T.T.K.-lig Ltd. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. facts : these appeals are listed before the larger bench by virtue of the order dated 2-8-2005 made by the division whether additional duty of customs was leviable under section 3 of the customs tariff act, 1975 on the imported rubber, as on the date of importation, to the extent equal to the duty of excise levied as cess under section 12 of the rubber act, 1947 on rubber produced/manufactured in india as on the said date? 2. it appears that the appellants had challenged the said order dated 2-8-2005 before the hon'ble supreme court objecting to the reference being made, but as recorded in the order dated november 11, 2005 of hon'ble the supreme court made in civil appeal no. 6468/05, after hearing the learned counsel for the parties and after some arguments, the learned counsel appearing on behalf of the appellants was permitted to withdraw the appeals as the matter had been referred to a larger bench.3. the principal objection against the making of reference to the larger bench raised on behalf of the appellant before the division bench was that, when the revenue had accepted the legal position in several cases by not challenging the earlier decisions, it was not open to it to raise a contrary contention in the case of another assessee, and that it could not pick and choose the assessee for refund of duty.it was contended that having accepted an earlier judgment of the tribunal and the legal position by not pressing the appeals, upon instructions before the supreme court, which were filed in another case, the revenue cannot be permitted to raise a contrary contention in these appeals before the division bench or before the larger bench. the division bench, however, was of the opinion that the order of the hon'ble supreme court dismissing the appeal on the ground that it was not pressed against the decision in which a similar question was decided by the tribunal, cannot be taken to be the law declared by the hon'ble supreme court in the terms of such decision of the tribunal. it was held that the fact that the appeal was not pressed and therefore, was dismissed, clearly indicated that there was no decision rendered by the hon'ble supreme court on the merits of the issue involved and that the dismissal of that appeal, on its not being pressed, did not take away the jurisdiction of the tribunal to decide the issue which was already referred and was pending before the earlier larger bench. the division bench noted that there was a serious question involved in these matters as to whether the earlier decision of the tribunal in mrf ltd. v. commissioner of customs , and the subsequent decisions that followed it, laid down the correct legal position.3.1 in mrf ltd., the tribunal on the basis of a clarification issued by the ministry of finance on the letter of ministry of commerce, came to the conclusion that the cess demanded (under section 3 of the customs tariff act by way of additional duty payable with reference to cess levied under section 12 of the rubber act, 1947 by way of duty of excise), should not have been levied on the imported rubber. even before the present reference was made to the larger bench an earlier division bench had made a similar reference, but the earlier larger bench had returned the same by order dated 1-9-2003 to the regular bench for being heard in the light of the order passed by the hon'ble supreme court dismissing the appeal filed by the revenue against the decision of the tribunal in a group of other matters against which that appeal was preferred to the supreme court and later not pressed as evident from the order of the hon'ble supreme court made on 17-2-2003 : learned counsel for the appellants states that she has instructions not to press these appeals. it is dismissed as such.however, the division bench before which the matter again came up, and which has made the present reference, has held that the order dismissing the appeal as not pressed made by the hon'ble supreme court in other matters did not preclude the tribunal from reconsidering the ratio of its earlier decisions. the division bench having considered the effect of dismissal of the revenue's appeal as not pressed before the hon'ble supreme court, for the reasons indicated in its order dated 2-8-2005, more particular in paragraph 7 thereof, being itself of the opinion that the question referred had arisen for being considered by a larger bench in view of its inability to agree with the earlier decisions, has referred the above question for a decision of the larger bench.4. against the said decision, the appellants filed civil appeal no.6468 of 2005 before the supreme court in which the following order was passed on november 11, 2005: after some arguments, learned counsel appearing on behalf of the appellants is permitted to withdraw these appeals as the matter has been referred to larger bench by the impugned order.5. these appeals have arisen out of the claim made by the appellants for refund of additional duty of customs on natural rubber which was collected under section 3 of the customs tariff act. the claim for refund was made on the grounds that, while extending the benefit of exemption from the whole of the basic customs duty in terms of ad hoc exemption order no. 79/95, dated 31-3-95, and from the levy of countervailing duty (cvd) as per notification no. 18/95-cex., cess was collected at the rate of re. 1/- per kg. as duty of excise leviable under the rubber act, 1947, on the imported natural raw rubber covered by the said claim; that cess could be collected only by the rubber board, and, that, the excise duty mentioned under the provisions of the tariff act was only excise duly levied under the central excise act, 1944; that the rubber, board by their circular dated 12-7-95 had clarified that cess on rubber was levied under section 12 of the rubber act, 1947 and was applicable only in the case rubber produced indigenously and not on the imported rubber; that the cess cannot be equated to additional duties of excise levied under other tax laws like goods of special importance act, 1957, additional duties of excise (textiles) act, 1978, where there were inbuilt provisions making central excise act, 1944, applicable, and, therefore, the cess collected in the form of additional duty in all these cases had become refundable.5.1 the assistant commissioner of customs (refunds) rejected the appellants' claims by holding that the customs authorities were fully empowered to levy and collect the duty of excise levied as cess as additional duty under section 3(1) of the tariff act. it was held that the basis for the charge under section 3(1) of the customs tariff act in case of imported goods arises from the said provisions, and that it was only for ascertaining whether any duty of excise was leviable on the like article produced in india, one had to refer to the law or laws that provided for such a levy. it was held that as far as imported rubber was concerned, customs authorities are fully empowered to collect amount equal to cess as additional duty, as duty of excise was leviable as cess on indigenously produced rubber and not exempted by any notification issued under the relevant act. following the ratio of the decision of the tribunal in commissioner of customs v. birla jute industries ltd. commissioner held that cess collected as additional duty under section 3(1) of the customs tariff act, and quantified as per the rubber act, 1947, was legal and proper and that the claim merited rejection.5.2 in the appeal which was preferred against the order of the assistant commissioner, it was held by the commissioner (appeals) that the cess leviable in terms of the rubber act was to be collected as a duty of excise, and that, the power to levy excise duty as additional duty was in section 3(1) of the customs tariff act. it was observed that under section 3(1) of the customs tariff act, the additional duty equivalent to the amount of excise duty for the time being leviable on a like article, if produced or manufactured in india, was leviable on imported goods. the learned commissioner (appeals) held that whether cess was leviable as excise duty, an amount equal to that amount was collected as additional/countervailing duty on imported goods. he noted that this legal position had been affirmed by the clarification issued by the ministry of finance vide f. no. 345/31/97-tru, dated 29-9-97, wherein it was stated that where cess is leviable as duty of excise on goods produced/manufactured in india, then on similar imported goods an amount of cess leviable is levied as additional duty of customs. for this purpose, what is required to be considered is whether under the relevant act enabling the levy, cess is levied and collected as a duty of excise, in which event on imports corresponding amount of duty of customs becomes payable under section 3 of the customs tariff act.accordingly, even though the rubber act, 1947, did not provide for collection of additional duty of customs on imports, it becomes payable on the import of rubber by virtue of section 3 of the customs tariff act. the appeal was, therefore, rejected leading to the present appeal.6. we have heard both the sides at great length. it has been contended before us on behalf of the appellants by the learned senior advocate that when something is levied as a cess, the nature and characteristic of that levy changes. it was submitted that cesses are earmarked for particular purposes unlike duties of excise and other taxes which are not so earmarked. he argued that section 3 of the customs tariff act, 1975, contemplated levy of duty of excise under the central excise act, 1944, and not any duty of excise levied as cess under any other law. he submitted that cess was levied and collected for the benefit of the industry, and did not constitute any additional burden that would require a level playing field. according to him, it was a settled law that excise duty referred to under section 3 of the customs tariff act refers to only what was payable by the indian manufacturer under the central excise act, 1944. he also submitted that the explanation in section 3(1) of the customs tariff act indicated that excise duty referred to in that section related to the duty of excise under the central excise act, 1944, since it provided that if a like article was not manufactured in india, the duty of excise leviable on the class or description of articles to which the imported article belonged, would be taken into consideration. the learned counsel submitted that in order to determine the class or description of article, reference would necessarily have to be made to the central excise tariff which provided for the class or description of article, and that no such class or description of article was provided under the rubber act. therefore, the provisions contained in the said explanation can only be worked out with reference to the central excise tariff act, and not to the rubber act. the learned counsel submitted that this clearly indicated that section 3 of the customs tariff act referred to duty of excise levied under the central excise act, 1944. it was also submitted that the cess was collected under the rubber act, and though first credited to the consolidated fund of india, it was then paid to the rubber board for being utilized for the purposes of the rubber act. thus, it was a tax collected for the allocated purpose, i.e., for the benefit of rubber industry to which the taxpayer belonged and benefited by such allocation. the levy of cess, therefore, did not constitute any additional burden to the taxpayer like duty of excise, which was not for any allocated purpose of development of the industry to which the taxpayer belonged. according to the learned counsel, the decisions of the supreme court in motiram tolaram v. uoi and hyderabad industries ltd. v. uoi , concluded the issue. it was also submitted that the revenue was precluded from raising the contention which was contrary to the earlier decisions of the tribunal relating to the issue referred, since those earlier judgments were accepted by the revenue by not preferring appeal, and because the appeals filed by the revenue in the earlier case of vikrant tyres ltd. were not pressed upon instructions and dismissed by the hon'ble supreme court by order dated 17-2-2003.6.1 the learned senior advocate for the appellants relied on the following decisions in support of his contentions : (a) the decision of the supreme court in hyderabad industries ltd. v. uoi , was cited to point out that it was held in paragraph 17 of the judgment that, "...the measure for levy of additional duty is the quantum of excise duty leviable on a similar article under the excise act. duty under the excise act can be levied, as has been held earlier, if the article has come into existence as a result of production and manufacture. in other words, when articles which are not produced or manufactured cannot be subjected to levy of excise duty then on the import of like articles no additional duty can be levied under the customs tariff act." (b) the decision of the supreme court in motiram tolaram v. uoi , was cited to point out that it was held in paragraph 4 of the judgment that, correct interpretation of section 3 of the customs tariff act was now settled that the rate of duty would be only that which an indian manufacturer would pay under the excise act on a like article, as held in hyderabad industries ltd. (c) the decision of the delhi high court in pasutpati fabrics ltd. v. union of india , was cited to point out from paragraph 16 of the judgment that, it was held therein that, merely because the words "duty of excise" were used in section 5a of the textile committee act, 1963, it would not mean that what was charged was the excise. one had to see the real nature of the levy and under section 5a, which was imposition of the prescribed cess. moreover, excise duty was leviable specifically under the central excises & salt act, 1944, and it was not the same excise duty which was sought to be charged all over again. it was held that the exemption was given as per the notification issued under the central excises & salt act, 1944, and, therefore, the promise was for exemption from payment of excise duties and not cess which was a fee, as held by the division bench in nath bros. exim international ltd. (quoted in paragraph 15 of the judgment). it was also held that there was no notification of exemption under section 5e of that act, and the notification of exemption was issued under the central excise act, 1944, and, therefore, the question of promissory estoppel did not arise in respect of exemption from cess. (d) the decision of the delhi high court in nath bros. international ltd. v. uoi and ors. (db), was cited to point out that it was held in paragraph 18 of the judgment that apart from the fact that having regard to the nature and purpose of the cess levied under the textiles committee act, 1963, although credited to the consolidated fund of india and then disbursed to the textile committee, it still had the traces of fee as was being levied prior to insertion of section 5a in the act, and could perhaps be distinguished from a tax, and that it was felt that the incidence of the two levies, namely, under the customs act and under the textiles committee act were entirely different. in this case validity of the public notice issued by the textiles committee under section 12 of the textiles committee act, 1963, directing all the manufacturers/exporters of silk ready-made garments to pay to the committee the amount of cess at 0.05% ad valorem from 1975 calculated on the basis of the fob value of the shipping bills, as contemplated under section 5a(1) of the textiles committee act, 1963, was challenged, and no question was, therefore, involved in the context of additional duty payable under section 3 of the customs tariff act.collector of central excise, pune v. tata engineering & locomotives co. ltd. , was cited to point out from paragraph 7 of the judgment that it was observed herein that, apart from the question of interpretation of the notification, the appellant had not offered any explanation why the decision of the tribunal in m/s. bajaj auto where identical issue was decided in respect of an earlier year allowing the benefit of the notification in respect of gauges manufactured and captively consumed in the factory had not been challenged, and, therefore, it was concluded that the tribunal's interpretation was accepted by the revenue, and they were precluded from taking an inconsistent stand.7. the learned authorized representative for the department contended that the additional duty of customs was governed by the provisions of section 3(1) of the customs tariff act, 1975, and not by the rubber act, 1947, and that the demand was, therefore, not of cess simplicitor under that act, but for additional duty of customs which in quantitative extent was to be equal to the cess