2006(07)LCX0268

In the Customs, Excise & Service Tax Appellate Tribunal, Bangalore

Dr. S.L. Peeran, Member (Judicial) and Shri T.K. Jayaraman, Member (Technical)

Kitex Garments Ltd.

Versus

Commissioner of Customs (Appeals), Cochin

Final Order No. 1273/2006 dt. 27.7.2006 in Appeal No. C/361/2004

Cases Quoted -

CC, Bangalore vs. Maestro Motors Ltd. 2004(12)LCX0006 Eq 2004 (065) RLT 0780 (SC)-Relied on [Paras 2,4]

Indian Airlines, Calcutta vs. CC 1988 (038) ELT 679-Relied on [Paras 2,4]

Advocated By -

Shri V. Giri, Adv. for Appellant
Shri R.K. Singla, JCDR for Respondent

Per Dr. S.L. Peeran :

This appeal arises from Order-in-Appeal No. 107/2004 dated 4.6.2004 passed by the Commissioner (A) affirming the Order-in-Original No. 4/2004 dated 15.2.2004 passed by the Deputy Commissioner of Customs (Imports), Cochin rejecting the prayer for grant of the benefit of Notification No. 21/2002 dated 1.3.2002 as amended in respect of plastic bags which has been embossed with the words "Bags Made in China". The authorities below have concluded that embossing cannot be treated as printing. The Notification granted benefit to tags, labels, printed bags, stickers, belts, buttons or hangers imported by bonafide exporters. The appellant's contention in terms of Note 2 to Chapter 49 of the First Schedule to the Customs Tariff Act, 1975, is that the term "printed" includes "embossing". They have also referred to Shorter Oxford English Dictionary, 3rd Edition which defines the meaning print to include the word embossed also. However, this plea has been rejected.


2. The learned Counsel's simple argument is that once the term has been understood in a particular way in terms of the CTA Tariff Note, then that interpretation should be applied for interpreting the terms of the Notification also, as held by the Supreme Court in the case of CC, Bangalore Vs. Maestro Motors Ltd. - 2004(12)LCX0006 Eq 2004 (065) RLT 0780 (SC)=2004(12)LCX0006 Eq 2004 (174) ELT 0289 (SC). He also refers to the Larger Bench judgment of the Tribunal rendered in the case of Indian Airlines, Calcutta Vs. CC -1988 (038) ELT 679 wherein a similar proposition has been laid down. He submits that embossing is nothing but printing and the rejection of the benefit of Notification to the exporter of garments, is not justified.


3. The learned JCDR distinguishes the judgments referred to by the learned Counsel and contended that printing refers only to printing made through printing machine and embossing cannot be considered as printing. The Note 2 to Chapter 49 although refers to embossing within the term of printing, that definition cannot be applied to the term printing used in the impugned Notification. He submits that the impugned order is correct and should be upheld.


4. On a careful consideration, we notice that Note 2 to Chapter 49 has clearly indicated that the term "printing" includes embossing. The same meaning has been given in the Shorter Oxford English Dictionary, 3rd Edition, therefore, the ratio laid down by the Supreme Court in the case of CC Vs. Maestro Motors Ltd. (supra) and the Larger Bench judgment of the Tribunal in the case of India Airlines (supra) would clearly apply to the facts of the case. The meaning given to the term can be read while interpreting the words in a Notification as held in the Apex Court ruling. Portion of Para 9 of the said judgment is reproduced herein below.

9. The question then arises as to whether M/s. Maruti Udyog Ltd. is entitled to benefit of Notification No. 29/83. The said Notification reads as follows:

"In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest to hereby exempt components (including components of fuel-efficient motor cars in semi-knocked down packs and completely knocked down packs) required for the manufacture of fuel-efficient motor car of engine capacity not exceeding 1000 cubic centimeters from:-

(a) So much of the duty of customs which is leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), as is in excess of the amount calculated at the rate of 25% ad valorem; and

(b) The whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act.

