1. These proceedings were initially instituted before the Central Government by way of a Revision Application which, in terms of Section 131B of the Customs Act, 1962, have come to this Tribunal for being disposed of as if they were appeals filed before the Tribunal.
2. The facts of the case, briefly stated, are that the appellants imported three consignments of microscopical stains in packings ranging from 5 grms. to 500 grms. The Customs authorities assessed the goods to basic customs duty leviable under heading No. 29.01/45(19) of the First Schedule to Customs Tariff Act, 1975. This heading reads as follows :- "Laboratory chemicals, organic and inorganic, as defined in Note 2 to this Chapter." "In addition to those specified in note 1 above, this chapter also covers all chemicals, organic and inorganic, whether or not chemically defined, imported in packings not exceeding 1/2 kilogram or 1/2 litre and which can be identified with reference to their purity, marking or other features to show them to be meant for use solely as laboratory' chemicals..
3. There is no dispute in the present proceedings about the aforesaid classification. In addition to the basic customs duty, the Customs Authorities charged additional (countervailing) duty of Customs corresponding to the Central Excise duty leviable under. Item No. 14D of the First Schedule to the Central Excises and Salt Act, 1944 (CET).
This item reads as follows:- "Synthetic-dyestuffs (including pigment dyestuffs) and synthetic organic " derivatives used in any dyeing process." The dispute centres round the levy of countervailing duty. The respondents claim that the correct classification under the C.E.T. is Item No. 68 which covers all goods not elsewhere specified in' the Central' Excise Tariff Schedule and not Item No. 14D.4. After payment of duty as assessed by the Customs Authorities, 'the respondents claimed refund of the excess countervailing duty paid by them because of the aforesaid disputed classification. The Assistant Collector, by Order No. S/6-C-4202/79R dated 3-3-1980 and Order No.S/6-C-2585/79/R. dated 22-9-1979 rejected the claims holding that the microscopical stains, though assessed as laboratory chemicals under the Customs Tariff Schedule, were, crecotly assessable as dyes under item No. 14D CET .irrespective of the nature of thieir :packing and purity.
These orders were with respect to the consignnierits cleared vide bills of entry cash No. 4382 dated 21-6-1979 and'4662 dated 23-5-1979 respectively In respect of the third consignment cleared on Bill of entry cash No. 2858 dated 16-12-1978, the application for refund Was received in the office of the Assistant Collector on 24-8-1979 i.e.
after a period of six months from the date of payment of duty. It was rejected by the Assistant (colllector as time-barred under Section 27(1) of the Customs Act, 1962.
5. Aggrieved with the aforesaid orders, the respondents preferred appeals before the Appellate Collector of Customs, Bombay. The Appellate Collector held that the language of Item No. 14D CET showed that nothing should be classified thereunder if, in fact, it is not used either as dyestuff or as, derivative in dyeing process. The effect of dyeing might very much be there when laboratory specimens are stained. However, this is not dyeing as such. He, therefore, held that the goods did not fall under Item No. 14D but,under Item No. 68 CET. He allowed all the appeals. He further held that in respect of the goods imported prior to 1-3-1979, the whole of the countervailing duty collected should be refunded because during the relevant period the countervailing duty leviable with reference to item No. 68 CET stood exempted. In , respect of the goods imported after 1-3-1979, the Appellate Collector directed 'that the countervailing duty should be reassessed under item No. 63 CET and the balance should be refunded. He further held that the.question of time bar under Section 27(1) of the Customs Act did not arise since, prior to 1-3-J979, countervailing duty was not leviable with reference to Item No. 68 6. The Govepirnent of India, on examination of the records of the case and the submissions of the importers at different stages, came to the tentative view that the goods in question were appropriately' classifiable under Item.No. 14D CET. It appeared to the Government that Item No. 14D was an omnibus item covering Within its ambit any dyestuff used in any dyeing process. Microscopical stains etc. were used in staining laboratory specimens and staining was synonymous with dyeing, The classification for basic customs duty as Jabbfatory chemicals would not settle the classification for countervailing duty proposes. In this view of the matter, the Government of India issued a notice on 29-8-1980 to the respondents under Section 131(3) of the Customs Act, 1982 calling upon them to show cause why the Appellate Collector's orders should be set aside and why the Assistant Collector's orders should not be restored or modified as considered fit.
7. The respondents, by a letter dated 17-9- 1980, denied the allegations in the show cause notice and reiterated their contentions before the lower authorities. In particular, they stated that laboratory stains are dealt with by a small number of people dealing in laboratory chemicals. Dealers in dyes and dyestuffs do not deal in laboratory stains. They contended that dyeing process is predominantly a process used in the textile industry and staining laboratory specimens cannot be considered as a dyeing process according to scientific or trade parlance.
8. On the setting up of this Tribunal, the aforesaid review proceedings were transferred to this Tribunal in terms of Section 131B of the Customs Act, 1962 to be disposed of as if they were appeals filed by the Collector of Customs, Bombay before this Tribunal.
