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Coromandel Fertilisers Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(16)ELT563TriDel
AppellantCoromandel Fertilisers
RespondentCollector of Customs and Central
Excerpt:
.....limited (hereinafter called the 'appellants' are the manufacturers of chemical fertilisers.rock-phosphate, one of the raw materials used in the manufacture of chemical fertilisers, is imported from sources outside the country. as per the regulations laid down by the government of india, the import of rock-phosphate is canalised through the minerals and metals trading corporation (a government of india undertaking). during the period 1972 to 1976, the appellants imported rock-phosphate and it was initially assessed to countervailing duty at 15% under section 2 (a) of the indian tariff act, 1934 as prescribed under section 14 of the customs act, 1962 and to auxiliary duty at 5% under customs tariff item no. 35 on a provisional basis. on 24th october 1978, the assistant collector of.....
Judgment:
1. This is a revision application addressed to the Central Government (now transferred to the Appellate Tribunal under Section 131 B) against the order-in- appeal No. 65/79 (Cus.) dated 12-4-1979.

2. M/s Coromandel Fertilisers Limited (hereinafter called the 'appellants' are the manufacturers of chemical fertilisers.

Rock-phosphate, one of the raw materials used in the manufacture of chemical fertilisers, is imported from sources outside the country. As per the regulations laid down by the Government of India, the import of rock-phosphate is canalised through the Minerals and Metals Trading Corporation (A Government of India Undertaking). During the period 1972 to 1976, the appellants imported rock-phosphate and it was initially assessed to countervailing duty at 15% under Section 2 (A) of the Indian Tariff Act, 1934 as prescribed under Section 14 of the Customs Act, 1962 and to auxiliary duty at 5% under Customs Tariff Item No. 35 on a provisional basis. On 24th October 1978, the Assistant Collector of Customs, Visakhapatnam, finalised the assessment of six shipments of rock-phosphate including in particular, that in respect of Bill Entry No. 008/2.9.75 relating to rock-phosphate shipment received per S.S.'irish Larch' which was provisionally assessed during 1975. The Assistant Collector of Customs, Visakhapatnam, while finalising the above Bill of Entry in respect of the above shipment, levied auxiliary duty at 15% and countervailing duty at 15% as against 5% auxiliary duty and 15% countervailing duty levied under the provisional assessment on the basis that the item 'Rock phosphate' would fall under Item No. 87 and not under Item No. 35 of the Customs Tariff as initially determined by him and accordingly a demand notice No. S8(a)/l148/75-76 dated 9-IO-I978 under Section 18(2) of the Customs Act, 1962 was issued against the appellants to pay an additional duty in the amount of Rs, 13,96.233.90. Against the demand raised by the Assistant Collector of Customs, the appellants applied to the Collector of Customs, Madras for review under Section 130 of the Customs Act, 1962 of the order of the Assistant Collector of Customs and at the same time preferred an appeal "to the Appellate Collector of Customs Central Excise, Hyderabad under Section 128 of the Customs Act, 1962 as the time for riling the appeal was going to be expired.

3. The Collector of Customs, Madras passed his orders in review sometime in March 1979 upholding the contention of the appellants that the rock-phosphate consignments in respect to 5 shipments were correctly classifiable under Item No. 35 of the Indian Customs Tariff chargeable auxiliary duty at 5% and ordered reassessment accordingly but in respect of rock-phosphate relating to the shipment 'Irish Larch' relating to Bill of Entry No. 008/2-9-1975 the order of the Assistant Collector was upheld and the contention of the appellants was rejected.

The reason given by the Collector of Customs, Madras, in upholding the decision of the Assistant Collector with respect to this shipment was that the rock-phosphate imported relating to this Bill of Entry No.008/2-9-1975 in respect of the shipment 'Irich Larch' was the rock-phosphate in lumpy form and it could not bet said to enrich the soil and fertilise it and therefore it was classifiable under item 87 of the Indian Customs Tariff and not under item 35 ibid and hence the computation of auxiliary duty at 15% in the finalised assessment was found in order with respect to this shipment.

4. The Appellate Collector, Hyderabad, who heard the appeal, observed with respect to this shipment relating to 'Irish Larch', as under :- "In view of the order of the Collector of Customs Madras, to the effect that auxiliary duty should be charged at the rate of 15% only, the auxiliary duty should be charged at the said rate of 15%." 5. Aggrieved by the said order of the Appellate Collector, Hyderabad, the appellants filed a revision application before the Central Government which was transferred to this Tribunal and is treated as an appeal.

