Customs, Excise and Gold Tribunal - Delhi
Simla Agencies vs Collector Of Customs on 8 March, 1993
Equivalent citations: 1993ECR196(TRI.-DELHI), 1993(67)ELT599(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. Arguing on the Misc. Application for adducing additional grounds of appeal in the above three appeals, Shri K. K. Anand, Ld. Counsel for the appellants, submitted that they had contested the levy of auxiliary duty at 45 per cent under Notification 85/88 by filing the refund claim and the amount of refund due to them had been calculated by the appellants in their claim on the basis of exemption Notification 88/88, which itself should have been noticed by the Assistant Collector and the Collector (Appeals) and, therefore, according to the appellants, the merits of their claim for refund on the ground that auxiliary duty in terms of exemption notification 88/88 is applicable to the goods imported by them ought to have been considered and pronounced upon. The Ld. Counsel referred to the written submissions before the Collector (Appeals) dated 25-4-1989 wherein it has been submitted as follows :-
"In respect of the three Bills of Entry No. 908, 909 and 910, as already stated in Para 2 of the grounds of Appeal, a wrong notification has been made applicable, instead of applying correct Notification No. 88/88."
2. The Ld. Counsel submitted that it is well-settled that a purely legal question can be raised at the appellate stage even though not agitated before the lower authorities. He cited the case law reported in 1991 (51) E.L.T. 631 (S.C.) in the case of Assistant Collector of Central Excise v. Ramdev Tobacco Company as also the Tribunal's decision reported in 1991 (53) E.L.T. 437 in the case of Hindustan Platinum Pvt. Ltd. v. Collector of Central Excise to say that additional grounds can be raised at the appeal stage.
3. Shri J. N. Nair, the Ld. D.R. opposed the application for adducing additional grounds and submitted that the issue is linked with the appeals already decided by the Tribunal's Order No. 440-445/92-D dated 13-10-1992. The Ld. D.R., further, submitted that the question of eligibility to auxiliary duty exemption under Notification 88/88 will depend on the importer proving to the satisfaction of the authorities that the goods imported are wood in the rough whereas the Department's case is that the goods imported by the appellants, herein, is not classifiable as wood in the rough but as sawn timber. In the circumstances, the additional grounds now raised cannot be permitted.
4. The submissions made by both the sides, have been carefully considered. The applicants have furnished the 5th copy of the relevant Bills of Entry No. 908, 909 and 910. A perusal of these copies shows the following endorsement thereon :-
"Assessed including the offending goods covered by the Order-in-Original Section 111/9 to 11/88-Cus., (Off.) dated 28-4-1988."
This refers the adjudication order by the Additional Collector of Customs, Mangalore which is the subject-matter of Appeal No. C/3197/89-D. This order, inter alia, had given a finding to classify the goods as sawn timber heading 44.07 CTA'75 overruling the claim for classification of the goods under heading 44.03 as declared in the Bills of Entry. The Bills of Entry considered in the adjudication order are the same Bills of Entry for which present Misc. Application has been filed, relating to their refund claim. The duty and fine on the goods having been paid in terms of the adjudication order, the appellants were bound to substantiate their claim to say how the goods will be eligible for auxiliary duty under exemption notification 88/88 as wood roughly squared and half squared, but not further manufactured which is the description given by them in the Bills of Entry (and which had been turned down by the Additional Collector and to which Notification 88/88 relates) because the adjudication order, referred to above inter alia, notes the admission of the importer that the goods imported are scantlings other than wood in the rough. In such a context, the plea made for adducing additional grounds, saying that both the authorities below were duty bound to look into the quantum of the refund claim and from that should have inferred that the claim for exemption was under notification 88/88 fails to carry conviction. In this view of the matter, the Misc. Application for adducing additional grounds is without substance and is rejected. These appeals alongwith Appeal No. C/3197/89-D may now be listed for hearing on merits.
