TaxTMI 
TaxTMI 
2002 (2) TMI 129
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....s executed by the petitioners and release the bank guarantees furnished at the time of provisional release of the goods in question. 2.Petitioner No. 1 is a partnership firm while petitioner No. 2 is a partner of petitioner No. 1 Firm. The petitioners are engaged in business of trading in various commodities including Crude Palm Oil and Crude Palm Olein of non-edible grade which is imported in accordance with law. Respondent No. 1 is Union of India while respondent No. 2 is the Central Board of Excise and Customs, a statutory authority constituted under the Central Board of Revenue Act, 1963. Respondent No. 3 is the proper officer having jurisdiction to assess the duty under the provisions of the Act. 3.On 1-3-2001 the Central Government issued an exemption Notification bearing No. 17 of 2001-Cus., dated 1-3-2001 (hereinafter referred to as 'Notification No. 17') in exercise of powers available under Sec. 25(1) of the Act. On 28-3-2001 the petitioners imported consignments of crude palm oil (non-edible grade) and crude palmolein and filed Bills of Entry for home consumption wherein the said goods were classified under Chapter 15 of the First Schedule to the Customs Tariff Act....
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....s clearance of vegetable oils imported for industrial purposes at concessional rate of duty under Notification No. 17 of 2001. By the said circular, it was incumbent upon the importer to satisfy the proper officer that actual use was for the industrial purpose only and only where such actual use was shown the importer would be entitled to benefit at the concessional rate of 35% under Notification No. 17. 5.Learned Senior Counsel Shri Kamal Trivedi appearing with Shri Rakesh Gupta, Advocate, submitted that the impugned Circular No. 40 of 2001 was illegal, without jurisdiction and authority inasmuch as it sought to rewrite Notification No. 17 by adding condition in relation to end-use even when Notification No. 17 itself did not provide for any such condition. That by virtue of the impugned circular a condition precedent was being imposed on an importer before availing of concessional rate of duty in respect of imported goods resulting in unwarranted harassment of the petitioner. That Notification No. 17 was subordinate legislation in relation to taxing statute and there was no room for supposed intendment while interpreting the said Notification. That, Entry at Sr. No. 29 was cle....
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....765 (S.C.). 6.Mr. D.N. Patel, learned Standing Counsel for Revenue, appearing on behalf of the respondents contended that respondent No. 3 had already passed a provisional assessment order and as the same was appealable this Court should not entertain the petition. A further contention was raised that the petitioner can avail of benefit of exemption Notification No. 17 only lawfully and after fulfilling the prescribed condition and not just by misinterpreting the entries in the notification. It was also submitted that Circular No. 40 of 2001 was issued by the Central Board of Excise and Customs after examining the issue and in consultation with the Ministry of Food and Directorate of Vanaspati so as to ensure that benefit of concessional rate of duty for crude palm oil is available to actual users for industrial purposes and such actual use has to be shown to the satisfaction of the proper officer. That in the present case, though Crude Palm Oil imported by the petitioner was not conforming to the specifications of the provisions of Food Adulteration Act, 1954, it could be subsequently refined to make it fit for human consumption and if concessional rate of duty under Entry at S....
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....urden is on the person who claims exemption to establish his case that he falls within the particular entry of the notification. That the present Circular No. 40 of 2001 merely laid down guideline or procedure to enable the assessee to discharge such burden. 7.In rejoinder, it was submitted on behalf of the petitioners that there was no dispute as regards the classification of the goods, the only dispute being applicability of the circular to the extent that the circular required establishing end-use when the same was practically not possible. It was further submitted that in taxing statute the proposition was well established that where two interpretations were possible, an interpretation which was more beneficial and which would leave the assessee with a lighter burden should be preferred. That in case of an item which might fall within two entries, the option was with the assessee to claim benefit of an entry which would leave the assessee with a lighter burden of tax. The decision in case of Collector of Central Excise v. Bakelite Hylam Ltd., 1997 (91) E.L.T. 13 (S.C.) was relied upon in support of this proposition and lastly, it was submitted that the Revenue's reference an....
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....ranted in relation to any goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of customs chargeable on such goods shall in no case exceed the statutory duty. Explanation. - 'Form or method', in relation to a rate of duty of customs, means the basis, namely valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable. Every notification(4) issued under sub-sec. (1) shall - (a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette; (b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. Notwithstanding(5) anything contained in sub-sec. (4), where a notification comes into force on a date later than the date of its issue, the same shall be published and offered for sale by the said Directorate of Publicity and Public Relations on a date on or before the date on which the said notification comes into force." 10.Sub-se....
