Full Judgment
2. Shri U. Raja Ram, learned JDR, appearing for the Revenue, pleaded that the respondents have imported 4 consignments of waste paper during the period from 1.3.2000 to 22.10.2001 and availed concessional rate of duty on the imported waste paper under Notification No. 16/2000-Cus.
dated 1.3.2000 and 17/2001-Cus. dated 1.3.2001 on furnishing an undertaking that the imported goods will be used for manufacture of paper. The End Use certificates submitted by the importer in respect of disputed four bills of entry indicated that the waste paper was used for manufacture of board only. This was also confirmed by the central excise record that only paper board was manufactured and cleared and thus, the imported waste paper was not used for he intended purpose and the importer was called upon to pay the differential duty. However, show cause notice was dropped by the Commissioner on the ground that notification No. 56/2002-Cus.(NT) dated 26.8.2002 was issued under Section 28A of the Customs Act, amending notification No. 16/2000-Cus.
and 17/2001-Cus. retrospectively and ordered that the duty so leviable but not levied during the period from 1.3.2000 to 22.10.2001 on the said goods falling under heading 47.07 of the Customs Tariff Act, will not be required to be paid when used in the units manufacturing paper board.
3. In their appeal, the Revenue has taken the ground that the Commissioner has erred in holding that the Government have retrospectively exempted the waste paper vide notification No.56/2002-Cus.(NT) dated 26.6.2002 issued under Section 28A of the Act as it is not an exemption notification. It does not grant any exemption to the imported goods retrospectively. It only waives the basic customs duty and countervailing duty leviable under serial No. 122 of notification No. 16/2000-Cus. dated 1.3.2000 and serial No. 139 of notification No. 17/2001-Cus. dated 1.3.2001. But it does not waive the surcharge on basic customs duty and special additional duty of customs chargeable no the goods imported by the respondents. The surcharge on basic customs duty and the special additional duty of customs were required to be worked out by taking into account the basic customs duty and the additional duty of customs (CVD) correctly payable and not what was incorrectly paid even if now waived. Notification No.56/2002-Cus.(NT) dated 26.8.2002 applies only to the duties chargeable under Notification No. 16/2000-Cus. and 17.2001-Cus., which are basic customs duty and the additional duty of customs (CVD). It does not refer to other duties of customs like surcharge on basic customs duty and the special additional duty of customs (SAD). Therefore, the order of the Commissioner relating to dropping of demand of Rs. 27,394/- on account of; surcharge on basic customs duty and Rs. 98,722/- on account of special additional duty of customs, should be set aside and suitable penal action may be taken against the respondents.
4. In their Cross-objections, the respondents had submitted that during the period from 1.3.2001 to 22.10.2001, all the imported goods were exempt from payment of surcharge under notification No. 26/2001-Cus.
dated 1.3.2001. During the material period, the bill of entry No. 291 dated 22.3.2001 was filed under OGL and the basic customs duty of Rs. 29,412/- at the rate of 5% ad valorem under notification No.17/2001-Cus. dated 1.3.2001 (Serial No. 139 of the table) and the special additional duty of customs (SAD) of Rs. 24,706/- at the rate of 4% was paid under TR-6 No. 440 dated 24.3.2001 in Punjab National Bank, Extension Counter, CFS Dhandari Kalan, Ludhiana. The other three bills of entry No. 376 dated 25.4.2001, 424 dated 4.5.2001 and 624 dated 4.6.2001 were filed against Duty Entitlement Pass Book (DEPB). The goods imported against DEPB licences were exempt from payment of special additional duty of customs (SAD) under notification No.19/2001- Customs dated 1.3.2001 (serial No. 45 of the table) during the relevant period. The fact of exemption from payment of special additional duty (SAD) of customs under notification No. 19/2001-Customs dated 1.3.2001 was in the knowledge of customs as the said three bills of entry were filed by the respondents under the guidance of Customs House Agent mentioning therein that SAD was exempted under notification No. 19/2001-Cus. dated 1.3.2001 and the goods were allowed to be cleared by customs accordingly after complete examination and study. It was also urged no behalf of the respondents that the demand is time barred as show cause notice was issued on 6.6.2001 after expiry of six months. It was also urged that with the issuance of notification No.56/2002-Cus. dated 26.8.2002, according to practice generally prevalent in the trade, the waste paper was also being allowed to be imported at concessional rate of duty if the same was used in the manufacture of paper board as well. Thus, there has been no mis-statement or suppression of facts or wrong declaration on the part of the respondents.
5. We have considered the submissions made by both sides. We find that the departmental's appeal is for levy of surcharge on basic customs duty and special additional duty of customs (SAD). We find that the respondents had imported waste paper at a concessional rate of duty for use in the manufacture of paper. However, instead of manufacturing paper, they manufactured paper board. We find that under notification No. 26/2001-Cus. dated 1.3.2001, all the goods falling within the first Schedule of Customs Tariff Act, were exempt from whole of surcharge on customs duty when imported into India. Therefore, surcharge on basic customs duty was not leviable as all the imports are between 22.3.2000 and 4.6.2001 as per show cause notice. We also find that the respondents had paid special additional duty of customs at the time of import on the first bill of entry and in other three bills of entry, imports were under DEPB for which special additional duty of customs was exempt under notification No. 19/2001-Customs. Thus the department's claim now remains that only one bill of entry on which special additional duty was paid should have been worked out without taking into account the concessional rate of duty under notification No. 17/2001-Cus. dated 1.3.2001. We find that notification No.56/2002-Cus.(NT) dated 26.8.2002 directs that duty of customs payable under the Customs Act and Customs Tariff Act on the goods falling under heading 47.07 of the First Schedule to the Customs Tariff Act imported for use in, or supply to, a unit for manufacture of paperboard, shall not required to be paid in respect of the waste paper on which the duties of customs were not levied in excess of the rate as prescribed under notification No. 16/2000-Cus. dated 1.3.2000 and 17/2001-Cus.
dated 1.3.2001 when such goods were imported for use in, or supply to a unit for manufacture of paperboard, during the period 1.3.2000 to 22.10.2001. once the duty in excess than prescribed under notification No. 17/2001 for waste paper used in the manufacture of paper, is not required to be collected then the question of charging SAD on duty different from what remains payable under notification 17/2001-Cus.
read with notification 56/2002-Customs dated 26.8.2002, does not arise.
We, therefore, see no merits in the appeal of the Revenue and the same is rejected. The Cross Objections filed by the respondents also stand disposed of accordingly.