Customs, Excise and Gold Tribunal - Delhi
Mec India Ltd. vs Collector Of Customs And C. Ex. on 31 December, 1993
Equivalent citations: 1994(51)ECR91(TRI.-CHENNAI)
ORDER S.D. Mohile, Member (T)
1. Heard both sides. All these appeals deal with the same product and hence these have been heard together and are being decided by a common order. There are two issues involved; (i) whether the 'Additional Collector' could exercise the power of 'Collector' under the proviso to Section 11-A of demanding duty short-levied beyond six months; and (ii) whether the product Madhur T.V. was entitled to the concessional rate under Serial No. 18 of Notification No. 87/89-C.E., dt. 1-3-1989.
2. As regards the second issue the stand of the Department is that the T.V. was combined with a sound recording/repreducing apparatus, namely, stereo cassette recorder. The plea of the appellant is that the said cassette player was merely supplied free along with the T.V. but could function independently and was not 'combined' with the T.V.
3. The learned Advocate handed over written propositions in support of the two pleas which are reproduced below for facility of reference:
"An Additional Collector can acquire a statutory status of a Collector and of an adjudicating authority to pass any order or decision under the Central Excise Act only through a notification either under Section 33 issued by the Central Govt. or under Rule 4 by the CBEC specifying thereunder the power as well as the territorial jurisdiction.
CASE-LAW
1. 1988 (37) E.L.T. 347 (Cal.) in the case of Bansal Industries Gases (Bihar) Ltd., v. CCE (paras 7 & 8) (B) PROPOSITION An Additional Collector could exercise powers of a Collector under the Rules, if specifically so delegated by the Collector under Rule 5 or a particular rule with reference to a part or whole of his territorial jurisdiction.
(C) PROPOSITION An Additional Collector can be a Collector to exercise quasi-judicial powers of adjudication under Section 33(a) read with Section 2(a) only if defined to be so in the Act but not in the Rules, and that too without any condition, like in the case of the Customs Act.
CASE-LAWS
1. AIR 1968 All. 87 in the case of Jawahar v. State (para 4).
2. 1989 (40) E.L.T. 3 (Bom.) in the case of Atlas Exporters v. K. V. Irniraya, ACCIE (para 13).
(D) PROPOSITION A definition given under the Rules cannot be imported into the Act, particularly when quasi-criminal powers of imposing a penalty and confiscating goods is only contained in the Act but not in the Rules. A definition given under the Act shall apply to the Rules but not vice versa.
(E) PROPOSITION Only such letter of the Board (Dated 30-12-1985) can be used to ascertain the correct exposition of amendment law dated 27-12-1989 which is contemporary and not the one (dated 7-4-1989) which was issued by the Board 2J/2 years after the amendment.
CASE-LAWS
1. AIR 1981 SC 1922 in the case of K.P. Varghese v. ITO (para 11).
2. 1988 (38) E.L.T. 564 (SC) in the case of CCE v. Andhra Sugar Ltd., (para 5)
3. 1988 (38) E.L.T. 741 (SC) in the case of CCE v. Park Export Pvt. Ltd. (paras 11 and 15).
(F) PROPOSITION A legal fiction is created for some definite purpose and therefore must be limited to that purpose and should not be extended beyond that limit.
CASE-LAW
1. (1985) 155 ITR 711 (718) SC in the case of CIT., Kanpur v. Mother India Refrigeration India Pvt. Ltd.
(G) PROPOSITION An Additional Collector is admittedly an officer subordinate to the Collector (unless notified otherwise by the CBEC or the Central Govt. with reference to a particular Section or a rule & given territorial jurisdiction).
CASE-LAWS
1. Refer various notifications issued by various Collectors under Rule 5.
2. Board's letters dated 30-12-1985 and 10-6-1986.
(H) PROPOSITION Whatever the legislature had wanted that a definition under the Rules was also to apply to the Act, it made it clear like in the case of Rule 2 (XIVB) (b) (IV). Also compare Rule 2(ii) (B) with rules 18(3), 69, 2084, 210A to see the difference. While in Rule 2(ii) (B), expression 'rules' has been used, in the other rules "The Act or these rules" or "the Act or under the rules have been used.
(I) PROPOSITION Provisions and definitions under a rule cannot be accorded the same status as the provisions of the Act with effect from 19-5-1973 by virtue of Section 4 of the Central Excises and Salt Act, 1973 (22 of 1973).
CASE-LAW
1. 1991 (17) ETR 434 (Trib.) in the case of Meghmani Dyes and Intermediates v. CCE (para22).
