1. M/s. Aggarwal Commercial Corporation, Bombay, hereinafter referred to as the importer, filed appeal before the Tribunal under Section 129-A of the Customs Act, 1962 on January 27, 1983 against the Order dated 17th of January, 1983, passed by the Collector of Customs (Appeals), Bombay. The importer had simultaneously filed a stay petition which was accepted by the Tribunal vide its order No. B-23/83 dated 14th of February, 1983. The Tribunal, granting stay for a period of three months or till the final disposal of the appeal filed, directed early hearing and that is how the matter has come before us out of turn.
2. The adjudication by the Assistant Collector of Customs (Refund) Bombay dated 16th of December 1981 was a common order in respect of the importer, M/s. Chhaganlal & Sons, Bombay, M/s. Raj Industries, Bombay as also M/s. Madanlal & Co., again of Bombay. The Collector's order as mentioned in the above para is also a common order, as given in the annexure, which we like to notice as follows, to complete the picture:S. Appeal Order-in- Appeal No. Appellant's NameNo. File No. Original No. & Date--- -------------- -------------- -------------- -----------------1.
S/49-292/82-R S/6-CM161/79 NK/37/82/268 M/s. Aggarwal Comm and Ors.
Dt. 15-2-82 ercial Corpn.3.
S/49-307/82-R S/6-C-1550/80R NK/12/82/273/ M/s. Madanlal & Sons 82 Dt. 15-2-824.
S/49-308/82-R S/6-C-117/80R NK/9/82/274/ M/s. Raj Industries.
82 Dt. 15-2-82 3. Though in the Memorandum of appeal as many as ten separate grounds have been taken, Shri S.D. Nankani Advocate, appearing, specifically submitted that he was resting his case on the exemption Notification No. 29/79-Cus. dated 10th February, 1979, and was under instructions to specifically give up all other contentions and grounds -of appeal.
Therefore, we are not referring to the grounds of appeal in the memo at all.
4. For purpose of deciding the importer's appeal as also three other appeals, whose names are mentioned in the annexure- to the Collector's order reproduced above, and which have also been heard today, (No.being F. No. 85/83-D and F. No. 90/83-D respectively) we were addressed one set 'of arguments and it was accepted by the parties that the facts as also the contentions relating to the importer's case were by and large the same, and therefore constituting the necessary basis for deciding all the four appeals. On such stand by the parties, we are referring to the facts in the case of the importer only.
5. The importers in or about the year 1979 imported five consignments of P.U. leather cloth. We are not giving the precise dates of import of five consignments because the facts as stated by the Assistant Collector's order are not disputed either in the instant case or in the three other cases. In 'is not the Revenue's contention that the benefits of the Notification No. 29/79 supra would not be available because of different dates of imports. On the contrary, it is an accepted position that the dispute arising -in relation to the four cases would be covered by the notification if it is held to be applicable.
6. The imported goods were assessed to duty at 100% + 20% + CVD. Though the importers paid the duty they filed claims for refund. Against it is nobody's case that any limitation question was involved or the claims were barred by limitation as stipulated under Section 27 of the Act.
The basis for the claims was that the duty leviable on the imported goods could be 40% only as these were covered by the term "other embellishments for footwear" mentioned at Sl. No. 12 of the exemption notification. The Assistant Collector admitted the claim and refunded the excess differential amount of duty amounting to Rs. 4,25,052.08.
7. However, the Assistant Collector of Customs served a show cause notice on the ground that refund claim had been erroneously accepted and duties wrongly refunded. After hearing the party, the Assistant Collector by his order dated 16th December, 1981 held that since the goods had been imported in running lengths, these could not be considered as "embellishment for leather footwear". The importers were, therefore, required to pay back the amount of Rs. 4,25,052.08 which had been refunded to them.
