TaxTMI 
TaxTMI 
2013 (9) TMI 942
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....VD by mis-declaring the product as 'Molybdenum Ore' or 'Roasted Molybdenum Ore'. Based on the above intelligence, two consignments of the appellant imported under B/E no. 4567406 dated 6-9-2011 and 4551981 dated 5-9-2011 were detained for examination on 14-9-11. Examination of the goods revealed that in respect of B/E No. 4567406 dated 6-9-11, the bags in which the goods were packed contained labels/marking which read as 'Roasted Molybdenum Concentrate'. In respect of B/E No. 4551981, the markings were 'Molybdenum Sulfide (MoS2) Roasted'. Samples of the products under importation were drawn and sent for chemical examination to Chemical Examiner, CRCL, Vadodara. It appeared that the appellant had mis-declared the goods as 'Molybdenum ore' with a view to avail benefit of CVD exemption and they were seized on 26-9-11 under the provisions of Section 110 of the Customs Act, 1962, on the reasonable belief that they are liable to confiscation under Section 111 of the said Act. 2.1 The test report received from Chemical Examiner, Vadodara, vide report dated 28-9-11 confirmed that the goods were Molybdenum Ore Concentrate containing Molybdenum 61.6% as MoO3 in respect of B/E No. 456746 .....
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....e appellant proposing to confiscate 59000 kgs. of Roasted Molybdenum Ore concentrate seized on 26/9/2011 valued at Rs. 6,12,61,048/- and 275000 kgs. of the said goods valued at RS.28,57,49,418 imported earlier under 14 bills of entry, under the provisions of Sections 111(d) and 111(m) of the Customs Act, 1962. The notice also proposed to demand differential duty amounting to Rs. 66,61,664/- on the seized goods and Rs. 3,10,73,035/- on the goods imported earlier, under the provisions of section 28(1) of the Customs Act along with interest thereon under section 28AA apart from penalties on the appellant under section 114A and 112(a) of the Customs Act. 2.6 The case was adjudicated vide the impugned order. The goods under importation seized but released provisionally were confiscated under the provisions of section 111(d) and (m) of the Customs Act with an option to redeem the same on payment of fine of Rs. 1 crore under Section 125 ibid and those imported earlier were held liable for confiscation under section 111(d) and (m). The differential duty demands of Rs. 66,61,664/- and Rs. 3,10,73,035/- were confirmed under section 28(1) by denying the benefit of CVD exemption along with ....
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....f the entry as held in 1) Alladi Venkateswaralu [1978 (41) STC 394 (SC)]; 2) Jain Exports [1992 (61) ELT 173 (SC)]; 3) Kalpana Waterproof Products [1986 (62) STC 181 (Bom)] and 4) Agarwal & Co. {1983 (52) STC 117 (Bom)]. He also relies on the decision of the Tribunal in the case of Fabworth (India) Ltd. [2002 (143) ELT 663 (Tri.-LB)] wherein proviso to section 3(1) was amended retrospectively which resulted in enhancement of duty liability whereas the notification granting exemption remained unamended and the Tribunal held that the increase in liability will have not result in duty liability since the exemption notification continue to exempt the enhanced duty liability. (f) The CVD demanded is available as Cenvat Credit and consequently, the duty demand itself is not sustainable. He relies on a few decisions in this regard such as India Pistons Ltd. [2008 (221) ELT 295], Savita Polymers Ltd. [2009 (240) ELT 616] and SRF Ltd. [2007 (220) ELT 201]. (g) There is no willful mis-statement or mis-representation that can be attributed to the appellants and hence extended period of time cannot be invoked to confirm the duty demand. Therefore, the demands for the period March, 2011 t....
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....ue that ores and concentratesare one and the same. c) Exemption to ores have been given under notification No. 4/06. It is a well settled position in law that an exemption notification has to be construed very strictly. The ld. AR relied on the decisions cited in the impugned order in this regard. Accordingly he submits that the imported concentrates are liable to CVD especially since the budget 2011. d) As regards the invocation of extended period of time for the demand of duty on earlier imports, he submits that the appellant knew that the product under importation was concentrate and yet they misdeclared the goods as oresand claimed exemption. This action was deliberate and was done to avail ineligible exemption. Therefore, the extended period of time has been correctly invoked. d) As regards the confiscation of the goods under section 111 and consequent imposition of penalty, the ld. AR submits that by mis-declaring the description of the goods, which is a material particular, contravention envisaged under sub-section (m) of the said section is established and the goods are rightly liable to confiscation. ....
