THERMAX PRIVATE LIMITED vs. COLLECTOR OF CUSTOMS (BOMBAY) NEW CUSTOMS HOUSE

CIVIL APPEAL No. 4693/1990Supreme Court[1992] 3 S.C.R. 94319 August 1992Bench: 3 JudgesAuthor: S. RANGANATHAN, V. RAMASWAMI, B.P. JEEVAN REDDY17 pages
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What were the facts?

The appellant, Thermax Private Limited, imported "Sanyo Single Effect Chiller" goods. They paid customs duty and additional duty under Section 3(1) of the Customs Tariff Act, 1975. The appellant claimed exemption from the additional customs duty based on two notifications issued under Section 8 of the Central Excises & Salt Act, 1944, and sought a refund of the additional duty paid. The Assistant Collector rejected the claim. Appeals to the Collector resulted in one appeal being allowed and the other dismissed. Both the assessee and the Revenue appealed to the Tribunal. The Tribunal allowed the Revenue's appeal and dismissed the assessee's appeal. The assessee then filed the present appeals before the Supreme Court.

What did the Supreme Court hold?

The Supreme Court held that the benefit of Chapter X of the Central Excise Rules, 1944, including the procedure therein, can be claimed by any person, not necessarily a manufacturer, wishing to obtain remission of duty. The Court found that there is nothing in Rule 192 that makes it inapplicable to an importer of goods, provided the goods are sold for a use that qualifies for the concession and the purchaser fulfills the requirements of Rule 192. Therefore, the Tribunal erred in holding that the assessee could not get a refund because the procedure of Chapter X is inapplicable to importers. However, the entitlement to the concession depends on whether the purchaser is a holder of an L-6 licence or a C.T.-2 certificate. The concession was correctly granted for goods supplied to a firm holding an L-6 licence, but rightly denied for the other firm where no material was produced to show eligibility. Regarding the second issue, the Court held that the Explanation to Section 3(1) is applicable only where goods of exactly the same description attract different rates of duty. Since the goods in question fell under a specific serial number in the notification with only one rate of duty, the higher rate under the Explanation was not attracted. The Court rejected the Revenue's contention on this point.

What were the issues?

1. Whether the benefit of Chapter X of the Central Excise Rules, 1944, including the procedure outlined therein, can be availed by an importer for claiming exemption from additional duty of customs (CVD) under Section 3(1) of the Customs Tariff Act, 1975, when the goods are used in a specified industrial process, even if the importer is not a manufacturer. The assessee contended that the exemption under the notification dated 27.7.87 could not be denied, even if the procedure of Chapter X could not be strictly complied with by an importer. The Revenue argued that the procedure of Chapter X is inapplicable to importers. 2. Whether the Explanation to Section 3(1) of the Customs Tariff Act, 1975, which mandates the highest rate of duty when like articles attract different rates, is applicable to the imported goods in question. The Revenue contended that the applicable rate would be 80% being the highest rate. The assessee argued that this provision is only applicable where goods of exactly the same description attract different rates of duty.

Which sections of the Income-tax Act were involved?

Section 3(1),Section 8(1)

AI-generated summary — verify with the full judgment below

-( THERMAX PRIVATE LIMITED A v. COLLECTOR OF CUSTOMS (BOMBAY) NEW CUSTOMS HOUSE AUGUST 19, 1992 (S. RANGANATHAN, V.RAMASWAMI AND B.PJEEVEN B REDDY, JJ.)

Customs Tariff Act, 1975/Central Excises & Salt Act, 1944: Section 3(1)/Section 8(1)/Rules 8(1), and Rule 192 in Chapter X-Ad- c dional duty on article imported equal to excise duty leviable on a like article-Exemption/concession granted to a like article under Rule 8(1) ~- tends to additional duty-Procedure specified in Chapter X-Extends to ad- ditional duty on import-Concession available to importer for supplying them to Indian manufacturers-Explanation to S.3(1}-Applicable only where D goods of exactly the same description attracted different rates of duty-Highest rate of duty-Applicability of. 'lbe appellant-assessee imported certain goods and paid the cus- toms duty and additional duty at the appropriate rate under the relevant entry of the customs tariff but claimed exemption from the additional duty E of customs leviable under S.3(1) of the Customs Tariff Act, 1975 on the basis of two notifications issued u/s. 8 of the Act, and refund of the additional customs duty paid by it. Since the claim was rejecte

The order continues below.

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