1. DICTIONARY MEANING OF THE WORD 'COMBINED' on PAGE 143 OF COLLINS COBUILD ESSENTIAL ENGLISH DICTIONARY.
COMBINE "If someone combines two activities, they do them both at the same time. If you combine two or more things or if they combine they exist together.
COMBINED "If someone or something has one quality or feature combined with another, they have both those qualities or features.
2. DICTIONARY MEANING OF THE WORD 'COMBINED' ON PAGE 412 IN THE WORD BOOK DICTIONARY VOLUME ONE A-K PUBLISHED BY WORLD BOOK. INC.
COMBINED joined together, united, done by groups, persons, or things acting together.
3. Words & Phrases Permanent Edition Vol. 7A published by St. Paul. Minn. West Publishing Co.
COMBINED The word "Combined" means jointly.(page 368)
4. During the hearing the sample of the Stereo Cassette Recorder was played to demonstrate that it could function independently.
5. Learned JDR produced a letter from the concerned Asstt. Collector which stated that the sample now produced was not the same which was cleared during the relevant periods and that the same had been modified to get A over the objection from the Department. Learned JDR reiterated the Orders-in-Original Original.
6. The first issue, namely, whether the 'Additional Collector' 'Collector' for the purpose of adjudication under proviso to Section 11A been settled by the Larger Bench deciding that the Additional Collector was Collector for the above purpose.
7. As regards the second issue the relevant extracts from one of the Adjudication Orders are reproduced below:
"The model is basically designed in such a way that the cassette player, which is sound reproducing apparatus is placed in cavity specially designed to house the same. The T.V. receivers and cassette players are, therefore, combined in the same housing. I do not accept party's contention that the cavity is only a left over portion between speakers and that it is covered by a hard board and cleared as such, leaving the option to the consumers of fitting the cassette player in the cavity or put anything else there. I find that the set only looks complete and fully finished, if the hard board cover is removed and the cassette player placed there.
Party have also contended that they have been supplying T.V.s direct to the consumers, whereas the cassette players are given to the Head Office for onward transmission to the customers. They have, however, not produced any evidence to substantiate as to how the whole process is carried out. Moreover, for example in one case on 30th Sept., 1990, 4 Colour T.V. 'Madhur' model were cleared vide gate-pass Nos. 362 to 365, as consigned to four individual customers in Delhi. Simultaneously a gate-pass was issued on the same day in the name of M/s. MEC India Ltd. for 4 cassette players. However, the motor vehicle used to transport the T.V.s as well as the cassette players, was the same. It is obvious that cassette players never reached M/s. MEC India Ltd.'s Head Office in New Delhi and were only consigned on papers. The cassette players were actually evidently supplied to the Individual customers alongwith the 'Madhur' model T.V. There are numerous such examples, in fact, where all the cassette players appeared to have been supplied direct to the consumers had never reached the Head Office. Party have also not shown any records as to how the Head Office knew to whom the cassette players were to be supplied free of charge. In cases were T.V.s were sent to the dealers, it would be, in any case, not be known, as to who was the ultimate purchaser of the T.V. and, therefore, entitled for free cassette player."
8. From the above it is seen that not only the T.V. is so designed that the cassette recorder can be fitted in the empty space specifically provided in the same housing, as the T.V., the cassette recorder has also been invariably supplied along with the T.V.
9. On behalf of the appellant it was contended that the Department has not pointed out the single case where the cassette recorder was fitted inside the T.V. at the time of clearance.
10. This may not, in our opinion be necessary, since the Notification makes a distinction between T.V.s combined, inter alia, with sound recording/reproducing apparatus in the same housing, and those not so combined. It is not disputed that the T.V. cabinet has been so designed that the cassette recorder can be housed in the same cabinet. It was also admitted by Mr. D.R. Mehta, Executive Director of the Appellants' Company that the circuitary of the T.V. had been modified to enable the cassette recorder to be combined with the T.V.
11. It is also seen from the catalogue of the said Madhur Model T.V.s that the same has been advertised as "Stereo Sound Television" Stereo HI FI Play Back Audio Amplifier. In the picture of the T.V. Madhur Model (51 cm T.V.) the Stereo cassette player has been fitted in the same housing and two speakers have been displayed on each side of the T.V. As pointed out in the Order-in-Original as the T.V. transmission in India is not on stereo system, the description of the T.V. as "Stereo Sound Television" can only be due to incorporating the stereo cassette player.
12. We, therefore, do not find any reason to interfere with the Orders-in-Original which are correct in law and based upon the facts of the case. The appeals are, therefore, liable to be rejected and are accordingly hereby rejected.