1. This is a revision application filed before the Govt. of India (now transferred to the Appellate Tribunal under Section 131B of the Customs Act, 1962) against the Order-in-appeal No. C3/1701/1980 dated 30-5-1981 passed by the Appellate Collector of Customs, Madras.
2. The facts of the case are that the appellants are manufacturers of Nylon Tyre Yarn/Cord/Warp. In the manufacture of this product, they use caprolactum, an organic chemical falling under sub-heading No. (20) of Heading No. 29.01/45 of the First Schedule to the Customs Tariff Act, 1975.
3. Prior to 4th December, 1979, caprolactum was chargeable to countervailing duty (equivalent to the excise duty) at 25% ad valorem under Notification No. 61/75C.E. dated 16-3-1976 instead of the Tariff rate of 50% under Tariff Item 14AA of the Central Excise Tariff. This notification was later superseded by Notification No. 305/79-C.E. dated 4th Dec. 1979, under which the effective rate of duty on caprolactum manufactured from duty paid Benzene (derived from raw naphtha), was reduced to 23% ad valorem. Notification No. 305/79-C.E., dated 4-12-1979 was superseded by Notification No. 39/80-C.E., dated 23-4-1980 under which the effective rate of duty of caprolactum became chargeable at 28 1/2% ad valorem.
4. As per the case of the appellants, after the issue of the Notification No. 305/79-C.E., dated 4-12-1979 trade notices were issued by various Collcctorates viz. West Bengal Collectorate Trade Notice No.220/GL/58/CE/ 1979 dated 15-12-1979, Baroda Collectorate Trade Notice No. 249/79-Plastics 7/79 dated 17-12-1979; Bangalore Collectorate Trade Notice No. 273/79 (79 Plastics) dated 18-12-1979; Pune Collectorate Trade Notice No. 225/79 dated 1-1-1980; and Bombay Collectorate Trade Notice No. MP/Plastics (1)/1980 dated 5-1-1980 clarifying as under :- "As the exemption from Excise duty envisaged under each of the Notification Nos. 302/79-C.E., 305/79-C.E., 306/79-C.E., 307/79-C.E. and 308/79-C.E.; is conditional, the countervailing duty rate on the affected products (including PVC for which the countervailing duty rate is already 40% ad valorem vide Notification No. 122/79 dated 4-6-1979 (communicated vide Public Notice No. 17/79-Cus., dated 18-6-1979) remains unchanged." 5. As per the allegations made by the appellants in the revision petition, in view of these trade notices, the appellants took clearances of 9 consign- ments of imported caprolactum ex-bond during the months of January and February, 1980 and the Madras Customs House assessed c.v. duty at 25% ad valorem. Subsequently, the Asstt.
Collector of Customs (Gp. 1) Madras served on the appellants a notice under Section 28(1) of the Customs Act, 1962 on the ground that the countervailing duty was chargeable at the Tariff rate of 50% ad valorem.
6. The appellants submitted before the Asstt. Collector of Customs, Madras that they had made a representation to the Mintstry of Petroleum and Chemicals through the Association of Synthetic Fibre Industry and that they were hopeful of getting additional duty on imported caprolactum reduced to the original level of 25%, as the Govt. of India lost sight of the implication of the supersession of the earlier Notification No. 61/76. It was also alleged that in all probability a new notification with retrospective effect is likely to be issued. This contention of the appellants was, however, not accepted either by the Asstt. Collector of Customs or the Appellate Collector of Cus- toms and the demand for Rs. 31,11,400.62 was confirmed holding that after supersession of Notification No. 61/76-C.E., dated 10-3-1976, the rate of addi- tional duty on imported caprolactum was 50% plus 5% special excise duty on the ground that the Notification No. 305/79 being a conditional notification on the Central Excise side, was not applicable in the determination of the countervailing duty.
7. Being aggrieved by the order passed by the Appellate Collector of Customs, Madras, the appellants submitted a revision petition before the Govt. of India which stands transferred to this Tribunal and is treated as an appeal.
8. We have heard Shri D.N. Kohli, consultant for the appellants and Shri Chandramouli, SDR for the department and have gone through the record.
9. Shri D. N. Kohli, consultant drew our attention towards Trade Notices issued by various Collectorates in this regard. According to him, these Trade Notices were issued under the instructions of the Govt. of India, the Central Board of Excise & Customs. As per these Trade Notices, which were issued after the issue of Notification No.305/79-C.E., dated 4-12-1979 it was clarified that the countervailing duty on the affected products would remain unchanged, meaning thereby the rate of the c.v. duty would be 25% ad valorem as before. Believing these Trade Notices as correct and binding, the appellants took clearances of the consignments of the imported caprolactum ex-bond and paid c.v. duty at 25% ad valorem. According to Shri Kohli, the learned consultant, even if a Trade Notice amounts to not more than executive instructions, it would be binding on the department and the department would be estopped from contending that what was mentioned in the Trade Notices should not be adhered to. He cited a decision of the Supreme Court in the case of Union of India and Ors. v. Indo-Afghan Agencies (AIR 1968 S-C.-718) and also a decision of the Gujarat High Court in Nav-Gujarat Paper Industries v. Supdt. of Central Excise and Ors.