which was leviable as the duty of excise on like goods produced in india. he submitted that the rubber produced in india and the imported rubber were like goods, and, therefore, whatever excise duty was chargeable on like goods produced in india would be chargeable as additional duty of customs in the case of such imported goods. he further argued that the expression "excise duty" in section 3(1) of the customs tariff act was not confined only to the central excise duty leviable under the central excise tariff act, 1985, but included duty of excise leviable under the other laws as well. he relied on the decision of the tribunal in haryana distillery v. collector of customs , in support of this contention. it was held by the tribunal therein that excise duty contemplated by section 3(1) of the customs tariff act was not confined to the excise duty leviable under the central excise act, but would also apply to levy under various state enactments. he then submitted that proviso to section 3(1) of the customs tariff act, which was inserted by the finance act, 2001, provided for the levy of additional customs duty on alcoholic liquor for human consumption imported into india, clearly indicated that the scope of expression "excise duty" under section 3(1) of the customs tariff act was not confined to the central excise duty alone. the learned authorized representative for the department further submitted that the expression "excise duty for the time being leviable on a like article" occurring in section 3(1) of the customs tariff act was only a measure of duty leviable on the imported article and did not determine the nature of duty. according to him, the rationale of charging additional duty of customs was aimed at safeguarding the interest of the manufacturers in india from the adverse impact of imports and to provide them a level playing field. he relied on paragraph 15 of the judgment of the supreme court in hyderabad industries (supra) in support of this contention. the supreme court in paragraph 15 of the judgment in hyderabad industries, held that the customs tariff act, 1975 was preceded by the indian tariff act, 1934 and in section 2a of the tariff act of 1934, a provision was made for levy of countervailing duty. that section stipulated that any article which was imported into india shall be liable to customs duty equal to the excise duty for the time being leviable on like article if produced or manufactured in india. it: was noted by the supreme court that, in the explanatory notes to clauses of the customs tariff bill, 1975, with regard to clause 3, it was stated that the said clause 3 provided for the levy of additional duty on an imported article to counter-balance the excise duly leviable on the like article made indigenously or on the indigenous raw materials, components or ingredients which go into the making of the like indigenous article. the learned authorized representative for the department further argued that it was apparent from the provisions of section 12 of the rubber act that though leviable as cess on the rubber produced in india, it was a duty of excise, and, therefore, by virtue of section 3(1) of the customs tariff act, additional duty of customs equal to excise duty was leviable. he submitted that when cess was levied as a duty of excise, the method or machinery of collection and the authority administering the same did not affect the nature and character of the levy. in support of this contention, he placed reliance on the decisions of the supreme court in r.c. jail v. union of india reported in 1998 (001) scc 0616 sc (paragraphs 13, 14 and 23), barnagore jute factory co. v. inspector of central excise and the decision of theandhra pradesh paper mills ltd. v. collector of central excise, guntur that the decisions in, vareli textile industries ltd. v. union of india of the gujarat high court (paragraphs 4vikrant tyres ltd. v. commissioner of customs, chennai vikrant tyres (tribunal's final order nos. 786-789/2003, dated 25-9-2003 (para 5), vikram ispat v. commissioner of customs, mumbai , collector of customs v. gemini overseas supported levy of additional duty of customs on the imported goods equal to the cess leviable as duty of excise. it was submitted that though the decisions were with reference to the cess leviable under the textiles committee act, 1963, the ratio was applicable to the cess leviable as duty of excise under rubber act, 1947, since the provisions of section 5a of the textiles committee act and section 12 of the rubber act were similar. he further argued that the tribunal's judgment in the case of mrf ltd. (supra), which was against the revenue, considered the issue only with reference to the ministry of finance letter dated 22-7-97, and did not examine the issue on merits and that the said letter was with reference to levy of cess on the rubber produced in india and had no relevance to the additional duty payable under section 3 of the customs tariff act. there was no valid reason to hold that the additional duty of customs under section 3 of the customs tariff act was not payable on the basis of that letter. it was submitted that the subsequent judgments merely followed the mrf judgment and the ministry of finance's letter dated 22-7-97, but did not consider the effect of the ministry of finance letters dated 2-9-97 and 29-9-97 though cited by the department before the tribunal in the case of t.t.k. lig ltd. (supra) and mm. rubber ltd. (supra). he further submitted that the tribunal in mrf ltd. (supra) did not consider the earlier decisions in birla jute industries (supra) of the tribunal and vareli textile ltd. (supra) of the gujarat high court and, therefore, the judgment in the case of mrf ltd. (supra) and subsequent judgments following the same were rendered per incuriam. it was also submitted that the letter dated 12-7-95 of the rubber board and the letter dated 30-6-97 of the ministry of commerce have been misinterpreted inasmuch as they only said that cess is levied on the rubber produced in india and not on imported rubber, and they did not say that additional duty equal to the excise levied in terms of section 3(1) of the customs tariff act was not to be levied in respect of the imported rubber. it was submitted that, in any case the ministry of finance had issued a further clarification by its letters dated 2-9-97 and 29-9-97 to the effect that even though rubber act, 1947, did not provide for collection of cess on imports, additional duty of customs is payable on import of rubber by virtue of section 3 of the customs tariff act. the cbec circular no. 75/98-cus., dated 8-10-98 withdrawing the letter dated 22-7-97 reaffirmed the position already clarified vide the ministry of finance letters dated 2-9-97 and 29-9-97. it was submitted that the imports were made by t.t.k.-lig ltd. and good year (i) ltd. after the issuance of these clarificatory letters. he also argued that no promissory estoppel could be invoked against the provisions of the act. moreover, the ministry of commerce and the rubber board were not the authorities competent to issue clarification regarding leviability of the additional duty of customs under section 3(1) of the customs tariff act. for this he relied on the decision of the supreme court in national aluminium co. ltd. v. collector of customs, madras . it was further submitted that the contention that the department was precluded from contesting the issue and the tribunal, therefore, could not consider the same, was rejected by the division bench making the reference and having withdrawn the appeal filed against that order before the supreme court after some arguments, that question cannot be agitated again before the larger bench. he then argued that a case decided on the basis of a concession/wrong concession did not form a binding precedent, and, therefore, dismissal of the appeal in other matters by the supreme court on the basis of the statement of the counsel that the appeals were not pressed, did not amount to any decision containing a declaration of law. he relied on the decisions of the supreme court in union of india v. mohanlal likumal punjabiuptron india ltd. v. shammi bhan and anr.in support of this contention. he submitted that the judgment in the case of birla corporation ltd. (supra) relied on by the appellant was distinguishable, because in that case, as recorded in paragraph 3 of the judgment, there was a specific letter from the department that the order of the tribunal had been accepted by the chief commissioner, and the statement was made by the learned attorney general that he did not wish to press the appeal on the basis of such letter. however, in the case where appeals which were not pressed before the supreme court (vikrant tyres and ors.), no such instructions were given by the department, and in fact the department had filed an application before the hon'ble supreme court seeking clarification that the appeal was dismissed on the ground of delay and not on merits, which application came to be dismissed on 31-10-2003 stating that there was no ground to modify/clarify the order dated 17-2-2003.8. since the appeal filed against order dated 2-8-2005 referring the question reproduced hereinabove for decision of the larger bench was dismissed as withdrawn after some arguments before the supreme court as recorded in the order of the supreme court made on november 11, 2005, we are required to consider and answer the said question and determine whether additional duty of customs was leviable under section 3 of the customs tariff act, 1975 on imported rubber as on the date of importation to the extent equal to the duty of excise levied as cess under section 12 of the rubber act, 1947 on rubber produced/manufactured in india on the said date. in this context, we will first refer to the provisions of section 3(1) of the customs tariff act, 1975, which are reproduced hereunder: section 3 "levy of additional duty equal to excise duty. - (1) any article which is imported into india shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in india and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at the percentage of the value of the imported article. explanation. - in this section, the expression 'the excise duty for time being leviable on a like article if produced or manufactured in india' means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in india, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.it will be noticed from the above provision that the quantum of the additional duty of customs chargeable by virtue of section 3(1) of the customs tariff act depends upon the quantum of the excise duty "for the time being leviable on the like article if produced or manufactured in india". where such excise duty on a like article is leviable at any percentage of its value, additional duty to which the imported article shall be so liable, has to be calculated at that percentage of the value of the imported article. there is no reference in section 3(1) to any particular act of the parliament or the legislature imposing the excise duty and the expression "excise duty for the time being leviable" would, therefore, be the excise duty for the time being leviable under any law on a like article if produced or manufactured in india. the theory put forth by the learned senior advocate for the appellant that the excise duty contemplated in section 3(1) of the customs tariff act would mean only the central excise duty leviable under the central excises & salt act, 1944, is not at all borne out from the wordings of section 3(1) and stands excluded by the proviso, which was subsequently introduced w.e.f. 1-3-2005, to sub-section (1) of section 3., which clearly contemplates consideration of excise duty for the time being leviable in different states on alcoholic liquor produced or manufactured in different states. even the explanation to sub-section (1) of section 3 does not confine the extent of the levy of an additional duty of customs merely to the extent of central excise duty leviable under the central excises & salt act, 1944, and it defines the expression "the central excise duty for the time being leviable on a like article if produced or manufactured in india" to mean, the excise duty for the time being in force, which would be leviable on a like article if produced or manufactured in india or if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported articles belong and where such duty is leviable at different rates, the highest duty. it is also significant to note that under sub-section (3) of section 3 of the customs tariff act, it was provided that if the central government was satisfied that, it was necessary in the public interest to levy on any imported article such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or, similar to those used in the production or manufacture of such article, it may by notification in the official gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the central government. the supreme court has in the context of the provisions of section 3 of the customs tariff act held in paragraph 15 of its judgment in hyderabad industries ltd. (supra), that even though the impost under section 3 of the customs tariff act 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 further manufacturers of the like article in india. in the notes to clauses to the customs tariff bill, 1975, it was stated that clause (3) provided for the levy of additional duty on an imported article to counter-balance the excise duty leviable on the like article made indigenously or on the indigenous raw materials, components or ingredients which go into making of the like indigenous articles. this provision corresponded to section 2a of the indian tariff act, 1934 which preceded the customs tariff act, 1975. section 2a of the indian tariff act, 1934, stipulated that any article which was imported into india shall be liable to customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in india. the rationale behind the provision was that it was necessary to safeguard the interests of the manufacturers in india. since section 3 of the customs tariff act, 1975 corresponds to section 2a of the indian tariff act, 1934 and both referred to the excise duty leviable on the like article made indigenously, there is no scope for imposing any narrow construction on the provisions of section 3(1) by confining the "excise duty for the time being leviable on a like article if produced or manufactured in india" only to such excise duty leviable under the central excises & salt act, 1944 and not to the excise duty leviable on a like article if produced or manufactured in india under the other laws imposing such excise duty. even in paragraph 17 of the said judgment, the supreme court observed that "when articles which are not produced or manufactured, cannot be subjected to levy of excise duty, then on the import of like article no additional duty can be levied under the customs tariff act. the levy of additional duty being with a view to provide for counter balancing the excise duty leviable, we are clearly of the opinion that additional duty can be levied only if on a like article excise could be levied". there is nothing in the said decision to suggest that additional customs duty was not leviable under section 3(1) of the customs tariff act even if excise duty was levied on a like article under the other laws. nor is the decision of the supreme court in motiram tolaram (supra) suggestive of such an interpretation. even in that case, the supreme court was not concerned with imposition of excise duty under the laws other than the central excise act. it is, therefore, not correct to say that it is a settled law that excise duty referred to under section 3 of the customs tariff act refers to only the duty payable under the provisions of the central excise act, 1944 and not the excise duty payable under the other laws.the contentions canvassed on behalf of the appellants on the basis of these two decisions of the supreme court are based on picking certain observations out of the context in which the observations were made, and, in both these cases, it is evident that no issue regarding excise duty leviable under other laws vis-a-vis section 3 of the customs tariff act was at all involved. admittedly, there are number of central acts providing for levy of cess as a duty of excise or simply of duty of excise, leviable on various items and the interpretation sought to be suggested on behalf of the appellants would bring about unintended consequences that would fly in the face of the provisions of section 3(1) of the customs tariff act, which was enacted for affording a level playing field to indigenous producers and manufacturers by imposing the countervailing duty on the imports of like articles.8.1 the nature of "excise duty" was considered by the federal court and gwyer, c.j., described "excise duty" thus : but its primary and fundamental meaning in english is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption". [in