TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 674
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....f schedule 'F' of the Rules. A brief background of facts in the present Petition is necessary. 3. The Petitioners are manufacturers of "Stainless Steel Articles" which conforms to the standards prescribed for grade AISI 304 of "Austenitic Variety". The Petitioners have exported between July to October 1988 various quantities of stainless steel bright bars of grade AISI 304. The Petitioners had filed drawback claim in respect of four shipping bills pertaining to the export effected between 6th June 1988 and 21st June 1988 for amount of Rs. 2,76,122/-. A public notice had been issued on 31st May 1988 by the Ministry of Finance, Government of India, Department of Revenue, wherein inter alia SS No. 3606 and 3803 were included under item Nos. 36 & 38 respectively in the duty drawback schedule of the Rules. The Respondents initially admitted the drawback claim of the Petitioners but by a letter dated 29th July 1988 paid a sum of Rs. 12,254/- by classifying the exported goods under sub-serial No. 3606 rather than subserial No. 3803 to the said drawback schedule. The Petitioners filed supplementary claim on 6th September 1988 for balance amount to Rs. 2,63,868/- and filed detaile....
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....rnment of India. 5. The Petitioner filed reply to the show cause notice issued by the Central Government and opposed the review proposal. The Joint Secretary of the Central Government vide order 23th December 1992 (the impugned order) set aside the order of the Collector (Appeals). The Assistant Collector Drawback Department issued letter dated 10th March 1993 demanded Rs. 2,63,868/- from the Petitioner. The Petitioners have challenged the impugned order dated 23rd December 1992 and the order dated 10th March 1993 issued by Assistant Collector Drawback Department by the present Writ Petition. The Writ Petition came to be admitted by order dated 28th June 1993 passed by Division bench of this Court and interim relief was granted in terms of prayer clause (c) of the Writ Petition. 6. Mr. Anand the learned counsel for the Petitioners had first sought to raise a contention that the impugned order was without jurisdiction as it reviewed the order of the Collector (Appeals) which the Central Government was not authorised under Section 129DD of the Customs Act, 1962. An application for review can be made only by "any person aggrieved" and that the Collector of Customs (Judicial) Bombay ....
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....teel is specifically covered under sub serial 3803 cannot be classified elsewhere. He has then sought to explain the manufacturing process of "Stainless Steel Bright Bars of Austenitic Variety" which is a specialised process and has a distinct identity on is own and can be used directly with minimal machining work as a part of Automobile Machinery, Agricultural machinery, Textile Machineries etc. He has then given a chart of comparison of entries where drawback is provided for different articles made from the same or similar raw material which establish that drawback is to be granted on the basis of the raw material and not the general description of the article. In the chart he has also referred to safety razor blades made from stainless steel strips which are classified under sub-serial No. 3816 having drawback at 25% of FOB value and therefore the article of stainless steel cannot be classified under sub-serial No. 3606 wherein the drawback is only Rs. 395 per M.T. and the correct entry would be sub-serial No. 3803 where the drawback allowed is of Rs. 8.90 per kg. He has submitted that with effect from 1st June 1989, the "Stainless Steel Bright Bars" was listed in sub-serial No.....
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....ch could only mean that stainless steel has at all times been considered as a type of bright steel bars and hence the impugned order of first Respondent in classifying stainless steel under a type of bright steel bar is an appropriate classification under sub serial No. 3606 and cannot be found faulted with. 9. After careful considering arguments on both sides, we are of the view that "Stainless Steel Bright Bars of Austenitic Variety" had been treated in a manner differently from that of bright steel bars and shafting at the relevant time. Stainless steel comprises of ingredients which are Nickel and Chromium, both imported items used in manufacturing of stainless steel. The duty drawback has also been treated differently for stainless steel articles from that of all types of bright steel bars and shafting. The duty drawback of stainless steel articles of "Austenitic Variety" was Rs. 8.90 per kg. as against Rs. 395/- PMT for bright steel bars and shaftings. This distinction has also been carried forward in the change effected in the schedule of duty drawback of the Rules from 1st June 1989. The duty drawback of stainless steel with effect from 1st June 1989 was Rs. 1090 PMT as ag....
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....t would also appear from the revised drawback schedule effected from 1st June 1989 that SS No. 3606 was divided into two different categories and Sub-serial No. 3803 was kept vacant and read thus:- 3606 All types of bright bars and shaftings : (i) of stainless steel : (ii) All others : Rs.1,090/- PMT Rs.540/- PMT 11. This could only mean that prior thereto "Stainless Steel Bright Bars of Austenitic Variety" were classified under a specific entry viz. sub-serial No. 3803 and after the change, sub-serial No. 3803 has been kept vacant. There are also rates prescribed, one for stainless steel (higher rate) and another for all other bright bars (lower rate) after the change. Thus, bright stainless steel bars of austentic variety has at all times been treated differently. 12. We are, therefore, inclined to concur with view taken by the Collector (Appeals) that "Stainless Steel Bright Bars of Austenitic Variety" could classify only for inclusion in subserial No. 3803 at the relevant time. It is a settled law that where there are two views possible, the one favourable to the assessee in the matter of taxation has to be preferred. We are of the view that the impugned or....