TaxTMI 
TaxTMI 
2008 (4) TMI 165
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....iable for excise duty under Notification No. 4/2006-C.E., dated 1-3-2006, the respondent preferred appeals. By the impugned order, upholding the contention of the respondent, assessment was modified deleting the additional duty (CVD), and the appeals were allowed. 3. Section 3(1) of the Customs Tariff Act, 1975 provides for levy of additional duty equal to excise duty. If the import is found to be covered under the said Notification dated 1-3-2006, the respondent would not be liable for any additional duty as the goods in question was chargeable to 'nil' rate of excise duty. Having regard to its significance, the provision i.e. Section 3(1) may be quoted as under :- "3. Levy of additional duty equal to excise duty. - (1) Any article which is imported in India shall, in addition, be liable to a duty (hereinafter in this Section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of t....
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....g of dye-stuffs, printing paste, and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles Nil - … … … … …" 6. The case of the Revenue is that the exemption i.e. the 'nil' rate of duty provided in the notification is subject to the condition that the goods are used in the same factory which means that the goods must be used in the same factory in which they were manufactured. Where the goods are manufactured but sold to some other factory or person, for whatever purpose, excise duty would be leviable. Similarly, where the goods are not manufactured in the factory where they are used, the benefit of the Notification cannot be claimed. The case of the respondent is that if the expression 'same factory' is understood to mean the factory where the goods are actually manufactured, the notification can never be applied in the case of import of goods, for, in the case of import, there is no question of the goods being manufactured in the same factory. According to the respondent, 'the same factory' only means that the imported goods must be used in the factory of the importer where manufa....
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.... under the S. 8 Notifications. The types of use specified in the concessions notified could be of any kind and, even in the notifications under our consideration, they are many and varied. In respect of items falling under S. Nos. 3 and 8, in particular, the actual users may be private individuals or authorities and need not necessarily be manufacturers using the goods in question is an 'industrial process' in a narrow sense of that term. For instance, any computer room, hospital or factory purchasing parts of refrigerating and air-conditioning appliances and machinery for use in the computer room, hospital or factory would be entitled to claim the concession by following the prescribed procedure. Only, for claiming a concession in excise duty the user should be the manufacturer himself or he must have made the purchase from a manufacturer liable to pay excise duty on the item whereas in regard to a claim for CVD concession, the supplier will be an importer. The latter will be entitled to sell the goods at the concessional rate of duty (or at nil rate if there is an exemption) if the purchaser from him who puts the goods to the specified use (whether a manufacturer or not) fulfils ....
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....'. The use of the word 'so' implies that the production or manufacture referred to in the second limb is relatable to the use of that expression in the first limb which is of a like article being produced of (sic) manufactured in India. 11. The words ' produced or manufactured in India' does not mean that the like article should be actually produced or manufactured in India. As per the Explanation if an imported article is one which has been manufactured or produced then it must be presumed, for the purpose of Section 3(1), that such article can likewise be manufactured or produced in India. For the purpose of attracting Additional Duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary. As observed by this Court in Thermax Private Limited v. Collector of Customs, Bombay 1992 (61) E.L.T. 352 (S.C.): (1992) 4 SCC 440 that Section 3(1) of the Customs Tariff Act 'specifically mandates that the CVD will be equal to the Excise duty for the time being leviable on a like article if produced or manufactured in India. In other words, we have to forget that the goods are imported, imagine tha....
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....e factory because of the word, 'within' used in the Heading 74.04. According to them, the word, 'within' pre-supposes that the copper waste arid scrap was generated in the same factory. We are unable to read the entry in the manner as suggested by the Revenue." The Court recalled the dictum laid down in Thermax Pvt. Ltd., approved in Hyderabad Industries Ltd., that "one has to forget that the goods are imported, imagine that the importer had manufactured the goods in India, determine the amount of Excise duty that he would have been called upon to pay in that event". 10. In the case of Plastic Processors (supra), while considering the validity of a circular of the Central Government directing that the relevant exemption notifications are applicable only in respect of plastics "reprocessed in India", it was held that for the purpose of attracting additional duty under Section 3 of the Customs Tariff Act on the import of a manufactured or produced article, the actual manufacture or production of a like article is not necessary. In essence, what has to be imagined is that the importer had manufactured the goods in India and then the amount of excise duty that he would have been ....