Customs, Calcutta Vs. M/S. Indian Rayon & Industries  INSC 1145 (16
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8371 of 2002
Commissioner of Customs, Calcutta .....Appellant - Versus - Indian Rayon &
Industries Ltd. .....Respondent
instant appeal has been filed by the Revenue under Section 35L of the Central
Excise Act, 1944 against the final judgment and order No.1-1255/KOL/2001 dated
23rd November, 2001 passed by the Customs, Excise and Gold (Control) Appellate
Tribunal, Eastern Bench, Kolkata (for short "the Tribunal"), whereby
the Tribunal has set aside the order passed by the Commissioner.
three Bills of Entry which are the bone of contentions in the present case are
of Entry Sl. No. 2256 dated 30th April, 1998, per Vessel X-Press Singapore
Voy-257, Rot. No. 258/98 dated 7th April, 1998, Line No. 97, Country of origin
- India, Goods 135 cartons 2/64 NM Merino Wool 100% Raw White on paper cone,
Assessable Value - Rs.36,63,829/-.
of Entry Sl. No. 2440 dated 29th May, 1998, per Vessel S.S. Acacia V. 818, Rot
370/98, Line No. 154,
Country of Origin - India, Goods - 20 pallets Polyester 100% Semi Dull Ring
Spun Yarn for weaving NE 24/2, Assessable value - Rs.16,88,481.23 (iii) Bill of
Entry Sl. No.930 dated 12th August, 1998 per Vessel Breeze, Rot. No. 549/98,
Line No. 26, country of origin - India, 2 Goods 765 Ctns. of 100% polyester
yarn, Assessable value liable to duty Rs.27,37,954.76.
goods were initially exported by the respondent-assessee, which were rejected
by the foreign buyer being defective and the assessee re- imported them back to
had initially claimed in the Bills of Entry the benefit of Notification No.
158/95-Cus and also executed bonds for re-export, as required under the said
notification. The Bills of Entry were assessed provisionally. The assessee
could not re-export the goods due to recessionary conditions in the textile
industry. It claimed before the adjudicating authority that since it was not
possible for it to re-export the goods, it may be allowed the benefits of
another Notification No. 94/96-Cus., which was in force at the time of the
clearance from the factory originally.
show cause notices were issued in respect of the three Bills of Entry for
realization of the amounts which were guaranteed under the bonds executed by
the assessee at the time of importation. The demands under the show cause
notices were in terms of Notification No. 158/95- Cus. referred to above.
Confronted with the liability to pay the duty as enjoined under the
notification, in view of non re-export of the goods within six months of the
date of re-importation as stipulated, the assessee took the ground before the
adjudicating authority that Notification No. 158/95-Cus. was not in force at
the time of the importation. Having realized this to be incorrect, the assessee
shifted its stand and submitted that Notification No. 94/96-Cus. dated 16th
December, 1996 was applicable to the goods in question and the benefit
thereunder should be given to it.
main contention raised by the assessee was that if the benefits were available
under the two Notifications to the assessee, then the assessee could avail of
the benefits under either of them. Revenue's reply to the said contention was
that it was not correct to say that if the two Notifications are applicable,
assessee after having opted to take benefit under one of the Notifications,
could change its option and avail the benefit under the other scheme. In any
case, this would depend upon the nature and contents of the Notifications. It
was revenue's contention that the assessee could not change its option because
of the nature and contents of the notifications.
Authority-in-Original confirmed the demand against (i) Bill of Entry No. 930 in
the sum of Rs.20,76,111/- and (ii) Bill of Entry No. 2440 in the sum of
Rs.13,86,355.24. The assessee was given the benefit of Notification No.
94/96-Cus. in respect of Bill of Entry No. 2256 of 1998 as the goods were
re-exported under Incentive Scheme, i.e., Duty Exemption Entitlement Scheme
(DEEC). Thus, in relation to Bill of Entry No. 2256 dated 30th April, 1998, the
duty was confirmed in the sum of Rs. 4,99,188.79. The benefit was not extended
to other two Bills of Entry as the goods in these cases were covered under Duty
Entitlement Passbook Scheme (DEPB). Contention raised on behalf of the assessee
that the benefits of the Notification No. 94/96-Cus. having been given to the
assessee in regard to Bill of Entry No. 2256, could not be denied on Bills of
Entry Nos. 930 and 2440, was rejected.
assessee being aggrieved filed an appeal against the order of the Commissioner,
which has been accepted by the Tribunal by its impugned order. The Revenue
being aggrieved has filed the present appeal.
for the parties have been heard.
