Customs, Excise and Gold Tribunal - Calcutta
Ruia Cotex Ltd. vs Cc (Air Cargo), Nch on 3 April, 2002
Equivalent citations: 2002(81)ECC535, 2002ECR925(TRI.KOLKATA)
ORDER G.R. Sharma, Member (T)
1. Shri S.C. Chakraborty, Ld. counsel of the applicant submits that the head office of the company is in Calcutta and therefore the appeal filed by the applicant may be retained in the East Regional Bench at Kolkata. The request is allowed, the appeal is allowed to be retained in Calcutta. As the issue in the appeal was the same as one decided by the Tribunal in the case of Rupa & Co. Ltd. v. CC, Kolkata 2002 (81) ECC 520 (Tri) contained in Order No. A-154/Kol/2002 dt. 31.1.2002 with the consent of both the parties it was decided to hear the appeal itself after dispensing with the conditions of pre-deposit of duty.
2. The fact of the case are that the appellants imported Circular Knitting Machines and claimed the benefit of exemption from duty under Notification No. 29/97. The goods were cleared but subsequently departmental authorities issued a show cause notice that as the imported Circular Knitting Machines were directly not used in the manufacture of garments, therefore the benefit of exemption of CVD under Notification No. 29/97 was not admissible. The adjudicating authority and the appellate authority confirmed the demand holding that the benefit of exemption of CVD under Notification No. 29/97 was not admissible to the appellants.
3. Arguing the case for the appellants Shri S.C. Chakraborty, the Ld. counsel submits that the appellants are manufacturing fabrics from the Circular Knitting Machines and these fabrics are further subjected to formation of garments. He submits that exactly identical issue came before the Tribunal in the case of M/s. Rupa & Co. Ltd. wherein the Tribunal in para 8 held as under:--
8. We would like to refer to the Hon'ble Calcutta High Court's judgment in the case of Naffar Candra Jute Mills Ltd. v. Assistant Collector of Central Excise relied upon by the appellants. The Hon'ble Court in the said decision held that the expression--'bags of jute'--appearing in Notification No. 65/87-CE dt. 1.3.87 does not mean that the bags should be made entirely or exclusively of jute and the polyline jute bags would also earn the exemption. The Court held that inasmuch as the notification did not use the expressions such as 'only' or 'exclusively' or 'entirely' for classifying the inputs, the remarks--'made of do not mean 'made exclusively of. By applying the same ratio in the present case, the Notification nowhere uses the expression that the imported machines should be used directly in the manufacture of textile garments. To the similar effect, is another decision of the Hon'ble Supreme Court relied upon by the appellants in the case of Union of India and Ors. v. Tata Iron & Steel Co. Ltd., Jamshedpur reported in 1977 ELT J-61. While interpreting the Notification No. 75/62-CE, the Hon'ble Apex Court observed that "if the intention of the notification were to exclude the exemption to duty-paid pig iron when mixed with other materials then the notification would have used the expression 'only' or 'exclusively' or 'entirely' in regard to duty-paid pig iron...." Inasmuch as the notification under consideration does not use the expression--'directly', we agree with the learned Counsel that the machines in question which are used for preparation of the fabric for manufacture of the textile garments would be covered by the expression--'required for the manufacture of the textile garments'. The appellants have also relied upon the Larger Bench decision of the Tribunal in the case of Kudremukh iron Ore Ltd. v. Collector of Customs, Bangalore and Anr. reported in 2000 (41) RLT 138 (CEGAT-LB). The question before the Larger Bench was the availability of Notification No. 13/81-Cus. dt.
9.2.81 to the spares for various machines used in processing of mined ore. The said notification granted exemption to the specified goods imported into India for the purpose of manufacture of articles for export out of India by 100% Export Oriented Undertakings, from the whole of Duty of Customs leviable thereon and the Additional Duty. The Revenue sought to deny the benefit to the various spares on the ground that they are not directly used in the manufacture of the final product exported namely, iron ore which is mined. On the other hand, the appellants' contention was that the equipments imported by the assessee, were highly essential for the purposes of manufacturing the product which is to be exported. The Tribunal in paragraphs 9 and 10 of the said decision accepted the appellants' contention. For better appreciation, we are reproducing the said two paragraphs as follows:
9. The various machinery for which spares have been imported were used in the manufacture of the finished product as far as the appellant is concerned. Machinery, which played some role in the process of manufacture of finished goods could not have become possible, should necessarily be treated as machinery used in the manufacture of such goods. Learned Departmental Representative was not justified in advancing an argument that machinery which are entitled to exemption under Customs Notification No. 13/81 must be those that are meant for the actual process of manufacturing the final product only.
10. Wabo Trucks, P&H Shovel, Motor Grader, CAT Front End Loader, Terex Front Loader, Komatsu Dozer, 35T Cap Haulpack Truck, Poclain Excavator and Water Sprinkler used by the appellant in processing the mined ore are vital machinery which play an integral part in the process of manufacture of finished goods. Even though they are not directly involved in the manufacture of the finished goods, they are machinery used in the manufacture of such goods. Spares imported for such machinery are entitled to the benefit of Customs Notification No. 13/81. The contrary view taken by the authorities below are illegal. They are set aside. Authorities below are directed to pass final order on the refund applications as expeditiously as possible at any rate, within one month from the date of receipt of a copy of this order and to effect refund of the duty levied on such spares imported.
The ratio of the above decision is squarely applicable to the facts of the instant case. As we have already held that it is not possible to manufacture the final textile garments without undertaking the above detailed activities by the various machines imported by the appellants, we hold that the machines in question are required for the manufacture of the appellants' final product. As such, the benefit of the notification cannot be denied to the appellants. The impugned orders are accordingly set aside and the appeal is allowed with consequential reliefs to the appellants.
4. He submits that in that case the Tribunal held that the benefit of exemption of CVD under Notification No. 29/97 will be admissible to the appellants. He submits that in this view of the matter the appeal may be allowed with consequential benefits.
5. Shri A.K Mondal, Ld. DR reiterates the findings of the authorities below.
6. We have heard the Ld. counsel for the appellant. We note that the facts in the present case are identical to the facts of the case decided by the Tribunal and cited and relied upon by the appellant. Since the issue has already been decided by the Tribunal and we do not see any reason to disagree with the decision. Following the ratio of the Tribunal's order in the case of M/s. Rupa & Co. Ltd. we hold that the benefit of exemption of CVD under Notification No. 29/97 shall be admissible to the appellants. The appeal is thus allowed in above terms. Consequential relief, if any, shall be admissible to the appellants in accordance with law.