(Cencus 1978-24-D and 25-D) - 1977 E.L.T. (J 67) in support of his contention. According to Shri Kohli in view of the decision of the Supreme Court, the government and its officers cannot go back on the clarifications g ven in the Trade Notices cannot demand the c.v. duty at 50% ad valorem, since it was clearly stated in the Trade Notices that after the issue of the Notification No. 305/79-C.E., dated 4-12-1979 the c.v. duty on caprolactum remained un- changed at 25% ad valorem and the appellants got clearances on the basis of the said clarification.
10. Shri Kohli pointed out that Notification No. 305/79-C.E., dated 4-12-1979 was superseded by Notification No. 39/80-C.E., dated 23-4-1980. Issue of Notification No. 39/80 dated 23-4-1980 clearly reflects the reason for superseding Notification No. 305/79. A practice which was prevalent regarding levy of duty was once again brought back by treating the imported as well as indigenous caprolactum at par. If the appellants had been informed that the benefit of lower assessment of c.v. duty would not be available in their case, they would have allowed the material to remain in-bond rather than clearing it for home consumption at a higher rate of c.v. duty. Shri Kohli further submitted that the other Collectorates have not raised such demands as has been done in Madras Collectorate. This amounts to discrimination and has caused extreme hardship to the appellants. In this connection our attention was drawn towards the decision of Gujarat High Court in the case of M/s. Anoop Engineering Ltd. (Cencus-1978-248D) 11. The last submission made by Shri Kohli is that their representation before the Ministry of Petroleum and Chemicals through the Association of Synthetic Fibres Industries is pending decision and that they are hopeful of getting the additional duty of imported caprolactum reduced to the original level of 25% ad valorem as apparently the Govt. of India had lost sight of the implication of the supersession of their earlier Notification No. 61/79. He stated that in all probability, a new notification with retrospective effect is likely to be issued and therefore, before giving any decision on the matter, the decision of the Govt. of India be awaited.
12. Shri Chandramouli, the learned S.D.R. countered the arguments of Shri D.N. Kohli the learned consultant and submitted that at the relevant time i.e. January and February, 1980 Notification No.305/79-C.E., dated 4-12-1979 was in force. This Notification laid down certain conditions and before the benefit under that notification could be availed of, those conditions should have been fulfilled. Admittedly, the appellants did not fulfil those conditions as laid down in that notification and therefore, they were rightly refused the benefit of that notification. According to him, a notifica- tion has a statutory value whereas a Trade Notice has no statutory effect and therefore, the Govt. of India cannot be precluded from putting forward conditions contrary to the contents of Trade Notices issued by its officers. He pointed out that there cannot be any estoppel in taxing matters. He cited a decision of Supreme Court in the case of Dunlop India v. Union of India (1983-E.L.T.-1566-S.C.) in support of his contention. He further submitted that this Tribunal is not competent to declare a statutory provision illegal on the ground that it is discriminatory.
There is no force in the plea of the appellants that the matter be stayed till the Govt. of India decides the representation alleged to have been made on behalf of the appellants in this regard. As per the law which was in force at the relevant time, this appeal is to be rejected.
13. There is no dispute about the fact that at the relevant time i.e.
January and February, 1980 when the appellants took the clearance of these consignments, the effective rate of Excise duty for caprolactum was mentioned in Notification No. 305/79-C.E., dated 4-12-1979 which reads as under : "G.S.R. 666 (E).~In exercise of the powers conferred by Sub-rule (1) of Rule8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 61/76-Central Excise, dated the 16th March, 1976, the Central Government hereby exempts caprolactum, falling under sub-item (2) of Item No. 14AA of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), and manufactured from benzene (derived from raw naphtha), on which the appropriate amount of duty of excise has already been paid, from so much of the duty of excise leviable on such caprolactam as is in excess of twenty-three per cent ad valorem.
