Full Judgment
From this point of view, the contention made by the appellant that their raw wool imported by them is not chargeable to CVD, since in C. Ex., this is not a manufactured article and therefore not liable to excise duty, is also having some force. Subsequently, it is observed that scoured wool is nothing but raw wool after they have been subjected to cleaning process and therefore as the entry exists in the C. Ex. Tariff, the scoured wool under 51.01 should also include raw wool it is one and the same excepting the fact that dirt and grease have been removed by scouring and it is the earliest stage of the scoured wool. Hence there is absolutely no reason to disqualify greasy raw wool from the benefit of exemption contemplated under Notification No. 50/87. On a further reading of the exemption notification, it is observed that wool in any other form namely, scoured, carded, combed and also in the form of tops have been exempted from the Central Excise duty and consequently from the CVD on importation. Hence it will be an anomalous situation if raw wool or greasy wool which are starting material for all these items under the Notification No. 50/87 is charged to CVD, but the wool after subjecting to all these processes are exempted from the CVD and allowed to be cleared at the nil CVD rate. Therefore, the intention of the Government is not at all to allow such anomalous position to exist and Bombay Customs rightly has allowed them the benefit of the exemption while initially bond of tire imported goods under Bombay Custom House and the appellant claimed that it is practice still followed in Bombay Customs House. Hence, this will lead to another anomaly since Bombay Customs, who are the original asessing authority of Customs on importation has assessed the goods by allowing nil duty CVD, whereas C. Ex authorities in Jamnagar will be charging them CVD treating them as not scoured wool and not exempted under Notification No. 50/87.
9. In view of the above discussion, the imported greasy wool imported by the appellant is at the first stage of scoured wool and hence it is included in the description for scoured wool both in the sub-heading 51.01 of C. Ex. Tariff Act, 1985 as well as in the Notification 50/87 and therefore, the appellant is eligible for the benefit of this notification for the other imported items of greasy wool. The Assistant Collector has taken an erroneous decision which requires to be turned down." 2. It is against the aforesaid reasoning that the Revenue has now filed the appeal.
3.3 It has been urged that Notification 50/87-C.E. gives exemption only to that wool which is not carded or combed and which has already been scoured. While the Revenue does not dispute that the Customs Tariff mentions about raw wool and greasy wool or fleece but the Central Excise Tariff begins with wool, not carded or combed but scoured." Revenue, however, urges that the intention of the Government in the present case appears to be to check by restricting the elements of pollution for being imported along with the raw material i.e. greasy wool.
3.4 On the above grounds it is urged that the lower appellate authority has erred in extending the benefit of C.V. duty to raw and greasy wool which is not covered by Notification 50/87-C.E.3.5 On the other hand, learned Advocate, Shri H.A. Ahmedi reiterates the findings of the lower appellate authority. He hightlights the position that if the benefit is not given the anomalous situation pointed out in the impugned order will arise. The process of construction should not lead to an anomalous situation.
4. We have carefully considered the pleas advanced from both sides. We agree with the findings of the lower appellate authority. It is a well reasoned order taking into account all relevant facts; his process of his interpretation also avoids the anomalous position which would otherwise be created, if C.V. duty is not charged on scoured wool but is charged on raw and greasy wool. As regards the ground of pollution taken by the concerned Collector this could be checked by fumigation of wool concerned and not by imposing a differential rate of duty on it.
Pollution is not lessened by charging differential or higher duty.
Ground urged by Revenue lacks substance.
5. In view of the foregoing discussion, we reject the appeal of Revenue.