Customs, Excise and Gold Tribunal - Delhi
Webel Telematik Ltd. vs Collector Of Customs on 7 June, 1995
Equivalent citations: 1995(80)ELT617(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The captioned six appeals have been filed by M/s. Webel Telematics Ltd. being aggrieved by the orders passed by the Ld. Collector of Customs (Appeals). The Collector (Appeals) had held:
"I have carefully considered all the submissions of the appellants as mentioned in the appeal petition. The appellants produced the certificate as required by Notification No. 60/88 much after the clearance of the goods. In fact the certificate was not even applied for when the Bill of Entry was filed for home consumption. As such the Notification rate of duty was not applicable to the imported goods on the date of presenting the Bill of Entry. The goods were correctly assessed as per the applicable rate of duty oh the day of presentation of the Bill of Entry. Under Section 15, that rate is applicable and not the notification rate of duty. In that view of the matter, the rejection of the refund claim based upon reassessment of rate of duty is correct and proper. The appeal lacks merit and it is rejected."
Briefly stated the facts of the case are that the appellants filed refund claims on the strength of a Duty Exemption Certificate issued by D.G.T.D. which was not submitted by the appellants at the time of clearance of the goods. In the absence of the said certificate, the goods were assessed to duty on merits. Later on when the Essentiality certificate came in possession of the appellants, they claimed refund stating that they were entitled to concessional rate of duty in terms of Notn. No. 60/88 read with Notification No. 59/88. The claims for refund were rejected by the Asstt. Collector. The order of the Asstt. Collector was confirmed by the Collector of Customs (Appeals).
2. Shri L.P. Asthana, the ld. Advocate appearing for the appellants submitted that in the instant case, six appeals as under are involved :-
Appeal No. C/388/93-B in respect of Bill of Entry No. Al-232, dated 10-1-1992 Appeal No. C/389/93-B in respect of Bill of Entry No. AI-248, dated 10-1-1992.
Appeal No. C/390/93-B in respect of Bill of Entry No. AI-277, dated 13-1-1992.
Appeal No. C/391/93-B in respect of Bill of Entry No. AI-226, dated 12-2-1992 Appeal No. C/392/93-B in respect of Bill of Entry No. AI-736, dated 30-3-1992.
Appeal No. C/522/93-B in respect of Bill of Entry No. AI-524, dated 24-2-1992.
The ld. counsel submitted that in respect of all the above appeals, the issue is the same, that is, whether the essentiality certificate No. E.L.T./5 (303)EQ/ 89/807 issued on 6-4-1992 be held to be valid for reassessment of goods imported and cleared before 6-4-1992 in terms of Notification No. 60/88-Cus. read with Notification No. 59/88-Cus. The ld. Advocate submitted that the appellants applied to the Director General of Technical Development, Electronics Directorate, Udyog Bhawan on 29-1-1992 of issuance of the duty concession certificate in respect of the goods specifying the details of their requirement; that the Industrial Advisor of the D.G.T.D. issued the Duty Concession Certificate on 6-4-1992; that on receipt of the Essentiality Certificate, the appellants lodged claims with the Asstt. Collector for refund of excess duty paid when the goods were assessed on merits, but on production of the Essentiality certificate concessional rate of duty was available in terms of Notification No. 60/88-Cus. read with Notification No. 59/88-Cus.; that there is nothing in the Notification to suggest that the assessment at the concessional rate of duty is only available on production of an Essentiality Certificate at the time of importation; that reassessment of the goods on production of Essentiality certificate obtained subsequently at the concessional rate was not ineligible; that there is no provision that in the absence of Essentiality certificate, the importer may execute a bond for difference in duty and claim assessment at the concessional rate subsequently on production of essentiality certificate; that there is no bar in claiming refund on the strength of the Essentiality certificate procured and submitted subsequent to the clearance of the goods; that the Essentiality certificate though procured subsequently, specifically covers the goods imported; that in the Customs Tariff, there are two types of Notifications; that in one type of Notification, there is a specific stipulation that for getting assessment at concessional rate in terms of an exemption notification, Essentiality certificate is required to be presented at the time of clearance; that this condition is very clear in respect of Notification No. 333/88-Cus., dated 31-12-1988; that in other types of exemption notification, there was no such stipulation; that in the second type of notification, in the absence of Essentiality certificate, the importer could pay the duty at higher rate on merit and then claim refund on the strength of Essentiality certificate procured subsequently. The ld. counsel therefore prayed that the Essentiality certificate dated 6-4-1992 maybe accepted for covering the goods cleared before 6-4-1992 and the order-in-appeal may be set aside. In support of his contention, the ld. counsel cited and relied upon the ratio of the decision of cases reported in 1987 (31) E.L.T. 117, 1991 (56) E.L.T. 753, 1991 (56) E.L.T. 470, 1992 (62) E.L.T. 719, 1983 (14) E.L.T. 2019,1989 (42) E.L.T. 124,1991(55) E.L.T. 437,1981 (8) E.L.T. 165 and 1990 (46) E.L.T. 434.