S.L. Peeran, Member (J)
5. I have gone through the order proposed by my learned brother but I express my inability to agree to the same.
6. With due respect to my learned brother, I may point out that my learned brother has given reasons to reject the grounds made out in additional grounds proposed to to be brought on record. I may hereby point out that at this stage, we have to examine only as to whether the additional grounds raised at this stage could be permitted to be raised. The additional ground sought to be raised is noted herein below :-
"That the learned Collector (Appeals) grossly erred in not considering their plea which was specifically taken before him that in respect of three bills of entry No. 908, 909 and 910 a wrong notification had been made applicable instead of applying correct Notification No. 88/88-Cus. But he has not even discussed this submission/ground. Though it is true that the appellants due to sheer inadvertence did not specifically mention the fact of application of wrong notification in their claim for refund application but they mentioned the correct amount i.e. 45% which they had paid in excess. He was duty bound to take this submission into consideration while passing the impugned order. When the appellants had claimed the refund of the entire auxiliary duty i.e. 45% certainly it was something more than mere excess of auxiliary duty of 5% which they had paid due to refusal to entertain their bills of entry before the budget day. Both the authorities below were duty bound to look into this aspect that when there was an increase of 5% auxiliary duty as to why the appellants had preferred a refund claim of 45%. Both the authorities below are silent on this point. They should have also looked into the fact that auxiliary duty on the goods imported i.e. Burma Teak Posts (Timber rough squares and half squares but further not manufactured) was nil upto 28-2-1988 vide Notification No. 112/87-Cus., and 5% vide Notification No. 88/88-Cus. Hence, there was no question of their paying 45% as auxiliary duty. The impugned order merits to be quashed."
As can be seen from this ground proposed to be pleaded, is that the learned Collector (Appeals) has failed to consider a specific plea raised by the importer before him in respect of Bill of Entry No. 908, 909 and 910 regarding a wrong notification having been applied instead of correct Notification No. 88/88. Therefore, this plea raised before the Collector (Appeals) not having been considered by him, is not a fresh plea raised at this stage. Further, the plea raised now is more in the nature of legal plea regarding correct duty liability. Therefore, the appellants are entitled to raise the above ground at this stage. The ruling relied by the learned Counsel, supports his plea also. Further, I notice that in large number of cases, plea to raise additional grounds has been permitted by the Tribunal which are as under :-
National Radio & Electronics Co. Ltd. v. C.C.E. [1992 (62) E.L.T. 168 & various rulings noted in this order by President] Nandi Metal Rolling Mills v. C.C.E. [1992 (60) E.L.T. 322 and various rulings noted in this order] General Electro Mechanical Industries v. C.C.E., Pune [1987 (32) E.L.T. 785] In view of my findings, I direct for allowing the appellants to raise the additional ground set up in the above Misc. application. Misc. application is allowed.
DIFFERENCE OF OPINION In view of difference of opinion, the matter is referred to the President to constitute a Third Member Bench to decide the issue on the following points of difference -
(i) Whether the additional ground raised by the applicant to be dismissed for the reasons stated in the order of Member (Technical);
or Whether the additional ground raised by the applicant to be allowed for the reasons stated in the order of Member (Judicial).
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(S. L. Peeran) (K. S. Venkataramani)
Member (Judl.) Member (Tech.)
G.P. Agarwal, Member (J)
7. The aforesaid points of difference have been referred to me by the Hon'ble President in terms of Sub-section (5) of Section 129C of the Customs Act, 1962.
8. Arguing on behalf of the appellants, Shri K. K. Anand, learned Counsel, submitted that the appellants had contested the levy of auxiliary duty at 45% under Notification No. 85/88 by filing the refund claim, calculating the duty on the basis of the exemption Notification No. 88/88, which was rejected by the Assistant Collector. On appeal, the appellants submitted the written submissions stating that "In respect of the three Bills of Entry No. 908, 909 and 910, as already stated in para 2 of the grounds of appeal, a wrong Notification has been made applicable, instead of applying correct Notification No. 88/88.". It was stressed by him that when such a plea was raised, it was obligatory on the part of the Collector (Appeals) to discuss the said contention, but he did not advert himself to the said plea of the appellants. In this premises, he submitted that the appellants may be allowed to raise the said plea before this Tribunal. That apart, he also submitted that, the said plea is purely a question of law and can be decided on the basis of the evidence available on the record and cited the following cases -
(i) Nandi Metal Rolling Mills v. Collector of Central Excise, 1992 (60) E.L.T. 322;
(ii) Larsen & Toubro Ltd. v. Collector of Customs, 1991 (56) E.L.T. 823;
(iii) Hindustan Platinum Pvt. Ltd. v. Collector of Central Excise, 1991 (53) E.L.T. 437;
(iv) Assistant Collector of Central Excise v. Ramdev Tobacco Company, 1991 (51) E.L.T. 631 (SC);
(v) General Electro Mechanical Industries v. Collector of Central Excise, Pune, 1987 (32) E.L.T. 785; and
(vi) Dunlop India Limited v. Union of India, 1983 (13) E.L.T. 1566 (SC).
