customs excise

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whether the goods manufactured by the appellant are liable to be taxed as ‘Parts of Television Receivers’ falling under Tariff Entry 8529 of the Central Excise Tariff contained in the First Schedule to the Central Excise Tariff Act, 1985 (in short ‘the Tariff’) or as ‘Television Receivers’ under Tariff Entry 8528 of the Tariff, for the year 1989-90. -how the goods transported by them shall not be covered by the Rule, especially as a complete or finished article, ‘presented unassembled or disassembled’. The terminology of the Rule is wide enough to cover the goods transported by the appellant, and we are not convinced that the processes required to be carried out at the satellite units are so vital to the manufacture of the Television Receivers so as to render the goods transported by the appellant lacking the ‘essential character’ of Television Receivers. Rule 2(a) of the Rules for Interpretation has been couched in wide terms, and in terms of this Rule, it is our view that the goods produced by the appellant do in fact possess the essential character of Television Receivers.The appellant had also raised the plea of double-taxation; however, in our view once the question of classification of the goods transported by the appellant has been answered in the above manner, it is not open to us to grant the appellant any relief on this ground alone. Further, it is always open to the satellite units of the appellant to avail input tax credit on the duty paid by the appellant on the goods transported by them. 32. In view of the facts stated hereinabove, we are of the view that the Tribunal did not commit any error while passing the impugned order and, therefore, the appeal is dismissed with no order as to costs.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4427 OF 2003 M/S Salora International Ltd. Appellant Vs. Commissioner of Central Excise, New Delhi Respondent J U D G M E N T ANIL R. DAVE, J 1. The challenge in this appeal is to an order dated 1st April, 2003 … Continue reading

“(i) Whether Section 129(6) of the Customs Act, 1962, which stipulates that on demitting office as Member of the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as the “CESTAT”) a person shall not be entitled to appear before the CESTAT, is ultra vires the Constitution of India? (ii) Whether the said provision applies to the petitioner, as it was introduced after the petitioner had not only joined as Member of the CESTAT but also demitted office as such Member?”

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2850 OF 2012 (Arising out of SLP (C) No.8479 of 2010) N.K. Bajpai …Appellant Versus Union of India & Anr. …Respondents WITH CIVIL APPEAL NOS. 2851 OF 2012 (Arising out of SLP (C) Nos.8482 of 2010) AND CIVIL APPEAL NOS. 2852 … Continue reading

the Customs Excise & Service Tax Appellate Tribunal, New Delhi (for short “the Tribunal”). By the impugned order the Tribunal has quashed the additional excise duty demand of `9,34,89,367/- under Section 11A of the Act; penalties of `1.5 crores each on respondent Nos.1 and 2 1 =whether the Assessee and Heinz are related persons. It based its decision solely on the observation made by the Adjudicating Authority “that the status of the Assessee was not better than that of a hired labour”. We are, therefore, of the opinion that in the light of the above discussion, it would be necessary for the Tribunal to examine in depth the agreement between the Assessee and Heinz as also any other additional material, the 16


Excise duty=for claiming exemption from excise duty under notification , one has to make an application=Admittedly, no such application was made by Indo Gulf Corporation Limited in the form at Annexure-1 to the jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise. As the procedure set out in the 2001 Rules has not been followed, the appellant was not entitled to exemption on the Naphtha cleared from its factory for supply to Indo Gulf Corporation Limited for manufacture of fertilizer.