re the central provinces and berar act no. xiv of 1938 (1939) f.c.r. 18, 40, 41, 107, cited with approval by hon'ble supreme court r.c. jail v. union of india reported in 1962 (049) air 1281 sc].referring to the decision of the federal court in the province of madras v. boddu paidanna and sons reported in 1941 f.c.r. 90, 101 and the decision of the judicial committee, in governor general in council v. province of madras - (1945) l.r. 72 la. 91, 103, hon'ble supreme court held in r.c. jail (supra) as under : with great respect, we accept the principles laid down by the said three decisions in the matter of levy of an excise duty and the machinery for collection thereof. excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. it is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. the method of collection does not affect the essence of the duty, but only relates to the machinery or collection for administrative convenience. whether in a particular case the tax ceases to be in essence of an excise duty, and the rational connection between the duty and the person on whom it is imposed ceased to exist, is to be decided on a fair construction of the provisions of a particular act.8.2 thus, having regard to the rationale underlying the provisions of section 3(1) of the customs tariff act, which is of providing a level playing field to the indian producers and manufacturers, and having regard to the nature of the duty of excise, we find no valid reason for confining the operation of section 3(1) of the customs tariff act only to excise duties leviable under the central excise act, 1944, and ignoring excise duties leviable under the other laws. any such construction would undermine the operational effect intended to be brought about by section 3(1) of the customs tariff act and would be wholly unwarranted by the provisions of the act.9. section 12 of the rubber act, 1947 in the context of which the question of levy of additional customs duty under section 3 of the customs tariff act had arisen, reads as under : 12. imposition of new rubber cess. - (1) with effect from such date as the central government may, by notification in the official gazette, appoint, there shall be levied as a cess for the purposes of this act, a duty of excise on all rubber produced in india at such rate, not exceeding two rupees per kilogram of rubber so produced, as the central government may fix. (2) the duty of excise levied under sub-section (1) shall be collected by the board in accordance with rules made in this behalf either from the owner of the estate on which the rubber is produced or from the manufacturer by whom such rubber is used. (3) the owner or, as the case may be, the manufacturer shall pay to the board the amount of the duty one month from the date on which he receives a notice of demand therefore from the board and, if he fails to do so, the duty may be recovered from the owner or the manufacturer, as the case may be, as an arrear of land revenue. (4) for the purpose of enabling the board to assess the amount of the duty of excise levied under this section - (a) the board shall, by notification in the official gazette, fix a period in respect of which assessments shall be made; and (b) without prejudice to the provisions of section 20, every owner and every manufacturer shall furnish to the board a return not later than fifteen days after the expiry of the period to which the return relates, stating, - (i) in the case of an owner, the total quantity of rubber produced on the estate in each such period : provided that in respect of an estate situated only partly in india, the owner shall in the said return, show separately the quantity of rubber produced within and outside india. (ii) in the case of a manufacturer, the total quantity of rubber used by him in such period out of the rubber produced in india. (5) if any owner or manufacturer fails to furnish, within the time prescribed, the return referred to in sub-section (4) or furnishes a return which the board has reason to believe is incorrect or defective, the board may assess the amount of the duty of excise in such manner as may be prescribed. (6) any person aggrieved by an assessment made under this section may, within three months of the service of the notice under sub-section (3), apply to the district judge for the cancellation or modification of the assessment, and the district (which shall be final) as he thinks proper. (7) the proceeds of the duty of excise collected under this section reduced by the cost of collection as determined by the central government shall first be credited to the consolidated fund of india, and then be paid by the central government to the board for being utilized for the purposes of this act, if parliament by appropriation made by law in this behalf so provides.9.1 it is evident from the above provisions that a duty of excise on all rubber produced in india is levied as a cess for the purposes of the said act. the provisions of sub-section (1) of section 12 of the rubber act specifically laid down that the duty of excise was being levied on rubber produced in india. the word "rubber" is defined in section 3(h), and, therefore, duty of excise would be leviable on all such rubber, as is defined in clause (h) of section 3 of the act, when produced in india. this provision clearly answers the requirement of section 3(1) of the customs tariff act that additional duty shall be equal to "excise duty for the time being leviable for the article if produced or manufactured in india". the additional duty leviable under section 3(1) will be equal to the excise duty leviable under section 12(1) of the rubber act in respect of the rubber produced in india when like article is imported so as to attract the provisions of section 3(1) of the customs tariff act. the mode adopted for the collection of excise either from the owner of the estate or from the manufacturer by whom rubber is used will not change the nature of excise duty which is levied as a cess. the fact that the duty of excise is levied as a cess under the rubber act for being paid by the central government to the rubber board for its being utilized for the purposes of that act will not change the nature of the excise duty. in other words, the duty of excise remains as such notwithstanding the fact that it is levied as a cess for the purposes of the act. when cess is a tax and not a fee, the fact that the duty of excise collected is to be ultimately used for the purposes of the act will not change the nature of a tax into a fee, as is evident from sub-section (7) of section 12 the proceeds of the duty of excise collected under section 12 reduced by the cost of collection as determined by the central government, are required first to be credited to the consolidated fund of india. therefore, a subsequent allocation by the central government to the rubber board of such amount for being utilized for the purposes of the act, if parliament by appropriation made law in that behalf so provides, can never take away the characteristics of the duty of excise and it remains like any other duty of excise under any law for the time being in force including the one leviable under the central excise act. in any event, such subsequent allocation of an amount by appropriation made by law by parliament will not take away the duty of excise leviable as cess under the rubber act from the sweep of the provisions of section 3(1) of the customs tariff act for the purpose of imposing additional duty of customs equal to the excise duty leviable under section 12 of the rubber act.10. the major defect that, in our respectful opinion, occurred while deciding mrf ltd. (supra) was a total mis-construction of the meaning and effect of the communications of the government of india issued on 22-7-97 on the basis of the office memorandum by the ministry of finance on 30-6-97 which had been reproduced in the order made in mrf ltd. after reproducing these two communications, the tribunal disposed of the appeal by observing : the instructions as given by the ministry of finance are binding on the authorities as held by the hon'ble supreme court. in this circumstance, therefore, inasmuch as the ministry concerned have also clarified that the provisions of section 12 of the rubber act, 1947 can only be invoked in respect of rubber produced in india, we are of the view that the cess as demanded could not have been levied on the imported rubber. we, therefore, set aside the orders of the learned lower authority and allow the appeals of the appellants with consequential relief.10.1 the tribunal relied on the contention of the appellants that the issue stood clarified by the ministry of finance based on the clarification given by the ministry of commerce. in the clarification dated 22-7-97, the ministry of finance wrote to the commissioners informing them that the ministry of commerce had clarified that "under section 12 of the rubber act, 1947, cess is levied on rubber produced in india and not on rubber imported". copy of the office memorandum dated 30-6-97 of the ministry of commerce was forwarded for information and necessary action. in that office memorandum dated 30-6-1997 issued by the ministry of commerce, it was stated that "under section 12 of the rubber act, 1947, cess is levied on the rubber produced in india and not rubber imported". it is thus clear that neither the communication dated 22-7-97 of the finance ministry nor the communication dated 30-6-97 of the ministry of commerce dealt with the additional duty of customs leviable under section 3(1) of the customs tariff act. the communications only clarified that the cess cannot be levied under section 12 of the rubber act on any imported rubber, obviously because, the provision of section 12 was intended to levy duty of excise as cess on rubber produced in india and not on imported rubber. there was no question of levying duty of excise by way of cess under section 12 of the rubber act on the imported rubber. the imported rubber was liable to additional duty of customs under section 3(1) of the customs tariff act, which was a different duty, but was to be levied when a duty of excise was leviable on a like article produced or manufactured in india. therefore, since these communications made it clear that duty of excise was levied as cess on rubber produced in india by virtue of section 12 of the rubber act, additional duty of customs under section 3(1) of the tariff act would be attracted in respect of imported rubber, since on the like article produced in india duty of excise as cess was leviable. we may note here that, alarmed by the mis-interpretation of the these communications, the ministry of finance, within a few months of these communications, informed all commissioners of customs on 2-9-97 to ensure collection of additional duty of customs on imported goods equal to cess wherever leviable as duty of excise on goods produced/manufactured in india. it was again clarified on 29-9-97 that, when cess is leviable as duty of excise on goods produced/manufactured in india under an act then on similar imported goods an amount equivalent to the amount of cess leviable is levied as additional duty of customs. it was clarified that though the rubber act, 1947, may not provide collection of cess on imports, additional duty of customs is payable on the import of rubber by virtue of section 3 of the customs tariff act, 1975. by circular no.75/98-cus., dated 8-10-98, the government of india, ministry of finance withdrew the circular dated 22-7-97 by which the ministry of commerce letter dated 30-6-97 was circulated, with immediate effect. it is a sad comment on the processes of adjudication that these important communications should have been overlooked as a result of either the dexterity of some or negligence of others in not highlighting them as a result of which the mis-reading of the earlier communications dated 22-7-97 and 30-6-97 perpetrated. we, therefore, reproduce hereunder these important communications dated 2-9-97 and 29-9-97 of the government of india/central board of excise & customs and the circular dated 8-10-98 :- subject : levy of additional duty of customs equivalent in the amount of cess leviable under various acts - reg. section 3 of the customs tariff act, 1975 provides for levy of additional duty of customs equal to excise duty leviable on like goods produced or manufactured in india. cess is leviable on number of goods manufactured or produced in india under various acts. in number of cases such cess is collected as duty of excise. since, cess is collected as duty of excise, additional duty of customs equivalent to such cess is also leviable on imported goods. in other words, for imported goods, an amount equivalent of amount of cess leviable as duty of excise is to be collected as additional duty of customs. 2. all commissioners of customs are, therefore, requested to ensure collection of additional duty of customs on imported goods equal to cess wherever leviable as duty of excise. 3. this is issued with the approval of member (customs), central board of excise and customs. sub : levy of additional duty of customs equivalent to the amount of cess leviable under various acts-regarding. i am directed to state the following regarding levy of additional duty of customs equivalent to the amount of cess leviable on indigenously manufactured goods. 2. it has been clarified vide f. no. 572/6/97-l.c, dated 22-7-1997 that cess under rubber act, 1947 is not leviable on imported rubber since the said act provides levy of cess only on rubber produced in india and not on imported rubber. this clarification pertains to levy of cess on imported rubber. the issue under consideration vide tru's letter of even number dated 2-9-1997 is not levy of cess but levy of additional duty of customs equivalent to the amount of cess wherever such cess is leviable as duty of excise. when cess is levied on goods as duty of excise, then as per section 3 of the customs tariff act, 1975 additional duty of customs equivalent of such cess (collected as duty of excise) is leviable on similar imported goods. 3. in view of the above, wherever under an act, cess is levaible as duty of excise on goods produced/manufactured in india, then on similar imported goods an amount equivalent to the amount of cess leviable is levied as additional duty of customs. for this purpose, what is required to be considered is whether under the relevant act enabling levy of cess, cess is levied as a duty of excise. if the enabling legislation provides for levy and collection of cess as a duty of excise, then on imports corresponding amount of additional duty of customs becomes payable under section 3 of the customs tariff act, 1975. accordingly, even though the rubber act, 1947 may not provide for collection of cess on imports, additional duty of customs is payable on import of rubber by virtue of section 3 ibid. cess on imported rubber circular no. 75/98-cus., dated 8-10-98 government of india i am directed to refer to board's letter of even number dated 22-7-1997 circulating ministry of commerce's o.m.no. 14(3)97 plant (b), dated 30-6-1997 on the above subject (copy enclosed) and to say that board's above circular letter dated 22-7-1997 stands withdrawn with immediate effect.10.2 it will be evident from these communications of the ministry of finance/central board of excise & customs that there was no question of the department having accepted the stand of the assessees that the additional duty of customs was not leviable under section 3(1) of the customs tariff act in respect of the imported rubber on the ground that duty of excise levied as cess under section 12 of the rubber act, 1947, was to be imposed on rubber produced in india and not on imported rubber. there could arise no question of levying such cess under the rubber act on any imported product, because under the rubber act it was intended to the levied on rubber produced in india. the question of levy of additional duty of customs on imported rubber under section 3(1) of the customs tariff act stood totally on a different footing, and in fact that levy was attracted precisely because, duty of excise was levied as cess on rubber produced in india under the rubber act.therefore, the contentions raised on behalf of the appellants are both misconceived and misleading.11. for the foregoing reasons, we answer the question referred to us as under: additional duty of customs was leviable under section 3 of the customs tariff act, 1975 on the imported rubber, as on the date of importation, to the extent equal to the duty of excise levied as cess under section 12 of the rubber act, 1947 on rubber produced/manufactured in india as on the said date.11.1 the contrary ratio of the decision in mrf ltd. (supra) and other decisions of the tribunal following it stands overruled.12. the registry will now place the appeals before the regular bench for their disposal in accordance with the law and in the light of this judgment.