4. Shri K.K. Jha, the ld. SDR appearing for the respondent submitted that in one of the conditions in clause (b)(1), it has been provided that "Exemption contained in this notification shall be applicable only to those components which are certified by an officer not below the rank of the Joint Director in the Deptt. of Electronics of the Govt. of India or an Additional Industrial Advisor in the D.G.T.D. of the Govt. of India to the effect that the said components are required for the aforesaid purposes and (ii) the importer furnishes an undertaking to the Asstt. Collector of Customs at the time of importation to the effect that he shall pay on demand, in the event of his failure to comply with (i) above an amount equal to the difference between the duty leviable on the said components but for the exemption contained herein and that already paid at the time of importation; that in the instant case, the importer did not furnish an undertaking to the Asstt. Collector of Customs at the time of importation of the goods that the said components shall be used for the purpose specified above; that a plain reading of this condition of the Notification clearly shows that the Essentiality certificate should be available at the time of clearance of the goods; that in the instant cases, the admitted position was that the essentiality certificate was not available at the time of importation/clearance of the imported goods; that the lower authorities rightly held that as the Essentiality certificate was not produced nor was available with the importers at the time of clearance of goods, Essentiality certificate issued on 6-4-1992 was not valid to cover the goods cleared earlier. The ld. SDR, therefore, submitted that the concessional rate of duty under Notification No. 60/88, dated 1-3-1988 was not available to the appellants and prayed that the appeal may be rejected.
5. Heard the submissions of both sides and considered them. The ld. counsel for the appellants cited and relied upon the decision of the Tribunal in the case of India Photographic Company Ltd. reported in 1994 (71) E.L.T. 524. It was held by this Tribunal that "We are inclined to hold that the applications for the certificates required in terms of Notification No. 424/86-Cus., dated 28-8-1986 having been made prior to the importation of the goods and the appellants having been duly authorised by the National Remote Sensing Agency to file refund claims on their behalf were entitled to claim of duty on the strength of the prescribed certificates." For this purpose, the Tribunal relied on the ratio of the decision of the cases reported in 1991 (55) E.L.T. 437 (SC) and 1992 (57) E.L.T. 449 (T).
6. Examining the present issue in the light of the above ruling, we find that the appellants had applied to the D.G.T.D. on 29-1-1992 for grant of the certificate. We also observe that Bill of Entry No. A.I. 232 in Appeal No. C/388/93 was presented on 10-1-1992 Similarly Bill of Entry No. A.I. 248 in Appeal No. C/389/93 was presented on 10-1-1992. Again Bill of Entry No. 277 in Appeal No. C/390/93 was presented on 13-1-1990 which is much before the date, i.e., 29-1-1992 and therefore the ratio of the decision cited and relied upon by the appellants will not be applicable to the above-mentioned three appeals. In respect of the remaining three appeals, the Bill of Entry was presented subsequent to the date of the application made to the D.G.T.D. and therefore these three appeals namely, Appeal No. C/391/93, Appeal No. C/392/93 and Appeal No. C/522/93 will be covered by the ratio of the decision cited and relied upon by the appellants.
