Full Judgment
2. The appellants imported acetonitrile in 3 shipments. These 3 shipments are as under:---------------------------------------------------------------------- Details for Consign- Details for Consign- Details for consign ment No. 1 ment No. 2 ment No. 3Name of Ship JESENICE VISHVA VISHVA ADITYA AMITABHCash No. 1177 dated 9-4-1979 1501 dated 19-8-1979 2811 dated 21-9-1979 3. The imported goods were used in the manufacture of Sodium Salt of sulpha somidine which in turn was converted into the bulk drug sulpha somidine. As the Customs Department was of the view that in order to claim the benefit of concessional rate of duty available under Sl. No.11 of the table annexed to the above mentioned Notification, conversion of acetonitrile must take place in the appellants' own factory, full duty was paid and a bond was executed and thereafter refund claims in respect of the 3 consignments were filed. Upon rejection of the refund claims the importers pursued the matter in appeal and the Collector (Appeals) extended the benefit of the Notification in respect of consignments No. 1 and 2. The appeal in respect of consignment No. 3 was rejected for want of evidence that the goods were used in the manufacture of a drug. Hence this appeal.
4. We have heard Shri T. Pooran, Advocate and Shri S.K. Roy, learned SDR and perused the records.
5. The refund claims were rejected by the Assistant Collector on the ground that the claimants did not produce the original end-use certificate which they claimed to have submitted to the Assistant Collector, Group V in file No. S/40-178/80V. Earlier the refund claims had been rejected by the Assistant Collector on 10-11-1980 as unsubstantiated for want of end-use certificate. The Collector (Appeals) rejected the appeal by order dated 27-1-1982 on the ground that the end-use certificate was not produced before the adjudicating authority. Against this order of the appellate authority the matter came up to the Tribunal which by its order dated 27-9-1985 remanded the matter to the Assistant Collector for de novo adjudication stating as follows : "Quite clearly there has been a confusion in the processing of the refund claims and in view of the facts stated, the order-in-appeal has been vitiated and has to be set aside for de novo consideration on the facts of the basis as claimed by the appellants. While doing so due consideration needs also to be given to the fact that the appellants have since filed end-use certificate".
6. The reasoning given in the order impugned before us for rejection of the refund claims is that the photo-copy of the certificate issued by the Superintendent of Central Excise shows that the goods were used in the manufacture of a drug intermediate and not a drug. The lower appellate authority has discarded the letter produced by the importers from M/s. Hindustan Ciba-Geigy Ltd. of 5-5-1989 to the effect that the imported raw material was used by the importer in the manufacture of drug intermediate which in turn was purchased by them for manufacture of the bulk drug, in view of it being a general letter which did not specify any particular import.
7. All along the appellants have consistently claimed that they had filed end-use certificate issued by the Central Excise authorities to prove that the imported chemical has been used in the manufacture of a bulk drug. The certificate was submitted by them on 14-11-1981 i.e.
subsequent to the first order of the Assistant Collector but prior to the order of the Collector (Appeals) dated 27-1-1982. This averment has also been recorded by the Tribunal in its order of 27-9-1985 and has not been controverted by the Department. It is too late in the day for the Department to contend, as it now does that no such certificate was produced before the Customs authorities. The certificate issued on 20-11-1980 issued by the Superintendent of Central Excise contains details of consumption of acetonitrile in the manufacture of sulpha somidine giving batch Nos. and quantities and also details of consumption of the drug intermediate in the manufacture of bulk drug "Sulpha Somidine". We cannot accept the argument of the learned SDR that the certificate is misleading and mala fide inasmuch as it shows the importers as manufacturers of the drug when such is not the case of the importers - the certificate which has been shown to have been available with the Department right from November 1981 has not been challenged till now and, therefore, it has to be accepted as it stands.
Even after the personal hearing before the Collector (Appeals), the importers wrote to the lower appellate authority on 10-5-1989 referring to the end-use certificate filed along with the letter dated 14-11-1981 and this reference is at para 7(g) of the above letter. Hence the Department cannot now at this belated stage plead that the certificate should be rejected for any reason whatsoever. The other contention of the learned SDR that the notification should be read as meaning that the importers themselves should manufacture the drugs from the imported raw material is also not tenable as there is no such condition in the Notification which reads as follows : "GSR.No. In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 44-Customs, dated the 1st March, 1979, the Central Government being satisfied that it is necessary in the public interest so to do hereby exempts the goods specified in the Table annexed hereto and falling within Chapter 29 or Chapter 30 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India for the manufacture of drugs, from so much of the portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of: (a) twenty-five per cent ad valorem, when the standard rate of duty is leviable, and (b) fifteen per cent ad valorem if the goods are the product or manufacture of any country or territory declared by the Central Government under Sub-section (3) of Section 4 of the Customs Tariff Act, 1975 as preferential area : Provided that the importer, by execution of a bond in such form and for such sum as may be prescribed by the Assistant Collector of Customs, binds himself to pay on demand in respect of such quantity of the goods in question as is not proved to the satisfaction of the Assistant Collector of Customs to have been used in the manufacture of drugs, an amount equal to the difference between the duty leviable on such quantity but for the exemption contained herein and that already paid at the time of importation.----------------------------------------------------Sl. No. Description of the goods 8. On a careful consideration of the submissions of both sides and a consideration of the certificate of end-use we hold that the importers are entitled to the benefit of concessional rate of duty in terms of Notification 64/79-Cus. We set aside the impugned order and allow the appeal with consequential relief if any.