20 of the Customs Act, 1962, which deals with re-importation of the goods,
provides:- "20. Re-importation of goods. - If goods were imported into
India after exportation therefrom, such goods shall be liable to duty and be
subjected to all the conditions and restrictions, if any, to which goods of the
like kind and value are liable or subject, on the importation thereof."
Notification No. 158/95-Cus. dated 14th November, 1995, goods manufactured in
India and re- imported in India for repairs or for re- conditioning are
exempted from whole of the duty of customs leviable on them as well as
additional duty subject to the condition, inter alia, that the goods are
re-exported within six months of the date of re-importation or any extended
period as may be allowed and a bond is executed at the time of importation to
export within the said period and, in the event of failure to do so, pay an
amount equal to the difference between the duty levied at the time of re-import
and the duty leviable on such goods at the time of importation. The assessee
executed a bond with the President of India, complying with the aforesaid condition
of notification and undertook to pay, on demand in the event of its failure to
comply with any of the conditions of notification, an amount equal to the
difference between the duty levied and leviable on such goods. In respect of
each of the Bills of Entry, separate bonds were executed indicating Bill of
Entry No., description of goods, country of origin, CIF Value, the assessable
value and the bond value.
Revenue contends that the assessee could not avail the benefit under
Notification No.94/96- Cus and that it could not change its option. According
to the assessee, the assessee could change its option even at a later stage and
it could avail of the benefit under Notification No.94/96-Cus which was in
force at that time.
do not find any substance in this submission advanced on behalf of the
assessee. The only notification which was available to the assessee at the time
of import which granted the assessee the right to import duty free goods was
Notification No. 158/95-Cus. Having availed of the benefit of notification, the
assessee has necessarily to comply with the conditions of the notification. It
goes without saying that the assessee cannot approbate and reprobate. In
Tractors and Farm Equipment Ltd. v. Collector of Customs, Madras, [1998 (9) SCC
665], it was pointed out by this Court that once the assessee's case was that
what it had imported do not constitute internal combustion piston engines but
only certain components, the importer cannot turn around and say that what was
imported constitutes piston engines. Of course, there is no estoppel against
the law but having sought for and taken the benefit of the notification to
import goods without payment of duty, it is not open to the assessee to contend
that the conditions in the said notification need not be fulfilled, be it on
the ground that the benefit under another notification is available to him or
any event, Notification No. 94/96-Cus. is, on its own terms, not applicable to
the facts of the present case. The assessee has claimed the benefit under
clause 1(e) of Notification No. 94/96-Cus. The description of the goods claimed
in Serial No. 1(e) under Notification No. 94/96-Cus., which reads as under:
Sl. Description of
goods Amount of duty No. (1) (2) (3) 10
1. Goods exported-
XXXXX (a). XXX XXXXX (b). XXX XXXXX (c). XXX XXXXX (d). XXX XXXXX (e). under
duty Amount of excise duty exemption scheme leviable at the time (DEEC) or
export and place of Promotion Capital importation of goods Goods Scheme (EPCG)
and subject to the following conditions Applicable for such Goods (I) DEEC book
has not been finally closed and export in question is delogged from DEEC book.
(II) In case of EPCG
scheme the period of full export performance has not expired and necessary
endorsements regarding reimport have been made.
(III)The importer had
intimated the details of the consignment re-imported to the Assistant
Commissioner of Central Excise in charge of the factory where the goods were
11 (2) XXX XXX (3) XXX XXX refers to the goods exported under DEEC or Export
Promotion Capital Goods (EPCG) Scheme and not under DEPB Scheme. In the present
case, out of the three Bills of Entry covering goods which had to be re-
exported, only one of them was for goods earlier exported under DEEC scheme
while the other two were under DEPB scheme. The adjudicating authority had, in
respect of goods initially imported under DEEC Scheme, given the benefit of the
Notification No. 94/96-Cus, while rejecting the claim in respect of the goods
exported under a DEPB Scheme. This is in accordance with the language of
Notification No. 94/96-Cus. The difference between DEEC and DEPB Schemes can be
seen from the following :- "DEEC Scheme Under this scheme the importer is
issued an Advance Licence to procure the raw material for a manufacturer of the
export product. The goods which are cleared 12 under Advance Licence are meant
for use in the manufacture of export product or replenishment of the raw
materials already used. The clearance is allowed duty free.