2. This notification shall be in force up to and inclusive of the 30th day of November, J980." A perusal of this notification shows that appellants before they could avail the benefit of this notification had to prove the following conditions : "Caprolactum should have been manufactared from Benzene (derived from raw napatha), on which the appropriate amount of duty of excise has already been paid." In this case, admittedly, the appellants did not satisfy these conditions and obviously they were not entitled to the benefit of this exemption notification. Now we have to see what is the effect of the Trade Notices issued by the various Collectorates laying down that the c.v. duty rate on the affected products would remain unchanged. The Trade Notices issued by the various Collectorates reads as under : - "As the exemption from Excise duty envisaged under each of the Notification No. 302/79-C.E., 305/79-C.E., 306/79-C.E., 307/79-C.E., and 308/79-C.E. is conditional, the countervailing duty rate on the affected products including PVC for which the countervailing duty rate is already 40% ad valorem vide Notification No. 122/79 dated 4-6-1979 (communicated vide Public Notice No. 17/79-Cus. dated 18-6-1979) remains unchanged." 14. No doubt it is true that various Collectorates clarified that the c.v. duty rate on the affected products would remain unchanged meaning thereby the rate of c.v. duty would be at 25% ad valorem as it was before but we have to see what is the value of such Trade Notices in the eyes of law 15. It has been laid down in various judicial decisions of different High Courts including that of Bombay High Court in Union of India and Ors. v. The Elphinstone Spinning and Weaving Mills Co. Ltd. (1978 E.L.T. 1680) that Trade Notices have no statutory effect. Trade Notices cannot alter the meaning of the words of the Statute and it cannot be read for the purpose of controlling the plain meaning of a tariff entry. In the absence of any statutory sanction for the issuance of a Trade Notice, no excise duty can be levied on the basis of such a Trade Notice. In making the assessment and in levying duty under the Excise Act. a Trade Notice must be ignored. There is no provision in the Excise Act empowering the Board to issue directions to the Assessing and Appellate Authorities for deciding disputes between the assessees and the department. Such directions would completely vitiate the proceedings and make a mockery of the judicial process. The Board cannot issue directions for inclusion of excisable goods in a particular tariff item and therefore, the Govt. of India cannot be precluded from putting forward conditions contrary to the contents of trade notice issued by its officers. Though Trade Notices, the Board's Tariff Rulings and instructions, as also government's Press Notes, have no statutory effect, the question has sometime arisen whether a plea of estoppel could be based on them In the case of Jeetram Shiv Kumar v.State of Haryana (1980 ASC 1285) the Supreme Court held, that the Govt.
is not bound by its servants acting beyond the scope of authority. In the Union of India and Ors. v. The Elphinstone Spinning and Weaviag Mills Co. Ltd. (Supra) the Court "The Trade Notices have no statutory affect. It is a matter of regret that senior officers of the Govt. should have put forward before the trade wrong interpretation of the Act but that cannot be held to estop the appellants from canvassing the true interpretation of the Statute." The decision of the Supreme Court in Indo-Afghan Agencies (Supra) cited by the appellants does not help the appellants in the circumstances of the present case. In that case before the Supreme Court, the Trade Notices were issued offering inducement to the prospective exporters.
The exporters relied upon that inducement and in those circumstances the Hon'ble Supreme Court held that the Union Govt. and its officers are not entitled at their mere whim to ignore the promises made by the Govt. It was a case of promissory estoppel but in the case before us there was neither any inducement nor any promise was made while issuing the Trade Notices and it cannot be said to be a case of promissory estoppel. Moreover the appellants have not proved on record that Madras Collectorate had issued any such Trade Notice on which they acted upon before taking clearance of the consigned goods. In the case of Dunlop India v. Union of India (1983 E.L.T. 1566) the Supreme Court held that there is no estoppel against a party in taxing matters.
16. Andhra Pradesh High Court had an occasion to deal with the point whether there can be any equitable estoppel against the government In a decision. Etikoppaka Co-operative Agricultural Society Ltd. v. Union of India and Ors. (1979 E.L.T. J 533) it was held that if the Central Govt. had placed an incorrect interpretation over a notification at one stage, it does not give rise to equitable estoppel so as to prevent the Govt. from interpreting the notification correctly at a later stage.
17. In this case before us, Notification No. 305/79-C.E., dated 4-12-1979 issued by the Govt. of India under Rule 8 of the Central Excise Rules, 1944 is the law owing its source of power to statute. If the Collectors in different Collectorates had placed an incorrect interpretation over the notification by issuing Trade Notices at one stage, it does not give rise to an equitable estoppel so as to prevent the Govt. from interpreting the notification correctly, at a later stage. Punjab & Haryana High Court also took the same view in the case of State of Punjab v. Amrit Vanaspati Co. Ltd. (AIR 1977 Punjab & Haryana, page 268).
18. Under those circumstances, there can be no estoppel against the statute and the plea raised by the learned consultant of the appellants on this point cannot be said to be legally correct.
19. The other plea of the appellants that other Collectorates have not raised such demands as has been done in Madras Collectorate in respect of this product and this amounts to discrimination and has caused extreme hardship to the appellants, is also not tenable. This Tribunal which is a creature of a statute is not in a position to declare any statutory provision as ultra vires on the basis of discrimination. The ratio of the decision in M/s. Anup Engineering Ltd. (Supra) is not applicable in the case before us.
20. The request of the learned consultant that the matter be stayed till the Govt. of India decides the representation made by the Association of Synthetic Fibre Industry cannot be acceded to. We have to decide the case on the basis of the law as it stood at the relevant time. At that time the product caprolactum was subjected to excise duty at the rate of 50% plus 5% under Tariff Item No. 14AA of the Central Excise Tariff and by virtue of the Notification No. 305/79-CE dated 4-12-1979 the effective rate of duty on caprolactum manufactured from duty paid Benzene was reduced to 23% ad valorem. The appellants could not satisfy the conditions as laid down in that notification and as such the authorities below have correctly assessed this product caprolactum falling under sub-item (2) of Item No. 14AA of the First Schedule to the Central Excises and Salt Act, 1944 for the purpose of c.v. duty and special excise duty at 50% plus 5%.
21. We find no ground for interfering in the findings of the authority below and we, therefore, reject this appeal.