Subject to the following conditions, namely:-

(i) the exemption contained herein shall be applicable only to those components (including components of fuel-efficient motors cars in semi-knocked down packs and completely knocked down packs) which are covered by lists certified by an officer not below the rank of an industrial Advisor or Additional Industrial Adviser in the Directorate General of Technical Development and an Officer not below the rank of a Joint Secretary in the Ministry of Industry (Development of Heavy Industry) to be required for the manufacture of fuel efficient motor cars of engine capacity not exceeding 1000 cubic centimeters;

(ii) the importer products evidence to the Assistant Collector of Customs to the effect that the said components (including components of fuel-efficient motor cars in semi-knocked down packs and completely knocked down packs) have been imported by such importer under a programme duly approved by the Ministry of Industry (Department of Heavy Industry) and the Industrial Adviser or the Additional Industrial Adviser of the Directorate General of Technical Development in the Ministry of Industry for the manufacture of fuel efficient motor cars of engine capacity not exceeding 1000 cubic centimeters; and

(iii) the importer shall, within such period as the Asst. Collector of Customs may specify in this behalf, produce a certificate from the Asst. Collector of Central Excise in whose jurisdiction the factory manufacturing such fuel-efficient motor cars is situated to the effect that such imported components (including components of fuel-efficient motor cars in semi-knocked down packs and completely knocked down packs) have been used in the manufacture of fuel-efficient motor cars of engine capacity not exceeding 1000 cubic centimeters.

Explanation. - For the purpose of this notification, "fuel efficient motor car" in respect of a motor car of engine capacity not exceeding 1000 cubic centimeters means a motor car which is certified to run not less than 20 kilometers per liter of petrol by an officer not below the rank of a Joint Secretary in the Ministry of Industry (Development of Heavy Industry) on the basis of the tests (hereinafter referred to as the fuel-efficiently test) carried out by the vehicle Research Development Establishment of the Ministry of Defence, Ahmednagar (Maharashtra) or the Automotive Research Association of India, Pune (Maharashtra), having regard to the following, namely:-

(a) the fuel-efficiency test shall be conducted with a pay load of 300 kilograms;

(b) the fuel-efficiency test shall be conducted using petrol having an octone level not exceeding 87; and

(c) the fuel efficiency test shall be carried out on a selected level test track at a steady speed of 50 kilometers per hour for a minimum stretch of one kilometer and the average of 20 runs, comprising of 10 runs in each direction shall be taken for carrying out the test and the test figures shall be corrected to sea level and to +25% C ambient temperature.


2. This Notification shall be in force upto an inclusive of the 24th day of February 1988."

It is settled law that to avail the benefit of a notification a party must comply with all the conditions of the Notification. Further, a Notification has to be interpreted in terms of its language. If in the Notification exemption is granted with reference to tariff items in the First Schedule to the Customs Tariff Act, 1975, then the same Rules of Interpretation must apply. In that case the goods will be classified, even for the purposes of the Notification, as they are classified for purposes of payment of customs duty. But where the language is plain and clear effect must be given to it. In this Notification what is exempted is components, including components of fuel efficient motor cars in semi-knocked down packs and completely knocked down packs. Undoubtedly, for purposes of levy of custom duty, by virtue of Interpretative Rule 2 (a), the components in a completely knocked down pack would be considered to be cars. But in view of the clear language of the Notification the components including components in completely knocked down packs are exempted. Effect must be given to the wording of the Notification. Thus components in completely knocked down packs would get the exemption under this Notification, even though for purposes of classification they may be considered to be cars, (emphasis supplied by us)

Applying the ratio of the above cited judgments, the benefit of the Notification is required to be extended to the appellants. The impugned order is not legal and proper and the same is set aside by allowing the appeal with consequential relief, if any.

Pronounced and dictated in open Court.

Equivalent 2006 (077) RLT 0519 (CESTAT-Ban.)

Equivalent 2007 (208) ELT 0137 (Tri. - Bang.)