1. The appellant, Sesu Trading Corporation, had, in the course of its business, imported Cocoa Powder (unblended and unflavoured) and had been called upon to pay Countervailing Duty thereon in spite of objecting thereto. Their claim for refund, contending that no such Contervailing Duty was payable, relying upon the decision of the Bombay High Court in Cadbury Fry (India) Limited v. Union of India and Ors.
(Writ Miscellaneous Petition No. 1404 of 1975) had been rejected by the Assistant Collector and the appeals therefrom have been rejected by the Collector of Customs (Appeals). It is against the said orders that these two Revision Petitions have been preferred to the Govt. of India and, under Section 35-P of the Central Excises & Salt Act, the said Revision Petitions have been transferred to this Tribunal for disposal as appeals.
2. Shri V. Subramaniam, Proprietor of the appellant, appeared on behalf of the appellant and the Respondent was represented by Shri Vineet Ohri, SDR. Both appeals were heard together since the same question arises for determination in both of them. There is no dispute that the commodity imported in both instances was unblended and unflavoured Cocoa Powder. The contention for the appellant is that the same is not known as Cocoa Powder in common trade parlance but it is only after blending and flavouring that the commodity is known and sold as Cocoa Powder in the market and, therefore, the claim for Countervailing Duty under Item I-A of the Central Excise Tariff was not legal. He relied upon the decision of the Bombay High Court cited supra in support of his contention and further pointed out that in at least two other subsequent imports the Department itself had accepted this position to be correct and had not levied Countervailing Duty on such import. Shri Ohri for the Department stated that he had instructions that an appeal has been filed against the above said decision of the Bombay High Court, but had no instructions as to whether the same has been disposed of. Shri Subramaniam stated that the appeal has been dismissed by the Division Bench. Though a copy (not certified) has been supplied of the judgment of the Single Judge, no copy of any appellant judgment has been produced. Shri Ohri further contended that the judgment of the Bombay High Court dealt with the liability for payment of Central Excise Duty with reference to unblended and unflavoured Cocoa Powder and, therefore, the said judgment would be no authority so far as the liability for levy of Countervailing Duty on the said commodity. His contention was that so far as levy of Central Excise Duty is concerned, the description of the commodity in the course of trade within the country may be looked into but so far as Countervailing Duty payable under the Customs Act is concerned, it is the description of the commodity as accepted in the course of international trade that will have to be looked into and the very description of the commodity as Cocoa Powder in invoices, bill of entry etc. would suffice to establish that even unblended and unflavoured Cocoa Powder is also called Cocoa Powder only in the course of the international trade and, therefore, Countervailing Duty has been rightly levied and collected.
3. We have carefully considered the submissions of both sides.
Undoubtedly, the Bombay High Court, in the judgment cited supra, had held that unblended and unflavoured Cocoa Powder will not be liable for Central Excise Duty since such a commodity is not knwon as Cocoa Powder in the course of normal trade and that it is only after blending and flavouring that the commodity is known and dealt with as Cocoa Powder and, therefore, it is only at that stage that it becomes liable for payment of Central Excise Duty. As regards the appeal said to have been filed against the said judgment, Shri Subramaniam states that the same had been dismissed and Shri Ohri is unable to refute the same.
Therefore, the finality of the said judgment on the said matter is now not in question.
4. We are not convinced with the argument of Shri Ohri that the said judgment would not be of any assistance in the present cases since the said judgement dealt with liability for Central Excise Duty where as the duty in question in the present appeals is Countervailing Duty.
Countervailing Duty is payable in terms of Section 3 of the Customs Tariff Act, 1975. It reads that any article which is imported in India shall, in addition, be liable to duty (hereafter in the Section referred to as the additional duty) equal to the Excise Duty for the time being leviable on a like article if produced or manufactured in India and if such Excise Duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Therefore, the Countervailing Duty shall be equal to the Excise Duty for the time being leviable on a like article if prodced or manufactured in India. So far as unblended and unflavoured Cocoa Powder is concerned, it has been already seen that no Excise Duty is leviable thereon, as held by the Bombay High Court. In that event, the Countervailing Duty, which is to be equal to the Excise Duty, would also be necessarily nil.
5. But Shri Ohri contends that this would not be so and cites the decision of this Tribunal in Chokshi Tube Limited Bombay v. Collector of Central Excise, Bombay [1983 (14) E.L.T. 2362]. The dispute in the said case was with reference to liability for payment of Central Excise Duty and exemption had been claimed by the party by virtue of a certain notification. The commodity in question had been manufactured utilizing articles imported on which Countervailing Duty had been paid. It was in that connection that the party had contended that additionaal duty (Countervailing Duty) and Excise Duty are synonymous. This contention had been rejected and it had been held that merely because additional duty is quantified on the basis of Excise Duty, it would not for that reason be Excise Duty. It was held that such additional duty would remain a duty of Customs. It was in those circumstances that it was held that the exemption claimed by the party could not be granted.
Therefore, that judgment does not support the contention that even when no Excise Duty would be payable on the commodity in question if manufactured in India, it would attract Countervailing Duty when imported. The further contention of Shri Ohri, that in connection with such importation it is the connotation in international trade that would have to be looked into and not the connotation in trade within the country, is also therefore, not acceptable.
6. We are, therefore, satisfied that in so far as no Excise Duty is leviable on unblended and unflavoured Cocoa Powder manufactured in India the said commodity, when imported, does not attract Countervailing Duty.
7. We may note at this stage that the Revision Petitions referred to the judgement of Bombay High Court as if it was Countervailing Duty that was involved in the said case also. No doubt, Shri Subramaniam stated the same in his arguments before us also. But on a perusal of the judgment of the Bombay High Court it is clear that what was in question in the said case was not a demand for Countervailing Duty but a demand for Central Excise Duty. But even so the conclusion that in the present appeals no Countervailing Duty is payable on the imports in question follows from the said decision for the reasons stated earlier.
8. Accordingly, both these appeals are allowed and the orders of the lower authorities are set aside ordering consequential relief to the appellant in both cases.