Judgment:
1. Facts : These appeals are listed before the Larger Bench by virtue of the order dated 2-8-2005 made by the Division Whether Additional Duty of Customs was leviable under Section 3 of the Customs Tariff Act, 1975 on the imported rubber, as on the date of importation, to the extent equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947 on rubber produced/manufactured in India as on the said date? 2. It appears that the appellants had challenged the said order dated 2-8-2005 before the Hon'ble Supreme Court objecting to the reference being made, but as recorded in the order dated November 11, 2005 of Hon'ble the Supreme Court made in Civil Appeal No. 6468/05, after hearing the learned Counsel for the parties and after some arguments, the learned Counsel appearing on behalf of the appellants was permitted to withdraw the appeals as the matter had been referred to a Larger Bench.

3. The principal objection against the making of reference to the Larger Bench raised on behalf of the appellant before the Division Bench was that, when the Revenue had accepted the legal position in several cases by not challenging the earlier decisions, it was not open to it to raise a contrary contention in the case of another assessee, and that it could not pick and choose the assessee for refund of duty.

It was contended that having accepted an earlier judgment of the Tribunal and the legal position by not pressing the appeals, upon instructions before the Supreme Court, which were filed in another case, the Revenue cannot be permitted to raise a contrary contention in these appeals before the Division Bench or before the Larger Bench. The Division Bench, however, was of the opinion that the order of the Hon'ble Supreme Court dismissing the appeal on the ground that it was not pressed against the decision in which a similar question was decided by the Tribunal, cannot be taken to be the law declared by the Hon'ble Supreme Court in the terms of such decision of the Tribunal. It was held that the fact that the appeal was not pressed and therefore, was dismissed, clearly indicated that there was no decision rendered by the Hon'ble Supreme Court on the merits of the issue involved and that the dismissal of that appeal, on its not being pressed, did not take away the jurisdiction of the Tribunal to decide the issue which was already referred and was pending before the earlier Larger Bench. The Division Bench noted that there was a serious question involved in these matters as to whether the earlier decision of the Tribunal in MRF Ltd. v. Commissioner of Customs , and the subsequent decisions that followed it, laid down the correct legal position.

