Customs, Excise and Gold Tribunal - Mumbai
Bayer India Ltd. vs Commissioner Of C. Ex. on 18 August, 2000
Equivalent citations: 2001(130)ELT97(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. Notification No. 43/88 dated 1-3-1988 exempts several chemicals listed thereunder when used in the manufacture of pesticides. This Notification was amended vide Notification No. 165/88 dated 3-5-88, whereby, the words "pesticides falling under Chapter 38" were replaced by the words "goods falling under sub-heading 3808.10."
2. At the material time, the sub-heading read as under : "Insecticides, fungicides, herbicides, weedicides and pesticides".
3. The show cause notice dated 2-4-1993 was issued alleging that during the period 1-3-88 to 2-5-88, the assessee had wrongly availed the benefit of the Notification for their product "Phosphorous Sulfochloride" in as much as it was used in the manufacture of insecticides and not of pesticides. The duty allegedly short-levied was Rs. 10,10,075/-. The allegations were made that they had suppressed the facts with intention to evade payment of duty. The Commissioner having confirmed the duty and having imposed the penalty of Rs. One lakh, the present appeal has been filed.
4. We have heard Shri Gunasekharan, Advocate appearing along with Shri M.V. Ravindran for the appellants and Smt. R. Arya for the Revenue.
5. Shri Gunasekharan claimed that the ratio of the Tribunal's judgment in the case of Collector of Central Excise, Vadodara v. United Phosphorus Ltd. 1998 (104) E.L.T. 564 (Tribunal) would apply to the case before us. We have seen the text of that judgment. The judgment covers the ambit of Notification No. 43/88, after it was amended by Notification No. 165/88. The events covered in the present case occurred before the Notification was amended and therefore, the appellants cannot draw any support from the said judgment.
6. Shri Gunasekharan claimed that the terms "insecticide and pesticide" were synonymous and therefore, the benefit of the notification would accrue to them. He cites from Indian Pesticide Directory Second Edition published by Scintia Publical Pvt. Ltd., Colaba, Mumbai. At page 187 the following occurs-
"The term pesticides was found about 25 years ago as the Collective Noun, covers materials normally referred to as economoic poisons of similar substance."
7. It is further stated that pesticides can be classified into several products including insecticides, fungicides and weedicides etc. Pesticides are further defined in the Text Book of Chemistry of Pesticides as "any substance used to destroy plant or animals". This Text Book also states that insecticides means a sub-division of pesticides.
8. The case of the appellant is that the said notification having used the word "pesticidies" would cover the various sub-divisions thereof, the benefit thereof would cover insecticides also.
9. As per the extract of the sub-heading, the Tariff has separately shown insecticides and some other divisions of pesticides viz. fungicides and weedicides etc. The HSN refrains from using the term pesticides altogether.
10. The Tribunal judgment in the case of Bombay Chemicals Pvt. Ltd., 1986 (24) E.L.T. 373 came up for discussion. This judgment examined the coverage of Notification No. 55/75-C.E. under which exemption was given to insecticides, pesticides, weedicides and fungicides. The issue before the Tribunal was whether 'disinfectants' were covered by the various terms. The Tribunal held that although disinfectants also could be termed as pesticides, they did not benefit from this notification. This judgment was upheld by the Supreme Court in the case reported in 1995 (77) E.L.T 3 (S.C.). The Supreme Court observed that where the words described categories of goods having certain characters, the expressions were capable of achieving proper and narrow meaning. The phrase 'pesticides' came in for detailed discussion in this judgment. However, in delivering the judgment, the Supreme Court did not go into the distinction between insecticides and pesticides. This is because the Notification 55/75 did not seek to distinguish between the two terms but that the benefit thereof was available to both of them. Although, the findings of the Tribunal had been set aside as regards disinfectants, these findings of the Tribunal would remain of guiding value even though they were relevant to the interpretation of the Notification No. 55/75. In paragraph 20 and 36 of the judgment, the Tribunal categorically observed that a meaning should be given to every word. It was held that the words pesticides and insecticides designated two products of specific use. In effect, this judgment established that the phrases insecticides and pesticides were not synonymous.
11. The words as were there in Notification No. 55/75 also occur in describing the products falling under sub-heading 3808.10. Therefore, it has to be held that where a notification grants exemption to a product specifically described in the Tariff Entry, the benefit thereof would necessarily be extended to that entry alone and cannot be permitted to be extended to another product described separately in the said entry.
12. Shri Gunasekharan also made arguments on the aspect of limitation. The show cause notice dated 2-4-1993 covers the period 1-3-1988 to 2-5-1988 and contains the specific allegation that the asessee suppressed the fact that they were using permitted chemicals in the manufacture of pesticides. We have seen the classification list effective from 1-3-1988. At Sr. No. 1, phosphorus sulfochloride had been shown as benefitting from Notification No. 43/88. A further entry shows manufacture of insecticides etc. including pesticidies. The entry at Sr. No. 1 specifically claims exemption in terms of Notification which permitted duty free clearance when used in a particular product. It is not denied that the use was not in that class of product but was in another product. Therefore, it does not become a defence for the assessee in claiming the limitation.
13. Shri Gunasekharan also claimed that RT 12 assessments had been finalized. If in the classification list a wrong benefit is taken and the fact of benefit having been wrongly taken is known only to the assessee, the fact that the RT 12 have been finalised would not come to the rescue of the assessee. We find no force in the argument on the ground of limitation.
14. In the result we find that the impugned order is sustainable. The appeal is dismissed.