8. Thereafter, the importers filed a writ petition in the High Court of Judicature at Bombay (Registered as No. 1924 of 1981). The Hon'ble High Court disposing of the writ directed the petitioners to exhaust alternate remedy and stayed the recovery proceedings for a period of six weeks from the date of disposal of the stay application by the Revenue Authorities.
9. The importer's appeal came to be rejected by the Collector of Customs (Appeals) vide Order dated 17th of January, 1983 as mentioned in the Memorandum of Appeal. Against the above stated rejection order, the importers are before us as mentioned in the beginning of this judgment order.
10. At the time of hearing, Shri S.D. Nankani, Advocate, appearing before us in all the four appeals submitted that the dispute arising in the four appeals (importers and three others) already stand resolved in favour of the importers and against the Revenue by virtue of two orders of the Tribunal, one dated 4th of January, 1983 (Order No. 16/83) in Appeal No. 22 of 81-D in the case of Allibhoy Mohamed vs. Collector of Customs, Bombay 1983 (12) ELT 385 (CEGAT) and the other of 9th February 1983 (Order No. C-30/1983-in Appeal No. CD(SB)(T)(A). No. 503/8NC in the case of P. Hira, Bombay vs. the Collector of Customs, Bombay.
11. For the Revenue, Shri K.V. Kunnikrishnan, JDR very emphatically submitted that embellishment does not mean material for embellishment.
He further submitted that in the earlier cases an important plea was left to be taken by the Revenue that the goods imported were also capable of being put to use in many fields other than as embellishment in footwear. This according to the learned D.R. made all the difference. Shri Nankani, however, reacting very strongly to Shri Kunnikrishnan's argument submitted that in the first place in the present case the only charge levied under the show cause notice by which the amount refunded was sought to be recovered, was that since the' imported goods were in running lengths, these could not be considered as embellishment material for footwear. Referring us to Para 4 of the Order No. C-30/1983, dated 9th of February, 1983 in P. Hiras's case (supra) he effectively countered the Revenue's contention that the argument that, if the goods imported could also be put to use other than an embellishment material for footwear, it was outside the purview of exemption Notification No. 29/79-Cus., was left to be taken and considered.
12. In our considered view, it would be in fitness of things and shall have the effect of completing the picture of the case if we would notice the Order in P. Hira's case by reproducing the same : "This is a revision application to the Government of India under Section 131 of the Customs Act, 1962 (as then applicable) which, in accordance with Section 131B(2) ibid is to be proceeded with as if it were an appeal filed before the Tribunal. After notice had been duly issued, the matter was taken up for hearing.
2. The question involved in this appeal is whether Polyester Plastic (Polyester Supported) are covered by Entry No. 12 "Buckles and Embellishments for footwear" occurring in Notification No. 29/79, dated 10-2-1979 so as to make the goods imported by the appellants eligible for the concessional rate of duty provided for in the said Notification.
3. Shri Krishnamurthy stated that the goods in question were Polyester Plastic (Polyester Supported) imported in rolls of 50 yards by 1 yard. These were later on cut to various artistic patterns, shapes and designs. These were then pasted to the uppers of the leather footwear with the aid of adhesives and afterwards stitched to the same. With the help of some samples Shri Krishnamurthy showed that the imported material had no functional use but merely served the purpose of embellishment. His further submissions can be briefly summed up as follows :- (i) The appellants were reputed manufacturers of leather footwear and were issued REP licences and actual user licences. They were regular exporters, of such fancy leather footwear, particularly ladies footwear, to foreign countries. The goods were imported in the form of rolls because the actual work of converting the material into various designs, shapes, forms and profiles as embellishments had to be done in the appellants' factory.
(ii) While the use of the imported materials for purposes other than as embellishments for leather footwear could not be ruled out completely, such other uses were of a negligible order. The predominant use of the goods was to embellish leather footwear only.
