1. The captioned appeal was initially filed as a revision application before the Central Government which, under the provisions of Section 35-P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The facts of the case, as seen from the review show cause notice F.No. 158/6/77-81-CX-II, dated 11-9-1981 (to which we shall advert later) are that- "The assessee filed three refund claims amounting to Rs. 11,900.71 (Rs. 3,896.62, Rs. 2,022.91 and Rs. 5,981.18) to the Asstt.
Collector of Central Excise, Calcutta-II Division, Calcutta for refund of duty paid by them on diesel oil/furnace oil supplied in bunker to foreign going vessels on the grounds that the Govt. of India vide Notification No. 349/77, dated 16-12-77 did not envisage any payment of duty on such supplies. The Asstt. Collector of the Division vide his orders : (1) 1/Refund/9/7 8, dated 7-9-78 ; (2) l/Refund/10/78, dated 7-9-78 and (3) V/10/18/4/7838, dated 1-9-78 rejected the claims on the ground that the supplies to bunker were received in the ocean-going vessel on 7-2-78 when the Govt. of India Notification No. 349/77, dated 16-12-77 was in force and accordingly on that date the delivery of light diesel oil to ocean-going vessels did not call for rebate to the extent of Rs. 36.21 per kilo litre.
Being aggrieved by the said order of the Asstt. Collector, Central Excise, Calcutta II Division, Calcutta, the said assessee preferred an appeal to the Appellate Collector under Section 35 of the Central Excises and Salt Act, 1944. The assessee contended that the supply was made by them from their bonded tanks to a foreign vessel; that they were entitled to supply the oil without payment of duty under Rule 130 of the Central Excise Rules, 1944. The Appellate Collector allowed the appeal and set aside the order of the Asstt. Collector with directions to grant the refund on the ground that it was an established fact that the supplies were made to a foreign-going vessel." 3. On examination of the case records, the Central Government formed the tentative view that the Appellate Collector's Order was not proper, legal and correct. The basis on which the view was formed is set out in the show cause notice issued by the Central Government to M/s.
Hindustan Petroleum Corporation Ltd., Calcutta (hereafter called the "Respondents") under Section 36(2) of the Central Excises and Salt Act, 1944 in the following words : "Rule 12 of the Central Excise Rules permits grant of rebate of duty on excisable goods if exported outside India 'to such extent and subject to such safeguards, conditions and limitations as regards the class of the goods, destination, mode of transport and other allied matters as may be specified therein'. This shows that under Rule 12 the extent to which the rebate of duty could be given can be specified. Rule 13 of the Central Excise Rules uses the expression 'may in like manner be exported without payment of duty'. It would appear that although this Rule does not deal with the question of exemption of duty, it would be reasonable to take the view that the intention of the rule is not that duty exemption should be given in respect of goods if the same do not enjoy such rebate under Rule 12.
The procedure for export contained in Chapter IX of the Central Excise Rules has been specifically mentioned in Rule 13 and that being the case it appears that expression 'in like manner' occurring in Rule 13 would indicate that the export under bond would also be subject to the conditions on which similar exports are allowed under Rule 12. Chapter III of the Central Excise Rules deals with levy and refund of and exemption from duty. It will be seen that the only rule occurring in this Chapter relating to exemption of duty is Rule 8. There is nothing in Rule 13 to indicate that merely because it provides for export under bond of excisable goods, such goods are exempted from payment of duty. It would appear that the expression 'without payment of duty' has no bearing on the question whether the duty is leviable in respect of the goods or not. It, therefore, appears to the Govt. that not only the manner of export but also conditions of export envisaged under Rule 12 would equally be applicable to export under Rule 13 and that the extent of rebate of duty would consequently be the same under both the rules. Prima facie it appears therefore that the goods exported under bond under Rule 13 should pay the duty of the unrebated amount under Rule 12 so that the net incidence of duty covered under the rules is the same." 4. The notice called upon the Respondents to show cause why the impugned order should not be set aside or such order as deemed fit should not be passed after consideration of the Respondent's submissions. By their reply dated 14-10-1981, the Respondents denied all the allegations set out in the show cause notice and stated that the Appellate Collector's Order was correct, legal and proper and called for no review.
5. On the setting up of this Tribunal, the above proceedings were transferred to it for disposal as if it were appeal filed before the Tribunal.
6. In the hearing before us, Shri A.S. Sunder Rajan, Deptl.
Representative, relied upon this Tribunal's Order No. C-156-157/1985, dated the 19th February, 1985 in Appeals Nos. ED (SB) (T) A. 1302 and 1681/1981-C filed by the very same assessee in support of the Department's stand as set out in the show cause notice.