Reportable IN THE SUPREME COURT OF INDIA   CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs. 4530-4532 OF 2005 M/s Indian Oil Corporation Ltd. … Appellant   Versus   Commissioner of Central Excise, Vadodara … Respondent   WITH   CIVIL APPEAL NO.8048 OF 2004 M/s Indian Oil Corporation Ltd. … Appellant   Versus   Commissioner of Central … Continue reading

excise duty -the mechanical mixing of polymer with heated bitumen does not amount to manufacture of a new commercially identifiable product and therefore, is not exigible to Excise duty under the Act. =We therefore, hold that PMB or CRMB cannot be treated as bituminous mixtures falling under CSH 27150090 and shall continue to be classified under CSH 27132000 pertaining to tariff for petroleum bitumen.


the case of the revenue was that when actual shipment took place, after the expiry of the original shipment period, the international market price of crude sunflower seed oil had increased drastically, and, therefore, the contract price could not be accepted as the `transaction value’ in terms of Rule 4 of CVR 1988. – excess duty is payable ? = Section 14(1) read with Rule 4 provides that the price paid by the importer in the ordinary course of commerce shall be taken to be the value in the absence of any special circumstances indicated in Section 14(1). Therefore, what should be accepted as the value for the purpose of assessment is the price actually paid for the particular transaction, unless the price is unacceptable for the reasons set out in Rule 4(2). admittedly the contract for supply of crude sunflower seed oil @ US $ 435 CIF/PMT was entered into on 26th June 2001. It could not be performed on time because of which extension of time for shipment was agreed to between the contracting parties. It is true that the commodity involved had volatile fluctuations in its price in the international market but having delayed the shipment, the supplier did not increase the price of the commodity even after the increase in its price in the international market. This fact is also proved by the actual amount paid to the supplier. There is no allegation of the supplier and importer being in collusion. It is also not the case of the revenue that the transaction entered into by the respondent was not genuine or under-valued. Nor was there a misdescription of the goods imported. It is also not the case of the revenue that the subject imports fell within any of the situations enumerated in Rule 4(2) of CVR 1988. It is manifest from the show cause 15


