TaxTMI 
TaxTMI 
2021 (5) TMI 129
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....Act, 1962 (in short, "the Act"), challenging the common final order No.40860-40861/2018, dated 16.03.2018, passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (in short, "the Tribunal"). 3. The civil miscellaneous appeal was admitted on the following substantial questions of law: "(i) Whether the CESTAT is correct in holding that processes viz., sterilization, re-packing, re-labelling etc., defined as manufacture in the Chapter Note under Chapter Heading 4015 of Central Excise Tariff w.e.f. 11.07.2014, cannot be invoked to interpret a Notification under Customs Tariff Act? (ii) Whether the CESTAT is correct in allowing refund of SAD under Notification No.102/2007-Cus dated 14.09.2007 when the importer has not fulfilled the conditions 2(d) and 2(3)(ii) stipulated in the said Notification? (iii) Whether CESTAT is correct in allowing the refund on the ground that there is no such condition viz., imported goods to be sold as such in the Notification No.102/2007-Cus. Dated 14.09.2007, in spite of the clarification under CBEC Circular No.34/2010- Customs, dated 15.09.2010?" 4. The writ appeals have been filed by Assistant Commissioner of C....
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....tice and why the penalty should not be imposed on the assessees under Section 117 of the Act. The assessees submitted their reply dated 02.11.2015 contending that they had not used the imported goods for any manufacturing activities as alleged in the show cause notice and the gloves are either sold as non-sterile gloves, after repacking or relabelling and sterile gloves, surgical gloves are sold after repacking and sterilization. 10. It was further submitted that the process of sterlization would not amount to manufacture as the use and character of the imported gloves remain the same even after packing and no new product has been created on account of the said process of sterilization and repacking. Further, in terms of the notification, if the importer can establish that the goods sold were the same as imported, the benefit of exemption would apply and there is no specification in the notification that the goods are required to be sold as such. 11. Further, it was submitted that the correct test to be applied is whether the process undertaken by the assessees has resulted in emergence of a different product or a new commodity with distinct character and name and if this test is....
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....acts is incorrect and whatever allegations made in the show cause notice is only based on the documents produced by the importer in respect of the refund application and no additional evidence has been brought on record by the Revenue and therefore, there is no justification for proposing to impose penalty under Section 117 of the Customs Act. 18. The Adjudicating Authority, namely, the Commissioner of Customs, Tuticorin, framed the following three questions for consideration: "1. Whether the process to which the imported goods have been subjected to render such products to be different from what were imported. 2. Whether the notification 102/2007-customs dated 14.9.2007 necessarily requires the imported goods to be sold in subsequent sale without their being subjected to any process at all. 3. Does it become necessary that the process undertaken should constitute what is generally referred to in the Central Excise law as 'manufacture' which would alone disentitle the goods for the benefit of exemption under Notfn. 102/2007-customs dated 14.9.2007." 19. The Adjudicating Authority, after referring to the deeming provision in terms of Section 2(f)(iii) of the Central ....
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....me. Further, it was observed that no extraneous conditions can be introduced in the notification, which has to be interpreted on its own wording and Notification No.102/2007 uses the expression "subsequently sold", which has been done by the assessees and that on account of the activities like repacking and sterilization, the imported gloves have not undergone any change and therefore, there is no justification for the denial of SAD. The Revenue is aggrieved by the order passed by the Tribunal. 23. Mr.B.Vijay Karthikeyan, learned Senior Standing Counsel appearing for the Revenue, submitted that Notification No.102/2007 exempts the goods from the whole of the additional duty of customs leviable thereon under sub-section (5) of Section 3 of Customs Tariff Act, when imported into India for subsequent sale if the conditions stipulated in Paragraph No.2 of the Notification is fulfilled. It is further submitted that as per Paragraph Nos.2(d), 2(e)(ii) and 2(e)(iii) of the Notification No.102/2007, as amended, the words "said goods" and "such imported goods" have been emphasized only to imply that the said goods referred therein are only imported goods and that the imported goods were re....
