AI Drafter 
TaxTMI 
TaxTMI 
1994 (2) TMI 82
X X X X Extracts X X X X
X X X X Extracts X X X X
....80/89/DBK/93 RACUS. - do - 20/93-BCH. dt. 22-1-1993 2. In the impugned orders the appellate authority had set aside the orders of the original authority and had allowed drawback claims under Section 74 of the Customs Act, 1962 in respect of export of returnable bobbins (or spool) which were earlier said to have been imported with yarn wound on them. 3. A show cause notice dated 28/29-7-1993 were issued to all the respondents forwarding the proposal and grounds on which the review was sought, the main being :- (i) The goods imported were yarn though wound on cops. Thus what was imported was yarn and not cops. Therefore, sending back of cops cannot be treated as re-export of the imported goods. The basic requirement of Section 74 of Customs Act, 1962 i.e. "those very goods" (which were imported) to be re-exported was not fulfilled (H.S. Mehra v. Union of India - AIR 1968 Delhi 142). (ii) The goods re-exported were not in the same original condition as they were at the time of import. Since, they are used in the `manufacturing activity' of un-winding of yarn, they have lost their original identity. As such the claim does not fulfil the statutory requirement under Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asan, learned consultant representing M/s. Dinesh Mills also averred that Proviso (b) to Section 19 ibid was squarely applicable to the present case because values of yarn and bobbins were separately invoiced and since both the items attracted different rates of duty, assessment was to be made separately. On the time-bar aspect Shri Srinivasan as well as Shri Narender Baghla representing M/s. Wire & Fabriks (S.A.) Ltd. averred that they shall be submitting written submissions inter-alia that Government cannot take suo motu action and start proceedings under Section 129DD (4). However, till date these have not been received. 6. Shri L.P. Asthana, advocate representing M/s. Porritts and Spencer (P) Ltd. was heard at Delhi on 10-11-1993 when he also repeated the above arguments stating further that H.S. Mehra's case was not applicable to the present proceedings as it was given under the Sea Customs Act [Section (43-B)] and which had an explanation dealing with the "manufacture"; that this explanation was absent in Section 75 of Customs Act, 1962. The learned consultant also averred that applicant Collector's plea as contained in para 5 (iii) that "classification of one composite co....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s. Wires & Fabrics stated that spools had been treated separately than yarn; that since they had to return the spools for the purpose of ITC, they had even executed an ITC bond with bank guarantee which was discharged by the department apparently after satisfaction that the spools, which had been clearly identified, had been exported. He also reiterated Shri Srinivasan's arguments in regard to Section 19 of the Customs Act. 11. Shri L.P. Asthana, learned advocate has carried the arguments further stating that not only yarn and bobbins in his case were invoiced separately and shown as returnable these were also assessed under different Chapters of the tariff. It was further averred by him that H.S. Mehra's judgment given by Delhi High Court was not applicable in the instant case, because the said judgment was given under Sea Customs Act which had an explanation appended to Section 43B which defined manufacture, but which does not appear in Section 75 of the Customs Act, 1962. The learned advocate also dealt at length with the general rules for the interpretation of classification of schedule to the import tariff. According to the Rule 5(b) packing materials and packing container....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3 was inconsistent to any statutory provisions or authority. The arguments of the learned consultants/advocates were in respect to provision of Section 19 of Customs Act, 1962, and Rules of Interpretations. It is no doubt true that spools and yarn were separately assessed at the time of importation but that should not make any difference for the simple reason that the test of "those very goods" being re-exported has not been satisfied (H.S. Mehra v. GOI - AIR 1968 Delhi 142). When dealing with exports, whether for the purpose of drawback or rebate it will not be permissible to break up imported goods in two components. The export incentive is given to the goods as a whole and not to parts thereof. This should apply even to drawback under Section 74 of Customs Act, 1962. Government is strengthened in this reasoning by the judgment of the Tribunal in the case of CCE, Madras v. Engineering & Industrial Foundary & Co. [1987 (31) E.L.T. 594 (T)] which was a case under Rule 12, Central Excise Rules and is apparently pari materia. On the applicability of Rules of Interpretations, Government's own decision in the case of CCE v. India Steel Industries [1993 (67) E.L.T. 760 (GOI)] is relevan....