Customs Act, 1962-Section 2(22) (c) and (e) 12, 24 & 28(1)-Customs valuation (Determination of Price of Imported Goods) Rules, 1988-Rules 3&4- Customs duty-Levy of-On import of drawings, designs etc.-In the course of transfer of technology with foreign collaborators-Held, customs duty can be levied, since they are goods-Customs Tariff Act, 1995-Chapter 49. Sections 12 & 14-Rules 3,4, &9-Customs duty-On the imported drawings and designs, etc.-Valuation of-Plea that duty can be levied only on the media- Held, intellectual property when put on a media would be regarded as an article and hence duty is payable on its total value. Section 28(1) proviso-Rule 10-Customs duty-Non-payment of- Issuance of notice-After limitation period-Plea that notice barred by limitation, in the absence of intention to evade duty-Willful suppression or miss- statement of value of the imported goods, proved-Held, notice not barred by limitation. Sections 2 (14) , 2(22) & 12-Customs duty-Levy of-Import of drawings and designs etc.-Without payment of duty-Duty levied on entire contract value- Tariff provided that import on the goods was free of duty- Held, drawings and designs were not dutiable articles–Central Excise Act, 1944-Section 2(d)-Customs Tariff Act, 1995-Heading No. 49.06 Section 28(1)-Customs duty-Levy of–On the import of drawings and designs etc.-Drawings originally sent from India, later imported after approval of the same from the foreign collaborator-Held, duty not leviable. Customs Tariff Act, 1995-Heading No. 98.03-Customs duty-Levy of-Import of technical material by courier-Clearance of–A part of passenger baggage- Held, duty has to be paid on such goods by virtue of the Heading. Appellants, public corporations engaged in the manufacture of excisable goods, entered into technical collaboration with foreign companies. As part of the fulfilment of the contract, the contracting parties abroad, sent drawings designs etc. to India through professional couriers or by post parcels. In Civil Appeal No. 3632 of 2000 these were imported by hand through a passenger. In Civil Appeal No. 1493 of 2000, the drawings sent from India were approved by the foreign company and then sent to India. At the time of importation only the nominal value of the drawings etc., were declared. It came to the notice of the respondent that the appellants had imported drawings, designs, etc., on remitting the consideration for the same, and they had been cleared without proper declaration and without payment of correct amount of duty The respondents issued show cause notices under Section 28(1) r/w Section 24 of the Customs Act, 1962, for levying customs duty on the drawings, designs, etc. Appellants replied that since the imported materials were not `goods’, there could not be any excise duty on service since the remittance were in form A-2 and tax at source under the Income Tax Act was paid in respect of the contracts; and that the demand was barred by limitation. The Commissioner demanded duty and imposed penalty on the appellants. Appeal of the appellants before the Tribunal was dismissed. In appeal to this Court it was contended that the transaction between the appellants and their respective foreign collaborators was one of transfer of technology and hence excise duty cannot be levied on the value of ideas which are not goods; and that the contracts in these cases were for services on the basis of which permission for release of foreign exchange was obtained from Reserve Bank of India; and that even if what was imported were goods, valuation of the same had to be nominal only on the media; and that the show cause notices which were issued were barred by time inasmuch as the extended period of limitation could not be availed as the appellants had never intended to evade duty; and that the imports through the courier could not be governed by heading No. 98.03 of the Customs Tariff Act In Civil Appeal No. 3632 of 2000 appellant contended that at the time when the drawings were imported, the import of the same was free of duty and duty could not be levied even as part of the passenger baggage. Allowing Civil Appeal Nos. 3632 of 2000 and 1493 of 2000 and dismissing the other appeals, the Court. HELD : 1.1. Drawings, plans, manuals etc., specified in Chapter 49 of the Custom Tariff Act, 1995 are statutorily regarded as goods, attracting a specified rate of customs duty on their import into India. There is no challenge to any of the statutory provisions and reading the two Acts i.e., Customs Act, 1962 and Customs Tariff Act together, there is no doubt that what has been imported into India by the appellant collaborators were goods even though the tangible articles so imported contained information or knowledge for use by the appellants. [627-D] 1.2. In view of the clear provisions of the Customs Act and the Customs Tariff Act. whenever any goods of movables of tangible articles are imported into this country, customs duty is payable. For the purpose of attracting levy it would be immaterial as to what are the types of goods imported or what is contained in them or recorded thereon . The contents will be relevant for the purpose of valuation. [627-F] 1.3. The moment the information or advice is put on a media, whether papers of diskettes or any other thing, that what is supplied becomes chattel. It is in respect of the drawings, designs etc., which are received that payment is made to the foreign collaborators. It is these papers or diskettes etc., containing the technological advice, which are paid for and used. The foreign collaborators part with them in lieu of money. It is, therefore, sold by them as chattel for use by the Indian importer. The drawings, designs, manuals etc., so received are goods on which customs duty could be levied. [628-C] 1.4. The belief of the appellants that what was imported were not `goods’, as the Reserve Bank had also regarded the payment was being made for services and not goods, was clearly erroneous and misplaced. The appellants had represented to the Reserve Bank that the collaborators were rendering service and no this representation remittances were allowed. The Reserve Bank must have examined the applications from the point of view of release of foreign exchange. It was not an adjudicating authority under the Customs Act. Had there been any doubt about the question whether what was imported were goods or not then, perhaps the grant of permission to remit money for services rendered and payment of taxes in respect thereof may have been relevant. But here, on the examination of the law applicable to the levy of customs duty the position is free from any ambiguity. As the drawings, designs, manuals etc., imported through couriers were `goods’ on which customs duty was payable. The action of the Reserve Bank cannot result in negating the statutory provisions of the Customs Act and the Tariff Act applicable in the instant cases. |628-G-H; 629-A| The Assistant Sales Tax Officer and Others v. B.C. Kame, Proprietor Kame, Proprietor Kame Photo Studio, [1977] I SCC 634 and Everest Copiers v. State of Tamil Nadu, [1996] 5 SCC 390, distinguished. State of Himachal Pradesh v. Associated Hotels of India Ltd., (1972) 29 STC 474; State of Madras v. Gannon Dunkerley and Co. (Madras) Ltd., (1958) 