2015(11)LCX0133

IN THE CESTAT, EASTERN BENCH, KOLKATA

Dr. D.M. Misra, Member (J) and Shri H.K. Thakur, Member (T)

Tata Chemicals Ltd.

Versus

COMMISSIONER OF CUS. (PORT), KOLKATA

Final Order Nos. A/75665-75673/KOL/2015, dated 17-11-2015 in Appeal Nos. CA/75221-75229/2015-DB

Cases Quoted -

A.K. Enterprises v. Commissioner - 2005(10)LCX0054 Eq 2006 (199) ELT 0067 (Tribunal) - Referred [Para 3.3]
Bayshore Glass Trading Pvt. Ltd. v. Commissioner- 2002(07)LCX0200 Eq 2002 (148) ELT 1243 (Tribunal) - Referred [Para 3.3]
Commissioner v. Nandana International - 2004(10)LCX0269 Eq 2005 (184) ELT 0320 (Tribunal) - Referred [Para 3.3]
Hutchison Max Telecom Pvt. Ltd. v. Commissioner- 2004(01)LCX0170 Eq 2004 (165) ELT 0175 (Tribunal) - Referred [Para 3.3]
Parle Biscuits Pvt. Ltd. v. Commissioner - 2006(03)LCX0114 Eq 2006 (199) ELT 0146 (Tribunal) - Referred [Para 3.3]

Departmental Clarification Quoted-

C.B.E. & C. Instruction F. No. 336/9/2013-TRU, dated 17-12-2013 [Para 3.2]
Commissioner of Customs, Marmagoa Public Notice No. 11/2012, dated 30-12-2012 [Para 3.2]

Advocated By -

S/Shri Ravi Raghavan and T. Chakraborty, Advocates, for the Appellant.
Shri S. Nath, AC (AR),for the Respondent.

[Order per : D.M. Misra, Member (J)]. -

These appeals are filed against Order-in-Appeal No. 491 /CUS(Appg)/KOL(Port)/2014, dated 30-12-2014.


2.1 The factual matrix of the case, necessary to determine the issues raised in the present appeals, are briefly stated as below.

2.2 The appellant had filed 9 Bills of Entry during the period 9-4-2013 to 16-1-2014 declaring the product imported as "Red Fine Standard Grade Mu-rate of Potash (MOP)" in bulk (cargo imported for use as manure 01" manufacture of complex fertilizers) classifying the said product under CTH 3105 20 00 of CTA, 1975. The appellant claimed benefit of Notification No. 12/2012-Cus., dated 17-3-2012 as amended whereunder the rate of Basic Customs Duty (BCD) was 5% against applicable tariff rate; for Additional duty (CVD) they claimed exemption under Notification No. 12/2012-C.E., dated 17-3-2012. While assessing the said Bill of Entry, the Customs authorities has directed payment of CVD at 1% as per Notification No. 12/2012-Cus., dated 17-3-2012 as amended by Notification No. 46/2012-Cus., dated 17-8-2012 and denied the benefit of Notification No. 12/2012-C.E., dated 17-3-2012 as claimed by the appellant.


2.3 Aggrieved by the said assessments, the appellant filed appeal before the Id. Commissioner (Appeals). Since there was delay in disposal of the appeal by the Id. Commissioner (Appeals), the appellant approached the Hon'ble Calcutta High Court by filing the writ petition No. 900 of 2014. The Hon'ble High Court while disposing the writ petition, inter alia, directed the Id. Commissioner (Appeals) to dispose of the appeals preferably by 31st December, 2014. The Id. Commissioner (Appeals) after hearing the appellant rejected their appeal observing that the appellants are not eligible to the benefit of Notification No. 12/2012-C.E., dated 17-3-2012 and required to pay 1% CVD. Hence, the present appeals.