3.1 In MRF Ltd., the Tribunal on the basis of a clarification issued by the Ministry of Finance on the letter of Ministry of Commerce, came to the conclusion that the cess demanded (under Section 3 of the Customs Tariff Act by way of additional duty payable with reference to cess levied under Section 12 of the Rubber Act, 1947 by way of duty of excise), should not have been levied on the imported rubber. Even before the present reference was made to the Larger Bench an earlier Division Bench had made a similar reference, but the earlier Larger Bench had returned the same by order dated 1-9-2003 to the regular Bench for being heard in the light of the order passed by the Hon'ble Supreme Court dismissing the appeal filed by the Revenue against the decision of the Tribunal in a group of other matters against which that appeal was preferred to the Supreme Court and later not pressed as evident from the order of the Hon'ble Supreme Court made on 17-2-2003 : Learned Counsel for the appellants states that she has instructions not to press these appeals. It is dismissed as such.

However, the Division Bench before which the matter again came up, and which has made the present reference, has held that the order dismissing the appeal as not pressed made by the Hon'ble Supreme Court in other matters did not preclude the Tribunal from reconsidering the ratio of its earlier decisions. The Division Bench having considered the effect of dismissal of the Revenue's appeal as not pressed before the Hon'ble Supreme Court, for the reasons indicated in its order dated 2-8-2005, more particular in Paragraph 7 thereof, being itself of the opinion that the question referred had arisen for being considered by a Larger Bench in view of its inability to agree with the earlier decisions, has referred the above question for a decision of the Larger Bench.

4. Against the said decision, the appellants filed Civil Appeal No.6468 of 2005 before the Supreme Court in which the following order was passed on November 11, 2005: After some arguments, learned counsel appearing on behalf of the appellants is permitted to withdraw these appeals as the matter has been referred to Larger Bench by the impugned order.

5. These appeals have arisen out of the claim made by the appellants for refund of additional duty of Customs on natural rubber which was collected under Section 3 of the Customs Tariff Act. The claim for refund was made on the grounds that, while extending the benefit of exemption from the whole of the basic Customs duty in terms of ad hoc exemption Order No. 79/95, dated 31-3-95, and from the levy of countervailing duty (CVD) as per Notification No. 18/95-CEX., cess was collected at the rate of Re. 1/- per Kg. as duty of excise leviable under the Rubber Act, 1947, on the imported natural raw rubber covered by the said claim; that cess could be collected only by the Rubber Board, and, that, the excise duty mentioned under the provisions of the Tariff Act was only excise duly levied under the Central Excise Act, 1944; that the Rubber, Board by their circular dated 12-7-95 had clarified that cess on rubber was levied under Section 12 of the Rubber Act, 1947 and was applicable only in the case rubber produced indigenously and not on the imported rubber; that the cess cannot be equated to additional duties of excise levied under other tax laws like Goods of Special Importance Act, 1957, Additional Duties of Excise (Textiles) Act, 1978, where there were inbuilt provisions making Central Excise Act, 1944, applicable, and, therefore, the cess collected in the form of additional duty in all these cases had become refundable.

5.1 The Assistant Commissioner of Customs (Refunds) rejected the appellants' claims by holding that the Customs authorities were fully empowered to levy and collect the duty of excise levied as cess as additional duty under Section 3(1) of the Tariff Act. It was held that the basis for the charge under Section 3(1) of the Customs Tariff Act in case of imported goods arises from the said provisions, and that it was only for ascertaining whether any duty of excise was leviable on the like article produced in India, one had to refer to the law or laws that provided for such a levy. It was held that as far as imported rubber was concerned, Customs authorities are fully empowered to collect amount equal to cess as additional duty, as duty of excise was leviable as cess on indigenously produced rubber and not exempted by any notification issued under the relevant Act. Following the ratio of the decision of the Tribunal in Commissioner of Customs v. Birla Jute Industries Ltd. Commissioner held that cess collected as additional duty under Section 3(1) of the Customs Tariff Act, and quantified as per the Rubber Act, 1947, was legal and proper and that the claim merited rejection.

5.2 In the appeal which was preferred against the order of the Assistant Commissioner, it was held by the Commissioner (Appeals) that the cess leviable in terms of the Rubber Act was to be collected as a duty of excise, and that, the power to levy excise duty as additional duty was in Section 3(1) of the Customs Tariff Act. It was observed that under Section 3(1) of the Customs Tariff Act, the additional duty equivalent to the amount of excise duty for the time being leviable on a like article, if produced or manufactured in India, was leviable on imported goods. The learned Commissioner (Appeals) held that whether cess was leviable as excise duty, an amount equal to that amount was collected as additional/countervailing duty on imported goods. He noted that this legal position had been affirmed by the clarification issued by the Ministry of Finance vide F. No. 345/31/97-TRU, dated 29-9-97, wherein it was stated that where cess is leviable as duty of excise on goods produced/manufactured in India, then on similar imported goods an amount of cess leviable is levied as additional duty of customs. For this purpose, what is required to be considered is whether under the relevant Act enabling the levy, cess is levied and collected as a duty of excise, in which event on imports corresponding amount of duty of Customs becomes payable under Section 3 of the Customs Tariff Act.

Accordingly, even though the Rubber Act, 1947, did not provide for collection of additional duty of customs on imports, it becomes payable on the import of rubber by virtue of Section 3 of the Customs Tariff Act. The appeal was, therefore, rejected leading to the present appeal.

6. We have heard both the sides at great length. It has been contended before us on behalf of the appellants by the learned senior advocate that when something is levied as a cess, the nature and characteristic of that levy changes. It was submitted that cesses are earmarked for particular purposes unlike duties of excise and other taxes which are not so earmarked. He argued that Section 3 of the Customs Tariff Act, 1975, contemplated levy of duty of excise under the Central Excise Act, 1944, and not any duty of excise levied as cess under any other law. He submitted that cess was levied and collected for the benefit of the industry, and did not constitute any additional burden that would require a level playing field. According to him, it was a settled law that excise duty referred to under Section 3 of the Customs Tariff Act refers to only what was payable by the Indian manufacturer under the Central Excise Act, 1944. He also submitted that the explanation in Section 3(1) of the Customs Tariff Act indicated that excise duty referred to in that section related to the duty of excise under the Central Excise Act, 1944, since it provided that if a like article was not manufactured in India, the duty of excise leviable on the class or description of articles to which the imported article belonged, would be taken into consideration. The learned counsel submitted that in order to determine the class or description of article, reference would necessarily have to be made to the Central Excise Tariff which provided for the class or description of article, and that no such class or description of article was provided under the Rubber Act. Therefore, the provisions contained in the said explanation can only be worked out with reference to the Central Excise Tariff Act, and not to the Rubber Act. The learned counsel submitted that this clearly indicated that Section 3 of the Customs Tariff Act referred to duty of excise levied under the Central Excise Act, 1944. It was also submitted that the cess was collected under the Rubber Act, and though first credited to the Consolidated Fund of India, it was then paid to the Rubber Board for being utilized for the purposes of the Rubber Act. Thus, it was a tax collected for the allocated purpose, i.e., for the benefit of rubber industry to which the taxpayer belonged and benefited by such allocation. The levy of cess, therefore, did not constitute any additional burden to the taxpayer like duty of excise, which was not for any allocated purpose of development of the industry to which the taxpayer belonged. According to the learned counsel, the decisions of the Supreme Court in Motiram Tolaram v. UOI and Hyderabad Industries Ltd. v. UOI , concluded the issue. It was also submitted that the Revenue was precluded from raising the contention which was contrary to the earlier decisions of the Tribunal relating to the issue referred, since those earlier judgments were accepted by the Revenue by not preferring appeal, and because the appeals filed by the Revenue in the earlier case of Vikrant Tyres Ltd. were not pressed upon instructions and dismissed by the Hon'ble Supreme Court by order dated 17-2-2003.

6.1 The learned senior Advocate for the appellants relied on the following decisions in support of his contentions : (a) The decision of the Supreme Court in Hyderabad Industries Ltd. v. UOI , was cited to point out that it was held in Paragraph 17 of the judgment that, "...the measure for levy of additional duty is the quantum of excise duty leviable on a similar article under the Excise Act. Duty under the Excise Act can be levied, as has been held earlier, if the article has come into existence as a result of production and manufacture. In other words, when articles which are not produced or manufactured cannot be subjected to levy of excise duty then on the import of like articles no additional duty can be levied under the Customs Tariff Act." (b) The decision of the Supreme Court in Motiram Tolaram v. UOI , was cited to point out that it was held in Paragraph 4 of the judgment that, correct interpretation of Section 3 of the Customs Tariff Act was now settled that the rate of duty would be only that which an Indian manufacturer would pay under the Excise Act on a like article, as held in Hyderabad Industries Ltd. (c) The decision of the Delhi High Court in Pasutpati Fabrics Ltd. v. Union of India , was cited to point out from Paragraph 16 of the judgment that, it was held therein that, merely because the words "duty of excise" were used in Section 5A of the Textile Committee Act, 1963, it would not mean that what was charged was the excise. One had to see the real nature of the levy and under Section 5A, which was imposition of the prescribed cess. Moreover, excise duty was leviable specifically under the Central Excises & Salt Act, 1944, and it was not the same excise duty which was sought to be charged all over again. It was held that the exemption was given as per the notification issued under the Central Excises & Salt Act, 1944, and, therefore, the promise was for exemption from payment of excise duties and not cess which was a fee, as held by the Division Bench in Nath Bros. Exim International Ltd. (quoted in Paragraph 15 of the judgment). It was also held that there was no notification of exemption under Section 5E of that Act, and the notification of exemption was issued under the Central Excise Act, 1944, and, therefore, the question of promissory estoppel did not arise in respect of exemption from cess.