9 STC 353; Slate of Tamil Nadu v. Anandam Viswanathan, |1989] 1 SCC 613; Hindustan Shipyard Ltd. v. State of U.P., [2000] 6 SCC 579; Rainbow Colour Lab & Anr v. State of M.P. and Others, [2000] 2 SCC 385; Hindustan Aeronautics Ltd v. State of Karnataka, [1984] 1 SCC 706 and Builder’s Association of India and Others v. Union of India & Others, [1989] 2 SCC 645, referred to Deta Nominees Pty. Lit. v. Viscount Plastic Products Ply. Ltd., (1979) VR 167; Wilhelm Winter; Cynthia Zheng v. G.P. Putnam’s Sons, 938 F. 2nd 1033 9th Cir. (1991); Robinson v. Graves (1935) KB 579 and Lee v. Griffin, (1861) 1 B & S 272, referred to. `Contract of Sale of Goods’, by Benjamin, Third Edition, referred to. 2.1. Intellectual property, when put on a media, would be regarded as an article on the total value of which customs duty is payable. The legislative intent can easily be gathered by reference to the Customs Valuation Rules and the specific entries in the Customs Tariff Act. The value of an encyclopaedia or a dictionary or a magazine is not only the value of the paper. The value of the paper is in fact negligible as compared to the value or price of an encyclopaedia. Therefore, the intellectual input in such items greatly enhance the value of the papers and ink. The charge of a duty is on the final product whether it be the encyclopaedia or the engineering or architectural drawing or any manual. [634-B-C] 2.2. It is misconception to contend that what is being taxed is intellectual input. What is being taxed under the Customs Act read with Customs Tariff Act and the Customs Valuation Rules is not the input alone but goods whose value has been enhanced by the said inputs. The final product at the time of import is cither the magasine or the encyclopaedia or the engineering drawings as the case may be. There is no scope for splitting the engineering drawing or the encyclopaedia into intellectual input on the one hand and the paper, on which it is scribed on the other. For example, paintings are also to be taxed. Valuable paintings are worth millions. A painting or a portrait may be specially commissioned or an article may be tailor-made. This aspect is irrelevant since what is taxed is the final product as defined. [635-A-C] 2.3. The shift from the concept of price of goods, as was classically understood, is clearly discernible in the new principles. Transaction value may be entirely different from the classic concept of price of goods. Full meaning has to be given to the rules and the transaction value may include many items which may not classically have been understood to be part of the sale price. It would not be correct, to take the entire contract value as being the value of the imported goods. [635-E] M/s Gannon Dunkerley and Co. and Others v. State of Rajasthan and Others, [1993] 1 SCC 364; Collector of Customs (Prev.) Ahmedabad v. Essar Gujarat Ltd., (1996) 88 ELT 609 S.C. and State Bank of India v. Collector of Customs, Bombay, [2000] 1 SCALE 72, referred to. St. Albans City and District Council v. International Computers Ltd., (1996) 4 all ER 481 and Advent Systems Ltd. v. UNISYS Corporation, (925) F 2nd 670 3rd Cir (1991), referred to. 3.1. There was a wilful suppression or mis-statement of the value of the goods imported and, therefore, the respondents were entitled to invoke the provisions of the proviso to Section 28 (1) of the Customs Act and issue show-cause notice even it period of six months importation had expired but before the expiry of five years thereof. [643-B] 3.2. The proviso to Section 28 can inter alia be invoked when any duty has not been levied or has been short-levied by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter, his agent or employee. Even if both the expressions `mis- statement’ and `suppression of facts’ are to be qualified by the word `wilful’, the making of such a wilful mis-statement or suppression of facts would attract the provisions of Section 28 of the Customs Act [641-B-C] Collector of Central Excise, Hyderabad v. M/s Chemphar Drugs and Liniments, Hyderabad, [1989] 2 SCC 127; Cosmic Dye Chemical v. Collector of Central Excise, Bombay, [1995] 6 SCC 117; M/s Padmini Products v. Collector of Central Excise. Bangalore, [1989] 4 SCC 275; Tamil Nadu Housing Board v. Collector of Central Excise. Madras and Another, [1995] suppl. 1 SCC 50 and Collector Central Excise v. H.M.M. Ltd., (1995) 76 ELT 497, referred to. 4. In the present cases, the technical material which was received was cleared as part of passenger baggage. Whether the courier or the person bringing the technical material was a person nominated by the collaborator or by the appellants is of no consequence because the levy under Section 12 of the Customs Act is on the goods imported into India. In other words, the subject matter of the tax is not the person importing or exporting but the subject matter of the tax is the goods imported. If such goods are imported as a part of the baggage then by virtue of heading No. 98.03 rate of duty prescribed therein has to be paid. The underlying principle prior to May, 1995 in relation to taxing the passengers’ baggage was that the said baggage which contained dutiable articles was not to be taxed separately as articles but the baggage as a composite unit was to be taxed in its entirety, after giving credit for the free allowance which was available to the passenger. [644-D-F] 5.1. In Civil Appeal No. 3632 of 2000, the drawings and designs which were imported by the appellant were correctly classifiable under heading No. 49.06 and the tariff itself providing that the import of the same is free, the said drawings and designs were not dutiable articles and, therefore, no customs duty was leviable thereon even as a part of the passenger. [648-E] 5.2. Under the Central Excise Act, 1944 in definition of words “excisable goods” under Section 2(d), the very specification or inclusion of goods in the First and Second Schedule of the Central Excise Tariff Act would make them excisable goods subject to duty. Under the Customs Act, the provisions seem to be somewhat different While by virtue of Section 2(22) all kinds of movable property would be `goods’ but it is only those goods which would be regarded as `dutiable goods’ under Section 2(14) which are chargeable to duty and on which duty has not been paid. The expression “chargeable to duty on which duty has not been paid’ indicates that goods on which duty has been paid or on which on duty is leviable, and therefore no duty is payable, will not be regarded as `dutiable goods’. It is only if payment of duty is outstanding or leviable that goods will be regarded as dutiable goods. [647-H; 648-A-B] Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd., (1996) 83 ELT 3 SC and Wallace Flour Mills Company v. Collector Central Excise, (1989) 44 ELT 598, referred to. 6. The value of drawings in Civil Appeal No. 1493 of 2000, which belong to the Indian company were merely approved by the German company could only be nominal and under no circumstances the said value could be regarded as DM 60,000. The nominal value disclosed by the courier, on the facts and circumstances of the case, could not, therefore, be said to be incorrect. [649-F] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 821 of 2000.

