1997(02)LCX0036
IN THE CEGAT, COURT NO. II, NEW DELHI
S/Shri S.L. Peeran, Member (J) and Shiben K. Dhar, Member (T)
BISLERI BEVERAGES PRIVATE LIMITED
Versus
COLLECTOR OF CUSTOMS, BOMBAY
Final Order No. C/342/97-B2, dated 18-2-1997, in Appeal No. C/2698/90-B2
Cases Quoted
Collector v. Bharat Heavy Electricals Ltd. — 1983(03)LCX0042 Eq 1987 (031) ELT 0534 (Tribunal) [Para 2]
Jain Engineering Co. v. Collector — 1987 (32 ) ELT 0003 (S.C.) [Para 3]
Ecoplast Pvt. Ltd. v. Collector — 1992 (060) ELT 578 (Tribunal) [Para 3]
Appraiser, Madras Customs v. Tamil Nadu Newsprint Papers Ltd. —
1988(01)LCX0040 Eq 1988 (036) ELT 0272 (Mad.) [Para 3]
Collector v. Parle Exports Pvt. Ltd. — 1988(11)LCX0047 Eq 1988 (038) ELT 0741 (S.C.) [Para 4]
Union of India v. Jalyan Udyog — 1993(09)LCX0040 Eq 1993 (068) ELT 0009 (S.C.) [Para 4]
Abrol Watches Pvt. Ltd. v. Collector — C. Appeal No. 3121 of 1990
decided on 17-10-1996 [Para 6]
Advocated By : S/Shri M.P. Baxi, R.C. Pandey and V. Rana, Advocates, for the Appellants.
Shri K.K. Jha, SDR, for the Respondent.
[Order per : S.L. Peeran, Member (J)]. - This appeal arises from the Order-in-Appeal dated 28-11-1989, passed by the Collector of Customs (Appeals), Bombay. The question that arises for consideration in this appeal is the correct classification of imported item described in the Bill of Entry as “Cup Noodle Making plant for dried Cup Type Noodles production capacity 50,000 PCS per 8 Hours”. The appellants had imported the said goods under OGL, Appendix I, Part B, Item No. 12(i)(5) of the Import Export Policy, 1985-88, which reads as under : -
“12. (i) Food processing machines, the following :-
(v) Macroni, noodles, sphagetti, vermecilli and other paste products manufacturing machinery."
The department did not raise nay dispute as regards the import of the item under the said OGL. The appellants had imported the said machinery under the project import. The same was assessed as project import in terms of the Chapter Note 1 and 2 of Chapter 98 and thus it was classifiable under Heading 9801 of the Customs Tariff Act along with benefit of Notification No. 132/85 which exempted customs duty in excess of 45% ad valorem. The appellants thereafter filed a refund application claiming the benefit of Notification No. 125/86 as amended by 225/86-Cus., 95/87-Cus. and 49/88-Cus. The Notification No. 125, dated 17-2-1986 came into force with effect from 28-2-1986 and the Assistant Collector in the order-in-original has noted that the date of entry inwards of the vessel in this case was 26-2-1988 and the Bill of Entry was noted on 22-2-1988 i.e. prior to the date form which the Notification came into force. Therefore, Notification No. 125/86-Cus. cannot be extended to these goods. He has further observed that besides, goods forming part of a contract and had been assessed under Heading 98.01 lose their identity and cannot be classified on merits under any other heading of the Customs Tariff. He has held that any differential rate of duty prescribed by any other exemption Notification on individual goods (other than those for goods specifically covered under Tariff Heading 98.01) will not come into play for the assessment of project goods and on that reasoning he rejected their refund claim.
2. The appellants agitated before the Collector their claim on the ground that the Assistant Collector had confused the year 1986 with the year 1988 and had disallowed the same on that ground. The other arguments made before the Learned Collector was that the classification of goods under Chapter Heading 98.01 does not bar for the importer to claim the benefit available to the imported goods in any other Notification. In this context, a reference was made to the preamble of Notification No. 132/85-Cus. which had been granted to them wherein it had been stated as follows :-
“Nothing contained in this notification shall effect the exemption granted under any other notification of the Government of India for the time being in force from the duty of customs, Schedule in respect of the goods referred to in this notification............”
