Customs, Excise and Gold Tribunal - Tamil Nadu
Brindha Enterprises vs Commissioner Of Customs on 23 December, 2005
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against Order-in-Appeal C.Cus. 24/2005, dated 27-1-2005 passed by the Commissioner of Customs (Appeals), Chennai.
2. The appellant imported lead covered copper cable relay scrap for the purpose of jobbing under Notification No. 32/97-Cus., dated 1-4-1997. In terms of the exemption Notification the appellants followed the Customs (IDCRDMEG) Rules, 1996 by taking registration with the Central Excise and had also executed a bond under the said Rules. The lower authority denied the benefit of Notification No. 32/97-Cus. on the ground that the process undertaken by the appellants would not amount to jobbing as given in Exim Policy 2002-2007. The appellant actually segregates the coating in the imported cable and the metal portion of the cable. The segregated coating and metal are re-exported in terms of the Notification. For this purpose the appellants received job charges. The Commissioner (Appeals) upheld the order of the lower authority. The main reason for denying the benefit of the Notification is that the mere segregation in the instant case does not amount to jobbing as there is no manufacturing activity or processing to complete the manufacturing activity. The appellants strongly challenged the findings of the lower authorities. Hence they have come before this Tribunal for relief.
3. Shri S. Murugappan, Id. Advocate appeared for the appellants and Smt. R. Bhagya Devi, SDR for the Revenue.
4. Ld. Counsel urged the following points.
(i) As per the policy "Jobbing" means processing or working upon of raw materials or semi-finished goods supplied to the job worker so as to complete a part of the process resulting in the manufacture of finishing of an article or any operation which is essential for the aforesaid process. Similarly the expression, raw material is defined in the same policy as (i) basic material which are needed for the manufacture of goods but which are still in a raw natural unrefined or unmanufactured state and (ii) for a manufacturer any materials or goods which are required for his manufacturing process whether they have actually been previously manufactured or are processed or are still in a raw or natural state. From the above it will be clear that the following will the implication.
(a) jobbing can be processing or it can bed merely working upon the items.
(b) The items to be worked upon can be raw materials or semifinished goods.
(c) The processing or working undertaken by the jobbers can be to complete the process of manufacture or finishing of an article. It can also be only for doing a part of the above process.
(d) The result of the processing can be manufactured it can also be merely finishing of an article. The processing can also be any operation essential for the above. In view of the above the Original authorities' conclusion that jobbing cannot be a part process is erroneous. Nowhere in the Notification it is mandatory that the processes should result in complete manufacturing.
(ii) The respondent's reliance on several decisions of the Supreme Court on the scope of the term manufacture is not relevant at all.
(iii) The respondent has observed in the Order-in-Appeal that they have produced the certificate in form Annexure III under Customs (IDCERDMEG) Rules, 1996. As such the appellants are rightly eligible for the benefit. It is to be noted that these rules apply even to production of commodities which are not excisable. Thus there is no need to that there should be manufacture as per Central Excise law to avail the benefit under these Rules.
(iv) The respondents has observed at the fag end of the impugned order that in the case of Research Foundation of Science Technology and Natural Resources Policy v. UOI 2005 (192) E.L.T. 8 (S.C.) and Board's Circular as specified under Section 8 of the Hazardous Waste (Management handling) at 1986 this scrap which emerges are prohibited. How this case is relevant to the issue under consideration is not all explained.
(v) In view of the above submissions the appellant is rightly entitled for the benefit of Notification No. 32/97.
4. The Id. SDR reiterated the order-in-appeal.
5. We have perused the connected records. The Notification 32/97-Cus., dated 1-4-97 provides exemption to goods imported for execution of an export order for jobbing. In this Notification "goods" means raw materials, components, intermediate, semi-finished goods, consumables, parts, packing materials including hangers for garments, patterns, drawing, jigs, tools, fixtures, moulds, tackles, instruments, and computer hardware and software as are directly related to the export order and supplied free of cost by the foreign buyer. The main condition for duty free import under this Notification is that the goods imported including resultant product are re-exported to the supplier of the goods within six months from the date of clearance. Further, the goods imported should be for execution of an export order placed on the importer by the supplier of goods for jobbing. From the definition of jobbing given in the Exim Policy it cannot be inferred that the jobbing process should necessarily result in a complete manufactured article. Jobbing can be a part of the process. In the case at hand the appellants segregate the outer insulation portion from the metallic portion of the imported cables. Both the resultant products are exported. In our view the activity carried out by the appellant it conforms to the definition of jobbing as given in the Policy. The lower authorities' interpretation that the jobbing should necessarily result in a manufactured product is not correct. As per the Notification the jobbing should be undertaken in accordance with the procedure set out in Customs (IDCRDMEG) Rules, 1996. It is not the Revenue's case that the appellants did not follow the procedure set out in the above Rules. The Commissioner (Appeals) reference to decision regarding hazardous waste is beyond the scope of the show cause notice and also not relevant as the appellant is exporting the segregated material in entity. In view of our above observation, the impugned order has no merit. Hence, we allow the appeal with consequential relief.
(Order dictated and pronounced in open Court)