BHOLANATH INTERNATIONAL LTD. Vs. CC

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Bholanath International Ltd., is whether benefit of Notification No. 32/97 -Cus dated 1.4.1997 is available to them in respect of goods imported.

(2.) Shri R. Santhanam, learned Advocate, submitted that the appellants imported 1533 yards of fabrics and filed Bill of Entry dated 8.5.1998 claiming the exemption under Notification No. 32/97 which provides exemption from payment of duty subject to the condition that the goods are imported for execution of an export order placed on the importer by the supplier of goods for jobbing; that the said material was to be used for edging jute carpets to be procured locally and thereafter would be exported to the supplier; that the said fabric has been supplied free of cost by the supplier and the appellants would be receiving only conversion charges which also include the price of the basic fabric of jute carpet; that the edged jute carpet had been exported also; that the Asst. Commissioner, under Adjudication Order No. 972/98 dated 20.7.1998, disallowed the benefit of Notification on the ground that their matter did not fall within the meaning of scope of jobbing relying upon the decision in the case of Prestige Engineering (India) Ltd. v. CCE, Meerut ; that the Commissioner (Appeals) has also, under the impugned Order, rejected their appeal holding that the process of edging of jute carpet did not fall within the scope of jobbing. The learned Advocate, further, submitted that as per the agreement between the appellants and M/s. Capel Incorporated, U.S.A. foreign customers had supplied fabrics for the edging of four sides of the carpet out of the fabrics supplied by them (foreign suppliers); that it is, thus, apparent that they have engaged themselves only in jobbing and as such fall within the ambit of Notification No. 32/97. He also mentioned that the term 'Jobbing' has been defined in EXIM policy, 1997 -2000 as processing or working upon raw materials or semi -finished goods supplied to the job worker so as to complete a part of whole of the process resulting in the manufacture or finishing of an article in operation which is essential for the aforesaid purposes; that since the import and export is governed by EXIM Policy the definition of jobbing given in the policy would be applicable to all Customs Notifications which are issued to give effect to the EXIM Policy; that there is no bar in the EXIM Policy that the job worker cannot procure some raw material locally. He finally submitted that in the case of Prestige Engg., the Supreme Court was interpreting the term 'Job Worker' in connection with Notification No. 119/75 -CE; that since the said judgment was rendered in a Central Excise matter the same cannot be applied in the customs matters especially when jobbing has been defined in the EXIM Policy. He also relied upon the judgment in the case of Section Mohan Lai v. R. Kondiah wherein it has been held that "the meaning of the word must be gleaned from the context in which it is used. Reference to the provisions of the Constitution or other statute where the expression is used cannot be of any assistance in determining its meaning.... It is not a sound principle of construction to interpret expression used in one Act with reference to their use in another Act, more so, if the two Acts in which the same word is used are not coagnate.

(3.) Countering the arguments Shri A.S. Bedi, learned SDR, submitted that the appellants themselves procure the carpets in India which are supplied to their foreign customers after edging the same out of the fabric supplied by foreign customers free of cost; that it is apparent that the appellants are not engaged in jobbing which is main condition of the Notification No. 32/97 as the carpets are procured by them and not imported for execution of an export order placed on the appellants by the supplier of goods for jobbing; that the scope and interpretation of the word 'jobbing' is well settled in that job work should be one which involves major contribution of the labour and skill and that substantial part of the raw material of the job worker is not involved. He relied upon the decision in the case of Prestige Engg. (India) Ltd. (supra) wherein the Apex Court has observed that "the Concise Oxford Dictionary assigns several meanings to the expression 'Job' but the relevant meaning having regard to the present context is "a piece of work specially one done for hire or profit." The expression 'job work' is assigned the following meaning: work done and paid for the job, addition or application of minor items by the job worker would not detract from the nature and character of his work. The learned SDR further submitted that merely because the Supreme Court in the said judgment has interpreted an excise notification it does not mean that the said interpretation would not apply while interpreting the customs notification pertaining to jobbing. He finally mentioned that even as per the EXIM Policy jobbing means processing or working upon raw materials or semi -finished goods supplied to the job worker; that in the present matter the customer is supplying only edging material whereas carpets are purchased by the appellants themselves. In reply the learned Advocate referred to the decision in the case of CCE, Meerut v. Kapri International (P) Ltd. wherein it has been held that by cutting cotton fabric from running length into small pieces and giving them a definite required shape the respondents has produced a new commodity which has different commercial identity in the market.