6. We have heard Shri S Ganesan, Advocate for the appelants and Sh.

A.S. Sundar Rajan, J.D.R. for the Department and gone through the record.

7. Shri Sundar Rajan raised a preliminary objection that no revision or appeal is maintainable against the order of the Appellate Collector, Hyderabad with respect to the classification of the goods relating to Bill of Entry No. 008/ 2-9-75 because the Appellate Collector of Customs & Central Excise, Hyderabad did not pass any order of his own on this point. He had only observed that the auxiliary duty should be charged at the rate of 15% as ordered by the Collector of Customs, Madras. The remedy was available to the appellants against the order of the Collector of Customs, Madras, by filing a Revision petition to Govt. of India. No appeal or revision lies against this order passed by the Appellate Collector, Hyderabad on this issue which has not been decided by him. It cannot be said to be an order against which any revision or appeal lies before this Tribunal. What the Appellate Collector, Hyderabad has observed is that the auxiliary duty should be charged at the said rate of 15% as per the order of the Collector of Customs, Madras. This observation cannot be said to be an order passed by the Appellate Collector, Hyderabad and therefore no appeal or revision lies against it.

8. On merits, the learned departmental representative argued that the order of the Collector has attained finality and cannot be questioned under Section 129 (A) of the Customs Act, 1962. According to him, admittedly a representative sample was drawn from the consignment pertaining to the Bill of Entry No. 008/2-9-75 which is under dispute and it was found to be grey colour lumps and powder. Lumpy for mitt which Rock Phosphate was imported could not be made use of as a 'manure'. It is only in the powder form that the rock-phosphate can enrich the soil and fertilise it. The authority below has correctly classified this consignment under Item 87 of Indian Customs Tariff and the goods of this particular consignment are not entitled to the exemption from auxiliary duty as claimed by the appellants.

"Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order; (a) a decision or order by the Collector of Customs as an adjudicating authority; (c) an order passed by the Board or Appellate Collector of Customs under Section 128, as it stood immediately before the appointed day; (d) an order passed by the Board or the Collector of Customs either before or after the appointed day under Section 130, as it immediately stood that day." 10. In this case before us, it is an appeal against the order of the Appellate Collector, Hyderabad dated 12.4.1979. Regarding the consignment in dispute the Appellate Collector has observed as under :- "As regards item No. I of the appendix, in view of the order of the Collector of Customs, Madras to the effect that the auxiliary duty should be charged at the rate of 15% only, the auxiliary duty should be charged at the said rate of 15%." 11. A perusal of these observations made by the Appellate Collector shows that the Appellate Collector following the decision given by the Collector of Customs, Madras, regarding the payment of auxiliary duty at the rate of 15% ordered that the auxiliary duty should be charged at the said rate of 15% in view of the order of the Collector of Customs, Madras. The words "the auxiliary duty should be charged at the said rate of 15%" clearly indicate that the Appellate Collector following the order of the Collector of Customs, Madras on this point has categorically ordered that the auxiliary duty should be charged at the said rate of 15%. Even an order, passed without going into the merits of the case on preliminary point disposing of matter, is appealable. In a case under the Income-tax Act reported in 46-lTR-Page 208, the assessee did not pay the tax which was a condition precedent to the maintainability of the appeal. The A.A.C. accordingly passed an order holding that he had no jurisdiction to hear the appeal. It was held by the High Court that this constituted an order against which an appeal lay to the Appellate Tribunal. In another case under the Income-Tax Act reported in 68-ITR-P-437, the A.A.C. passed an order refusing to exercise the jurisdiction and to entertain an appeal on the ground that the appeal was not maintainable. That order was held to be appealable before the Appellate Tribunal.

12. In the present case before us, the Appellate Collector has specifically ordered that in view of the order of the Collector of Customs, Madras to the effect that auxiliary duty should be charged at the rate of 15% only, the auxiliary duty should be charged at the said rate of 15%. This amounts to an order passed by (he Appellate Collector and is appealable before the Appellate Tribunal. This is a clear cut order of the Appellate Collector, Hyderabad, and" even if the Appellate Collector would have refused to entertain the appeal on this point observing that the Collector of Customs, Madras had already passed the order on this matter, even then having regard to the principles laid down in the decisions mentioned above, the said order of the Appellate Collector would have been an appealable order under Section 129(A) of the Customs Act, 1962.

13. The other argument put forward by Sh. A.S. Sundar Rajan, Departmental representative that though an appeal lies against the order of the Appellate Collector dated 12.4.1979 but as far as this portion of the order i.e. regarding the consignment pertaining to Bill of Entry No. 008/2.9.75 is concerned, it is not appealable, does not hold good. When an order is appealable, it cannot be said that it is appealable, on certain points and not appealable on the remaining one.

We have to take the order as a whole and not in pieces. Moreover this particular direction of the Appellate Collector though based on the findings of the Collector of Customs, Madras amounts to an order against which appeal lies to the Appellate Tribunal under Section 129(A) of the Customs Act, 1962. They availed the other remedy by filing an appeal before the Appellate Collector, Hyderabad against the order of the Assistant Collector, which has the order in original.

Appellate Collector, Hyderabad had the jurisdiction to entertain the appeal filed by the appellants against the order in original passed by the Assistant Collector. The order passed by the Collector of Customs and Excise, Madras on the review application had not attained the finality in these circumstances 14. In view of our discussion above, we reject the contention of the departmental representative on this preliminary point.

15. On merits, the main question that arises for consideration is whether the appellants are to pay auxiliary duty of Customs at 5% on the imported goods, namely, rock-phosphate (lumpy form) or at a higher percentage of 15%. For determination of this question two items, i.e.

items 35 and 87 under the Indian Customs Tariff are required to be construed as also the effect of the notification dated 15.1.1972 relating to exemption from duty on the rock-phosphate in all forms when imported into India for use as or in the manufacture of fertilisers.

16. Our attention has been drawn towards a decision of Gujarat High Court dated 14.12.1976 in special Civil Applications No. 668 and 1117 of 1974 in which the High Court of Gujarat held that rock-phosphate was mainly used for manurial purposes irrespective of the form in which it was imported and that therefore the rate of auxiliary duty leviable on it was 5% corresponding to Item 35, Indian Customs Tariff.

17. The facts in that case were similar to facts of this case before us. No particular form is prescribed in the tariff entry for the import of rock-phosphate. Rock-phospate even if it is imported in lumpy form, it will not cease to be rock-phospatc used in the production of fertilisers. Had it been the intention of the legislature that rock-phosphate should only be imported in powder form and not in any other form, the legislature would have indicated so in the tariff entry. It is therefore, manifest that irrespective of the fact whether particular mineral is in powder form or in pabble (lumpy) form if that particular mineral phosphate is used for manurial purposes, it would not fall under entry No. 87 of the Customs Tariff which deals with "all other articles not otherwise specified:" If entry No. 87 is not attracted, then auxiliary duty is leviable only at 5% as indicated in item No. 2 of the notification dated 1.3.1974, or of notification No.5/75 dated 1.3.1975.

18. The learned departmental representative has not been able to prove his point that rock-phosphate only in the powder form can be used for manurial purposes and not rock-phosphate in lumpy form- The form in which the rock-phosphate is imported is immaterial whether in powder form or in lumpy form-It should be indicative of its use for manurial purposes.

19. Under these circumstances as the department has failed to show and prove that the rock-phosphate imported in lumpy form cannot be made use of as a manure, we have got no other alternative but to set aside the order of the Appellate Collector and allow the appeal.

20. We, therefore, allow the appeal, set-aside the order of the Appellate Collector on this point. Consequential relief to follow.

21. The Appellate Collector passed no order with respect to Irish Larch (Bill of Entry No. 008/2.9.75). He merely told the appellants, M/S.Coromandel Fertilisers Ltd., that they should do what the Collector of Customs had decided should be the rate of auxiliary duty. This does not make it into an order of the Appellate Collector and indeed he was no longer in a position to pass any order with respect to that shipment.

It needs to be noted that he also wrote in paragraph 3 that the matter had been decided by the Collector against the appellants and that against such a decision no appeal lay to him (Appellate Collector). He said furthermore that the order of the Collector would hold good in respect of this consignment till it was altered by an authority competent to do so, viz., either the Board or the Government of India.