(d) The decision of the Delhi High Court in Nath Bros. International Ltd. v. UOI and Ors. (DB), was cited to point out that it was held in Paragraph 18 of the judgment that apart from the fact that having regard to the nature and purpose of the cess levied under the Textiles Committee Act, 1963, although credited to the Consolidated Fund of India and then disbursed to the Textile Committee, it still had the traces of fee as was being levied prior to insertion of Section 5A in the Act, and could perhaps be distinguished from a tax, and that it was felt that the incidence of the two levies, namely, under the Customs Act and under the Textiles Committee Act were entirely different. In this case validity of the public notice issued by the Textiles Committee under Section 12 of the Textiles Committee Act, 1963, directing all the manufacturers/exporters of silk ready-made garments to pay to the Committee the amount of cess at 0.05% ad valorem from 1975 calculated on the basis of the FOB value of the shipping bills, as contemplated under Section 5A(1) of the Textiles Committee Act, 1963, was challenged, and no question was, therefore, involved in the context of additional duty payable under Section 3 of the Customs Tariff Act.Collector of Central Excise, Pune v. Tata Engineering & Locomotives Co. Ltd. , was cited to point out from Paragraph 7 of the judgment that it was observed herein that, apart from the question of interpretation of the notification, the appellant had not offered any explanation why the decision of the Tribunal in M/s. Bajaj Auto where identical issue was decided in respect of an earlier year allowing the benefit of the notification in respect of gauges manufactured and captively consumed in the factory had not been challenged, and, therefore, it was concluded that the Tribunal's interpretation was accepted by the Revenue, and they were precluded from taking an inconsistent stand.

7. The learned authorized representative for the department contended that the additional duty of Customs was governed by the provisions of Section 3(1) of the Customs Tariff Act, 1975, and not by the Rubber Act, 1947, and that the demand was, therefore, not of cess simplicitor under that Act, but for additional duty of customs which in quantitative extent was to be equal to the cess which was leviable as the duty of excise on like goods produced in India. He submitted that the rubber produced in India and the imported rubber were like goods, and, therefore, whatever excise duty was chargeable on like goods produced in India would be chargeable as additional duty of customs in the case of such imported goods. He further argued that the expression "excise duty" in Section 3(1) of the Customs Tariff Act was not confined only to the central excise duty leviable under the Central Excise Tariff Act, 1985, but included duty of excise leviable under the other laws as well. He relied on the decision of the Tribunal in Haryana Distillery v. Collector of Customs , in support of this contention. It was held by the Tribunal therein that excise duty contemplated by Section 3(1) of the Customs Tariff Act was not confined to the excise duty leviable under the Central Excise Act, but would also apply to levy under various State enactments. He then submitted that proviso to Section 3(1) of the Customs Tariff Act, which was inserted by the Finance Act, 2001, provided for the levy of additional customs duty on alcoholic liquor for human consumption imported into India, clearly indicated that the scope of expression "excise duty" under Section 3(1) of the Customs Tariff Act was not confined to the central excise duty alone. The learned authorized representative for the Department further submitted that the expression "excise duty for the time being leviable on a like article" occurring in Section 3(1) of the Customs Tariff Act was only a measure of duty leviable on the imported article and did not determine the nature of duty. According to him, the rationale of charging additional duty of customs was aimed at safeguarding the interest of the manufacturers in India from the adverse impact of imports and to provide them a level playing field. He relied on Paragraph 15 of the judgment of the Supreme Court in Hyderabad Industries (supra) in support of this contention. The Supreme Court in Paragraph 15 of the judgment in Hyderabad Industries, held that the Customs Tariff Act, 1975 was preceded by the Indian Tariff Act, 1934 and in Section 2A of the Tariff Act of 1934, a provision was made for levy of countervailing duty. That section stipulated that any article which was imported into India shall be liable to customs duty equal to the excise duty for the time being leviable on like article if produced or manufactured in India. It: was noted by the Supreme Court that, in the Explanatory Notes to Clauses of the Customs Tariff Bill, 1975, with regard to Clause 3, it was stated that the said Clause 3 provided for the levy of additional duty on an imported article to counter-balance the excise duly leviable on the like article made indigenously or on the indigenous raw materials, components or ingredients which go into the making of the like indigenous article. The learned authorized representative for the Department further argued that it was apparent from the provisions of Section 12 of the Rubber Act that though leviable as cess on the rubber produced in India, it was a duty of excise, and, therefore, by virtue of Section 3(1) of the Customs Tariff Act, additional duty of customs equal to excise duty was leviable. He submitted that when cess was levied as a duty of excise, the method or machinery of collection and the authority administering the same did not affect the nature and character of the levy. In support of this contention, he placed reliance on the decisions of the Supreme Court in R.C. Jail v. Union of India reported in 1998 (001) SCC 0616 SC (Paragraphs 13, 14 and 23), Barnagore jute Factory Co. v. Inspector of Central Excise and the decision of theAndhra Pradesh Paper Mills Ltd. v. Collector of Central Excise, Guntur that the decisions in, Vareli Textile Industries Ltd. v. Union of India of the Gujarat High Court (Paragraphs 4Vikrant Tyres Ltd. v. Commissioner of Customs, Chennai Vikrant Tyres (Tribunal's Final Order Nos. 786-789/2003, dated 25-9-2003 (Para 5), Vikram Ispat v. Commissioner of Customs, Mumbai , Collector of Customs v. Gemini Overseas supported levy of additional duty of customs on the imported goods equal to the cess leviable as duty of excise. It was submitted that though the decisions were with reference to the cess leviable under the Textiles Committee Act, 1963, the ratio was applicable to the cess leviable as duty of excise under Rubber Act, 1947, since the provisions of Section 5A of the Textiles Committee Act and Section 12 of the Rubber Act were similar. He further argued that the Tribunal's judgment in the case of MRF Ltd. (supra), which was against the Revenue, considered the issue only with reference to the Ministry of Finance letter dated 22-7-97, and did not examine the issue on merits and that the said letter was with reference to levy of cess on the rubber produced in India and had no relevance to the additional duty payable under Section 3 of the Customs Tariff Act. There was no valid reason to hold that the additional duty of customs under Section 3 of the Customs Tariff Act was not payable on the basis of that letter. It was submitted that the subsequent judgments merely followed the MRF judgment and the Ministry of Finance's letter dated 22-7-97, but did not consider the effect of the Ministry of Finance letters dated 2-9-97 and 29-9-97 though cited by the Department before the Tribunal in the case of T.T.K. LIG Ltd. (supra) and MM. Rubber Ltd. (supra). He further submitted that the Tribunal in MRF Ltd. (supra) did not consider the earlier decisions in Birla Jute Industries (supra) of the Tribunal and Vareli Textile Ltd. (supra) of the Gujarat High Court and, therefore, the judgment in the case of MRF Ltd. (supra) and subsequent judgments following the same were rendered per incuriam. It was also submitted that the letter dated 12-7-95 of the Rubber Board and the letter dated 30-6-97 of the Ministry of Commerce have been misinterpreted inasmuch as they only said that cess is levied on the rubber produced in India and not on imported rubber, and they did not say that additional duty equal to the excise levied in terms of Section 3(1) of the Customs Tariff Act was not to be levied in respect of the imported rubber. It was submitted that, in any case the Ministry of Finance had issued a further clarification by its letters dated 2-9-97 and 29-9-97 to the effect that even though Rubber Act, 1947, did not provide for collection of cess on imports, additional duty of customs is payable on import of rubber by virtue of Section 3 of the Customs Tariff Act. The CBEC Circular No. 75/98-Cus., dated 8-10-98 withdrawing the letter dated 22-7-97 reaffirmed the position already clarified vide the Ministry of Finance letters dated 2-9-97 and 29-9-97. It was submitted that the imports were made by T.T.K.-LIG Ltd. and Good Year (I) Ltd. after the issuance of these clarificatory letters. He also argued that no promissory estoppel could be invoked against the provisions of the Act. Moreover, the Ministry of Commerce and the Rubber Board were not the authorities competent to issue clarification regarding leviability of the additional duty of customs under Section 3(1) of the Customs Tariff Act. For this he relied on the decision of the Supreme Court in National Aluminium Co. Ltd. v. Collector of Customs, Madras . It was further submitted that the contention that the department was precluded from contesting the issue and the Tribunal, therefore, could not consider the same, was rejected by the Division Bench making the reference and having withdrawn the appeal filed against that order before the Supreme Court after some arguments, that question cannot be agitated again before the Larger Bench. He then argued that a case decided on the basis of a concession/wrong concession did not form a binding precedent, and, therefore, dismissal of the appeal in other matters by the Supreme Court on the basis of the statement of the counsel that the appeals were not pressed, did not amount to any decision containing a declaration of law. He relied on the decisions of the Supreme Court in Union of India v. Mohanlal Likumal PunjabiUptron India Ltd. v. Shammi Bhan and Anr.

in support of this contention. He submitted that the judgment in the case of Birla Corporation Ltd. (supra) relied on by the appellant was distinguishable, because in that case, as recorded in Paragraph 3 of the judgment, there was a specific letter from the department that the order of the Tribunal had been accepted by the Chief Commissioner, and the statement was made by the learned Attorney General that he did not wish to press the appeal on the basis of such letter. However, in the case where appeals which were not pressed before the Supreme Court (Vikrant Tyres and Ors.), no such instructions were given by the department, and in fact the department had filed an application before the Hon'ble Supreme Court seeking clarification that the appeal was dismissed on the ground of delay and not on merits, which application came to be dismissed on 31-10-2003 stating that there was no ground to modify/clarify the order dated 17-2-2003.