Reference was also made to Note 1 and 2 of Chapter 98 which laid down that “this Chapter is to be taken to apply to all goods which satisfy the conditions prescribed therein, even thought they may be covered by a more specific heading elsewhere in this Schedule”. The Note 2 had laid down that the 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 (52 of 1962) and expressions used in this heading shall have the meaning assigned to them in the said regulations..... The appellants have also relied on the ratio of the judgment rendered in the case of Collector of Customs v. Bharat Heavy Electricals Ltd. as reported in 1983(03)LCX0042 Eq 1987 (031) ELT 0534 (Tribunal) = 1988 (1) ETR 483 wherein in para 5 of the judgment the Tribunal had held that there is no bar to avail more than one benefit unless specifically barred. The Collector in his brief order has observed that while Notification No. 132/85 as amended by Notification No. 103/86 etc. does not bar the benefit available under any other Notification, Notification No. 125/86 extends the benefit to only those goods which are classified under Chapter 84 or Heading Nos. 39.20, 39.21 or 39.23. Since the goods in the present case have been classified under Heading 9801, the appellants are not entitled to the concessional assessment under Notification No. 125/86.
3. Arguing for the appellants, Shri M.P. Baxi, the Learned Advocate submitted that the item admittedly fall under Chapter 84 and hence Note 1 and 2 of the Chapter 98 was applied for classification under Chapter 98. It is his submission that Chapter 98 would come into force and be applicable only if it satisfies that the goods were imported for project import and such other conditions laid down therein and it should be classifiable under Chapters mentioned in the Note to Chapter 98. Thus it follows that the department had not challenged the original classification of the goods under Chapter heading 8438.10 which is a correct classification on merits. It is only by legal friction the goods get classified under Chapter 98 on account of the goods having been imported under project import. It is his submission that the Notification under which the benefit had been granted i.e. Notification No. 132/85 it clarifies that nothing contained in the Notification shall affect the exemption granted under any other Notification. Therefore, it is his submission that the legislature has clearly intended to grant the benefit to the item if it fell within the said Chapter and mere fact of the goods having been classified under Chapter 98 being a project import should not be a bar for granting the benefit available in any other Notification. He relied on the following judgments :-
1. Jain Engineering Co. v. Collector of Customs - 1987 (032) ELT 3
2. Ecoplast Pvt. Ltd. v. Collector of Customs - 1992 (060) ELT 578
The Learned DR pointed out that one judgment of Madras High Court in the case of Appraiser, Madras Customs v. Tamil Nadu Newsprint Papers Ltd. as reported in 1988 (036) ELT 272, was against the importer. However he tries to distinguish the same by pointing out that Notification No. 132/85 itself recognises the fact that nothing contained in the Notification shall affect the exemption granted under any other Notification, which fact was also not so in the case dealt with by the Madras High Court.
4. The Learned DR arguing for the Revenue submitted that the Chapter 98 is a peculiar Chapter created by the Parliament for specific purpose. It is a special creation of the Statute and an importer opting for project import has voluntarily accepted the benefit as available under Chapter 98 even if the goods were classified elsewhere in the Customs Tariff. Thus, Chapter 98 overrules the basic classification of the imported item, and grants the benefit under it. He pointed out to the speech of the Finance Minister when introduced Chapter 98 in the Parliament which clearly discloses the mind of the legislature that the benefit which flow from Chapter 98 in excessive and once that is in operation, the party cannot chose to seek the benefit available in any other Chapter Heading which incidently, the item may get classified on merits. The Learned DR relied on the ratio laid down in this context on the importance of the Finance Ministers’ speech to know the mind of the legislature as `contemporaneous exposito’ as laid down in the case of Collector of Central Excise v. Parle Exports Pvt. Ltd. as reported in 1988(11)LCX0047 Eq 1988 (038) ELT 0741 (SC). He also relied on the judgment rendered in the case of Union of India v. Jalyan Udyog as reported in 1993 (068) ELT 9 para 19 to 25.
