Customs, Excise and Gold Tribunal - MumbaiGuest Keen Williams Ltd. vs Cce on 18 May, 1999Equivalent citations: 1999(85)ECR703(TRI.-MUMBAI)ORDERP.C. Jain, Vice-President1. Briefly stated facts of this case are as follows:1.1. The appellants herein imported steel wires and paid Basic Customs duty as well as additional Customs duty equivalent to duty of excise leviable on such goods manufactured and produced in India. On receipt of the said goods in the factory, the appellants cut them into small sizes, forged the cut wires by making a head. Such intermediate forged product was ultimately manufactured into screws. It is at the intermediate stage of forged product, as mentioned above, that the Revenue intends to charge duty.1.2. Appellants' plea, on the other hand, is that they are entitled to the benefit of Notification 206/63-CE which exempts the forged product falling under the erstwhile TI 26AA(ia) if the duty of excise on raw material out of which such forged products are manufactured are already duty paid. Appellants have urged j that since they have paid additional Customs duty equal to the excise duty, their wires should be treated as having been duty paid and therefore, benefit of Notification 206/63-CE should be extended to them.1.3. Lower authorities, however, have not accepted the aforesaid plea of the appellants on the ground that what they had paid on the imported goods out of which forged intermediate product has been manufactured is the additional duty of Customs and not the excise duty and therefore, the benefit of Notification 206/63-CE cannot be extended to the aforesaid forged intermediate product. Hence a demand of duty for Rs. 2,84,810.89 for one period and another demand for Rs. 98,373/- has been confirmed by the concerned Collector of Customs, Bombay-Ill. Hence this appeal before us.2. Learned advocate Shri Rajesh Chibber submits that additional duty of Customs is to be treated as duty of excise in view of Tribunal's judgment in the case of Collector of Customs, Madras v. Carborandum Universal  (Larger Bench of 5 Member Bench) : 1988 (17) ECR 329 (T). It has been held in the said judgment that if the provisions ofSection 3(1)of the Customs Tariff Act, 1975 read with Explanation thereto is to be given full effect to, the duty of excise for the time being leviable on a like article if produced or manufactured in India will be not only and merely the excise duty specified in the 1stSchedule to the Central Excises & Salt Act, 1944, but that worked out after taking into account the rate of duty specified in the 1st Schedule and any exemption notification issued under Central Excise Rule 8(1) which has the effect of reducing the duty leviable in terms of the said 1st Schedule. Any other view which ignores the notification, if any, issued under Central Excise Rules 8(1), would lead to assessment of goods to additional duty of Customs which would not be equal to the duty of excise for the time being leviable on like goods produced or manufactured in India. Notification issued under Central Excise Rule 8(1) is 'law' owing to its source of power to the Statute and should not be ignored for arriving at measure of duty for the purpose of determining countervailing duty. Since the Statute provides the basis for the levy of excise duty even for calculating the duty under theCustoms Tariff Act, it cannot be stated that Notification underSection 25of the Customs Act alone would govern the issue and that notification issued under Central Excise Rule 8 should be ignored. Therefore, the benefit of Central Excise Notification 24/65-CE was extended to the import involved in that case with reference to the liability for payment of additional customs duty.3. For taking the aforesaid view, the Tribunal relied on Bombay High Court's judgment in 1982 ELT 64 : 1982 ECR 177D (Bom). Learned advocate, Shri Chibber stressing upon the aforesaid extracts of the headnotes from the said judgment points out that theCustoms Tariff Actlevying additional duty of Customs provides for the basis for levy of excise duty even for calculating the duty under theCustoms Tariff Act. He, therefore, submits that additional duty of Customs levied at the time of import should be treated as duty of excise paid on similar goods manufactured or produced in the country. He, therefore, submits that there is no justification for the original authority to deny the appellants' benefit of Notification 206/63-CE in the present case. This judgment of Larger Bench, he submits, has been followed in several other cases.4. Opposing the contentions, learned JDR Shri S. Nunthuk reiterates the view of the adjudicating authority as already stated above that the Notification 206/63-CE refers to payment of duty of excise and does not include payment of additional duty of Customs on imported goods. He submits that specific inclusion of payment of additional duty of Customs has been incorporated in a subsequent notification, on supersession of this notification, i.e. under Notification 208/83-CE. He further relies on Supreme Court's judgment in the case of Khandelwal Metal & Engineering Works  wherein in para 4 of the said judgment it has been held that additional duty of Customs under theCustoms Tariff Actis not countervailing duty.5. We have carefully considered the pleas advanced from both sides. We are concerned here with the question whether the benefit of Notification 206/63-CE can be extended to the intermediate forged product where raw materials out of which such intermediate forged products have been manufactured have already paid not only the Basic Customs duty but also the additional Customs duty. Question before us is whether payment of additional Customs duty equal to the excise duty leviable on similar goods manufactured or produced in the country is to be treated as payment of duty of excise in terms of the said notification. We observe that the Tribunal's judgment in Carborandum Universal is of direct relevance in the issue before us. Additional duty of Customs, as mentioned in theCustoms Tariff Actis a duty equal to the duty of excise leviable on such goods manufactured or produced in the country. Therefore, the benefit of Notification 206/63-CE cannot be denied to the appellants' forged product before us. Reliance placed by the learned JDR on Khandelwal Metal & Engineering Works is not relevant to the controversy before us. We are not saying that the additional duty of Customs paid by the appellants at the time of importation of the steel wires is a countervailing duty. Its name in simple terms as mentioned in theCustoms Tariff Actis additional duty of Customs which as per the Statute is a duty equal to the duty of excise leviable on such goods manufactured or produced in the country.6. Therefore, we set aside the impugned order and allow the appeal with consequential relief to the appellants. Learned advocate has also raised a plea of the demands being barred by limitation issued under Section 11A but we do not consider it necessary to go into those pleas in view of our findings on merits, as mentioned above.Dictated and pronounced in the open Court.