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.... the present controversy shall have to be resolved. There is no dispute between the parties as regards classification of goods. The question that falls for determination is, once the goods are classified and the taxable event has occurred, the rate of duty is fixed statutorily and some benefit of exemption is granted by way of notification by exercising powers under Sec. 25(1) of the Act, is it possible to (i) postpone the taxable event, and/or (ii) to modify the levy by issuing circular in exercise of power under Sec. 151A of the Act. 13.As already seen, charge is leviable by operation of Sec. 12 of the Act and the said provision also prescribes taxable event. In the present case, taxable event having occurred when the goods were imported by the petitioners, can the department then take a stand that though the taxable event has occurred collection of duty shall be made provisionally and final chargeability shall be ascertained upon happening or not happening of a contingency. In our opinion, this course of action cannot be permitted as the statute does not so provide. Once the import of goods is complete, the charge is fastened and only the assessment or quantification remains ....
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.... pre-requisite for claiming exemption as part of the Notification No. 17. In fact, in condition No. 40, a period of two years is available from the date of importation or within such extended period as the officer may allow, in which the importer is required to produce necessary certificate. 16.In relation to Entry at Sr. No. 29, no condition is prescribed. Similarly, no condition is prescribed in relation to Entry at Sr. No. 34 or even in Entry No. 28. If the Notification No. 17 has not provided for any condition, in our opinion, subsequent circular cannot impose such a condition as the same would tantamount to rewriting Notification No. 17 or in other words legislating by circular, which is not permissible in law. As can be seen from the relevant provisions with special reference to Sec. 25 read with Sec. 159 of the Act, a notification under Sec. 25 of the Act requires publication in the Official Gazette as well as requires tabling before both the Houses of Parliament and if that exercise has been carried out without any condition being imposed in the Notification No. 17 it would not be permissible to permit Revenue to impose such condition by way of circular. If the Revenue i....
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....and Entry No. 34 is an exception carved out from that entry as regards crude palm oil of edible grade. In relation to Entry No. 29, it pertains to all goods other than edible oils i.e. goods envisaged by Entry No. 29 are those which do not fall either in Entry No. 28 or in Entry No. 34. If that be so, we have no doubt and that is the position, it is not possible to accept the contention of Revenue that goods falling under Entry No. 29 should not be made liable to concessional rate of duty i.e. 35% but should be treated as falling under Entry No. 34, if the importer fails to establish that though the goods are other than edible oils at the time of import, yet importer should establish that they shall not be refined or processed to make them of edible grade, in other words, the importer should establish end-use to the satisfaction of the proper officer. There is one more reason why this course of action proposed by the Revenue cannot be accepted. As can be seen from comparison of Entry No. 29 and Entry No. 34, though there are various types of oils mentioned in Entry No. 29 only crude palm oil of edible grade is brought under Entry No. 34 and the circular is only in relation to the s....
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....nion it would not be open to any one to take a contrary stand, unless and until such technical opinion is displaced by specific and cogent evidence in the form of another technical opinion. Merely by approaching the matter by stating that the goods could be converted into palm oil of edible grade by carrying out certain processes, the respondent No. 3 who is an officer of the department cannot displace the report of technical expert, nor can he insist that inspite of such report the importer must establish that end-use of the product shall not be other than one as regards entry in which the goods admittedly fall at the time of import. 20.The impugned Circular No. 40 of 2001 in Paragraph 6(c) requires that the end-use certificate shall have to be produced by the importer from the Assistant/Deputy Commissioner of Central Excise having jurisdiction over the factories of soap manufacturers (or other industrial application for which the vegetable oil is claimed to have been used) and such certificate is produced before the customs authority within a period of three months or a period as may be extended by the Commissioner of Customs on being requested by the importer. It is further s....
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....ere none have been prescribed. The entire matter is governed wholly by language of the notification and in a case where the plain term of the exemption show that the tax payer falls within the same, benefit cannot be denied by relying upon supposed intention of the exempting authority. Furthermore, it is well established that in a taxing statute the meaning of a particular word as accepted by the trade and its popular meaning should be preferred and should commend to the authority because it is the condition of the article at the time of importing which is material for the purpose of classification as to under what head duty will be leviable and whether it would be exempt wholly or partly. In the case of Collector of Central Excise v. Vipul Shipyard, 1997 (10) SCC 337 various notifications have been dealt with which grant exemption from excise duty to "Ocean-going vessels". The Revenue had contended that end-use of the vessel was relevant and if the vessels were used within inland waters as barges they were liable to levy of duty. The Apex Court held that at the point of time when the vessels were built the liability to excise duty arose, and at that time vessels were "ocean-going ....