3.1 Ld. advocate Shri Ravi Raghavan appearing for the appellants assailing the impugned order has submitted that the appellant used the imported MOP falling under Customs Tariff Heading 3105 20 00 in the manufacture of NPK fertilizers at their factory at Haldia. He submits that the said manufactured fertilizers attract excise duty @ 1% as they do not avail Cenvat credit on the raw materials. Further he has submitted that there is no bar in availing concessional rate of duty @ 5% in discharging Basic Customs Duty (BCD) under Notification No. 12/2012-Cus., dated 17-3-2012 and CVD at nil rate of duty availing the benefit under Notification No. 12/2012-C.E., dated 17-3-2012. It is their contention that as there was difficulty in the EDI system in accepting both the said Notifications together, the Systems Deptt. of C.B.E. & C. has directed for accepting man-ual Bill of Entry filed by the respective assessees claiming benefit of both exemption Notifications, i.e., 12/2012-Cus. and 12/2012-C.E. in the same Bill of Entry. He has produced the office noting (pages 294 to 351 of Appeal paperbook) recorded in the Customs House, Kolkata, whereunder the officers of the Customs House had opined that the benefit of both the notifications could be claimed by an assessee and there is no embargo in this regard. Further, he has submitted that Section 3(1) of Customs Act, 1962 stipulates that the Additional duty (CVD) leviable on any imported goods shall be equal to the prevalent rate of Central Excise duty leviable on the same product or the similar class of product. The explanation to Section 3(1) also clarifies that the expression "excise duty for the time being leviable on a like article, if produced or manufactured in India" means the excise duty leviable on the product, if the product is manufactured or produced in India. The onlv exception to the explanation is if the imported product is not manufactured or produced in India also then the duty is leviable should be similar to the class of product it belongs to and if there are different rates then the higher rate of duty amount than class of product shall be applicable.

3.2 Referring to Notification No. 12/2012-C.E., dated 17-3-2012, he submits that under Entry No. 127, all products falling under chapter Heading 31 of CETA, 1985, are exempted other than those which are clearly not to be used in the manufacture of other fertilizers whether directly or indirectly or through the stage of intermediate product from payment of any excise duty. Thus, the applicable duty to Murate of Potash (MOP) or Potassium Chloride classifiable under CTH 3105 20 00, attracts nil duty as per said Notification No. 12/2012-CE. Therefore, in view of Section 3(1) of Customs Tariff Act, 1975, the applicable CVD would accordingly be nil. It is his contention that the amending Notification No. 46/2012-Cus., dated 17-8-2012, wherein CVD @ 1% has been levied on MOP is palpably wrong and erroneous inasmuch as Notification No. 12/2012-C.E. already provides nil rate of duty. Referring to the Circular issued by TRU bearing F. No. 336/9/2013-TRU, dated 17-12-2013 the Id. advocate submitted that under the said circular it has been clarified that an importer could avail simultaneous benefit of two exemption notifications with regard to the import of MOP. Further, he has referred to the Public Notice No. 11/2012, dated 30-12-2012 issued by Marmagoa Commissionerate wherein it has been clarified that in case of import of MOP, exemption from BCD is available under Notification No. 12/2012-Cus. and from CVD under Notification No. 12/2012-C.E., in terms of Section 3(1) of Customs Tariff Act, 1975.

3.3 Further assailing the observation of the Id. Commissioner (Appeals) that they could not satisfy the condition of end use of MOP, i.e., used in relation to manufacture of fertilizers, the Id. advocate submitted that no such condition could be read into the exemption Notification No. 12/2012-C.E., dated 17-3-2012. However, despite there being no requirement of end use certificate, the appellant have duly procured the end use certificate from the statutory auditors, a copy of which is enclosed with the appeal memorandum. It is further contended that at no point of time, the department had disputed that MOP imported by the appellant has not been used in the manufacture of fertilizers but sold as such or used elsewhere. The impugned order is, therefore, liable to be quashed on this ground also. Further, the Id. advocate challenging the observation of the Id. Commissioner that they had protested the assessment only in case of one Bill of Entry and not protested against remaining eight Bills of Entry, the Id. advocate submits that filing of appeal, after payment of CVD, itself evident that they did not agree with the assessment denying them the benefit of Notification No. 12/2012-C.E., dated 17-3-2012. In support, he has referred to the following judgments of this Tribunal: -


(1) CC, Chennai v. Nandana International - 2004(10)LCX0269 Eq 2005 (184) ELT 0320 (Tri.-Chennai)

(2) Hutchison Max Telecom Pvt. Ltd. v. CCE, Mumbai - 2004(01)LCX0170 Eq 2004 (165) ELT 0175 (Tri.-Del.)


(3) Bayshore Glass Trading Pvt. Ltd. v. CC, Kolkata - 2002(07)LCX0200 Eq 2002 (148) ELT 1243 (Tri.-Kol.)

(4) AX. Enterprise v. CC, Kolkata - 2005(10)LCX0054 Eq 2006 (199) ELT 0067 (Tri.-Kol.)


