Customs, Excise and Gold Tribunal - Delhi
Northern Plastics Ltd. vs Collector Of Customs on 15 March, 1990
Equivalent citations: 1990(48)ELT415(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The above application has been filed under Section 130 (i) of the Customs Act, 1962 requiring the Tribunal to draw up a statement of case and refer certain questions of law arising out of its Order No. 388/89-C dated 14th August 1989, to the High Court.
2. The alleged questions of law said to have arisen out of the order are as follows :-
"(1) Whether on the strength of its SSI Registration the applicant is entitled as an 'Actual User Industrial' to import Cinematographic Colour Film (Un-exposed) Positive under OGL an item falling under Appendix 6, List 8, Part I of the Import Policy for AM 1988-91?
(2) Whether on the facts and in the circumstances of the case that the Applicant was always employing less than 50 workers in its factory, it was incumbent upon the Applicant to obtain a licence under the IDR Act, 1951 to be eligible under OGL to import Cinematographic Colour Films (Uncxposed) positive as an "Actual User Industrial"?
(3) Whether the expression 'Industrial undertaking' occurring in the definition of "Actual User Industrial" under paragraph 6.3 of the Import Policy for AM 1988-91 is to be construed to mean only an 'Industrial Undertaking' as defined in Section 3(d) of the IDR Act, 1951?
(4) Whether all industrial undertakings within the meaning of paragraph 6.3 of the Import Policy for AM 1988-91 are required to obtain a licence under the IDR Act, 1951 to be eligible to make imports as an "Actual User Industrial"?
(5) When the relevant Tariff Item i.e. 37.02.41 does not describe or mention 'Jumbo Rolls' is it incumbent upon an importer to describe the imported goods as 'Jumbo Rolls' because of such reference in some statutory notifications extending the benefit of concessional rate of customs duty?
(6) Whether on the facts and circumstances of the case, the Applicant can be said to have 'misdeclared' the imported goods within the meaning of Section 111(m) of the Customs Act, 1962 only because the Applicant has not declared the said goods in its Bill of Entry as 'Jumbo Rolls' as described in exemption Notification No. 253/88-Cus. although the declaration was in-conformity with all the import documents (Letter of Credit, Invoice Bill of Lading & Certificate of Origin) and also corresponds to the description in the Tariff Entry in the Customs Tariff Act especially when the declaration also discloses the size of the imported goods (corresponding to the size of a Jumbo Roll as explained in Notification No. 253/88-Cus.)?
(7) Whether the Applicant was justified in claiming benefits of Notification Nos. 52/86-Cus., dated 17-2-1986' and 50/88-C.E., dated March 1,1988?
(8) Whether the Tribunal had jurisdiction to decide the issue of applicability or otherwise of relevant notifications extending benefit of duty concessions when the said issue was pending adjudication before the Hon'ble Gujarat High Court at Ahmedabad and both the parties to the Appeal were before the said Hon'ble High Court?
(9) Whether the Tribunal can lawfully say that the Respondent ought to have held that the applicant has imported the goods contrary to provisions of law and/or misdeclared the imported goods, when the Respondent had not issued any show cause notice to the Applicant nor had the Applicant waived such a show cause notice in that behalf?"
3. The brief facts leading upto the present application are as follows :-
The applicant Company had been importing Cinematographic Colour Films (Unexposed) Positive Photographic Colour Paper, Graphic Art Films and X-Ray Films. The applicant is engaged in slitting and confectioning of the above items and it has been registered as Small Scale Industries Unit. The imports had been made under OGL. The present application relates to import of a consignment of Cinematographic Colour Films (Unexposed) Positive through the part of Kandla in the State of Gujarat. When the consignment arrived at Kandla the Bill of Entry was filed for clearance for home consumption and the import was described according to the description in the Letter of Credit, Certificate of Origin (issued by the Chambers of Commerce and Industry of the Socialist Republic of Romania), Bill of Lading and Invoices. After inspection of the goods, the Customs Authorities required confirmation that the imported goods were perforated and that the expression Jumbo Rolls means Rolls of width exceeding 1 metre as per Import Policy. The Customs Authorities denied the benefit of concessional rate of duty under Notification 52/86-Cus., dated 17-2-1986 and 50/88 dated 1-3-1988. The benefit of exemption Notification 266/86-Cus., dated 28-4-1986 as amended by Notification 253/88 Cus., dated 16-9-1988 was denied to the applicants as they were not holding an Industrial Licence under the provisions of the Industries (Development of Regulation) Act, 1951 for slitting and confectioning.
4. The Collector of Customs, Rajkot by Order dated 31-1-1989 dropped the charge of mis-declaration of description in the Bill of Entry for the purposes of classification/availing of exemption. He held that the applicants were eligible to import consignment as Actual User (Industrial) in terms of Entry No. 297 of Part-I of List-8 of Appendix 6 of the Import Policy 1988-91. However, the benefit of exemption under Notification No. 52/86-Cus. arid 50/88-C.E. was denied to the applicants.