8. Since the appeal filed against order dated 2-8-2005 referring the question reproduced hereinabove for decision of the Larger Bench was dismissed as withdrawn after some arguments before the Supreme Court as recorded in the order of the Supreme Court made on November 11, 2005, we are required to consider and answer the said question and determine whether additional duty of customs was leviable under Section 3 of the Customs Tariff Act, 1975 on imported rubber as on the date of importation to the extent equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947 on rubber produced/manufactured in India on the said date. In this context, we will first refer to the provisions of Section 3(1) of the Customs Tariff Act, 1975, which are reproduced hereunder: Section 3 "Levy of additional duty equal to excise duty. - (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at the percentage of the value of the imported article.

Explanation. - In this section, the expression 'the excise duty for time being leviable on a like article if produced or manufactured in India' means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.

It will be noticed from the above provision that the quantum of the additional duty of customs chargeable by virtue of Section 3(1) of the Customs Tariff Act depends upon the quantum of the excise duty "for the time being leviable on the like article if produced or manufactured in India". Where such excise duty on a like article is leviable at any percentage of its value, additional duty to which the imported article shall be so liable, has to be calculated at that percentage of the value of the imported article. There is no reference in Section 3(1) to any particular Act of the Parliament or the Legislature imposing the excise duty and the expression "excise duty for the time being leviable" would, therefore, be the excise duty for the time being leviable under any law on a like article if produced or manufactured in India. The theory put forth by the learned senior Advocate for the appellant that the excise duty contemplated in Section 3(1) of the Customs Tariff Act would mean only the central excise duty leviable under the Central Excises & Salt Act, 1944, is not at all borne out from the wordings of Section 3(1) and stands excluded by the proviso, which was subsequently introduced w.e.f. 1-3-2005, to Sub-section (1) of Section 3., which clearly contemplates consideration of excise duty for the time being leviable in different States on alcoholic liquor produced or manufactured in different States. Even the explanation to Sub-section (1) of Section 3 does not confine the extent of the levy of an additional duty of customs merely to the extent of central excise duty leviable under the Central Excises & Salt Act, 1944, and it defines the expression "the central excise duty for the time being leviable on a like article if produced or manufactured in India" to mean, the excise duty for the time being in force, which would be leviable on a like article if produced or manufactured in India or if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported articles belong and where such duty is leviable at different rates, the highest duty. It is also significant to note that under Sub-section (3) of Section 3 of the Customs Tariff Act, it was provided that if the Central Government was satisfied that, it was necessary in the public interest to levy on any imported article such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or, similar to those used in the production or manufacture of such article, it may by notification in the official gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government. The Supreme Court has in the context of the provisions of Section 3 of the Customs Tariff Act held in Paragraph 15 of its judgment in Hyderabad Industries Ltd. (supra), that even though the impost under Section 3 of the Customs Tariff Act 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 further manufacturers of the like article in India. In the Notes to Clauses to the Customs Tariff Bill, 1975, it was stated that Clause (3) provided for the levy of additional duty on an imported article to counter-balance the excise duty leviable on the like article made indigenously or on the indigenous raw materials, components or ingredients which go into making of the like indigenous articles. This provision corresponded to Section 2A of the Indian Tariff Act, 1934 which preceded the Customs Tariff Act, 1975. Section 2A of the Indian Tariff Act, 1934, stipulated that any article which was imported into India shall be liable to customs duty equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The rationale behind the provision was that it was necessary to safeguard the interests of the manufacturers in India. Since Section 3 of the Customs Tariff Act, 1975 corresponds to Section 2A of the Indian Tariff Act, 1934 and both referred to the excise duty leviable on the like article made indigenously, there is no scope for imposing any narrow construction on the provisions of Section 3(1) by confining the "excise duty for the time being leviable on a like article if produced or manufactured in India" only to such excise duty leviable under the Central Excises & Salt Act, 1944 and not to the excise duty leviable on a like article if produced or manufactured in India under the other laws imposing such excise duty. Even in Paragraph 17 of the said judgment, the Supreme Court observed that "when articles which are not produced or manufactured, cannot be subjected to levy of excise duty, then on the import of like article no additional duty can be levied under the Customs Tariff Act. The levy of additional duty being with a view to provide for counter balancing the excise duty leviable, we are clearly of the opinion that additional duty can be levied only if on a like article excise could be levied". There is nothing in the said decision to suggest that additional customs duty was not leviable under Section 3(1) of the Customs Tariff Act even if excise duty was levied on a like article under the other laws. Nor is the decision of the Supreme Court in Motiram Tolaram (supra) suggestive of such an interpretation. Even in that case, the Supreme Court was not concerned with imposition of excise duty under the laws other than the Central Excise Act. It is, therefore, not correct to say that it is a settled law that excise duty referred to under Section 3 of the Customs Tariff Act refers to only the duty payable under the provisions of the Central Excise Act, 1944 and not the excise duty payable under the other laws.

The contentions canvassed on behalf of the appellants on the basis of these two decisions of the Supreme Court are based on picking certain observations out of the context in which the observations were made, and, in both these cases, it is evident that no issue regarding excise duty leviable under other laws vis-a-vis Section 3 of the Customs Tariff Act was at all involved. Admittedly, there are number of Central Acts providing for levy of cess as a duty of excise or simply of duty of excise, leviable on various items and the interpretation sought to be suggested on behalf of the appellants would bring about unintended consequences that would fly in the face of the provisions of Section 3(1) of the Customs Tariff Act, which was enacted for affording a level playing field to indigenous producers and manufacturers by imposing the countervailing duty on the imports of like articles.

8.1 The nature of "excise duty" was considered by the Federal Court and Gwyer, C.J., described "excise duty" thus : But its primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption". [In re the Central Provinces and Berar Act No. XIV of 1938 (1939) F.C.R. 18, 40, 41, 107, cited with approval by Hon'ble Supreme Court R.C. Jail v. Union of India reported in 1962 (049) AIR 1281 SC].

Referring to the decision of the Federal Court in The Province of Madras v. Boddu Paidanna and Sons reported in 1941 F.C.R. 90, 101 and the decision of the Judicial Committee, in Governor General in Council v. Province of Madras - (1945) L.R. 72 LA. 91, 103, Hon'ble Supreme Court held in R.C. Jail (supra) as under : With great respect, we accept the principles laid down by the said three decisions in the matter of levy of an excise duty and the machinery for collection thereof. Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The method of collection does not affect the essence of the duty, but only relates to the machinery or collection for administrative convenience. Whether in a particular case the tax ceases to be in essence of an excise duty, and the rational connection between the duty and the person on whom it is imposed ceased to exist, is to be decided on a fair construction of the provisions of a particular Act.

8.2 Thus, having regard to the rationale underlying the provisions of Section 3(1) of the Customs Tariff Act, which is of providing a level playing field to the Indian producers and manufacturers, and having regard to the nature of the duty of excise, we find no valid reason for confining the operation of Section 3(1) of the Customs Tariff Act only to excise duties leviable under the Central Excise Act, 1944, and ignoring excise duties leviable under the other laws. Any such construction would undermine the operational effect intended to be brought about by Section 3(1) of the Customs Tariff Act and would be wholly unwarranted by the provisions of the Act.

9. Section 12 of the Rubber Act, 1947 in the context of which the question of levy of additional customs duty under Section 3 of the Customs Tariff Act had arisen, reads as under : 12. Imposition of new rubber cess. - (1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be levied as a cess for the purposes of this Act, a duty of excise on all rubber produced in India at such rate, not exceeding two rupees per kilogram of rubber so produced, as the Central Government may fix.

(2) The duty of excise levied under Sub-section (1) shall be collected by the Board in accordance with rules made in this behalf either from the owner of the estate on which the rubber is produced or from the manufacturer by whom such rubber is used.

(3) The owner or, as the case may be, the manufacturer shall pay to the Board the amount of the duty one month from the date on which he receives a notice of demand therefore from the Board and, if he fails to do so, the duty may be recovered from the owner or the manufacturer, as the case may be, as an arrear of land revenue.

(4) For the purpose of enabling the Board to assess the amount of the duty of excise levied under this section - (a) the Board shall, by notification in the Official Gazette, fix a period in respect of which assessments shall be made; and (b) without prejudice to the provisions of Section 20, every owner and every manufacturer shall furnish to the Board a return not later than fifteen days after the expiry of the period to which the return relates, stating, - (i) in the case of an owner, the total quantity of rubber produced on the estate in each such period : Provided that in respect of an estate situated only partly in India, the owner shall in the said return, show separately the quantity of rubber produced within and outside India.

(ii) in the case of a manufacturer, the total quantity of rubber used by him in such period out of the rubber produced in India.

(5) If any owner or manufacturer fails to furnish, within the time prescribed, the return referred to in Sub-section (4) or furnishes a return which the Board has reason to believe is incorrect or defective, the Board may assess the amount of the duty of excise in such manner as may be prescribed.

(6) Any person aggrieved by an assessment made under this Section may, within three months of the service of the notice under Sub-section (3), apply to the District Judge for the cancellation or modification of the assessment, and the District (which shall be final) as he thinks proper.

(7) The proceeds of the duty of excise collected under this section reduced by the cost of collection as determined by the Central Government shall first be credited to the Consolidated Fund of India, and then be paid by the Central Government to the Board for being utilized for the purposes of this Act, if Parliament by appropriation made by law in this behalf so provides.

