Customs, Excise and Gold Tribunal - Delhi
Mysore Industrial Plastic Corporation vs Collector Of Customs on 5 January, 1983
Equivalent citations: 1983ECR277D(TRI.-DELHI), 1983(12)ELT845(TRI-DEL)
ORDER
S. Grover, Vice-President
1. The Mysore Industrial Plastic Corporation, Bangalore (hereinafter referred to as the importer) filed a revision petition (RA) before the Government of India on 20th of February, 1980 against the order No. C. 3/2502/77-dated 20th of July, 1979 passed by the Appellate Collector of Customs, Madras. The R.A. stood transferred to the Tribunal on the appointed day i.e. 1 lth of October, 1982 as appeal by virtue of the provisions of Section 131B of the Customs Act and is accordingly being disposed of as such.
2. The case involves levy of countervailing duty under Section 3 of the Customs Tariff Act in respect of consignment imported under Bill of Entry No. 1812, dated 24-7-76, consisting of Acrylic Sheets Crushed Scrap. The importer making a refund claim of c.v. duty before the Assistant Collector of Customs (Refunds) contended that the goods were not covered under Item 15(A) of the Central Excise Tariff at all. The goods imported, however, were held to be covered by item 15A(1) of the C.E.T. for the purpose of levy of c.v. duty. The importer appealed and though the Appellate Collector sent the case book to Assistant Collector for fresh examination, the original levy of duty was upheld again. The second order of the Assistant Collector of Customs is S25/1577, dated 21-8-77 and the duty amounted to Rs. 17,438.09.
3. The importer once again appealed and reiterated before the Appellate Collector of Customs that the c.v. duty could only be under Notification No. 28 dated 1-3-74 which, inter alia, specified that articles made of plastics excluding those specified in the notification were exempted from the levy under Section 2A of the Indian Tariff Act, 1934.
4. It was stressed that the notification further specified that the expression "articles made of plastic" shall have the same meaning as in sub-item (2) of item 15A of the First Schedule to the Central Excises and Salt Act, 1944. The importer also urged that the C.E.T. being selective tariff, broken/crushed material though may be originating from some goods in which plastics were used could not automatically be deemed to come under item 15A(2).
5. The Appellate Collector of Customs, however, held that goods imported though could not be held to be articles made of plastics but come within the category as plastic materials more particularly with reference to the specifications granules, or flakes or in the form of moulding powders. The Appellate Collector further held that even if it was conceded that the imported goods were not in the form of granules or moulding powder, it could not be automatically excluded from the scope of flakes. To project that the learned Appellate Collector was not certain and clear about the correct position and partly accepted the appeal also by directing refund of duty to the extent of Rs. 4359.52 we reproduce the following portion from para 3 of his order as follows : -
"The C.E.T. being the selective tariff all broken materials though made of plastics could not automatically be deemed to come under 15A(2). At the same time, the appellants' contention that they are entirely exempt from the levy of countervailing duty as the item is not falling under 15A(1) or 15A(2) is not maintainable inasmuch as the goods imported though in the form of scrap are essentially plastic materials in the form and shape in which the imported items were cleared for home consumption. They would still fall under the category as 'plastic material in any form more particularly with reference to the specifications granules, or flakes or in the form of moulding powders'. Even if it is conceded that they are not in the form of granules or moulding powders it could not be automatically excluded from the scope of 'flakes'. In this view, I hold that the item is not covered by the exemption notification No. 28, dated 1-3-74 However, the appellants are entitled to such benefits in the same being categorised as falling under item 15A(1) for purposes of levy of countervailing duty."
6. Before us one of the partners of the importer firm appeared and submitted that the Revenue having accepted the decision of the Appellate Collector that the assessment had not been properly framed and that duty was assessable under Item 15A(1) and not under item 15A as done by the lower authorities the only question and issue before us was whether the assessment under item 15A(1) was valid and proper. He pleaded that the Revenue's contention raised by Mrs. Zutshi, Sr. Departmental Representative before the Bench, that if assessment was not proper under item 15A(1) the importer should be held to be assessable under item 15A (general category) was amazing because that would change the basis of assessment and result in enhancing the duty which under law was not permissible at this stage. He strongly urged that the issue was not whether the imported goods were dutiable but whether these were as under item 15A(1) of the Schedule. We were referred to a Public Notice No. 125/77 for the submission that even the Revenue was in doubt whether the plastic sheet crushed scraps could be termed as plastic materials otherwise there was no necessity for the clarification issued as late as on 28th of June 1977 on the basis of some clarifications/instructions of Board dated 9th of March 1977. For the Revenue Mrs Zutshi supported the order of the Collector of Customs and on the given facts tried her best to bring us around the view taken by the Customs authorities.
