Customs, Excise and Gold Tribunal - Delhi
Ecoplast (P) Ltd. vs Collector Of Customs on 24 February, 1992
Equivalent citations: 1992(60)ELT578(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. The appellants are engaged in the manufacture of plastic films. They imported one Multi-layer Extruding Machine along with standard spares. Since they intended to avail the concession applicable to Project Imports under Heading 9801 of the Customs Tariff, they applied for the registration of the import contract under the Project Imports Regulations, 1986. After registration the Customs Authorities allotted the necessary registration number to the contract. Under Notification No. 132/85-Cus., dated 19-4-1985 goods imported for industrial plants and projects falling under Heading No. 98.01 of the First Schedule of the Customs Tariff Act, 1975 were exempt from the basic duty of customs in excess of 30%. Multilayer Extruding Machines falling under Chapter 84 of the First Schedule to the Customs Tariff Act, being specifically covered by Notification No. 125 of 1986, the imported machine was assessed to basic duty of 10% under this notification in preference to the basic duty of 30% that would have been attracted in terms of Notification No. 132 of 1985 and the essential maintenance spares imported along with the machine were assessed on merits under the relevant headings of the tariff. After clearance of the goods the appellants claimed refund of differential duty on the grounds that the maintenance spares imported along with the machine were assessable under the Project Import Heading 98.01 at 55% ad valorem. By the impugned order dated 3-12-1990 the Collector rejected the claim on the ground that the appellants had opted for payment of duty on the main equipment viz. the Multilayer Extruding Machine under the Project Import Heading 98.01 hence, the spares were not eligible for assessment under Heading 98.01.
2. On behalf of the appellants, the learned Advocate, Shri A.N. Haksar with Advocates Shri Rajesh Kumar and Shri Nitin Mehta appeared before us. Shri Haksar stated that Notification No. 132-Cus., dated 19-4-1985 which exempted goods falling under Project Import Heading 98.01 from the basic duty in excess of 30% ad valorem also provided that nothing contained in the Notification was to affect the exemption granted in respect of the goods referred to in the Notification under any other notification. He contended that in view of the specific provision in Notification No. 132/85-Cus., dated 19-4-1985 even when greater benefit under Notification No. 125-Cus., dated 17-2-1986 was availed, the machine in question continued to be covered by the Project Import Heading No. 98.01 and the essential maintenance spares imported along with the machines were assessable under Heading 98.01 as provided under that heading. In support of his arguments, Shri Haksar quoted the following decisions :-
1. Chowgule Matrix Hobs Ltd., Bombay v. Collector of Customs, Bombay reported in 1987 (31) E.L.T. 736 (Tri.)
2. Collector of Customs, Madras v. Bharat Heavy Electricals Ltd., Madras reported in 1987 (31) E.L.T. 534 (Tri.)
3. Raman Boards Ltd. v. C.C.E., reported in 1988 (36) E.L.T. 615.
4 Collector of Central Excise v. Balraj Paper and Straw Boards Pvt. Ltd., reported in 1990 (47) E.L.T. 139.
3. On behalf of the Revenue, the learned JDR Shri M.S. Arora, contended that the main machine imported by the appellants was assessed in terms of Notification No. 125-Cus., dated 17-2-1986 which exempted goods falling under Chapter 84 of the First Schedule to the Customs Tariff Act from the payment of basic duty of customs in excess of 10% ad valorem. He argued that the main machine having been classified under Chapter 84 the accompanying maintenance spares could not be deemed as covered by the Project Import Heading 98.01. In support of his contentions he placed reliance on the Madras High Court judgment in the case of Appraiser, Madras Customs v. Tamil Nadu Newsprint Papers Ltd. reported in 1988 (36) E.L.T. 272.
4. We have considered the submissions made by both sides and examined the records of the case. It is seen that the short point that arises for consideration on this case is whether any goods falling under the Project Import Heading 98.01 of the First Schedule to the Customs Tariff Act would continue to be covered by Heading 98.01 even when exemption under any Notification specifically covering the goods as falling under any heading other than 98.01 is availed.
5. It is seen that Note No. 2 of Chapter 98 of the First Schedule to the Customs Tariff Act, 1975 provides that Heading 98.01 is to be taken to apply to all goods which are imported in accordance with the regulations made under Section 157 of the Customs Act, 1962. It is an admitted fact that the appellants had imported the Multilayer Extruding Machine and the accompanying essential maintenance spares under a contract which on an application by the appellants was registered by the proper officer in accordance with the Project Imports Regulations, 1986. Hence, but for the availment of the concession under Notification No. 125-Cus., dated 17-2-1986 in respect of the imported machine there would have been no dispute as regards the assessment of the machine as well as the accompanying maintenance spares upto 10% of the value of the machine under Heading 98.01 of the Tariff read with Notification No. 132-Cus., dated 19-4-1985 under which goods falling under Heading No. 98.01 were exempt from duty in excess of 45% ad valorem. As seen from the following extract from the Notification No. 132-Cus., dated 19-4-1985 the exemption in respect of any goods covered by the Heading 98.01 which are specified in the Notification was not to affect the exemption available to those goods under any other Notification :-
"Nothing contained in this Notification shall affect the exemption granted under any other Notification of the Government of India for the time being in force from the duty of customs specified in the First Schedule in respect of the goods referred to in the Notification."