CASE NO.: Appeal (civil) 821 of 2000 Appeal (civil) 1021 of 2000 Appeal (civil) 1023 of 2000 Appeal (civil) 1027 of 2000 Appeal (civil) 1028 of 2000 Appeal (civil) 1029 of 2000 Appeal (civil) 1030 of 2000 Appeal (civil) 1031 of 2000 Appeal (civil) 1032 of 2000 Appeal (civil) 1033 of 2000 Appeal (civil) 1423 … Continue reading

Dismissing the appeals, the Court HELD: 1. The object of providing concessional rate of duty, on the kerosene used for illuminating oil burning lamps, was to provide some relief to those economically backward sections of society who use kerosene for illumination and other domestic purposes and, therefore, the benefit of concessional rate of duty was available only on the kerosene cleared by the assessee to the Public Distribution System. [Para 13] [366-C] 2. In the light of the object and context of the notifications, it becomes abundantly clear that the word “ordinarily” used in the Notifications implies that the kerosene must be ordinarily used for illumination purposes, and it would be immaterial if the kerosene is also used for other domestic purposes. [Para 16] [367-B] Commissioner of Customs, Mumbai vs. J.D. Orgochem Ltd. (2008) 16 SCC 576; Viswa and Co. vs. The State of Gujarat (1966) 17 S.T.C. 581 – referred to. 3. From the perusal of the two Notifications, it is plain that the benefit of concessional rate of duty extends only to that variety of kerosene that: (i) has a smoke point of 18mm or more, and (ii) is ordinarily used as an illuminant in oil burning lamps. It is manifest that these two conditions are conjunctive and, therefore, the twin conditions need to be satisfied in order to avail of the concessional rate of duty. In the instant case, the fact that the assessee cleared kerosene manufactured by it to industrial consumers would entail that the assessee cannot claim the benefit of Notifications No. 5/98-CE and 5/99-CE. [Para 17] [367-C-D] Union of India and Anr. vs. Hemraj Singh Chauhan and Ors. (2010) 4 SCC 290; State of A.P. vs. V. Sarma Rao and Ors. (2007) 2 SCC 159 – relied on. Union of India and Ors. vs. Vipinchandra Hiralal Shah (1996) 6 SCC 721 – referred to. Case Law Reference: (2008) 16 SCC 576 Referred to Para 11 (1966) 17 S.T.C. 581 Referred to. Para 11 (2010) 4 SCC 290 Relied on. Para 14 (1996) 6 SCC 721 Referred to. Para 14 (2007) 2 SCC 159 Relied on. Para 15 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7041-7043 of 2002. From the Judgment & Order dated 21.01.2002 of the Central Excise & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/682-684/2001-C. Alok Yadav, M.P. Devanath for the Appellant. P.P. Malhotra, ASG, S. Wasim A. Qadri, Ron Bastian, Anil Katiyar for the Respondent.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 7041-7043 OF 2002 M/S INDIAN OIL CORPORATION — APPELLANT LTD. VERSUS COMMISSIONER OF CENTRAL — RESPONDENT EXCISE, VADODARA JUDGMENT D.K. JAIN, J.: 1. These civil appeals under Section 35L(b) of the Central Excise Act, 1944 (for short “the Act) are directed against … Continue reading

