COLLECTOR OF CUSTOMS Vs. PRESTO INDUSTRIES

JUDGEMENT

(1.) THIS appeal is directed against the Order dated 12 -3

(2.) 1990 passed by the Collector of Customs (Appeals), Bombay. The facts in brief are that the respondents are manufacturing Combs and Brushes out of imported cellulose acetate sheets in the Kandla Free Trade Zone. They are required to export minimum of 50% by weight of the product and the balance quantity of Cellulose Acetate Scrap is allowed to be cleared for Home Consumption on payment of duty after allowing 2% manufacturing loss. The respondents were required to pay additional duty of customs (CVD) on the Cellulose Acetate Scrap apart from customs duty by the order of the Assistant Collector of Customs, Kandla Free Trade Zone dated 22 -6 -1989. This came about because of the following circumstances : -

(3.) THE learned Senior Departmental Representative Shri S.K. Roy appearing for the Appellant Collector drew attention to the grounds of appeal and submitted that the exemption Notification 16/83 applies only where the goods discharged their duty liability by paying duties of customs, additional duty of customs equivalent to central excise duty is part and parcel of the duties of customs. Since this additional duty of Customs had not been paid on the scrap cleared for home consumption, the second condition in the Notification 16/83 is not satisfied. Therefore, the demand of short levy duty from the respondent is correct in law. Shri Arun Mehta, the learned Counsel appearing for the respondent contended that the Collector (Appeals) had rightly interpretated the provisions of Notification 16/83 which is an exemption Notification under central excise and it will be incongruous to charge central excise duty as additional duty of customs on the scrap when there was exemption Notification No. 26/79 -Cus., dated 31 -1 -1979 on the customs side which exempts cellulose acetate sheets and strips falling under Chapter 39 of the Customs Tariff Act, 1975 from duty in excess of 75% and also from the whole of the additional duty of customs leviable thereon.