TaxTMI 
TaxTMI 
2023 (3) TMI 1180
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....for brevity) imports Rock Phosphate from Egypt for manufacturing copper under the description "Natural Calcium Phosphate" falling under the tariff head 25101010. During the year 2012, the Custom Department had sought clarification from the importer, whether rock phosphate which they are importing will not fall under the classification of 'Minerals or Chemical Fertilizer Phosphotic' falling under Tariff head 3103. 2.2. The importer through its letter dated 26.04.2012 clarified the query by affirming that what they import is rock phosphate under the nomenclature of 'Natural Calcium Phosphate'. It falls under the Tariff head 25101010 and not under the Tariff head 3103. Therefore Fertilizer Control Order, 1985, is not applicable to the items which fall under the Chapter head 2510. Also stated that when similar issue raised in the year 2006 by the Assistant Commissioner of Customs, Tuticorin, on appeal, CESTAT based on the judgment of Bombay High Court and Supreme Court clarified that though the product does not fall under the Chapter 3103 having nomenclature "Mineral or Chemical Fertilizer Phosphatic", even then the importer is entitle for exemption from Special Additional Dut....
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.... dated 17.03.2012, the importer sought for exemption from SAD (Rs. 3,41,32,452/-). However the Customs Department declined to grant exemption holding that the cargo is classifiable under Chapter 25 and not under chapter 31. Being aggrieved by the denial of granting SAD exemption, the importer filed writ petitions to quash the CAD assessment on the 4 Bills of Entry mentioned in the table above. These writs were allowed, by the Learned Single Judge on 22.01.2013. 2.6. Against the order of the learned Single Judge, these intra court appeals are preferred by the Department alleging that the learned Single Judge erred in relying upon the CESTAT order dated 08.06.2007 which was rendered by wrongly applying the Bombay High Court Judgment in Albright Moraji case which arose under the Indian Tariff Act and the exemption order prevailing at that point of time. Whereas, the case in hand dealt under the Customs Tariff Act and the exemption notification No:21/2012 dated 17.03.2012 which has superseded all the earlier exemption notification. The interpretation of exemption notification issued under the old tax regime cannot be a binding precedent for the notification issued under the new tax re....
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.... to construction within the Act, they are not entitled to seek external aids, from other statutory enactments, such as Fertilizer Control Order (in short 'FCO'). 6. He further submitted that, the Hon'ble Supreme Court in Union of India -vs- Kamalakshi Finance Corporation Ltd: reported in 1991 (55) ELT 433 (SC) has held that all the lower quasi judicial authorities are bound by the decisions/orders of Higher Appellate Quasi- Judicial Authorities in conformity to the principle of judicial discipline. The orders of the Higher Appellate authorities should be followed unreservedly by the sub-ordinate authorities, unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws. This ratio squarely applies to the present case. 7. The learned Senior counsel would further submit that, even otherwise, the Fertiliser Control Order, 1985, applies only to import of such Rock Phosphate which has a minimum particle size such that at least 90% of the material shall pass through a 0.15mm IS-sieve and the balance 10% material shall pass through a 0.25mm IS-sieve.....
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....om SAD cannot be denied since the rock phosphate used in manufacturing phosphoric acid, which in turn has been further supplied for manufacturing fertilizers. To buttress his above submission, he also relied upon the judgment of Gujarat State Fertilizers Co -vs- Collector of Central Excise reported in 1997(91) ELT 3 ( SC). 10. Heard the learned counsels on either side. The provisions of Customs Tariff Act and Exemption notification perused. The judgments relied on either side considered. 11. This is a case regarding the claim of an importer to get Duty exemption in respect of the goods it has imported for a specific purpose, namely, Rock Phosphate used in the process of manufacturing copper. The Customs Act, 1962 is an Act of Parliament enabling the Government to levy duty on imports. The Act had vested the Government with the power to issue notification under Section 25(1) of the Act granting exemption from levy of duty. In exercise of the said power vested, the notification 12/2012 was issued on 17th March 2012 in supersession of earlier exemption notification dated 01.03.2002. The notification indicates that the Central Government being satisfied that it is necessary in the pu....
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....ct; (b) fertilizers consisting of any of the goods described in (A) above mixed together, but with no account beign taken of the fluorine content limit; (c) fertilisers consisting of and of the goods described in (A) or (B) above, but with no account being taken of the fluorine content limit, mixed withchalk, gypsium or other inorganic non fertilizing substances. 15. Now reverting back to the letter dated 26.04.2012 sent by the importer to the Assistant Commissioner of Customs, Tuticorin, it is the admitted case of the importer that they are importing 'rock phosphate' under the tariff head 25101010 (This tarrif head fall under section V Chapter 25 - assigned for Natural calcium phosphate). Their further case is that this product will not fall within the chapter 31, however it deemed to be a fertilizer as per the judgment of Bombay High Court. 16. This Court finds that the learned Single Judge has favourably considered this submission made by the importer. In the judgment much reliance is given to the earlier order of the CESTAT and the Judgments of Bombay High Court. However, it is for sure that, that CESTAT order referred is prior to the notification 12/2012 dated 17.....
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....t has accepted that contention. This contention is only partially correct. The Act, Schedule to the Act and the Notification goes on the premise that the fertilizers and all inputs and raw materials for manufacture of fertilizers granted exemption from SAD. But for 'rock phosphate' to qualify the definition of 'fertilizer', FCO alone is the source. When it is admitted that the product namely 'Rock Phosphate' does not qualifies the specification required for a fertilizer and when the product also not imported for manufacturing fertilizer and when the importer is also not a manufacturer of fertilizers, the question naturally arise is why then the duty concession should be given?. Interpretation of the law should not cause violence to its intention. Therefore this Court concludes that the order of the learned single judge suffers the following major legal infirmity:- a) The case of the importer does not satisfies the test of reasonableness. The request to classify 'rock phosphate' as 'fertilizer' for the sake of concession even though not utilised for manufacturing fertilisers is a colourable request. b) The earlier order of CESTAT , ought n....