Commissioner of Customs Vs. Mars Plastics and Polymers P. Ltd. - Court Judgment

Excerpt:
1. these appeals are filed by the department, against the orders passed by the cc (appeals). in order passed by the cc (a), he has held as under: thus the wirte-up or note, although give a general idea of the process by which such scrap is generated, yet i am of the view that the lower authority should have ascertained/verified about the correctness/genuineness of the certificate issued by the foreign supplier and then come to a conclusion as to whether the subject goods imported by the applicant are in fact, made of scrap of plastic or of some other material. in view of the above, i deem it expedient to remand the matter back to the lower authority to examine/consider the short point. accordingly i set aside the order of the lower authority and remand the matter back to him for necessary verification/examination of the "certificate" produced by the appellant and then pass an appropriate speaking order by observing the principles of natural justice. all the three appeals of the appellants are, thus disposed of by way of remand.2. shri v. thyagaraj, the learned sdr for the department drew our attention to the exemption notification 53/88 dated 1.3.1988 wherein so far as acrylic sheets are concerned, it is mentioned as follows: (ii) acrylic sheets nil if produced out of any of the follow- therefore, he contended that the exemption will be available only if the acrylic sheets are produced out of any of the materials mentioned therein either by themselves or by combination of those materials. in this connection he pointed out that the conditions with respect to payment of duty of excise under central excise act, 1944 additional duty under section 3 of the customs tariff act, 1975 would apply to the goods mentioned therein. he therefore, pointed out that in this case, the plea of the respondents is that acrylic sheets are produced from the scrap of plastics. he, therefore, pointed out that in order to get the benefit of the notification additional duty as mentioned therein should have been paid in this regard. in this connection he drew out attention to the grounds of appeal filed by the department wherein it was stated as under: in all these judgments referred by the collector (appeals) the exemption under the different central excise notifications involved in those cases were conditional in that such goods should be put to a particular, end-use. whether an exempted material is put to the intended end use is a factor which is verifiable by the department and therefore, the courts have ordered that such exemptions should be allowed. however, the condition of exemption in respect of acrylic sheets under the notification 53/88-ce is not similar i.e. this exemption is not extended because of intended end-use of the exempted material. in this case, payment of duty is a pre-condition and the exemption flows out from the fact that the duty has already been paid on the raw materials. it is, therefore, felt that the different judgments of hon'ble courts are distinguishable and therefore, the order-in-appeal is not legal and proper and therefore should be set aside.3. shri doiphode, learned consultant for the respondents contended before us that on a perusal of the notification it is very clear that the conditions with respect to payment of additional duty as well as central excise duty will be applicable only to methyl methacrylate monomer acrylic and not on the other two items. he therefore, pointed out that the cc(a) was correct in remanding the case to the ac to examine the admissibility of the exemption notification on acrylic sheets imported by the respondents by taking into consideration the certificate produced by the respondents to show that the same was prepared from scraps of plastics. he pointed out that this certificate was produced before the ac and in this connection he drew our attention to the order passed by the ac. he pointed out that the cc(a) nowhere in the impugned order had disputed the genuineness of the certificate produced by the respondents. he also pointed out that the cc (a) first relied upon the decision of the supreme court in the case of name tularam reported in (61) elt 352 : 1989 (20) ecr 129 (sc) : ecr c 1255 sc. in this connection he also drew out attention to the latest decision of the hon'ble supreme court in the case of good year india limited v. cc, bombay .4. the learned sdr relied upon the decision reported in 1986 (74) elt 119 : 1986 (6) ecr 325 (t) and stated that in similar notification 185/83-ce it was held by the tribunal that the condition with respect to payment of duty should be established in order to get the exemption.he therefore, stated that since payment of duty was not established in that case, exemption was denied in that case.5. we have considered the submissions made by both the sides. in the above cited decision, the tribunal has dealt with notification 183/83 and the wording of that notification as well as this notification are not same. on the contrary a plain reading of this notification goes to show that the conditions with respect to payment of additional duty of excise is attached only to methyl methacrylate monomer. this condition was not attached to the first two mentioned therein that is the way in which it can be read. there is no other way of reading the same. in this connection the above said decision relied upon by the sdr is not applicable to the facts of this case and therefore, his argument cannot be accepted. we, therefore hold that the cce(a) has correctly remanded the matter to the ac to look into the above certificate and discuss the certificate for the purpose of the benefit of the notification. in this connection the learned consultant pointed out that the ac in his order has not disputed the certificate. we find from the order passed by the ac that he has not at all discussed anything about the certificate either by accepting it or by rejecting it. the respondents have also not filed any cross appeal in this regard. in the circumstances the cc(a) was perfectly justified in remanding the case to the ac to consider this aspect of the case in the light of the certificate which was produced by the respondents. in the above circumstances, we are of the view that the order passed by the cc(a) is legal and proper and no grounds are made out to interfere with the same. it is for the ac to see whether the certificate produced can be accepted or rejected for good reasons in this regard. based on the ac's order consequential relief will flow in terms of that order.