whether laminated panels of particle and medium density fiber board should be classified under sub- heading no. 4406.90 and 4407.90 or under sub- heading no. 4408.90. The appellant alleged that the product manufactured by the respondent herein was classifiable under sub heading 4408.90. For this purpose the appellant relied on Chapter Note 5 of Chapter 44 of the Central Excise Tariff Act, 1985 (hereinafter referred to as `the Act’) which reads as under:- “For the purposes of heading No. 44.08, the expression “similar laminated wood” includes blockboard, laminboard and battenboard, in which the core is thick and composed of blocks, laths or battens of wood glued or otherwise joined together and surfaced with the outer plies and also panels in which the wooden core is replaced by other materials such as a layer or layers of particle board, fiberboard, wood waste glued or otherwise joined together, asbestos or cork”.

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4462 OF 2003 COMMNR. OF CENTRAL EXCISE, NOIDA …..Appellant. Versus M/S. KITPLY INDUSTRIES LTD. …..Respondent WITH CIVIL APPEAL NO.9736 OF 2003 J U D G M E N T ANIL R. DAVE, J. 1. The present appeals arise out of the judgments … Continue reading

whether the cost of packing charges expended/incurred by the appellant-company is liable to be included in the assessable value of the motorcycles manufactured by the appellant-company. 3. The appellant-company, previously known as M/s. Eicher Limited – unit Royal Enfield Motors, are manufacturing motorcycles falling under Chapter 87 of the Central Excise Tariff Act, 1985. The issue relates to non-inclusion of the value of packing charges by the assessee-company in the assessable value for motorcycles despite the fact that the said motorcycles were cleared by the assessee to the dealers located outside Chennai by sending them to their various depots on stock transfer basis and in packed condition from their factory during the period from April, 1999 to December, 1999. 4. At the time of removal from the factory to depot the motorcycles were cleared in fully packed condition. It is also established from records that Rs. 190/- is being charged as packing charges by the appellant and, therefore, the said amount which was collected as packing charges must have been passed on to the buyers.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4406 OF 2010 M/s. Royal Enfield (Unit of M/s. Eicher Ltd.) ….Appellant VERSUS Commissioner of Central Excise, Chennai ….Respondent JUDGMENT Dr. MUKUNDAKAM SHARMA, J. 1. By this judgment and order we propose to dispose of this appeal which is filed by the … Continue reading

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