Customs, Excise and Gold Tribunal - Delhi
Vikram Sarabhai Space Centre vs Collector Of Customs on 26 August, 1997
Equivalent citations: 1998(98)ELT714(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. This is an appeal filed by M/s. Vikram Sarabhai Centre, Government of India, Department of Space, Thiruvananthapuram being aggrieved with the Order-in-Appeal dated 3-8-1989 passed by the Collector of Customs (Appeals), Madras. The matter relates to the eligibility of the steel sheets/plates imported for fabrication of rocket motor hardware for a single shot application, to the benefit of exemption Notification No. 70/87-Cus., dated 1-3-1987 (as amended). In Notification No. 70/87-Cus., dated 1-3-1987, the consumable goods and spare parts required for the purpose of research when imported into India by any public-funded research institution enjoy full exemption from the customs duty subject to the specified conditions. The appellants cleared the goods on payment of appropriate duty. Subsequently, they filed a refund claim which was rejected by the Asstt. Collector, Customs as unsubstantiated. On appeal, the Collector, Customs (Appeals) observed that the goods in question steel sheets/plates were for fabrication of welded pressure vessels. They had been imported cut to specific sizes and that they were only raw materials and could not be treated as consumable as they did not get consumed in the process of manufacture. He held that Notification No. 70/87-Cus., dated 1-3-1987 was not applicable to the goods in question.
2. The Committee on Dispute had permitted the appellants to pursue the appeal in the Tribunal, having regard to the fact that there was a mixed question of law and fact involved in the dispute (Minutes of the Meeting held on 26-6-1997 issued from File No. COD/10/1997-LC, dated 1-7-1997 by the Cabinet Secretariat refers).
3. Under their communication dated 21-8-1997, the appellants have prayed for decision on merits. Shri Trilok Chand, Administrative Asstt. for the appellants presented the communication relating to the clearance from the Committee on Disputes.
4. We have heard Shri S.N. Ojha, JDR for the respondent Revenue. Shri Ojha mentioned that at the time of the import, the requisite certificates subject to which the exemption under Notification No. 70/87-Cus. was available, were not produced. The adjudicating authority had rejected the claim as unsubstantiated. He further submitted that the certificates produced before the appellate authority bears a date subsequent to the date of import. In fact, the application for the certificates had also been filed after the goods had been cleared out of the customs charges. He also submitted that steel sheets/plates were not in the nature of the consumable goods and they had been used for fabrication of welded pressure vessels and remanded as such without being consumed in the process of fabrication. He prayed for rejection of the appeal.
5. We have carefully considered the matter. The goods imported were steel sheets/plates. They were used in the fabrication of major sub-system rocket motors for Indian Space Research Organisation Launch Vehicle. In the technical write-up/end-use dated 31-7-1989, the Asstt. Purchase Officer for the appellants stated as under :
"Steel plates/sheets conforming to the 15 CDV6 specification are low carbon high strength steels. These sheets of the required dimensional tolerances, properties and consistency of properties are not produced in the country and are therefore, imported. The steel plates/sheets are used in the fabrication of major sub-system rocket motor for ISRO's Launch Vehicles. These sub-system, unlike other steel construction items are designed for a one time use. This is because aero space products need to be light in weight and also as these are ejected into the sea after their function is over. Consequently in the space applications of such steels they get 'consumed', just like the fuel inside them as they are not available/designed for a second use. 15CDV6 steel plates sheets imported by VSSCISRO are not used for steel structures or industrial application, involved value addition and some years of service life. They are almost exclusively used for the fabrication of rocket motor hardware for a single shot application. Consequently for this exclusive one shot application they are to be classified as consumables and they qualify for duty exemption."
6. Under Exemption Notification No. 70/87-Cus., the exemption is provided to the consumable goods and spare parts. The appellants had taken the plea that the goods imported were consumable goods. It has been rejected by the appellate authority.
7. The main issue for our consideration is whether the steel sheets/plates imported were consumable goods for the purpose of Notification No. 70/87-Cus. referred to above. The consumable is one that can be consumed, that is used up, wasted away. The steel sheets/plates which are used in the fabrication of rocket motors did not loose their identity as sheets and plates. No other goods were produced out of such sheets and plates which had been imported cut to specific sizes. Paddy is consumed when rice is produced from it by carrying out the process of dehusking at the mill, the miller who converts wheat into flour and the flour is utilised by the baker to manufacture bread out of it. Thus the miller and the baker have consumed wheat and flour respectively in course of their business (Refer to Supreme Court decision in the case of State of Karnataka v. B. Raghurama Shetty - (AIR 1981 SC 1206). The steel sheets/plates did not lose their identity even when they were not available/designed for its second use. They remained steel sheets/plates. No new goods emerged out of such steel sheets/plates. [Refer Supreme Court decision in the case of Rajasthan Rollers Flour Mills Association v. State of Rajasthan -1993 AIR SCW 3118,
8. In the case of C.C. v. Kidwai Memorial Institute of Oncology reported in 1991 (56) E.L.T. 234 (Tribunal), the Tribunal had held that Caesium Pellets a radioactive material, enclosed in a stainless steel container which totally covers glass activated caesium leads and when used in Selection machine for treatment of cancer could not properly be called a consumable item.
9. In exemption notification the exemption is provided to the consumable goods required for the purpose of research. The various chemicals assets and other items required for research which are used up in the process of research will be covered by this exemption notification. In the present case, the goods were used in fabrication of new articles and the plates and sheets were used not as consumable but as a specific part of the finished product.
10. The appellants had compared the steel sheets / plates with fuel and have submitted that in the spare applications of such steel they get consumed just like the fuel inside the vehicle. We consider that the sheets / plates imported in this case could not be compared with the fuel to make them consumable goods. The expressions 'consumable goods' are different from consumer goods. As the Notification had to be interpreted strictly we do not consider that the sheets/plates for fabrication of welded pressure vessels were consumable goods for the purpose of Notification No. 70/87-Cus. The fact that the goods were vised in Aero-Space application for strategic purposes will have no bearing on the classification of the goods and the applicability of the exemption notification.
11. Taking all the relevant considerations into account, we do not find any infirmity in the view taken by the Collector, Customs (Appeals) in this appeal and the appeal is rejected.