COCHIN SHIPYARD LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE impugned order sustained demand of Rs. 1,25,87,845/ - raised against the Appellant, M/s. Cochin Shipyard Ltd. The Assessee imports steel and manufactures ships following provisions allowing inbond manufacture. In the process of manufacture of ships scrap is generated. The Assessee cleared scrap from the warehouse and paid applicable duty taking into account the sale price of the scrap as assessable value during the period 1999 -2002. After due process of law, the original authority held that for determining the liability of waste generated in inbond manufacture of Assessee's final products viz. ships the provisions of Section 65(2)(b) of Customs Act, 1962 (the Act) are applicable. As per this Clause (b) of Sub -section (2) of Section 65, the Assessee was held liable to pay duty equal to the import duty payable on the steel contained in the scrap. In the appeal filed before the Tribunal, the impugned order is challenged on the ground that the method followed is not reasonable and that when more than one interpretation is possible, the interpretation obvious from the plain language has to be adopted. It is argued that when waste/refuse was cleared for home consumption, the form in which the goods are cleared is relevant for valuation. The adjudicating authority had wrongly held that the Assessee was liable to pay duty equal to import duty payable on the steel contained in the scrap.

(2.) THE learned Counsel reiterated the grounds taken in the appeal.

(3.) ON a careful consideration of the rival submissions, we do not find much merit in the appeal. The disputed differential duty was demanded in terms of the Clause (b) of Sub -section (2) to Section 65 of the Act. The Section 65 of the Act reads as follows: