1983 (3) TMI 265 - AT - Customs

Tribunal upholds countervailing duty & classification decisions. Appellants' arguments rejected. Orders affirmed.

The Tribunal upheld the levy of countervailing duty under Section 3(1) of the Customs Tariff Act, 1975, and affirmed the classification of goods under ... - Issues Involved:1. Levy of additional duty (countervailing duty) under Section 3(1) of the Customs Tariff Act, 1975.2. Classification of goods under Item 68 of the Central Excise Tariff Schedule.3. Legislative competence of Section 3 of the Customs Tariff Act.4. Discrimination in withdrawal of 'proforma credit' for imported raw materials.Detailed Analysis:1. Levy of Additional Duty (Countervailing Duty) under Section 3(1) of the Customs Tariff Act, 1975:The appellants contested the levy of countervailing duty on the grounds that the same or like articles were not produced or manufactured in India, thus no countervailing duty was payable under Section 3(1). The Tribunal referred to the specific wording of Section 3(1) and its Explanation, which states that the additional duty applies to imported articles equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The Tribunal emphasized that the Explanation covers both scenarios where a like article is produced or not produced in India. Therefore, the Tribunal found this ground unsustainable and rejected it.2. Classification of Goods under Item 68 of the Central Excise Tariff Schedule:The appellants argued that Item 68 is a residuary item and does not describe any specific goods or class of goods, thus countervailing duty under Section 3(1) could not be applied using the rate of duty under Item 68. The Tribunal examined judgments cited by the appellants, including the Bombay High Court's decision in Garware Nylons Limited v. Union of India and the Allahabad High Court's decision in Ashok Griha Udyog Kendra Pvt. Ltd. v. Collector of Central Excise and Customs. The Tribunal noted that the Allahabad High Court judgment specifically addressed the issue and held that Item 68 does not suffer from vagueness or ambiguity. The Tribunal agreed with the Allahabad High Court's reasoning that even though Item 68 has a wide scope, it is not vague as it comprehensively covers goods not specified elsewhere in the Central Excise Tariff Schedule. The Tribunal found no merit in the appellants' argument and upheld the classification under Item 68.3. Legislative Competence of Section 3 of the Customs Tariff Act:The appellants contended that the provisions of Section 3 are ultra vires and beyond the legislative competence of Parliament, and that the recovery of countervailing duty violates Articles 265 and 300A of the Constitution. However, the appellants' counsel did not argue this ground before the Tribunal, reserving the right to raise it in an appropriate forum. Consequently, the Tribunal did not address this issue in detail.4. Discrimination in Withdrawal of 'Proforma Credit' for Imported Raw Materials:The appellants also argued that the notification dated 3-3-1979, which withdrew the facility of 'proforma credit' for imported raw materials falling under Item 68, was discriminatory against users of imported raw materials compared to users of indigenous raw materials. Similar to the legislative competence issue, the appellants' counsel did not argue this ground before the Tribunal, and thus it was not considered in the judgment.Conclusion:The Tribunal, after careful consideration of the arguments and relevant judgments, rejected the appeals. The Tribunal upheld the levy of countervailing duty under Section 3(1) of the Customs Tariff Act, 1975, and affirmed the classification of goods under Item 68 of the Central Excise Tariff Schedule. The Tribunal found no merit in the appellants' contentions regarding the vagueness of Item 68 and the applicability of countervailing duty when like articles are not produced in India. The orders of the Appellate Collector were deemed correct, and the appeals were dismissed.