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.... 2601 11 50 --- Iron ore concentrates kg 10% 2613 Molybdenum ores and concentrates 2613 10 00 - Roasted Kg 10% 2613 10 90 - Other kg. 10% 5.2 From the tariff description given above, the tariff uses the expression ores and concentrates. Further wherever the tariff wanted to prescribe different classification, separate sub-headings have been provided. For example, in the case of Iron ore, separate sub-headings have been provided for iron ore lumps, iron ore fines and iron ore concentrates. From the above structure, it is clear that the use of the expression ores and concentratesand provision of separate sub-headings for ores and concentrates wherever necessary, implies that the legislature consciously made a distinction between ores on the one hand and concentrates on the other. The preposition and between the two terms is conjunctive. If the legislative intention is that ores and concentrates are one and the same, then the legislature would have used the expression ores or concentrates. 5.3 In the book Principles of Statutory Interpretation, 12th edition 2010, Justice G.P. Singh at pages 477 and ....
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.... aside words in a statute as being inapposite surplus age, if they can have appropriate application in circumstances conceivably within the contemplation of the statute[Aswini Kumar Ghose v. Arabinda Bose, AIR 1952 SC 369]. In Rao Shiv Bahadur Singh v. State of U.P.[AIR 1953 SC 394] it was held that it is incumbent on the court to avoid a construction, if reasonably permissible on the language, which render a part of the statue devoid of any meaning or application. Again in the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of U.P. [AIR 1961 SC1170] it was observed that in the interpretation of statutes, the courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute to have effect. The Legislature is deemed not to waste its words or to say anything in vain [AIR 1920 PC 181] and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons [AIR 1964 SC 766]. 5.6 In Balwant Singh vs. Jagdish Singh[2010 (262) ELT 50 (SC)] while interpreting the provisions of Section 15 of the Haryana Urban Rent (Control of Rent and Eviction) Ac....
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....egislature intended to treat the process of conversion of ore into concentrate as a manufacturing process. As per section 2(f ) of the Central Excise Act, 1944, manufacture includes any process, - i) incidental or ancillary to the completion of a manufactured product; ii) which is specified in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; The purpose of defining a process as manufacture is to bring the goods under central excise levy. In other words, the legislature intends to levy excise duty on concentrates converted from ores. Thus anybody who converts ore into concentrate is liable to discharge excise duty liability on the concentrate. In view of the above legal and factual position, if one accepts the arguments of the ....
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.... a Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave, (1969) 2 S.C.R. 253 that such a Notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption." Applying the ratio of the above decision to the facts of the present case, the exemption contained in notification No. 4/06-CE applies only to ores and not to concentrates and we hold accordingly. In the present case, as per the chemical test reports, the goods under import are concentratesand this fact has also been admitted by the appellant in the statement recorded under section 108 of the Customs Act. If that is so, the benefit of the said notification shall not be available to the goods under importation. 6. It will be useful at this juncture to examine the object of levy of additional Customs duty (CVD).This issue was examined at great length by the honble Apex Court in the ....
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....e benefit of exemption under notification No. 4/06-CE will not be applicable to concentratesimported from abroad. 6.2The issue involved in the present appeal also came up for consideration by the Central Board of Excise & Customs and the matter was discussed in a conference of the Chief Commissioners of Customs on Tariff and allied matters held in May, 2011. The discussion and the decision taken in the conference was communicated vide Circular No. 9/2012-Cus dated 23-3-2012. The circular reads as follows:- Subject:- Applicability of exemption under Sr. No.4 of the Notification 4/2006-CE dated 1-3-06 on import of Ore Concentrates Regarding. Doubts have been raised whether on imports of Ore Concentrates classifiable under Chapter 26 of the First Schedule to the Customs Tariff Act, 1975, the benefit that is admissible to Ore under serial number 4 of the Notification No. 4/2006-CE dated 1-3-2006 can be granted to the Concentrateof that Ore. The issue was taken up for discussion during the Conference of Chief Commissioners of Customs on Tariff and allied matters held in May 2011. 2. The matter related to: a) whether the term Ore includes Concentrate, and b) whether insertion....
