered the reasons given by the Revenue as already stated above. We are in agreement with the reasonings given above by the Revenue that the expression 'bond' is not qualified by any words "excise" or "customs". The same Clause (c) also refers not only to customs duty but also to excise duty. No bond obviously could be taken under the Customs Act for waiver of excise duty at the time of exportation. Apart from that, much more convincing reason which has been advanced by the ld. JDR, is that it will lead to large scale of evasion of Central Excise Duty if the contention as given by the respondents is accepted. We are convinced by ld. JDR's reasons. There is another principle of law which in our view would be applicable, for construing legal provisions in a fiscal enactment. It is that provisions of law should be construed in a manner that it does not promote evasion of tax. Keeping in view the aforesaid facts and circumstances, we are of the view that duty has been correctly charged by the Customs Authority in this case at the time of reimportation of the goods.
11. At this stage, ld. Advocate Shri D.K. Jain for the respondents submits that the goods had been taken to the factory from where the goods were exported in the first instance and they are lying in the non-duty paid stock and it would be again charged to duty when it is cleared from the factory. If this is the correct situation, then, this situation will also be wrong and we agree with the ld. Advocate for the respondents that no second duty on the same goods can be charged on the same goods when they are cleared from RGI (non-duty paid) stock since the duty equal to the excise duty has already been paid on the same goods. Therefore, if the goods are lying in the non-duty paid stock, no duty should be charged at the time of their clearance from RG I stock. In case they have already been cleared from the factory with levy of second time excise duty, respondents would be entitled to the refund of duty because it is settled principle of law that no duty on the same goods can be charged twice over.
12. Therefore, in view of the foregoing discussion, we allow the appeal of the Revenue, and set aside the impugned order subject to directions in Para 11 above.