GOODYEAR INDIA LIMITED Vs. COLLECTOR OF CUSTOMS BOMBAY

JUDGEMENT

(1.) THE appeal arises upon a judgment delivered by the Customs. Excise and Gold (Control) Appellate Tribunal. The appellants imported bulked nylon fabric. The bill of entry described the imported goods as being Nylon Woven Dipped Diffusion Resistance Fabric, Goodyear Code E02 NN. The imported goods were cleared upon payment of duty as demanded. The appellants then claimed refund of the additional duty paid by them now stated. The claim having been refused by the authorities below, the Tribunal was moved.

(2.) THE Customs Tariff Act, 1975, prescribes in Section 3 for the levy of additional duty equal to excise duty. Sub-section (I) its Explanation and sub-section (3) of Section 3 are relevant. and they read thus :

(3.) THE Tribunal noted the condition on behalf of the appellant that the yarn in question fell under S. No. 1 aforementioned and not under S. No. 2(a)(v), and the basis for the contention, namely, that the supplier of the imported goods had bought base yarn and subjected it to the process of air bulking to produce the textured yarn that was imported. The Tribunal stated, counsel "contends that the description of the article relevant to the present case is textured yarn produced out of base yarn and not other textured yarn in notification 55/78. This contention has, in our opinion, substance." The Tribunal went on to add, "The description of the article in the First Schedule to the Central Excises and Salt Act is Textured yarn. Textured yarn produced out of base yarn" is merely descriptive of process of manufacture. For duty purposes, notification No. 55/78 describes and fixes a different concessional rate of duty for textured yarn produced out of base yarn separately from other textured yarn. This itself shows that textured yarn is liable to excise duty at different rates, depending on the process of manufacture. The excise leviable on textured polyamide yarn of above 750 deniers would depend on the process of manufacture. It is Rs. 6.50 (Sl. No. 3(b)(vi) of notification No. 28/75 CE) plus Rs. 5.00 per Kg. (Col.3 against Sl. No. 1 of notification 55/78 CE), if such textured yarn is produced out of base yarn. If it is produced otherwise, the rate of duty is Rs. 24.60per Kg. (Sl. No.2(a)(v) of notification 55/ 78). In such a situation, the yarn content of the imported fabrics would attract duty at the higher rate viz., Rs. 24.60 per Kg. (plus special excise duty as may be applicable)".