The appellants also cited and relied upon the decision of the Tribunal in the case of Woke Hardt Medical Centre reported in 1993 (66) E.L.T. 522. The ratio of this decision is more or less similar to the ratio of the decision cited in the preceding paragraphs. The appellants also cited and relied upon the decision of the Tribunal in the case of Super Coil Spring Mfg. Co. reported in 1992 (62) E.L.T. 719 in which this Tribunal had held that the exemption under the Notification should be extended on one appellants satisfying the department post facto that they have substantially complied with the Notification No. 167/79 by showing that the goods cleared from their factory have been used for further manufacture of excisable goods in the factory of M/s. Premier Automobiles Ltd. The facts in the case of Super Coil Spring Mfg. Company were that the Asstt. Collector had rendered a finding that the goods produced by the appellants solely are supplied to M/s. Permier Automobiles Ltd. It was also found in that case that the department had never brought any possibility of classification under Item 68 for giving a scope to the appellants to apply for and follow Chapter 10 procedure for the purpose of Notification No. 167/79. On comparing these facts with the instant case, we find that the facts in the two cases are different and therefore the ratio of this case will not be applicable to the facts of the present case. The appellants had also relied upon the decision of the Tribunal in the Oil India Ltd. reported in 1992 (57) E.L.T. 449. In this case, the Tribunal had held "However, the application to the Empowered Committee seeking the Essentiality certificate had been already submitted to the Empowered Committee which was pending with that authority which has been issued only subsequent to the clearance of the goods and therefore the benefit of notification need not be fatal to the claim of exemption under that notification." In this case, we find that the application for obtaining the Essentiality certificate was made before the clearance of the goods. An identical issue has been discussed in the preceding paragraphs.
It was argued by the ld. counsel on the strength of the decision of this Tribunal in the case of Suburban Engineering Works Pvt. Ltd. reported in 1991 (56) E.L.T. 470 that benefit may be allowed on the basis of substantial compliance with the requirements of Notification notwithstanding certain procedural failure or omission. Examining the facts of the instant case in the light of this decision, we find that before 29-1-1992 there was no compliance of Notification No. 60/88 under which the concession had been prayed nor was an undertaking furnished to the Assistant Collector at the time of clearance of the goods and thus there was no compliance of Notification and therefore the ratio of the decision of this case will not be applicable to the facts of the present case.
The ld. counsel also cited and relied upon the decision of the Tribunal in the case of Birla Institute of Technology reported in 1991 (56) E.L.T. 753 in which the Tribunal had held that "Considering the entire facts and circumstances of the case, the Bench feels that a highly technical view in the matter should not be taken as the appellants though later have fulfilled all the conditions of the notification. In this view of the matter, the appellants' appeal deserves to be allowed." Comparing the facts in the two cases we observe that none of the conditions was satisfied in the instant case in as much as neither the Essentiality certificate was produced nor any claim was made for such benefit at the time of the clearance of the goods. The Hon'ble Supreme Court in the case of Liberty Oil Mills reported in 1995 (75) E.L.T. 13 had held that if there was a doubt in the interpretation of any Notification, the benefit of doubt should be given to the Govt. In the instant case, though there is no doubt but presuming that there is doubt in view of the rulings of the Hon'ble Supreme Court, we hold that there was no compliance of the conditions of the Notification permitting concessional rate of duty.