5. Aggrieved by the said order dated January 31,1989, the Applicant filed a writ petition under Article 226 of the Constitution of India in the Hon'ble High Court of Gujarat at Ahmedabad, being Special Civil Application No. 1461/1989. The Hon'ble High Court of Gujarat vide its order dated April 27,1989 directed the Respondent to permit the Applicant to clear the goods in question against the Bill of Entry dated January 11, 1989 on payment of concessional Basic Custom Duty as envisaged in Notification No. 52/86-Cus., dated February 17, 1986 and payment of concessional countervailing duty in terms of Notification No. 50/88-C.E., dated March 1,1988 and on payment of applicable Auxiliary Duty, on the condition that the Applicant gives a Bank Guarantee to the extent of 50% of the difference in the duty and gives a Security for the remaining 50% difference to the satisfaction of the Respondent within 3 weeks from the said order.
6. In exercise of powers under Section 129-D(1) of the Customs Act, 1962, the Central Board of Excise & Customs, New Delhi, by order dated July 11,1989 directed the Respondent to apply to the Customs, Excise and Gold (Control) Appellate Tribunal for correct determination of the points mentioned in their letter dated July 12,1989 and imposition of the suitable penalty. The respondent filed an appeal before the Tribunal bearing No. 2092/89-C against its own order dated January 31,1989. The Tribunal passed its order dated August 14,1989, holding inter alia that the import of Cine Film made by the Applicant was illegal inasmuch as it is not an Actual User (Industrial) and that the Applicant has mis-declared the goods as, according to the Tribunal, the goods in question are 'Jumbo Rolls'.
7. At the outset, a preliminary point of maintainability of the application was raised and we heard Shri Sandeep Agarwal, learned Counsel for the applicants & Shri A.S. Sunder Raj an, learned DR, on this preliminary issue.
8. Shri Agarwal submits that the application is maintainable in view of the fact that the order under Section 129B referred to in Section 130(1) is the order of the Appellate Tribunal which does not involve any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. He contends that the order of the Board dated 12th July 1989, directing the respondents to apply to the Tribunal for correct determination of certain points arising out of the Collector's order, does not refer any issue having a relation to the rate of duty or value of goods, and therefore a reference application would lie under Section 130(i) of the Customs Act, 1962. The relevant portion of the Board's Order is as follows :-
"The Board is therefore, satisfied that the order of the Collector-permitting import of the goods under OGL by treating the importers as Actual User (Industrial) and dropping the charge of mis-declaration is not illegal and proper."
9. In reply Shri A.S. Sunder Rajan, JDR submits that the reference application is not maintainable is as much as the Collector's order is one which relates, among other things to the determination of any question having the relation to the rate of duty of Customs or to the value of the goods for purposes of assessment. He also invites our attention to an order of the Tribunal in the case of Haryana State Electricity Board v. CCE [1989 (42) ELT 43] dealing with a identical situation under the CESA, 1944.
10. Before we proceed to consider the rival contentions of the parties, it would be useful to reproduce Sub-section (i) of Section 130 of the Customs Act, 1962 which runs thus :-
"130 (1). The Collector of Customs or the other party may, within sixty days of the dale upon which he is served with notice of an order under Section 129B (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), by application in such form as may be specified by rules made in this behalf, accompanied, where the application is made by the other party, by a fee of two hundred rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court :
Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented with a further period not exceeding thirty days."
11. From a plain reading of the section it is clear that no Reference Application is maintainable where the order passed by Tribunal under Section 129B relates among other things to the determination of any question having relation to the rate of duty of goods or to the value of the goods. Any such order of the Tribunal is appealable direct to the Supreme Court under Section 130 E(b).
