2005(08)LCX0181

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

Shri P.G. Chacko, Member (Judicial) Shri T.K. Jayaraman, Member (Technical)

Dhana Exim

Versus

Commissioner of Customs, Chennai

Final Order No. 1119/2005, Stay Order No. S/681/2005 and Misc. Order No. M/393/2005 dt. 11.8.2005 certified on 24.8.2005 C/PD/224/2004, C/EH/636/2004 in Appeal No. C/361/2004

Cases Quoted -

1. Priyesh Chemicals & Metals vs. CCE, Bangalore, 2000 (038) RLT 0588 (CEGAT-LB)-Referred [Para 2]

Departmental Clarifications Quoted

1. Circular No. 26/2004-Cus. dt. 31.3.2004 issued by CBEC [reported in 2004 (061) RLT M49] [Para 2]

Advocated By -

S/Shri A.K. Jayaraj, Adv. and C.V. Srinivasamoorthy, Consultant for Appellant
Smt. R. Bhagya Devi, SDR for Respondent

Per P.G. Chacko:

There are two applications before us, one seeking waiver of predeposit and stay of recovery in respect of the duty amount and the other praying for early disposal of the appeal. Having examined the records and heard both sides, we are of the view that the appeal should be disposed of at this stage. Accordingly, after dispensing with predeposit and allowing the application for early hearing, we take up the appeal.

2. The short question arising for consideration in this case is whether "Damar Batu" (a resin) imported by the appellants from Indonesia and covered by five Bills of Entry filed in 2002 is classifiable under SH 1301.90 as claimed by the importer or under SH 1301.10 as suggested by the department. After examining the records and hearing both sides we find that, for classification of the item under SH 1301.10 of the first Schedule to the Customs Tariff Act, it has to be shown that power was used in the manufacture of the item. The importer has produced a certificate issued given by the Government of East Java Province of the Republic of Indonesia, certifying that no power was used in the manufacture of the subject goods. This certificate was not accepted by any of the lower authorities, who, therefore, classified the goods under SH 1301.10 on the ground of power having been used in its manufacture.. Ld. counsel for the appellants has relied on the Board's Circular No. 26/2004-Cus. dated 31.3.2004 [reported in 2004 (061) RLT M491 which enabled the importer to prove that no power was used in the manufacture of the goods in the exporting country, by producing a certificate from the Government of that country. The circular, further, observed that the assessment should be kept provisional to enable the importer to adduce such evidence. Ld. Commissioner (Appeals) did not go by this circular, but preferred to rely on the Tribunal's larger bench decision in Priyesh Chemicals & Metals Vs. CCE, Bangalore, 2000 (038) RLT 0588 (CEGAT-LB)=2000(05)LCX0234 Eq 2000 (120) ELT 0259 (Tribunal-LB), wherein it was held that the Central Excise Act and the Rules framed thereunder did not apply to manufacture, abroad, of goods imported into India and, on this basis, the benefit of a Central Excise Exemption Notification was denied to such goods. We find that the Board's circular, which was issued long after the larger bench decision, clarified the legal position correctly. No subsequent decision taking contra view has been cited before us. In the circumstances, the lower authorities ought to have followed the Board's clarification and decided the case accordingly. In this context, we take notice of an order passed by the original authority (Order-in-Original No. 2707/2004 dt. 30.8.2004) in the assessee's own case in respect of a later Bill of Entry covering identical goods imported from the same country. This order rightly followed the above circular of the Board classifying the goods under SH 1301.90 (attracting 'Nil' rate of CVD) on the basis of certificate issued by the Govt. of East Java Province of the Republic of Indonesia. We are told that this order of the Dy. Commissioner has become final.

3. In the result, the impugned order is set aside and this appeal is allowed.

Dictated and pronounced in open Court.

Equivalent 2006 (072) RLT 0161 (CESTAT-Che.)

Equivalent 2006 (193) ELT 0565 (Tri. - Chennai)