1997 (11) TMI 327 - AT - Central Excise

Appeal granted: Benefit of Notification 62/90-C.E. for ship scrap import. Date deemed as bill of entry presentation.

The appeal was allowed, and the appellants were granted the benefit of Notification 62/90-C.E. for the scrap obtained from breaking up the ship. The date ... Ship breaking scrap - Benefit of exemption under Notification No. 62/90-C.E. Issues Involved:1. Eligibility of scrap obtained from breaking up of ships to the benefit of Notification 62/90-C.E.2. Interpretation of the date of import under the proviso to Notification 62/90-C.E.3. Applicability of the Supreme Court judgment in Union of India v. Jalyan Udyog.Issue-wise Detailed Analysis:1. Eligibility of scrap obtained from breaking up of ships to the benefit of Notification 62/90-C.E.:The primary issue in this appeal is whether the scrap obtained by the appellants from breaking up of ships is eligible for the benefit of Notification 62/90-C.E., dated 20-3-1990. The appellants claimed a concessional duty rate of Rs. 600/- per tonne under sub-headings 7230.00 and 7327.00 of the Central Excise Tariff. However, the Commissioner of Customs and Central Excise (Appeals) held that the appellants were not eligible for this concessional rate and were liable to pay duty at Rs. 1,800/- per tonne up to 29-2-1992 and Rs. 2,000/- per tonne from 1-3-1992, along with the applicable SED. This decision was based on the ground that the ship from which the scrap was obtained was imported by the Naval authorities from the Soviet Union in 1973, which did not satisfy the condition in the proviso to the Notification that the ship should have been imported on or after 20-3-1990.2. Interpretation of the date of import under the proviso to Notification 62/90-C.E.:The proviso to Notification 62/90-C.E. stipulates that the goods and materials must be obtained from breaking up ships imported on or after 20-3-1990. The appellants argued that the relevant date for determining the import should be the date of filing the bill of entry for home consumption, which was 2-1-1992. They cited the Supreme Court judgment in Union of India v. Jalyan Udyog, where it was held that the rate of duty and valuation prevailing on the date of breaking up would be applicable. However, the lower authorities and the Member (Judicial) held that the date of import should be the actual date when the ship was brought into India, which was in 1973, and thus did not satisfy the condition of the Notification.3. Applicability of the Supreme Court judgment in Union of India v. Jalyan Udyog:The appellants relied on the Supreme Court judgment in Union of India v. Jalyan Udyog, which dealt with the application of duty rates and valuation for ocean-going vessels subsequently broken up. The judgment created a legal fiction that the vessel must be deemed to have been imported for breaking up on the date it is broken up. The Vice President agreed with the appellants, stating that the date of presentation of the bill of entry for breaking up should be considered the deemed date of importation. Therefore, since the bill of entry was filed on 2-1-1992 and duty was paid on 6-1-1992, the conditions of Notification 62/90-C.E. were satisfied.Majority Opinion:The third Member (Technical) agreed with the Vice President, holding that the ratio of the Supreme Court judgment in Union of India v. Jalyan Udyog is applicable to the present case. The date of import for the purposes of the proviso to Notification 62/90-C.E. should be the date when the ship was imported for breaking up, which in this case was 2-1-1992. Therefore, the appeal was allowed, and the appellants were deemed eligible for the benefit of Notification 62/90-C.E.Conclusion:In view of the majority opinion, the appeal was allowed, and the appellants were granted the benefit of Notification 62/90-C.E. for the scrap obtained from breaking up the ship. The date of import was deemed to be the date of presentation of the bill of entry for breaking up, in line with the Supreme Court's judgment in Union of India v. Jalyan Udyog.