JHOONJHUNWALA VANASPATI LTD. Vs. C.C.E.

JUDGEMENT

(1.) M /s. Jhoonjhunwala Vanaspati Ltd. have filed this appeal against demand of Customs duty confirmed by the Commissioner (Appeals).

(2.) SHRI V. Lakshmikumaran, learned Advocate, submitted that the Appellants manufacture vegetable oil commonly known as vanaspati ; that they imported Crude Palm Oil which is the basis raw material for the manufacture of vanaspati and cleared the same under a few bills of entry at concessional rate of duty under Notification No. 16/2000 -Cus dated 1.2.2000; that the benefit of Notification is available subject to the condition that the importer follows the procedure set out in the Customs (Import of Goods at concessional rate of duty for manufacture of excisable goods) Rules, 1996; that the Appellants had obtained registration certificate under Rule 3 of the said rules and had also executed bond; that the Asst. Commissioner under Order -in -Original No. 49/2001 dated 1.11.2001 has confirmed the demand of duty in respect of 43.175 MT of Crude palm Oil which was short received by them under Rule 8 of the Rules, 1996; that the Commissioner (Appeals) has also rejected their appeal under the impugned Order. The learned Advocate, further, submitted that the total quantity of Palm Oil imported by them was 6200.735 MT out of which only a quantity of 6157.560 MT was received in the Appellants' factory ; that the loss of the quantity is only 0.7%; that the oil loss is because of its character as it sticks to the side of the walls of the tanker and some quantity of the oil is thus lost; that Rule 8 of the Rules, 1996 comes into operation only when the goods are not used by the manufacturer for the intended purpose; that it is not the case of the department that whatever quantity was received by them has not been used in the manufacture of vegetable oil; that the phrase "for manufacture" cannot be interpreted to mean actually used in the manufacture. He relied upon the decision of the Tribunal in the case of National Organic Chemical Industries Ltd. vs. C.C. (Import), Mumbai, 2000 (126) ELT 1072 (Tri.) wherein it has been held that importer -cum -actual user cannot be called upon to pay the duty on the quantity of difference of about 1% between the quantity as per discharge certificate and the quantity as per certificate of consumption issued by Central Excise authorities when the discharge certificate was a notional one; that this decision has been affirmed by the Supreme Court as the appeal filed by the Revenue has been dismissed as reported in 2002 (142) ELT A280(SC).

(3.) COUNTERING the arguments Shri O.P. Arora, learned SDR, submitted that the benefit of concessional rate of duty under Notification No. 16/2000 is available subject to the condition that the importer follows the procedure set out in the Customs Rules, 1996; that as such the concessional rate of duty is available to the Appellants only on fulfillment of the condition specified in the Notification; Rule 8 of the Customs Rules, 1996 empowers the Asst./Deputy Commissioner of Central Excise to recover the amount equal to the difference between the duty leviable on goods not used for the intended purpose but for the exemption and that already paid at the time of importation; that it has not been disputed by the appellants that a quantity of 43.175 MT was not used for the intended purpose and once it has not been put for the intended use provisions of rule 8 of Customs rules, 1996 become applicable and duty has to be discharged by the Appellants. Learned SDR also referred to Board's Circular No. 46/96 -Cus dated 30.8.96 wherein it has been mentioned that if in case there is a short receipt at the factory vis -a -vis quantity assessed/cleared under the Bill of Entry necessary action to recover the duty should invariably be taken; that admittedly the quantity had been received short by the Appellants in their factory; that no shortage in the quantity was noticed at the time of import of the goods. Learned SDR finally mentioned that the decision in the case of National Organic Chemicals Ltd. is not applicable as the imports therein were made prior to the issuing of Customs Rules, 1996. In reply the learned Advocate mentioned that the provision of Rule 8 of Customs Rules, 1996 applies only to the quantity received in the factory and not to any quantity which is received short; that the applicants were maintaining detail record of the quantity received and utilized.