This fact was well recognised in the concerned trade circles, and in support of this contention they obtained a certificate dated 28-1-1983 issued by the Export Promotion Council for Finished Leather and Leather Manufactures (a body sponsored by the Ministry of Commerce, Government of India). In the said certificate the appellants' goods figure at Sl. No. 8 in list of items considered as embellishments for leather footwear.
(iii) Only recently, the Tribunal sitting in Special Bench 'D' had decided an identical matter vide Order No. D-16/83, dated 4-1-1983.
There also, the issue involved was the same except that in those proceedings the goods were stamping foil whereas the appellants had imported polyester plastic (polyester supported). Since the appellants' case was on all fours with the matter decided in the above order, Shri Krishnamurthy pleaded that the ratio of that order should be made applicable to his appellants' case also.
4. Shri Sundara Rajan, JDR, raised the following points on behalf of the respondent Collector : (i) The Consultant for the appellants had laid an exaggerated emphasis on the nexus between the wording used in the Notification No. 29/79 and the relevant entries in the ITC Policy in support of his case. It was well accepted that notifications had to be construed strictly. On a strict interpretation of the notification, the lower authorities had denied the benefit of the said notification to the appellants as the goods had been imported in rolls of 50 yards by one yard, and in that form they could not be treated as fit for embellishment material for footwear. Many operations thereafter were required to be performed before the imported goods assumed the character of embellishment material.
(ii) The goods imported by the appellants were capable of being put to uses other than as embellishment material for footwear. This fact had been conceded by the appellants' consultant also.
5. We have carefully considered the matter in all its aspects. We find that the expression "embellishment" has not been defined either in the Customs Tariff or in the exemption Notification No. 29/79. In a situation like this we think that the only correct approach would be to go by the trade practice and the opinion of the persons conversant with the usage of the goods in question. It is not in dispute that the appellants have imported the goods to impart embellishment to the footwear manufactured by them. That the material qualifies to be classified as embellishment for leather footwear is supported inter alia by the certificate dated 28-1-1983 issued by the Export Promotion Council referred to earlier in this order. We have accepted the said certificate as an additional piece of evidence to be placed on record. We have also gone through the Order No. D-16/83, dated M-19S3 passed by the Special Bench 'D' of the Tribunal. We find that the issue raised in that appeal is practically on all fours with the matter under consideration in the present appeal as well. We are in agreement with the reasoning adopted in the above mentioned order and see full justification to follow the ratio of the same. The objection raised by the representative of the Respondent has been adequately covered in the order passed by the Special Bench 'D1 with which we are in total agreement.
6. In the light of discussion of the case in the preceding paragraphs, we hold that the goods imported by the appellants are entitled to the concessional rate of duty provided for in the Notification No. 29/79-Customs, dated 10-2-1979. Accordingly the appeal is allowed with consequential relief to the appellants." 13. In the above Order, reliance is placed on Allibhoy Mohamed's case in which stamping foil was the import. In P. Hira's case, imported goods were polyester plastics and since exemption in Entry No. 12 occurring in Notification No. 29/79-Cus., dated 10th February, 1979 related to buckles and embellishment for footwear, we see no justification as to why P. Hira's case should not be considered on all fours with the present case.
14. We are rejecting Shri Kunnikrishnan's contention that the argument sought to be advanced before us was left' to be taken and considered by the Tribunal. As a fact, in para 4 of the judgment in P. Hira's case, one of the contentions was specifically what was urged by Shri Kunnikrishnan and the Tribunal after recording that rejected the same in para 5. It is to project this aspect that we have considered it necessary to reproduce P. Hira's case judgment above.
15. Relying on Tribunal judgments (supra) in P. Hira's case and in Allibhoy Mohamed's cases, we hold that the goods imported by the appellant were entitled to the concessional rate of duty provided for in the Notification No. 29/79-Cus., dated 10th of February, 1979 and, therefore, the Revenue is debarred from recovering the duty already refunded.
16. The Rule issued in respect of the Stay Order dated 14-2-1983 shall stand discharged accordingly.