1. Heard both sides. The appellants have imported candles from Nepal.
The issue is whether such imports are to be charged to 4% of the additional customs duty applying Notification No. 3/2001 or these should be charged to full rate of additional customs duty equal to the excise duty leviable on like articles made in India. The exemption under Notification is subject to the condition that credit of duty paid on inputs or on capital goods has not been taken under the CENVAT Credit Rules.
2. Shri S.K. Bagaria, learned Senior Advocate appearing for the appellants inter alia argues as follows: (i) The additional customs duty can be levied only equal to the excise duty for the time being leviable on a like article produced or manufactured in India.
(ii) The condition in the Notification is clearly satisfied as the candles were manufactured in Nepal and admittedly, no duty credit has been availed under the CENVAT Credit Rules which are not applicable in Nepal.
(iii) No further condition or restriction can be imposed, which is not there in the Notification, as held by the following decisions of the Hon'ble Supreme Court:Bombay Oil Industries Ltd. v. CCE.3. He also cites the decisions of the Hon'ble Supreme Court in the case of CCEX v. J.K. Synthetics and Hyderabad Industries v. U.O.I. in support of the appellants' case. He states that in the case of J.K. Synthetics (cited supra), the Hon'ble Supreme Court allowed the benefit of excise exemption stating that Chapter-X Procedure can only be applied in respect of the indigenously produced goods. He states that in the case of Hyderabad Industries Ltd. (cited supra), it has been held that it has to be imagined that the articles imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon. He also cites the decision of the Hon'ble Delhi High Court in the case of Plastic Processors v. Union of India 2002 (143) ELT 521 (Del.), which held the Board's Circular No. 38/2000-Cus. dated 20.5.2000 is illegal. He further cites the subsequent Circulars of the Board bearing Nos.
112/2003-Cus dated 31.12.03 and 26/2004-Cus. dated 31.3.04.
4. Shri K.K. Biswas, learned Advocate appearing for the Department states that in the appellants' own case, the Tribunal vide Order dated 23.8.02 reported in 2003 (160) ELT 1022 has held that they are not eligible for concessional rate of duty under Notification No. 3/2001-CE following the decision of the Larger Bench of the Tribunal in the case of Priyesh Chemicals and Metal v. CCE, Bangalore 2000 (120) ELT 259 (Tri-LB). It is the submission of Shri Biswas that since the appellants have not gone in appeal against the order passed in their own case, they are precluded from agitating the matter again.
5. Shri Bagaria, learned Sr. Advocate, in the above context, states that the cited decisions of the Hon'ble Supreme Court in J.K.Synthetics (supra) and Hyderabad Industries (supra) were not brought to the notice of the Larger Bench which had decided earlier the appellants' own case. Hence, he urges this Bench to examine the matter afresh and allow the exemption in question.
6. After considering the arguments from both sides as well as the case records and cited decisions, we find that the same issue was the subject matter of the Tribunal in the appellants' own case in the case of Howrah Ispat v. CC (P), West Bengal reported in 2003 (160 ) ELT 1022. The appellants have not gone in further appeal, but have accepted the said decision. Moreover, the Tribunal in that case followed the decision of the 5 Members Larger Bench in the case of Priyesh Chemicals (supra), which also has not been appealed against. The cited decisions of the Hon'ble Supreme Court were very much available to the appellants, but these were not cited. Moreover, we find that the learned Advocate appearing for the department brings to our notice that a 3 Judges Bench of the Hon'ble Supreme Court in the case of CCE, Navi Mumbai v. Amar Bitumen & Allied Products Pvt. Ltd. 2006 (202) ELT 213 (SC) has held that when the Order of the Tribunal on the same question is not appealed against, the issue attains finality and questioning its correctness later on, is not permissible.
7. We also find that in the case of Motiram Tolaram v. UOI , the 3 Judges Bench of the Hon'ble Supreme Court has held in a similar case that the Notification was deliberately worded in such a way that the imported goods cannot get the concessional excise rate. In the said case, the exemption was subject to payment of appropriate amount of duty of excise on the inputs. In the present case, the Notification is also worded in a way to make the exemption conditional so that the inputs used in manufacture of candles pay duties without taking credit thereof. In our view, such a Notification cannot obviously be applied to imported goods, as has been correctly held by the Co-ordinate Bench in the appellants' own case (cited supra) as well as by the Larger Bench in the case of Priyesh Chemicals (cited supra). The decision of the Hon'ble Supreme Court in Motiram Tolaram (cited supra), has also been followed by one of us in the case of CC, Mumbai v. Pakash Co-op. Agro Industries 2005 (192) ELT 391 (Tri.
-Mumbai) holding that an exemption which is conditional, subject to not availing of the credit of duty paid on inputs used in the manufacture of final goods cannot obviously be satisfied in the case of imported goods; nor can such imported goods get concessional excise rate for the purpose of determining additional customs duty. Further, we find that the 5 Judges Bench of the Hon'ble Supreme Court in the case of Hyderabad Industries (cited supra) has observed as follows: ...Even though the impost under Section 3 is not called a countervailing duty there can be little doubt that this levy under Section 3 is with a view to levy additional duty on an imported article so as to counter-balance the excise duty leviable on the like article indigenously made.
In other words Section 3 of the Customs Tariff Act has been enacted to provide for a level playing field to the present or future manufacturers of the like articles in India.
8. Applying the observations of the Hon'ble Supreme Court to the case in hand, we find that an indigenous manufacturer who pays excise duty on the inputs and does not take credit thereon, can only avail the exempted rate of 4% on the candles. To interpret the Notification and make it applicable to imported candles which obviously has not paid any excise duty in respect of the inputs used thereon, as claimed by the appellants, is to deny a "level playing field" to the manufacturers in India. The manufacturers in India pay excise duty on the inputs as well as 4% of duty on the candles, whereas the imported candles which have suffered no excise duty on the inputs would merely pay 4% of additional customs duty on the candles. Such an interpretation which would put Indian manufacturers at a disadvantage and deny them a "level playing field" would also do violence to the scheme of levy of additional customs duty under Section 3 of the Customs Tariff Act, 1975 apart from upsetting the settled law, is clearly not warranted. Accordingly, we dismiss the appeal filed by the appellants.