9. During the hearing before us, Shri Sundar Rajan, the Ld.
Departmental Representative, at the outset, drew our attention to one of the orders of the Assistant Collector namely S-6-C-2586/79-R dated 31-8-1979 rejecting one of the refund claims as time-barred. He submitted that this claim cannot be entertained by this Tribunal in view of the fact that it was hit by the limitation imposed by Section 27(1). With respect to the merits of the dispute, Shri Sundar Rajan drew our attention to the invoices covering the goods showing the customs classifications of the goods under different headings of Customs Cooperation Council Nomenclature (C.C.C.N.). However, the Indian Customs Tariff Schedule has a specific heading to cover laboratory chemicals i.e. 29.01/ 454(19) and, but for this classification, the goods would have been classifiable under different headings in the Schedule. He contended that the classification under the Customs Tariff was not relevant or decisive of the classification under the Central Excise Tariff. He further contended that the Tribunal has, in one of its recent orders, held that Item No. 14D CET was not limited in its scope to textile dyes. Laboratory stains were also dyes and they correctly fell under item No. 14D CET. Shri Sundar Rajan cited certain decisions in support of his contentions to which we shall refer later.
10. Appearing on behalf of the respondents, Shri V. N. Deshpande Ld.
Counsel, drew our attention to the letter dated 23-9-1979 from the Collector of Central Excise, Bombay I to M/s. Mehtachem., Bombay to the effect that laboratory chemicals, namely microscopical stains and pH indicators, were classifiable under Item No. 68 CET so long as they were not used in any dyeing process in textile industry. Since the present goods were not used in textile industries but were used in the laboratory they would not fall under Item 14D but under Item No. 68 CET. He also drew our attention to Order No. 595/80 dated 21-4-1981 of the Government of India in Revision holding that gas/chromatographic chemicals sold in 1/2 kilogram or 1/2| litre packing was correctly classifiable as laboratory chemicals under heading No. 29.01/45 (19) of the Customs Tariff Schedule and not under heading No. 39.01/06 as assessed by the Customs Authorities. This would show that the goods in the present case also were only laboratory chemicals and not dyestuff.
However, the Ld. Counsel fairly stated that the petitioners in that case did not dispute that the goods were synthetic resin and, therefore, Government held that, for countervailing duty purposes, the goods were classifiable under Item No. 15A C.E.T. Shri Deshpande drew our attention to this Tribunal's Order No. C-l18/1983 dated 18-4-1983 wherein the Tribunal held that Carmine S.S. used more as a stain than as a chemical used in reactions was not classifiable as colouring material under heading No. 32.04/12 (1) but as laboratory chemicals under heading No. 29.01/45(19) of the Customs Tariff Schedule. In this case also, Shri Deshpande fairly stated that the countervailing duty classification was not in dispute.
11. We have carefully considered the submissions before us. Two decisions, one of the Government of India and the other of this Tribunal, cited by Shri Deshpande are of no relevance to the facts of the present case since the countervailing duty classification was not an issue arising for determination in those cases. In Lucas-T.V.S.Ltd., Madras v. Union of India-1978 E.L.T. (J 711), the Madras High Court held that the Schedules of the Customs Tariff Act and the Central Excises and Salt Act do not have the same basis of classification and so long as Sections 2 and 2A of the Tariff Act, 1934 (the present provisions are Section (2) and Section 3(1) of the Customs Tariff Act, 1975) did not, in terms, lay down that classification once made shall hold good for purposes of both the sections, it must be held that the provisions of each of the two sections have to be read without reference to the other. Thus the fact that the present goods were classified-and there is no dispute on this score-under heading No.29.01/45 (19) of the Customs Tariff Schedule as laboratory chemicals is not really relevant or decisive of the classification under the Excise Tariff Schedule for levy of countervailing duty. For the latter purpose, we must look at the different entries in the Central Excise Tariff Schedule and arrive at the correct specification. We had occasion to interpret the scope of Item No. 14D of the Central Excise Tariff Schedule in Deversons Private Ltd. v. Collector of Central Excise, Ahmedabad-\9U (17) E.L.T. 135, wherein, after discussing at length several authorities, we have held that the said item is not limited in its scope to synthetic organic dyestuffs and synthetic organic derivatives used in textile dyeing but would also coyer synthetic organic derivatives and dyestuffs used for colouring or dyeing diverse goods such as candles, petroleum products, soaps, hair oils etc. The Condensed Chemical Dictionary 10th edition, by G. Hawley has, on page 695, stated that organic dyes of various types are used to stain samples for precise identification by microscopy. It is, therefore, clear that microscopical stains are dyes used to stain or dye laboratory specimens. We have held in the Deversons case that Item No. 14D CET is wide enough to cover any dyeing process and, in our view, staining is one form of dyeing. The fact that the goods are not used in the textile industry but in the laboratory would not alter this position.
12. Having regard to the foregoing discussion, we hold that the subject goods are correctly classifiable under Item No. 14D CET and not under Item 68.
13. The Appellate Collector's order ignoring the fact that one of the refund claims was hit by the limitation in Section 27(1) of the Customs Act is not correct and it is contrary to the recent decision of the Supreme Court in Civil Appeal No. 1633 of 1984 which upheld the decision of this Tribunal in Miles India Ltd., Baroda v. Appellate Collector of Customs, Bombay-1983 E.L.T. 1026 (CEGAT) to the effect that quasijudicial authorities functioning under the Customs Act are not competent to overlook or ignore the said limitation.
14. In the result, the appeals arc allowed. The impugned orders of the Appellate Collector arc set aside and the orders of the Assistant Collector are restored.