The order of the Collector as well as that of the Appellate Collector were results of the appellants' application to them. To the one they asked for the powers under Section 130 of the Customs Act, 1962 to be exercised, while to the other, they appealed under the provisions of Section 128 of the same Act. The order of the Assistant Collector which caused these applications/appeal was the same Order No.S8(a)/1148/75-76 dated 9.10.78. The application to the Collector was dated 4.12.78, while to the Appellate Collector they went on 2.7.79.

Much arguments were made before the Tribunal why the appellants went to the two authorities, when normal remedy was only an Appellate Collector, but they are not important. All that we need to bear in mind was that the two authorities acted only when approached by the appellants, M/s. Coromandel Fertiliser, and not on their own volition.

It also needs to be remembered that the appellants went to the Collector first, before they approached the Appellate Collector a month later.

It is believed that a suppliant can appeal before any power who can redress. That is a position that no one need question. But that is not to say that the suppliant can approach first one power, and then another, perhaps in the expectation that if the one does not produce the desired remedy, the other might. Coromandel Fertilisers gained a good deal from the Collector's order but he resisted their demand with regard to Irish Larch. A month later, the Appellate Collector gave an order which, likewise, benefited Coromandel Fertilisers not a little, but he gave nothing on Irish Larch because he said that same matter had been decided by the Collector. He correctly and properly said that the Collector having decided a matter, the Appellate Collector was no longer able to sit in judgment over the dispute.

It is claimed that the Appellate Collector had given an order and, therefore, such an order can be appealed. Decisions have been cited to support this. But all the decisions were on orders about which there was a doubt as to its appealable nature. The order may not, after all, be an order, so whether can one appeal against it, or something on these lines. It is not that these orders had become inoperative because another and earlier order had been made by an authority competent to make it. The parties had not approached different redress-giving powers for redress. There was one order or decision or whatever one called the comunication, from one authority which became the subject of controversy.

Here we have two redress-giving powers being approached by the importer. The power first approached gave a decision that denied the importer what he sought saying that the rederess demanded was not available for reasons that the Power also recorded in its order. This is therefore the order that should be appealed because it gave a decision where none was in force or in existence. It told the importer he was refused the benefit he sought. The order of the Collector told the importer where he could go if he was aggrieved. The importer, therefore, was in possession of the requisite information about what he could do against the order. That order closes the chapter effectively and securely and shuts out all other co-ordinate or equivalent powers from interfering or intervening in any way. Any such interventions would be without the law and would have no effect because to hold the contrary would be saying that two -authorities can adjudge on one matter and can pass different orders if they so think fit. On a practical consideration, such a state would lead to anarchy. For example, an Appellate Collector can pass an order on appeal by the owner of the goods allowing release of goods confiscated by the Assistant Collector, even after the Collector, acting in revision, on application by the same owner, had decided that the confiscation should stand, being the correct action. Good and orderly management of business requires that the first order alone must holds way, and that the second (if such an order is issued) should not overrule or counter the first. If it is to be overruled, it must be only by a superior and competent power and never by a power of equal rank.

We do not have such a situation here, but this illustrates what could be the outcome if we hold that the Appellate Collector's order of 12.4.79 is a valid order in regard to the Irish Larch consignment. This order was made a month after the Collector passed his order and, therefore, was a non-order as tar as Irish Larch bill of entry was concerned. To be fair to the Appellate Collector, he himself recognised the difficulty and made elaborate comments as to leave no one in any doubt about what he was doing. He said clearly that his was not an order as the Collector had already decided the matter and that an appeal would arise only against the Collector's order and not to himself but to the Board/Government of India.

While the party is perhaps free to pursue any remedy, I am not able to accept that it can pursue two or three. A party must have its avenue for redress but it has no case to have more than one such avenue. These are important and weighty business and the energy of the State and its avenues must not be frittered away by opening as many doors as possible for a person who desires of enter to seek succour from injustice. One remedy at a time, one avenue at a time is surely what commonsense dictates, not extravagance of two or three, with, may be, two or three more at the next stage. An irrational idea. Coromandel can claim that it was in order for it to appeal to the Government of India against the Collector's order in review ; in that case the Government of India would have two appeals/applications and the appellant/ applicant also demand that two orders must be issued. I am not convinced by anything said on behalf of the appellants that the Tribunal should hear any appeal against the Appellate Collector's order as there was no such order that can be appealed. Coromandel's appeal is rejected.


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