It follows that in respect of goods which on account of having been imported in accordance with the Project Imports Regulations, 1986 are classifiable under the Project Import Heading 98.01 the importer has the option to avail in respect of the goods, any other exemption which may be more beneficial than the concession under Notification No. 132-Cus., dated 19-4-1985. This view finds confirmation from the Tribunal's decision in the case of Chowgule Matrix Hobs Ltd., Bombay v. Collector of Customs, Bombay reported in 1987 (31) E.L.T. 736, from which the relevant extracts are reproduced below :-
"We have given our careful thought to the matter, and we are of our considered view that in view of the position stated by the learned SDR, and also considering the wording of the notification under reference, on first principles, we are of the confirmed view that the Assistant Collector was certainly in error in considering that the import having been effected with reference to Project Import Regulations, as covered by Tariff Item 84.66, which gave concession to the importers, the appellants were not further entitled to the benefit of concessional notification inasmuch as we do not see any express or implied restriction in the said notification. The Appellate Collector had certainly gone wrong in rejecting the appeal on a totally new ground, and, in any case, that view is also not sustainable, as the law stands, in view of the clear provisions of Section 15(1)(b) of the Customs Act."
6. In the case of Collector of Customs, Madras v. Bharat Heavy Electricals Ltd., Madras reported in 1987 (31) E.L.T. 534, the Tribunal had once again held that concessional assessment under Project Import Regulations does not act as a bar to the availment of concession under any other Notification unless it is barred categorically. Paragraph 5 of this decision being relevant is reproduced below :-
"We have carefully followed the arguments of both the sides. We agree with the arguments put forward by Shri Rangaswamy on behalf of the respondents. We are convinced with his statement that the entire presses could not come in one consignment but they had to come in a knocked down condition under four consignments and under four separate Bills of Entry (of course under one contract) for the purpose of convenience. As regards the availing of benefit under Project Import Regulations as well as exemption Notification No. 40/78-Cus. we find no such ground taken in the Show Cause Notice issued by the Government of India. However, since the point was raised during the hearing, we would like to add that there is no bar to availing of more than one benefit unless it is barred categorically. Hence we uphold the orders of the Appellate Collector and set aside the Show Cause Notice issued by the Government of India."
7. The learned Departmental Representative had contended that the imported Multilayer Extruding Machine and the accompanying maintenance spares would not be covered by the Heading 98.01 of the Tariff since the machine had been assessed at the concessional duty in terms of Notification No. 125-Cus., dated 17-2-1986 which covered only the goods which were classifiable under Chapter 84 of the Tariff. In support of his argument he had placed reliance on the decision of the Madras High Court in the case of Appraiser, Madras Customs v. Tamil Nadu Newsprint Papers Ltd. reported in 1988 (36) E.L.T. 272 in which it was held that Heading 84.66 of the Tariff relating to Project Imports could not be deemed as a general heading and in respect of Paper making machinery and component parts thereof imported in terms of a contract registered as per Heading No. 84.66 relating to Project Imports an importer would not be entitled to the benefit of Notification No. 62/83-Cus., dated 1-3-1983 which specifically exempted Paper making machinery and component parts thereof falling under Heading 84.31 from the auxiliary duty payable thereon.
8. As observed by the Hon'ble High Court, it is well settled that when an exemption notification refers specifically to any Heading of the tariff and description of certain goods falling under that Heading, it would not be open to the importer to contend that the goods falling under any other heading would be covered by that notification but as discussed by us earlier, in respect of goods falling under Heading No. 98.01, in view of the specific provision in Notification No. 132-Cus., dated 19-4-1985 an importer can claim the benefit of any other exemption notification. In our view, in this notification, the words 'the goods referred to in this notification' imply that in respect of goods covered by Heading 98.01 even when the benefit of any other notification is availed of, the goods would continue to be covered by Heading 98.01. The ratio of the judgment of the Hon'ble Madras High Court in the case of Appraiser, Madras Custom House Ltd. v. Tamil Nadu Newsprint Papers Ltd. is not applicable in the case before us since Notification No. 132/85 which exempts goods covered by Heading 98.01 provides that the contents of the Notification do not bar the application of any other notification providing for the levy of lower rate of basic duty on the goods covered by Heading 98.01. Under the Heading 84.66 which was relevant to the case before the Hon'ble Madras High Court, there was no notification corresponding to Notification No. 132/85. Further, in the case before the Madras High Court the question for decision was whether Notification No. 62/83 which specifically referred to "Paper Making Machinery and component parts thereof falling under Heading 84.31 would be applicable for determining the auxiliary duty leviable on paper making machinery and component parts thereof when goods falling under Heading 84.66 were specifically mentioned under Notification No. 61/83. Since the goods falling under Heading No. 84.66 were specifically figuring in Notification No. 61/83, it was, correctly held by the High Court that auxiliary duty on the goods was leviable in terms of this Notification.
9. In view of the above discussion, we are of the view that the Multilayer Extruding Machine imported by the appellants in accordance with the Project Import Regulations, 1986 has to be deemed as covered by the Project Import Heading 98.01 even though it was assessed at the concessional rate of duty in terms of Notification No. 125-Cus., dated 17-2-1986. For this reason, in view of the specific provision under Heading 98.01 essential maintenance spares imported alongwith the machine have also to be deemed as covered by Heading 98.01.
10. The appeal is, therefore, allowed with consequential relief to the appellants.