7. After hearing the parties we first like to notice the description of goods in item No. 15A(I) and (2) and also reproduce Public Notice No. 125 as mentioned all over :-
"15A. ARTIFICIAL OR SYNTHETIC RESINS AND PLASTIC MATERIALS AND ARTICLES THEREOF (1) Artificial or synthetic resins and plastic materials in any form whether solid, liquid or pasty, or as powder, granules or flakes, or in the form of moulding powders, the following namely :-
(i) Condensation, Poly-condensation and polyaddition products, whether or not modified or polymerised, including Phenoplasts, Aminoplasts, Alkyds, Polyamides, Polyurethane, Polyallyl Esters and other unsaturated polyesters ;
(ii) Polymerisation and co-polymerisation products including polyethylene and Polytetrahaloethylene Polyisobutylene, Polystyrene, Polyvinyl Chloride, Polyvinyl acetate, Polyvinyl Chloroacetate and other Polyvinyl derivatives, Polyacrylic and Polymethacrylic derivatives and Coumarone-Indene resins ; and
(iii) Cellulose acetate, (including di-or tri-acetate) Cellulose acetate butyrate and cellulose propionate, Cellulose acetate propionate, Ethyl cellulose and Benzyl cellulose, whether plasticised or not, and plasticised Cellulose nitrate.
(2) Articles made of plastics, all sorts, including tubes, rods, sheets, foils, sticks, other rectanguler or profile shapes, whether laminated or not, and whether rigid or flexible, including lay flat tubings and polyvinyl chloride sheets, not otherwise specified."
"Public Notice No. 125/77 Chat 39.
Sub : Countervailing duty on import of Acrylic Plastic sheets scrap :
It is certified that notification No. 28 Cus., dated 1-3-64 (reissued under the new tariff as notification No. 228-Cus., dated 2-8-76) is applicable to articles made of plastics other than those which are mentioned in the table annexed to the said notification. Acrylic plastics sheet scrap being plastic materials, would not be covered by this notification and are liable to c.v. duty under item 15A(1)CET.
(Board's F. No. 355/97/77-Cus. I, dated 9-3-77) Cl 1/248/76 Ap.
Custom House, Sd/-
Madras-1. (K. VISHWANATHAN)
Dy. Collector of Customs,
Dated : 28-6-1977 for COLLECTOR OF CUSTOMS".
8. The real dispute before us whether the categorisation given by the Appellate Collector of Customs can be held to be correct and valid. We reject the Revenue's contention that the original assessment should be restored because that would mean enhancement of duty for which the Revenue is not before us. Reading item 15A(1) along with the order of the Appellate Collector the dispute boils down to the controversy whether the imported goods could be said and held to be plastic materials as mentioned in sub-item (1) above. We are inclined to agree with the importer that whereas acrylic flakes or powder or granules are used for the purpose of direct moulding the imported crushed scrap of unknown type of acrylic sheets necessarily had to be depoly-merised to be converted into liquid. The averments in the Petition, and which was reiterated, that two distillations had to be undergone and then only monomer recovered could not be controverted by the Revenue's representative. Therefore, the imported crushed scrap could not be termed as flakes.
9. Further, we are of the view that if the Revenue was so clear in its stand, there was no necessity for the Board to issue clarification of 3-9-1977. In any event, this facet is not influencing us in deciding this case because clarification and/or public notice by the executive authorities cannot take the rights of the parties away. Therefore, the public notice by the Deputy Collector of Customs No. 125/77 supra, which is reproduced above, was of no consequence as far as the validity of levy of duty in the importer's case was concerned and accordingly any reference or support attempted to be drawn by the Revenue in this regard is considered extraneous.
10. For the purpose of this case we are not expressing any opinion whether the importer could be said to be assessable under general item 15A of the First Schedule because the short question before us is about the correctness and validity of levying c.v. duty under item 15A(1) which we hold was totally wrong and unjustified. Therefore, accepting the assessee's appeal, we direct that the c.v. duty in respect of the consignment covered by Bill of Entry mentioned in the beginning of the order be refunded. The basis of our decision is that the crushed scrap is not from pure plastic sheets and not being capable of direct moulding cannot be considered as plastic material within the ambit of item 15A(1) of the First Schedule to the Central Excises & Salt Act, 1944.
11. Before parting, we like to observe that if a particular goods is sought to be brought to tax or duty under a statute, the onus would be on the Revenue to establish the validity and correctness of its decision. On the other hand, if exemption is provided by a statute the burden is always on the taxpayer to establish that it comes within the exemption ambit.