Tribunal allows appeal, rejects retrospective claim, woollen rags not excisable. Refund directed.

The Tribunal rejected the appellant's claim for retrospective application of Notification No. 69/79, stating it did not have retrospective effect. However, the Tribunal accepted the argument that the imported woollen rags were not excisable goods and thus not subject to countervailing duty. The appeal was allowed, and authorities were directed to refund the countervailing duty charged on the goods within sixty days.

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Issues Involved:
1. Retrospective application of Notification No. 69/79.
2. Excisability and countervailing duty applicability on imported woollen rags.

Issue-wise Detailed Analysis:

1. Retrospective Application of Notification No. 69/79:

The appellant, M/s. Modella Textile Industries Pvt. Ltd., argued that Notification No. 69/79, issued on 13-3-1979, should be deemed to have been in effect from 1-3-1979. They contended that this notification, which inserted Notification No. 240-Cus/76 into the schedule of Notification No. 49 of 1-3-1979, should retroactively exempt their imported woollen rags from countervailing duty. The Assistant Collector and Appellate Collector rejected this claim, stating there was no indication in the wording of Notification No. 69/79 to suggest it had retrospective effect. The Tribunal upheld this view, emphasizing that the express intention in the wording of the notification must be given precedence over any implied intent. The Tribunal concluded that Notification No. 69/79 did not have retrospective operation, and thus, the goods cleared before 13-3-1979 were not exempt from countervailing duty.

2. Excisability and Countervailing Duty Applicability:

The appellant alternatively argued that the imported woollen rags should not be subject to countervailing duty as they were not "excisable goods" under the Central Excises and Salt Act, 1944. They contended that these rags, described as "old rags of woollen textile fabrics," did not involve any manufacturing activity and thus were not liable for excise duty. The Tribunal found merit in this argument, noting that the goods were described as "old rags" meant for manufacturing shoddy yarn and were accepted as such by the Customs Department. The Tribunal referred to the Rajasthan High Court's decision in Prem Cables Pvt. Ltd. v. Assistant Collector, Customs, Bombay, which stated that if excise duty was not leviable on goods under the Central Excises Act, countervailing duty could not be imposed. The Tribunal concluded that the woollen rags, being old and worn out, did not qualify as excisable goods and thus were not subject to countervailing duty under Tariff Entry 68 of the Central Excise Tariff.

Conclusion:

The Tribunal dismissed the appellant's claim for retrospective application of Notification No. 69/79 but upheld the alternative plea that the woollen rags were not excisable goods and thus not subject to countervailing duty. The appeal was allowed, and the authorities were directed to refund the countervailing duty charged on the goods within sixty days.

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