9.1 It is evident from the above provisions that a duty of excise on all rubber produced in India is levied as a cess for the purposes of the said Act. The provisions of Sub-section (1) of Section 12 of the Rubber Act specifically laid down that the duty of excise was being levied on rubber produced in India. The word "rubber" is defined in Section 3(h), and, therefore, duty of excise would be leviable on all such rubber, as is defined in clause (h) of Section 3 of the Act, when produced in India. This provision clearly answers the requirement of Section 3(1) of the Customs Tariff Act that additional duty shall be equal to "excise duty for the time being leviable for the article if produced or manufactured in India". The additional duty leviable under Section 3(1) will be equal to the excise duty leviable under Section 12(1) of the Rubber Act in respect of the rubber produced in India when like article is imported so as to attract the provisions of Section 3(1) of the Customs Tariff Act. The mode adopted for the collection of excise either from the owner of the estate or from the manufacturer by whom rubber is used will not change the nature of excise duty which is levied as a cess. The fact that the duty of excise is levied as a cess under the Rubber Act for being paid by the Central Government to the Rubber Board for its being utilized for the purposes of that Act will not change the nature of the excise duty. In other words, the duty of excise remains as such notwithstanding the fact that it is levied as a cess for the purposes of the Act. When cess is a tax and not a fee, the fact that the duty of excise collected is to be ultimately used for the purposes of the Act will not change the nature of a tax into a fee, As is evident from Sub-section (7) of Section 12 the proceeds of the duty of excise collected under Section 12 reduced by the cost of collection as determined by the Central Government, are required first to be credited to the Consolidated Fund of India. Therefore, a subsequent allocation by the Central Government to the Rubber Board of such amount for being utilized for the purposes of the Act, if Parliament by appropriation made law in that behalf so provides, can never take away the characteristics of the duty of excise and it remains like any other duty of excise under any law for the time being in force including the one leviable under the Central Excise Act. In any event, such subsequent allocation of an amount by appropriation made by law by Parliament will not take away the duty of excise leviable as cess under the Rubber Act from the sweep of the provisions of Section 3(1) of the Customs Tariff Act for the purpose of imposing additional duty of customs equal to the excise duty leviable under Section 12 of the Rubber Act.

10. The major defect that, in our respectful opinion, occurred while deciding MRF Ltd. (supra) was a total mis-construction of the meaning and effect of the communications of the Government of India issued on 22-7-97 on the basis of the office memorandum by the Ministry of Finance on 30-6-97 which had been reproduced in the order made in MRF Ltd. After reproducing these two communications, the Tribunal disposed of the appeal by observing : The instructions as given by the Ministry of Finance are binding on the authorities as held by the Hon'ble Supreme Court. In this circumstance, therefore, inasmuch as the Ministry concerned have also clarified that the provisions of Section 12 of the Rubber Act, 1947 can only be invoked in respect of Rubber produced in India, we are of the view that the cess as demanded could not have been levied on the imported rubber. We, therefore, set aside the orders of the learned lower authority and allow the appeals of the appellants with consequential relief.

10.1 The Tribunal relied on the contention of the appellants that the issue stood clarified by the Ministry of Finance based on the clarification given by the Ministry of Commerce. In the clarification dated 22-7-97, the Ministry of Finance wrote to the Commissioners informing them that the Ministry of Commerce had clarified that "under Section 12 of the Rubber Act, 1947, cess is levied on rubber produced in India and not on rubber imported". Copy of the office memorandum dated 30-6-97 of the Ministry of Commerce was forwarded for information and necessary action. In that office memorandum dated 30-6-1997 issued by the Ministry of Commerce, it was stated that "under Section 12 of the Rubber Act, 1947, cess is levied on the rubber produced in India and not rubber imported". It is thus clear that neither the communication dated 22-7-97 of the Finance Ministry nor the communication dated 30-6-97 of the Ministry of Commerce dealt with the additional duty of customs leviable under Section 3(1) of the Customs Tariff Act. The communications only clarified that the cess cannot be levied under Section 12 of the Rubber Act on any imported rubber, obviously because, the provision of Section 12 was intended to levy duty of excise as cess on rubber produced in India and not on imported rubber. There was no question of levying duty of excise by way of cess under Section 12 of the Rubber Act on the imported rubber. The imported rubber was liable to additional duty of Customs under Section 3(1) of the Customs Tariff Act, which was a different duty, but was to be levied when a duty of excise was leviable on a like article produced or manufactured in India. Therefore, since these communications made it clear that duty of excise was levied as cess on rubber produced in India by virtue of Section 12 of the Rubber Act, additional duty of Customs under Section 3(1) of the Tariff Act would be attracted in respect of imported rubber, since on the like article produced in India duty of excise as cess was leviable. We may note here that, alarmed by the mis-interpretation of the these communications, the Ministry of Finance, within a few months of these communications, informed all Commissioners of Customs on 2-9-97 to ensure collection of additional duty of Customs on imported goods equal to cess wherever leviable as duty of excise on goods produced/manufactured in India. It was again clarified on 29-9-97 that, when cess is leviable as duty of excise on goods produced/manufactured in India under an Act then on similar imported goods an amount equivalent to the amount of cess leviable is levied as additional duty of Customs. It was clarified that though the Rubber Act, 1947, may not provide collection of cess on imports, additional duty of Customs is payable on the import of rubber by virtue of Section 3 of the Customs Tariff Act, 1975. By Circular No.75/98-Cus., dated 8-10-98, the Government of India, Ministry of Finance withdrew the circular dated 22-7-97 by which the Ministry of Commerce letter dated 30-6-97 was circulated, with immediate effect. It is a sad comment on the processes of adjudication that these important communications should have been overlooked as a result of either the dexterity of some or negligence of others in not highlighting them as a result of which the mis-reading of the earlier communications dated 22-7-97 and 30-6-97 perpetrated. We, therefore, reproduce hereunder these important communications dated 2-9-97 and 29-9-97 of the Government of India/Central Board of Excise & Customs and the circular dated 8-10-98 :- Subject : Levy of additional duty of Customs equivalent in the amount of cess leviable under various Acts - reg.

Section 3 of the Customs Tariff Act, 1975 provides for levy of additional duty of Customs equal to excise duty leviable on like goods produced or manufactured in India. Cess is leviable on number of goods manufactured or produced in India under various Acts. In number of cases such cess is collected as duty of excise. Since, cess is collected as duty of excise, additional duty of customs equivalent to such cess is also leviable on imported goods. In other words, for imported goods, an amount equivalent of amount of cess leviable as duty of excise is to be collected as additional duty of customs.

2. All Commissioners of Customs are, therefore, requested to ensure collection of additional duty of customs on imported goods equal to cess wherever leviable as duty of excise.

3. This is issued with the approval of Member (Customs), Central Board of Excise and Customs.

Sub : Levy of additional duty of Customs equivalent to the amount of cess leviable under various Acts-regarding.

I am directed to state the following regarding levy of additional duty of customs equivalent to the amount of cess leviable on indigenously manufactured goods.

2. It has been clarified vide F. No. 572/6/97-L.C, dated 22-7-1997 that cess under Rubber Act, 1947 is not leviable on imported rubber since the said Act provides levy of cess only on rubber produced in India and not on imported rubber. This clarification pertains to levy of cess on imported rubber. The issue under consideration vide TRU's letter of even number dated 2-9-1997 is not levy of cess but levy of additional duty of Customs equivalent to the amount of cess wherever such cess is leviable as duty of excise. When cess is levied on goods as duty of excise, then as per Section 3 of the Customs Tariff Act, 1975 additional duty of Customs equivalent of such cess (collected as duty of excise) is leviable on similar imported goods.

3. In view of the above, wherever under an Act, cess is levaible as duty of excise on goods produced/manufactured in India, then on similar imported goods an amount equivalent to the amount of cess leviable is levied as additional duty of Customs. For this purpose, what is required to be considered is whether under the relevant Act enabling levy of cess, cess is levied as a duty of excise. If the enabling legislation provides for levy and collection of cess as a duty of excise, then on imports corresponding amount of additional duty of customs becomes payable under Section 3 of the Customs Tariff Act, 1975. Accordingly, even though the Rubber Act, 1947 may not provide for collection of cess on imports, additional duty of Customs is payable on import of rubber by virtue of Section 3 ibid.

Cess on imported Rubber Circular No. 75/98-Cus., dated 8-10-98 Government of India I am directed to refer to Board's letter of even number dated 22-7-1997 circulating Ministry of Commerce's O.M.No. 14(3)97 Plant (B), dated 30-6-1997 on the above subject (copy enclosed) and to say that Board's above Circular letter dated 22-7-1997 stands withdrawn with immediate effect.

10.2 It will be evident from these communications of the Ministry of Finance/Central Board of Excise & Customs that there was no question of the department having accepted the stand of the assessees that the additional duty of Customs was not leviable under Section 3(1) of the Customs Tariff Act in respect of the imported rubber on the ground that duty of excise levied as cess under Section 12 of the Rubber Act, 1947, was to be imposed on rubber produced in India and not on imported rubber. There could arise no question of levying such cess under the Rubber Act on any imported product, because under the Rubber Act it was intended to the levied on rubber produced in India. The question of levy of additional duty of Customs on imported rubber under Section 3(1) of the Customs Tariff Act stood totally on a different footing, and in fact that levy was attracted precisely because, duty of excise was levied as cess on rubber produced in India under the Rubber Act.

Therefore, the contentions raised on behalf of the appellants are both misconceived and misleading.

11. For the foregoing reasons, we answer the question referred to us as under: Additional duty of Customs was leviable under Section 3 of the Customs Tariff Act, 1975 on the imported rubber, as on the date of importation, to the extent equal to the duty of excise levied as cess under Section 12 of the Rubber Act, 1947 on rubber produced/manufactured in India as on the said date.

11.1 The contrary ratio of the decision in MRF Ltd. (supra) and other decisions of the Tribunal following it stands overruled.

12. The Registry will now place the appeals before the Regular Bench for their disposal in accordance with the law and in the light of this judgment.