7. In reply, Shri D.P. Bhave, Joint Tax Manager of the Respondent-company fairly stated that the above cited decision would cover the issue in the present matter as well. But it was his contention that this Tribunal, being one with all-India jurisdiction, would not be bound by the judgment of any particular High Court. (In the Order cited by the Depth Representative, the Tribunal had followed the Delhi High Court's judgment in Hindustan Aluminium Corporation Ltd. v. Supdt. of Central Excise, Mirzapur and Ors.- 1981 ELT 642). It would be open to the Tribunal to consider the matter further and arrive at its own independent conclusion. This was the ratio of the Tribunal's decision in Order No. 399/1984-C, dated 21-6-1984.
8. Shri Bhave then referred to Central Excise Rules 9, 9A, 13, 14 and 14A and submitted that they made for a consistent and harmonious scheme which was that duty was leviable only on goods taken into home consumption whereas goods exported in bond were free from liability to pay duty. In the present case, all the prescribed procedures, such as execution of bond, etc., were complied with by the Respondents and there was no reason to deny them the benefit of duty-free export in terms of Rule 13.
9. We have carefully considered the submissions of both sides. We do not propose to deal here with Shri Bhave's submission that the Tribunal being of all-India jurisdiction, is not bound by the judgment of any particular High Court. We would only say that what the 5-Member Bench of this Tribunal in the Atma Steel case said was that the Tribunal had the judicial freedom to choose from among conflicting decisions of different High Courts and apply the one which appeared to the Tribunal to be most appropriate in the given situation.
10. We, however, see considerable force in the other submissions of Shri Bhave. Rule 9 provides that no excisable goods shall be removed from any place where they are produced, cured or manufactured, or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export or manufacture of any other commodity in or outside such place unless the excise duty leviable thereon has been paid. One of the exceptions to this general provision is that such goods may be exported under bond as provided in Rule 13. Rule 9A lays down or defines the date for determination of the applicable rate of duty and tariff valuation, if any, in respect of excisable goods. Sub-rule (3) of the said rule says that where any person who has removed excisable goods for export in bond fails to export or to furnish proof of such export to the satisfaction of the Collector or diverts the goods for home consumption, the rate of duty leviable and the tariff valuation, if any, in respect of such goods shall be the rate and valuation in force on the date on which the duty is paid. Rule 13, which is the crucial rule for the present case, provides that goods may "in like manner" be exported outside India except to Nepal or Bhutan without payment of duty, from a warehouse licenced factory subject to compliance with the conditions set out.
(There is no allegation that these conditions were not complied with by the Respondents). Sub-rule (2) of rule 13 provides for export without payment of duty, notified excisable goods to Nepal or Bhutan subject to compliance with the stipulated conditions. Rule 14A provides for imposition of penalty and payment of duty by the person who has removed excisable goods in accordance with Rule 13 for export in bond in the event of failure to export or to furnish proof of export within the prescribed period.
11. The above rules, read together, make for an integrated, well-knit scheme providing for export of excisable goods in bond without payment of duty, the conditions prescribed therefor and the consequences in the event of breach of the conditions. The scheme does not envisage levy of duty except on the happening of one or the other of the contingencies such as diversion for home-consumption, failure to export or to furnish proof of export. There is, thus, a good deal of ferce in the Respondents' contention that the levy of duty to the extent of the unrebated amount of duty (in terms of Central Excise Notification No.349/77, dated 16-12-1977 providing for reduction of rebate of duty by specified amounts in respect of specified goods exported under claim for rebate of duty in terms of rule 12) on exports in terms of Rule 13 is not warranted.
12. We have dealt with the crucial issue herein in our Order No.C-156-157/1985 (supra). In that order, we expressed the view that Rule 12 and the notifications issued thereunder would prima facie have no application to the facts of that case where also the bunker supplies were effected from bonded tanks. We then noted that the very issue as in that case (as also herein) came up before the Delhi High Court in 1981 E.L.T. 642 in an analogous case. The Court held that even in respect of export of goods under Rule 13 from bond, duty was payable to the extent required to be paid in respect of export of goods under claim for rebate of duty in terms of Rule 12. No contrary decision was cited before us then or even now. Apart from the Tribunal's Order No.339/1984/-C, dated 21-6-1984 in Appeal No. ED(SB) (T) A. No. 343/81-C filed by Bharat Petroleum Corporation Co. However, the Delhi High Court decision had not been cited before us in that case.
13. Following the Delhi High Court's decision, we hold that the impugned Order is not correct which we, therefore, set aside. The appeal is allowed.