(5) Parle Biscuits Pvt. Ltd. v. CC, Mumbai - 2006(03)LCX0114 Eq 2006 (199) ELT 0146 (Tri.-Kol.).


4. Per contra, the Id. AR for the Revenue submitted that the Id. Commissioner (Appeals) has rightly observed that the appellants are not eligible to the benefit of Notification No. 12/2012-C.E., dated 17-3-2012 as they have failed to produce necessary evidence before the Id. Commissioner (Appeals), whereby it could be ascertained that the said imported MOP are used only in the manufacture of fertilizers. It is his contention that end use certificate has become relevant in the present case in view of the direction of the Hon'ble High Court while disposing the writ petition filed by the appellant challenging the assessment order before the Hon'ble Calcutta High Court.

5. Heard both sides and perused the records. The limited question involved in the present case is whether the appellants are eligible to the benefit of Notification No. 12/2012-C.E., dated 17-3-2012. There is no dispute about eligibility of Notification No. 12/2012-Cus., dated 17-3-2012 in availing concessional BCD @ 5% on the imported product namely Muriate of Potash (MOP) falling under CTH 3105 20 00. Before proceeding to analyze the eligibility of this Notification, it is necessary to refer to the relevant portion of the said notifications applicable to the present case which reads as : -

Notification No. 12/2012-Cus., dated 17-3-2012

Notification No. 12/2012-C.E., dated 17-3-2012

5.1 On a careful reading of the observation recorded by the Id. Commissioner (Appeals) at Para 5 of the impugned order, we do not find that the benefit of Excise Notification No. 12/2012-C.E., dated 17-3-2012 has been denied to the appellant, recording any observation that the appellants are not eligible to the benefit of both the notifications simultaneously. The Id. Commissioner (Appeals), on the other hand, has categorically observed that the appellant has not furnished any proof to the effect that the imported goods (MOP) were to be used in the manufacture of fertilizers or sold directly in the market. It is his findings that if the said imported goods were not used in the manufacture of fertilizers then obviously the benefit of Notification No. 12/2012-C.E., dated 17-3-2012 would not be applicable. Further, interpreting Section 3(1) of the Customs Tariff Act, 1975, the Id. Commissioner (Appeals) recorded a finding stating that additional duty no doubt would be equal to the rate of Central Excise duty, but in the present case, the appellant failed to produce any certificate /evidence establishing the use of the imported goods in the manufacture of fertilizers; thus, they are not eligible to the benefit of the said notification. In other words, it is clear that denial of benefit to the said exemption notification rests only on the issue of lack of evidence to establish that the condition of Notification No. 12/2012-C.E., dated 17-3-2012 has not been satisfied. Vehemently challenging the same, the Id. advocate for the appellant submits that the Id. Commissioner (Appeals) observation is de hors of the conditions of the said notification, hence, untenable in law. However, rebutting the said finding of fact, claimed that the entire quantity of imported MOP was meant and in fact had been used in the manufacture of fertilizers; in support, the appellant have produced a certificate issued by their statutory auditors. Further, it is their contention that the benefit of concessional rate of Basic Customs Duty @ 5% was allowed only on the condition that the imported MOP had been used in the manufacture of fertilizers, therefore, it cannot be said that the imported MOP were not used in the manufacture of fertilizers, but sold in the market. We find force in the contention of the Id. advocate for the appellant. We find that at no point of time either during the adjudication or appellate proceeding, the use of MOP in the manufacture of fertilizers has been disputed by the Revenue. Further, from the certificate produced by the appellant, it is abundantly clear that the imported MOP had been used in the manufacture of fertilizers. In any case, it is needless to mention that at any point of time, if the department is able to unearth facts or bring evidences that would lead to an inference that the imported MOP had not been used in the manufacture of fertilizers, on that ground alone the benefit of exemption notification could be denied alleging sup-pression or misdeciaration of facts. However, at this stage since the evidence produced by the appellant, has not been rebutted by the Revenue by producing contradictory evidences, hence, in our opinion, it is safe to conclude that they have complied with the condition of Notification No. 12/2012-C.E., dated 17-3-2012; accordingly, eligible to the benefit of the said notification. The other issues raised by the Id. advocate, thus in our opinion become academic, and there is no reason to discuss the same in disposing the present appeals. In the result, the impugned Order is set aside and the appeals are allowed with consequential relief, if any, as per law.
(Operative part of the order was pronounced in the open Court)

Equivalent 2016 (335) ELT 0357 (Tri. - Kolkata)