The ld. counsel also relied on the ratio of the decision of the Hon'ble Supreme Court in the case of Mangalore Chemicals and Fertilisers Ltd. reported in 1991 (55) E.L.T. 437 in which the Apex Court had held that a distinction between provisions of the statute which are of substantial character and were built in with certain specific objectives of policy on the one hand and those which are merely procedural and technical in their nature on the other must be clearly distinguished. The ld. counsel had submitted that the essentiality certificate as well as the undertaking required under Notification No. 60/88-Cus. were procedural. We observe that whereas the essentiality certificate was required to ascertain the total quantity to be imported and used, there was a requirement that an undertaking should have been given in the Bill of Entry at the time of clearance of the goods that they were availing concession under the aforesaid notification are not mere procedural requirements. They are substantive in nature for availing the concession under the notification. We also find that in the order-in-original, the Asstt. Collector rendered a finding that the essentiality certificate produced by the appellants was valid for only 12 months from the date of its issue, i.e., 6-4-1992. This finding has not been rebutted by the appellants in this case. We, therefore, agree with his finding that this certificate was not even otherwise valid for the goods imported and cleared before 6-4-1992. The ld. counsel also had cited and relied upon the decision of this Tribunal in the case of Hindustan Machine Tools reported in 1990 (46) E.L.T. 434. In this case, this Tribunal had observed that: "The appellants have done whatever was required by them to be done to get the certificate and right from the beginning it could therefore be seen that their case is that the importation was intended for the purpose for which the DGTD certificate was applied for. In case the D.G.T.D. certificate applied for was for the goods imported and the same was issued for that purpose, we see no reason why this certificate should not be accepted," We find in this case cited by the appellants that the application was made before the importation of the goods and the certificate issued covered the goods imported. However in the case before us we find that no doubt application was made on 29-1-1992, but the. certificate was issued on 6-4-1992 and was made valid for 12 months after the date of issue. We have already discussed the point regarding submission of application on 29-1-1992 in one of the preceding paragraphs and the same reasoning will apply to the instant case also. The ld. counsel had also referred to the decision of this Tribunal in the case of HECL reported in 1990 (45) E.L.T. 131 in which the Tribunal had held that non-production of the essentiality certificate becomes only forgivable procedural failure and not an insurmountable lapse. In the instant case, we observe that even the application for obtaining the essentiality certificate in respect of three appeals was made subsequbent to the date of clearance of the goods. We find that the Asstt. Collector has given a finding that the certificate produced by the appellants was valid for imports from 6-4-1992 and therefore this Essentiality certificate was not valid to cover the imports in the instant case.
The ld. counsel also cited and relied upon the decision of this Tribunal in the case of Himson Textiles Engg. Industries reported in 1989 (42) E.L.T. 124 in which this Tribunal had held that when there has been substantial compliance with the conditions laid down in the Notification, any procedural deficiency should not stand in the way of the relief which is otherwise admissible to the appellants. Examining the facts of this case in the light of the facts of the case before us we observe that even the certificate issued on 6-4-1992 covered only imports after 6-4-1992 in accordance with the finding of the Asstt. Collector and therefore there was no valid certificate even produced subsequently.
Some other decisions were also cited which more or less cover the grounds and the discussions as above.
In the light of the discussion of the case law in the preceding paragraphs and various submissions made by both sides, we observe that there has been a consistent view that procedural formalities should not come in the way of granting substantial benefits. The admitted position in the present case is that out of six appeals, there are appeals which pertain to clearance of goods after 29-1-1992, when an application for obtaining the Essentiality certificate was made by the appellants.
We also observe that in the letter dated 29-1-1992 addressed to D.G.T.D. it has been categorically stated that "During the period April, 1991 to March, 1992, we plan to despatch 4000 pieces teleprinters out of which 2,300 teleprinters have already been despatched. The balance 1700 teleprinters for which we are having pending orders will be despatched before March, 1992. We are hereby enclosing our requirement for concession of Customs Duty for a quantity of 4000 nos. Teleprinters and would be highly obliged if you would kindly attest the enclosed application for duty concession and oblige.
From the above we observe that
(a) Request for duty concession was made on 29-1-1992.
(b) The request was categorical.
(c) It was for the period April 1991 to March, 1992.
Now we also observe that the DGTD in his letter dated 6-4-1992 has written that "The certificate may not be construed as an interpretation of the policy regarding permissibility or classification of the items under the policy. This certificate is valid for the period of 12 months from date of issue."
We find that the request to DGTD was for importing various components for manufacture of 4000 pieces of teleprinters during the period April 1991 to March 1992. We, therefore, hold that the application dated 29-1-1992 was a valid document. On the basis of this letter we hold that the three appeals in which the goods were imported/cleared on or after 29-1-1992 will be eligible for concessional rate of duty under Notification No. 60/88, dated 1-3-1988 read with Notification No. 59/88,1-3-1988. Therefore, the concessional rate of duty under Notification No. 60/88, dated 1-3-1988 read with Notification No. 59/88, dated 1-3-1988 will be applicable to the imports covered by Appeals Nos. C/391/93, C/392/93 and C/522/93. In this view of the matter, the appeals are partly allowed. Consequential relief, if any, will be admissible to the appellants according to law.