Judgment:
1. These appeals are filed by the department, against the orders passed by the CC (Appeals). In order passed by the CC (A), he has held as under: Thus the wirte-up or note, although give a general idea of the process by which such scrap is generated, yet I am of the view that the lower authority should have ascertained/verified about the correctness/genuineness of the certificate issued by the foreign supplier and then come to a conclusion as to whether the subject goods imported by the applicant are in fact, made of scrap of plastic or of some other material. In view of the above, I deem it expedient to remand the matter back to the lower authority to examine/consider the short point. Accordingly I set aside the order of the lower authority and remand the matter back to him for necessary verification/examination of the "certificate" produced by the appellant and then pass an appropriate speaking order by observing the principles of natural justice. All the three appeals of the appellants are, thus disposed of by way of remand.

2. Shri V. Thyagaraj, the learned SDR for the department drew our attention to the exemption Notification 53/88 dated 1.3.1988 wherein so far as Acrylic sheets are concerned, it is mentioned as follows: (ii) Acrylic sheets Nil If produced out of any of the follow- Therefore, he contended that the exemption will be available only if the acrylic sheets are produced out of any of the materials mentioned therein either by themselves or by combination of those materials. In this connection he pointed out that the conditions with respect to payment of duty of excise under Central Excise Act, 1944 additional duty under Section 3 of the Customs Tariff Act, 1975 would apply to the goods mentioned therein. He therefore, pointed out that in this case, the plea of the respondents is that Acrylic sheets are produced from the scrap of plastics. He, therefore, pointed out that in order to get the benefit of the Notification additional duty as mentioned therein should have been paid in this regard. In this connection he drew out attention to the grounds of appeal filed by the department wherein it was stated as under: In all these Judgments referred by the Collector (Appeals) the exemption under the different Central Excise Notifications involved in those cases were conditional in that such goods should be put to a particular, end-use. Whether an exempted material is put to the intended end use is a factor which is verifiable by the Department and therefore, the Courts have ordered that such exemptions should be allowed. However, the condition of exemption in respect of Acrylic Sheets under the Notification 53/88-CE is not similar i.e.

this exemption is not extended because of intended end-use of the exempted material. In this case, payment of duty is a pre-condition and the exemption flows out from the fact that the duty has already been paid on the raw materials. It is, therefore, felt that the different Judgments of Hon'ble Courts are distinguishable and therefore, the Order-in-Appeal is not legal and proper and therefore should be set aside.

3. Shri Doiphode, learned Consultant for the respondents contended before us that on a perusal of the Notification it is very clear that the conditions with respect to payment of additional duty as well as central excise duty will be applicable only to methyl methacrylate monomer acrylic and not on the other two items. He therefore, pointed out that the CC(A) was correct in remanding the case to the AC to examine the admissibility of the exemption notification on Acrylic sheets imported by the respondents by taking into consideration the certificate produced by the respondents to show that the same was prepared from scraps of plastics. He pointed out that this certificate was produced before the AC and in this connection he drew our attention to the order passed by the AC. He pointed out that the CC(A) nowhere in the impugned order had disputed the genuineness of the certificate produced by the respondents. He also pointed out that the CC (A) first relied upon the decision of the Supreme Court in the case of Name Tularam reported in (61) ELT 352 : 1989 (20) ECR 129 (SC) : ECR C 1255 SC. In this connection he also drew out attention to the latest decision of the Hon'ble Supreme Court in the case of Good Year India Limited v. CC, Bombay .

4. The learned SDR relied upon the decision reported in 1986 (74) ELT 119 : 1986 (6) ECR 325 (T) and stated that in similar Notification 185/83-CE it was held by the Tribunal that the condition with respect to payment of duty should be established in order to get the exemption.

He therefore, stated that since payment of duty was not established in that case, exemption was denied in that case.

5. We have considered the submissions made by both the sides. In the above cited decision, the Tribunal has dealt with Notification 183/83 and the wording of that notification as well as this notification are not same. On the contrary a plain reading of this notification goes to show that the conditions with respect to payment of additional duty of excise is attached only to methyl methacrylate monomer. This condition was not attached to the first two mentioned therein that is the way in which it can be read. There is no other way of reading the same. In this connection the above said decision relied upon by the SDR is not applicable to the facts of this case and therefore, his argument cannot be accepted. We, therefore hold that the CCE(A) has correctly remanded the matter to the AC to look into the above certificate and discuss the certificate for the purpose of the benefit of the Notification. In this connection the learned Consultant pointed out that the AC in his order has not disputed the certificate. We find from the order passed by the AC that he has not at all discussed anything about the certificate either by accepting it or by rejecting it. The respondents have also not filed any cross appeal in this regard. In the circumstances the CC(A) was perfectly justified in remanding the case to the AC to consider this aspect of the case in the light of the certificate which was produced by the respondents. In the above circumstances, we are of the view that the order passed by the CC(A) is legal and proper and no grounds are made out to interfere with the same. It is for the AC to see whether the certificate produced can be accepted or rejected for good reasons in this regard. Based on the AC's order consequential relief will flow in terms of that order.