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....acking carried out by them per se do not lead to emergence of new and distinct product with different use as has been held to be relevant for levy of excise duty. Therefore, the goods in question are deemed to be treated to be different from what was imported. 28. Further, it is submitted that the goods, after being subjected toi the process of sterilization, are being sold in the retail market under the brand name "Surgi-Care" and "Kaltex" with effect from 11.07.2014 and therefore, not entitled to the benefit of the notification. 29. It is further submitted that the Tribunal committed an error in observing that the legal fiction of manufacture incorporated in the chapter notes of the excise tariff cannot be invoked to interpret the Notification under the Customs Tariff Act as the importer, a central excise registration holder, a manufacturer, after importing the subject goods, subjects the imported goods to certain activities, which amounts to manufacture, as chapter notes of the Central Excise Tariff, as such the imported goods now becomes the input materials for the importers for further processes in the central excise premises and the imported goods no more remain the same go....
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....e order in original rejecting the refund claim as they were awaiting the decision of the Tribunal in the case of the assessees, subject matter in C.M.A.(MD) No. 687 of 2019 and after the decision, the assessees / writ petitioners submitted representations for reconsideration of the order in original and in spite of the reminder being submitted to the Revenue, since the order in original was not reconsidered, the assessees, left with no other option, filed the writ petitions. 34. It is submitted that the learned Writ Court was convinced with the explanation offered by the assessees and held that there is no total negligence on the part of the assessees in seeking redressal and therefore, permitted the assessees to challenge the orders in original in the writ petitions. Further, the Court took note of the relevant portion of the Notification No.102/2007 and held that Paragraph No.2(d) states that the importer shall pay on the sale of the said goods appropriate sales tax or VAT and this has been admittedly done by the assessees and stand of the Revenue that sterilization and repacking effects changes to the goods was rejected as the goods continue to remain as same commodity and cons....
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....tions in the year 2019-2020. 40. The explanation offered by the assessees as noted by the learned Single Bench in Paragraph No.8 is that they have submitted representations to the Assistant Commissioner of Customs to reconsider his order in original in the light of the order passed by the Tribunal, dated 16.03.2018, which is impugned in the civil miscellaneous appeal. The learned Writ Court has also observed that a further request was made by way of a reminder to the Assistant Commissioner to reconsider his earlier order. This explanation by the assessees was found to be reasonable and accordingly, the learned Writ Court held that the writ petitions can be entertained as against the order in original. To be noted that the Assistant Commissioner of Customs, who is the Adjudicating Authority, does not have power to review his own orders. If the Customs Act does not confer the power of review on an Authority, such Authority cannot assume such power nor state that the power of review is inherent in him. Unless and until the statute confers a power of review, no Authority is entitled to exercise such power. This legal position can never be disputed by the assessees and therefore, the e....
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....su. No external aids can be brought in to interpret an exemption notification. If the assessees, who claim benefit of exemption notification, fail to fulfil any one of the conditions contained therein, the benefit cannot be extended. Courts have to read the exemption notification as such without substituting the words or phrases. Bearing in mind this legal principle, if we examine the order passed by the Tribunal, we find that the Tribunal was of the view that the Notification No. 102/2007 was in supersession of the earlier notification and that the words "as such" has been omitted. 45. On a reading of Notification No.102/2007, we find that nowhere there is indication that it is a supersession of an earlier Notification. Therefore, the question would be whether the Tribunal could have come to the conclusion that Notification No.102/2007 was in supersession of the earlier notification, which uses only the expression "subsequently sold" will stand fulfilled in the case of the assessees. The position has been clarified by the Board in Circular No.34/2010-Customs, dated 15.09.2010, which reads as follows: "Special CVD is one of the duties specified under sub-rule (1) of rule 3 of ....
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..../2007. In our considered view, this finding prima facie appears to be not sustainable as the issue whether the Notification No. 102/2007 was in supersession of Notification No.56/1998 was required to be considered and decided. 49. From the reply given by the assessees to the show cause notice, dated 01.10.2015, it appears that the assessees did not raise the plea that the Notification No.102/2007 was in supersession of the earlier Notification nor there was any argument made by the assessees with regard to the effect of the Circular No.34/2010-Customs, dated 15.09.2010. Thus, in our considered view, the matters requires to be re-examined, for which purpose, we are inclined to remand the matter back to the Commissioner of Customs to reconsider the entire issue afresh. 50. In the preceding paragraphs, we have held that the writ petitions filed by the assessees challenging the orders of the Assistant Commissioner of Customs rejecting the refund claim was not maintainable. Those orders passed by the Assistant Commissioner of Customs were based upon the order in original No.1/2016, dated 19.04.2016, which is to be set aside and the matter to be remanded back to the file of the Commis....