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....1/703 expounded the principle of administrative construction, i.e., contemporaneous construction placed by administrative or executive officers charged with executing a statute, as follows:- It is a well-settled principle of interpretation that courts in construing a statue will give much weight to the interpretation put upon, it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it. 6.4 In the case of Collector of Central Excise, Guntur vs. Andhra Sugar Ltd. 1988 (38) ELT 564 (SC), the honble apex Court re-iterated the same as follows: It is well settled that the meaning ascribed by the authority issuing the Notification, is a good guide of a contemporaneous exposition of the position of law. Reference may be made to the observations of this Court in K.P. Varghese v. The Income Tax Officer, Ernakulam, [1982] 1 SCR 629. It is a well settled principle of interpretation that courts in construing a Statute will give much weight to the interpretation put upon it at the time of its enactment and since, by those whose duty has been to construe, execute and apply the same enactment. Thus even applying the principles of conte....
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....87. The honble apex court held as follows:- 8.It is common ground that the wolfram ore which was imported by the appellants were never subjected to any process of roasting or treatment with chemicals to remove the impurities. It thus remained wolfram ore concentrate containing 65% WO3 which was of the merchantable quality and was known commercially as such and imported as ore. Apart from all this it must be remembered that in interpreting Items in Taxing statutes resort should be had not to the scientific or technical meaning but to the meaning attached to them by those dealing in them in their commercial sense. There can, therefore, be no manner of doubt that the goods imported by the appellants fell within Item 26 of the Import Tariff and no duty was leviable on them. The appellants were entitled to the refund of the amounts which were paid by them by way of duty.. This decision of the honble apex Court was followed by this Tribunal in the case Hindustan Gas & Industries Ltd. and Electro Ferro Alloys Pvt. Ltd. while considering CVD exemption to molybdenum concentrate for the period prior to 1-4-2011. 7.1The facts obtaining in the case before us are different and distingu....
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....tion of kumkum, this decision is also not relevant. The tariff in the case of kumkum did not differentiate between various varieties of kumkum and hence it was held that all varieties of kumkum will be eligible for the duty exemption. As noted earlier, in the case of ores and concentrates, the tariff recognizes their distinct identities and the conversion of ore to concentrate also amounts to manufacture. Therefore to compare the present case with the kumkum case is akin to comparing chalk with cheese. The appellant has also relied on a decision of the apex court in the case of Laminated Packaging (P) Ltd. [1990 (49) ELT 326 (SC)]. The issue for decision in the said case was whether lamination of kraft paper with polyethylene would amount to manufacture since both the products fell under the same entry and the honble court held that the process amounts to manufacture and the appellant is liable to pay excise duty and the ground urged that both the products fell in the same entry is not relevant. We do not understand how this decision can help the case of the appellant. On the other hand, it goes against them. In the present case, the process of conversion of ore into concentrate ha....
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....s issued on 9-3-2012, that is, within a period of one year. Thus the notice for recovery of duty has been issued within the normal period of limitation and therefore, the question of time bar does not arise. Thus in the present case, as the goods under import are molybdenum ore concentrate and not molybdenum ore, as revealed by the test reports and as admitted by the appellant, the appellant is not eligible for CVD exemption under notification No. 4/2006-CE. Thus the entire demand of duty, that is, Rs. 66,61,664/- in respect of B/E s 4551981 dated 5-9-11 and 4567406 dated 6-9-11 and Rs. 3,10,73,035/- in respect of 14 bills of entry for the earlier imports during April to July, 2011 is sustainable in law and we hold accordingly. Once the duty demand is sustainable, the demand for interest thereon is automatic and consequential and therefore, we uphold the demand for interest as well. 7.5 The last issue for consideration is whether in the facts and circumstances of the case, confiscation of the impugned goods with an option to redeem the same on payment of fine and imposition of penalty is warranted. From the decisions in the case of Electro Ferro Alloys Pvt. Ltd. case and Hindust....