8.1 After submitting, as aforesaid, he ended his arguments by stating that for the reasons mentioned by the learned Judicial Member, the additional grounds proposed to be raised by the appellants be allowed.
9. In reply, Shri J. N. Nair, learned JDR, submitted that for the reasons mentioned by the learned Technical Member in his proposed Order, the appellants be not allowed to raise the additional grounds, as prayed for. He also stated that by the impugned Order-in-Appeal, which is the subject matter of the present appeal, the Collector had disposed of 18 appeals against which the present appellants filed their separate appeals before this Tribunal. Out of these appeals, 15 appeals (barring the present three appeals) were rejected by this Tribunal vide its Order No. C/440 to 454/92-D dated 13-10-1992.
10. I have considered the submissions. The main reason for not permitting the appellants to raise the said ground by the learned Technical Member appears to be that the relevant Bills of Entry No. 908, 909 and 910 were the subject matter of Order-in-Original No. 14/9 (wrongly typed as 111/9) to 11/88-Cus. (Off) dated 28-4-1988 whereby the subject goods were classified as SAWN under Heading 44.07 CTA, 1975 overruling the claim for classification of the goods under Heading 44.03, as declared in the Bills of Entry and the appellants have paid the duty and fine on the subject goods in terms of the said adjudication Order and, therefore, they were bound to substantiate their claim to say how the goods will be eligible for auxiliary duty under exemption Notification No. 88/88 as wood roughly squared and half squared, but not further manufactured which is the description given by them in the Bills of Entry (and which had been turned down by the Additional Collector and to which Notification 88/88 relates) because the Adjudication Order, referred to above, inter alia notes the admission of the importer that the goods imported are scantlings other than wood in the rough. In this view of the matter, the Misc. Application for raising additional grounds is without substance. Here it may be noted that the said adjudication Order No. 14/9 to 11/88 Cus., (Off) dated 28-4-1988 passed by the Additional Collector of Customs, Mangalore, is itself under challenge before this Tribunal in Appeal No. C/3197/89-D wherein in ground No. 6 it is stated that the goods in question were eligible for Nil duty assessment under Customs Basic and Additional Duty Rules and was liable to only 5% auxiliary duty. This appeal is pending for hearing and has been ordered to be heard along with the present appeals. See common Order Sheet dated 9-1-1992 recorded in the present three appeals. When such is the situation, how it can be said that the question of levying of auxiliary duty is a concluded issue. Besides the ground proposed to be raised as additional ground is purely a question of law which can be decided on the basis of the evidence available on the record. In fact, this factual position was not contested by the learned JDR. The ratio of the case law cited at the Bar is also to the effect that when the parties want to raise an additional ground which is a question of law and could be decided on the basis of the material on record, such ground should be allowed to be raised. In the case of Dunlop India Ltd. v. Union of India, supra, the Apex Court had gone to the extent that since there is no estoppel in law against a party in taxation matters, much significance should not be attached to the fact that the appellants themselves earlier treated the imported goods, namely, V. P. Latex under I.T.C. - Item No. 87 because in order to clear the goods for customs, the importer's agents might have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension, adding further that when law allows them the right to ask for refund on a proper appraisement and which they actually applied for, the Court do not attach any significance to the argument of the Revenue that the appellants themselves understood the matter earlier.
11. Here it may also be added that the merits of the additional ground are not to be looked into at the time of considering the question, as to whether the party should be allowed to raise the additional grounds or not. For, the merits of the ground proposed to be raised as additional ground are always examined at the time of hearing of the appeal on merits. To be brief on the point, allowing a party to raise the additional ground does not mean the acceptance of the ground on merits, as it is to be decided after hearing both parties on the merits of the case.
12. In the light of the above discussion, my answer to the question, as to whether the additional grounds raised by the appellants to be allowed is in emphatic "YES".
13. In the result, I answer the points of difference No. 1 in 'negative' and alternative question in 'affirmative'.
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( G. P. Agarwal)
16-3-1993 Member (J)
14. In view of the majority decision the Miscellaneous application for raising additional grounds in the appeals is allowed and the appeals may be posted for hearing on merits.