The details of items
allowed for import against a specific export product are published by the
Ministry of Commerce in their Input Output Norms which are part of the Exim
DEPB Scheme Under
this scheme the exporters are issued DEPB scrips which allows them the specific
amount to be utilized for payment of Customs duty. The amount for which DEPB
scrip is issued depends upon the rate for a particular export product. The
Ministry of Commerce notifies DEPB credit rates for export of an item. The DEPB
scrip is freely transferable and can be used to debit the payment of duty at
the time of clearance of goods except capital goods and goods mentioned in
attempt was made on behalf of the assessee to refer to Sl. No 1(d) of the said
notification which refers to goods exported under bond without payment of
excise duty. It is only Sl. No. 1(e) which deals with benefit under the EXIM
Policy but, at the same time, confines to DEEC and EPCG Scheme and not to the
DEPB Scheme. Sl. Nos. 1(a), (b), (c) and (d), all deal with export of goods in
the normal course, where duty becomes payable under the provisions of Central
Excise Act, 1944 or the Customs Act, 1962, as the case may be, and to the
Customs or Excise duties leviable on goods so exported. They do not deal with
imports or exports under the EXIM Policy which fall in Sl. No. 1(e).
13 of the Central Excise Rules, 1944, which was in force at the time of initial
export of goods in question (February 1998), provides as under:
"RULE 13- Export
in bond of goods on which duty has not been paid- (1)The Central Government
may, from time to time, by notification in the Official Gazette- (a)permit
export of specified excisable goods in bond without payment of duty, in the
like manner, as the goods regarding, which the rebate is granted under sub-rule
(1) of rule 12 from a factory of manufacture or warehouse or any other premises
as may be approved by the Commissioner of Central Excise;
materials, removal of which without payment of duty from the place of
manufacture or storage for use in the manufacture in bond of export goods, may
be 14 permitted by the Commissioner of Central Excise;
(c)allow removal of
excisable material without payment of duty for the manufacture of export goods,
as may be specified, to be exported in execution of one or more export orders;
or for replenishment of duty paid materials used in the manufacture of such
export goods already exported for the execution of such orders, or both;
subject to such
safeguards, conditions and limitations as regards the class or description of
goods, class or description of materials used for manufacture thereof,
destination, mode of transport and other allied matters as may be specified in
the notification which the exporter undertakes to abide by entering into a bond
in the proper form with such surety or sufficient security, and under such
conditions as the Commissioner approves.
Government may, from time to time, by notification in the Official Gazette,
permit export of specified excisable goods in bond, without payment of duty
from a factory of manufacture or warehouse, to Nepal or Bhutan, subject to such
conditions or limitations as regards the class of goods, destination, mode of
transport and other matters as may be specified therein.
Explanation I.- In
this rule, the expression "manufacture" includes the process of
blending of any goods or making alterations or any other operation thereon.
Explanation II.- In
this rule, the term `materials' shall include raw materials, consumables,
components, semi- finished goods, assemblies, sub- assemblies, intermediate
goods, 15 accessories, parts and packaging materials used in the manufacture
of export goods but does not include capital goods used in the factory in or in
relation to manufacture of export goods."
14 provides for entering into General Bond, for permission to export goods from
India under the prescribed conditions and Rule 14A provides for penalty for
failure to furnish proof of export within the prescribed period. Sl. No. 1 (d)
of Notification No. 94/96-Cus. covers these instances where goods are
manufactured in India and exported without payment of duty in accordance with
the procedure set out in Rule 13, as indicated above. Sl. No. 1(d) has,
therefore, no relevance to exports made under Export Import Policy Schemes.
the two consignments vide Bills of Entry Nos. 930 dated 12th August, 1998 and
2440 dated 29th May, 1998 under DEPB Scheme do not get the benefit of
Notification No.94/96-Cus., the order of the Tribunal deserves to be set aside
and the order of the Commissioner of Customs restored. Ordered accordingly.
Appeal is allowed with costs.