NORTHERN TANNERY Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Northern Tannery is whether Special Additional Duty of Customs is payable by them on the goods imported.

(2.) SHRI C.K. Rawal, ld. Advocate, submitted that the appellants manufacture finished leather, shoes, etc., for exporting to various countries; that they had imported Wet Blue Buff Hides falling under sub -heading No. 4101.10 of the First Schedule to the Customs Tariff Act from Nepal during the month of March, 2000. The goods were cleared without payment of duty and that subsequently a show cause notice dated 8 -9 -2000 was issued for demanding Special Additional Duty from them; that the Commissioner (Appeals) under the impugned order has confirmed the demand of duty along with interest. He further submitted that Notification No. 18/2000 -Cus., dated 1 -3 -2000 provides exemption from Special Additional Duty to all goods which are exempt from (a) the whole of the duty of customs leviable thereon under the First Schedule; and (b) the whole of the duty of customs leviable thereon under Sub -section (1) of Section 3 of the Customs Tariff Act. He further mentioned that basic customs duty is exempted under Notification No. 37/96 -Cus., dated 23 -7 -96; that the Additional Customs Duty is exempted under Notification No. 16/2000 -Cus., dated 1 -3 -2000; that as such they satisfied the condition specified in Notification No. 18/2000. He relied upon the decision in the case of Golden Paper Udyog Pvt. Ltd. v. CCE, Delhi [1983 (13) E.L.T. 1123] wherein it has been held that where, in fact, there is no levy, an exemption from levy is meaningless nor can a levy be inferred from an exemption from such levy when in fact, there was none.

(3.) COUNTERING the arguments, Shri A.S. Bedi, ld. SDR, submitted that the benefit of Notification No. 18/2000 will be available only subject to the conditions specified therein; that no doubt, the basic customs duty is exempted from payment of duty but there is no exemption from payment of duty in respect of Additional Duty of Customs as the rate of duty is nil; that as per the decision of the Supreme Court in the case of CCE, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. [1996 (83) E.L.T. 3 (S.C)] "Nil rate of duty is also a rate of duty." Thus, it is evident that the Additional Duty of Customs was not exempted and accordingly, Sl. 31 of Notification No. 18/2000 will not be applicable.