12. In the decision of the Tribunal cited supra it was held as follows :-
"6. From a plain reading of the said sub-section it is clear that no Reference Application is maintainable where the Order passed by the Tribunal under Section 35-C of the Act relates among other things to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. It may be stated that the reason for excluding the Reference Application where the order relates among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is apparent for, Section 35L(b) makes provisions for an appeal direct to the Supreme Court against such orders, that is to say, any order passed by this Tribunal relating among other things, to the determination of any question having a relation to the rate of excise duty or to the value of goods for purposes of assessment. The phrase "any question having a relation to the rate of duty or Excise" is of wide import. In the case of State Waqf Board, Madras v. Abdul Azeez Sahib, AIR 1968 Mad. 79 it was stated that the words "relating to or in relation to" are words of comprehensiveness which might both have a direct significance as well as an indirect significance, depending on the context. They are not words of restrictive content and ought out to be so construed. Adopting this meaning this Tribunal in the case of Shri Niwas Steels Ltd. v. Collector of Central Excise -1985 (19) ELT 235 held that in the light of the said meaning the true meaning and import of the term "an order relating to the determination of any question having relation to the rate of duty excise" can be properly understood only when the order is read not in isolation but along with pleadings in the case. Having so read, it was further held that there could be no doubt that the question relating to interpretation of Rule 56A of the Central Excise Rules and Notification No. 144/75-C.E., dated 7-6-1975 would be a question relating to rate of duty of excise. Same view was taken by this Tribunal in the case of Union Carbide India Ltd. v. Collector of Customs, Calcutta -1984 (18) ELT 449 wherein after referring to the various authorities on the point it was held that the words "an order relating to" occurring in Sections 129-C(b), 129-C(3), 579, 130-E(b) (which are inpari materia with Section 35-C of the Central Excises and Salt Act) mean "an order standing in some relation to" or "an order concerning or pertaining" to the determination of any question relating to rate of duty of customs or to the value of goods for assessment and not "an order whose dominant purpose or theme is the determination of the aforesaid issues. Following this judgment the Tribunal reiterated the same view in the case of Anil Starch Products Ltd. v. Collector of Central Excise, 1985 (210) ELT 306 and Bhikusa Papers v. Collector, 1986 (25) ELT 264. In the case of Collector of Central Excise v. Indian Rare Earths Ltd., 1986 (23) ELT 503 this Tribunal further held that the words "having a relation to the rate of duty of excise or to the value of goods for purposes of assessment" are of wide importance and significance. Consequently even if the Tribunal had disposed of an appeal relating to the value of goods on the preliminary ground of limitation, the question relating to the value of the goods for purposes of assessment, must be deemed to have been dealt with the Tribunal in its order and, therefore, such an order would remain an goods for purposes of assessment. That being so, no reference would lie to the High Court. In the case of Gopaldass Jagat Ram Pvt. Ltd. v. Collector of Central Excise, supra it was held that "if in a case the question for determination is whether a person is entitled to pay duty at the exemption rate of 10% or not, it cannot be anything but a question relating to rate of duty for purposes of assessment." It was further held that "the Notifications under which full or partial exemption was claimed by the appellants laid down numerous conditions of eligibility.... These conditions had to be gone into to determine whether the appellants were eligible to avail of the exemption under these Notifications or not but the basic question still remained that of the appellant's entitlement to 'Nil' rate of duty/concessional rate of duty under these Notifications. Since Section 35G specifically bars reference to High Court in respect of any order "relating, among other things, to value of goods for purposes of assessment...we reject the application as not maintainable". In this case reliance was placed on a judgment of the Supreme Court rendered in the case of Orient Weaving Mills (P) Ltd. v. Union of India, 1978 (2) ELT (J) 311 wherein it was observed that exemption Notifications modified the rate of duty.
7. We respectfully agree with the view expressed in the aforesaid decisions rendered by this Tribunal and would further like to add that the present appeal which has led to the filing of the instant Reference Application was heard by a Special Bench constituted by the President of the Tribunal for hearing such appeals in terms of Sub-section (2) of Section 35D of the Central Excises and Salt Act, 1944. The said section so far as relevant for the purpose of this application is reproduced as below :-
"35-D. Procedure of Appellate Tribunal.
(1) x x x x x x x x x x x (2) Every appeal against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment, shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than two members and shall include at least one judicial member and one technical member.
(3)x x x x x x x x
(a) x x x x x
(b) x x x x x
8. From the above it is clear that whenever an appeal is filed against "a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty or excise or to the value of goods for purposes of assessment" such appeal is to be heard and decided by a Special Bench in terms of Sub-section (2) of Section 35-D of the Act. In the instant case since the appeal filed by the appellants/applicants was against a decision/order relating, among other things, to the determination of questions having a relation to the rate of duty of excise, it was heard and decided by the Special Bench constituted by the President in terms of Sub-section (2) of Section 35-D of the Act. At no stage the appellants/applicants challenged the jurisdiction of the Special Bench. On the other hand they submitted to the jurisdiction of the Special Bench and obtained the judgment. That being so, the appellants/applicants after having submitted to the jurisdiction of the Special Bench and obtained the decision (though not favourable) cannot now say that the questions of law proposed by them do not relate among other things to the determination of any question having a relation to the rate of duty of excise for purposes of assessment."
12A. The present appeal which has led to the filing of the reference application was heard by the Special Bench constituted by Sr. Vice-President of the Tribunal for hearing such appeals in terms of Sub-section (3) of Section 129-C of the Customs Act, 1962 which is reproduced below :-
"129-C (1) x x x x x x
(2) x x x x x x
(3) Every appeal against a decision or 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, shall be heard by a Special Bench constituted by the President for hearing such appeals and such Bench shall consist of not less than three members and shall include at least one judicial member and one technical member."
13. In the instant case the applicants at no stage challenged the jurisdiction of the Special Bench. On the other hand they submitted to the jurisdiction of the Special Bench and obtained the judgment, and having done so it does not lie in their mouth to say that the questions of law proposed by them lies do not relate to the determination of any question having a relation to the rate of duty or value of goods.
14. In the light of the above discussion, we hold that the above reference application is not in accordance with law and is therefore, rejected as being not maintainable.