4. We have carefully considered the submissions made by both the sides and have perused the judgments.
5. After the hearing was completed, the Bench has come to know that the Hon’ble Supreme Court dealt with an identical matter on a similar issue as in the case of M/s Abrol Watches Pvt. Ltd. v. Collector of Customs, Bomaby in Civil Appeal No. 3121 of 1990 and by its judgment dated 17th December, 1996 held that the benefit that is available in a Notification covering Chapter 98 does not bar the importer from claiming the exemption Notification available to the imported items in any other Notification which covers the goods if assessed on merits. The Hon’ble Supreme Court has not approved the Madras High Court’s judgment noted supra, which had been pressed into service to the Revenue. The judgment rendered by the Hon’ble Supreme Court is extracted herein below :-
“The assessee imported horological machinery. It was imported to be installed in a watch making factory. The import was treated as a project import within the meaning of Chapter 98 of the First Schedule of the Customs Act and the goods were cleared under Heading 98.01.
To project imports an Exemption Notification dated 19th April,1985, as amended from time to time, applied. At the relevant time, such project imports were exempted from the Customs duty leviable thereon in excess of 20% ad valorem. The Notification added,
“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 said First Schedule in respect of the goods referred to in this notification.”
There was another Exemption Notification, which was dated 28-2-1985 as amended on 1-6-1985, which granted exemption from Customs duty to horological machines and testing equipments for manufacture or assembly of mechanical and quartz analog wrist watches and parts thereof over and above 10% ad valorem.
The assessee claimed the benefit of the second of the two Notifications referred to above (now called “the horological notification”). The Tribunal took the view that, since the assessee had chosen the classification under Chapter 98 as a project import, the assessee was not entitled to the benefit of the larger exemption given by the horological notification. The Tribunal relied upon a judgment of the Madras High Court in this behalf.
The horological notification exempted, as aforesaid, horological machines, etc., without specifying the heading under which they fell. Therefore, provided the machines were horological machines, they were entitled to the benefit of the exemption thereunder. The Madras High Court’s judgment dealt with a case where the assessee claimed the benefit of an exemption notification which specified a particular heading, and it was held that since the assessee had chosen to classify his imports under that particular heading, he could not be granted an exemption that applied to another heading.
The clause that we have quoted from the project imports notification clearly specified that the exemption thereunder granted would not affect the exemption granted is respect of Customs duty under any other notification. The two notifications read together, therefore, leave us in no doubt that the view taken by the Tribunal was erroneous. Though the assessee had cleared his goods under Heading 98.01, it was, for the reasons aforestated, entitled to the benefit of the exemption given by the horological notification.
The appeal is allowed. The order under appeal is set aside. Refund shall be made in accordance with law.
No order as to costs."
6. In view of the judgment of the Hon’ble Supreme Court as noted above it is not necessary for us to give any findings but to respectfully follow the judgment. The Revenue has not disputed about the applicability of the Notification No. 125/86. The points raised by the Assistant Collector that the goods had been cleared prior to the coming into effect of this Notification has already been set aside by the Collector (Appeals) on the ground that the Assistant Collector had wrongly confused the year 1986 with the year 1988. As regards the applicability of the Notification No. 125/86 on merits, no dipute on its applicability otherwise was raised by the lower authorities or by the Learned DR while arguing the matter. We have also perused the said Notification. The Sl. No. 2 of the said Notification described the goods as “Macoroni noodles, sphagetti, vermicelli, manufacturing machinery”. The description in the Notification covers the goods in question and therefore, the appellants would be entitled to the Notification in terms of the law laid down by the Hon’ble Supreme Court in the above noted judgment. In that view of the matter, we set aside the impugned order and allow the appeal.
Equivalent 1997 (92) ELT 429 (Tribunal)