Motiram Tola Ram v. Collector of Customs, Bombay

[Order per : S.D. Jha, V.P. (J)]. - The question for decision in all these appeals, raising common issue and disposed of by this common order, is whether imported High Density Polythelene Moulding Powder (hereinafter called HDPE) is eligible to concession in respect of additional duty under exemption Notification 302/79-C.E., dated 4-12-1979 as amended by Notification 184/80-C.E., dated 29-11-1980.

2. It may be stated that earlier the Tribunal by Order Nos. 222 to 226/84-C, dated March 5, 1985 on identical facts held that benefit to the notification was not available in respect of imported HDPE Moulding Powder. The reason which weighed with the Tribunal in taking the decision was that the importers had failed to show and prove that raw naphtha used for the manufacture of imported HDPE had already paid the appropriate amount of excise duty leviable under the Central Excises & Salt Act, 1944 and had thus not fulfilled one of the conditions of the notification.

3. At the hearing of the appeals there was no dispute between the parties about basic Customs classification under Heading 39.01/06 of the First Schedule to Customs Tariff Act, 1975 in respect of imported HDPE. There is also no dispute that the imported HDPE is manufactured out of raw naphtha or any chemical derived therefrom and would thus fulfil the first condition, about source of manufacture, of the notification.

4.  Shri S.D. Nankani, the learned Advocate for the appellants appearing with Mrs. Kanta Iyer of v.A. Phadke & Co. submitted that the Bombay High Court in a very recent decision Pan Asia Commercial Enterprises & Another v. Union of India & Another reported in (Born.) had held that HDPE is exempt from excise duty under notification dated 4-12-1979 and it is not permissible to levy countervailing duty thereon under Section 3 of the Customs Tariff Act, 1975. In. doing so the High Court had followed their earlier decision in Century Enka Ltd. & Ors. v. Union of India and two others reported in 1982 E.L.T. 64. This apart in the Writ Petition filed by M/s. Motiram Tola Ram the High Court had accepted this appellants plea and granted relief in respect of imported HDPE. In view of these decisions, the earlier decision given by the Tribunal (supra) could not be followed in these appeals and Bombay High Court decision had to be preferred to the Tribunal decision. Shri Nankani pointed out that Bombay High Court in Dhoot Compack Pvt. Ltd. Vs. Union of India (Bombay) had followed Century Enka Ltd.’s case and Pan Asia decision. In para 3 of the decision the High Court held that the controversy as to applicability of the two notifications in respect of import of HDPE stands concluded by the decision of the Division Bench in 1982 E.L.T. 64 (Century Enka Ltd. & Ors. v. Union of India & Ors.) and by judgment dated Duly 2, 1986 in Writ Petition No. 1182 of 1982. Shri Nankani explained that though in the E.L.T. reporting the Writ Petition number of Pan Asia case is given as 1057 of 1982 decided on 2-7-1986, it was a batch of Writ Petitions and the main decision was in Pan Asia case, which was followed in other Writ Petitions including 1182 of 1982. Shri Nankani further submitted that though dutiability of Customs on goods imported is by virtue of Section 12 of Customs Act, 1962, levy of additional duty equal to excise duty is in terms of Section 3 of Customs Tariff Act, 1975. Under this provision an article imported into India is in addition liable to a duty equal to excise duty for the time being leviable on a like article if produced or manufactured in India. He submitted that the only manufacturer of HDPE in India are M/s. Polyolefins Industries Ltd. who manufacture the same from excise duty paid raw naphtha or chemicals derived therefrom. The effective rate of duty thus on HDPE manufactured in India is as calculated under the two notifications. The goods imported being like goods or articles could be subjected to additional duty at the same rate to which HDPE manufactured by M/s. Polyolefins Industries Ltd. were leviable and not to standard rate of duty.

5.  About the precederitial force of decisions, Shri Nankani referred to a large number of decisions. Relying on M/s. East India Commercial Co. Ltd., Calcutta & Another v. Collector of Customs, Calcutta, AIR 1982 S.C. 1893 Shri Nankani submitted that an Administrative Tribunal cannot ignore the law declared by the highest Court in the State. It is implicit in the power of supervision conferred on the High Court that all the Tribunals subject to its supervision should conform to the law laid down by it. Relying on Mamleshwar Prasad & Another v. Kanahaiya Lal AIR 1975 S.C. 907 paras 7 and 8 he submitted that a decision once rendered must later bind live cases and the prior decision of the Court on identical facts and law binds the Court on the same points in a later case. Relying on Ambika Prasad Mishra v. State of U.P. & Ors. AIR 1980 S.C. 1762 a Five Member bench decision of the Supreme Court he submitted that every new discovery of argumentative novelty cannot undo or compel reconsideration of a binding precedent. He reiterated that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned. About the presidential force of High Court decision he also relied on Arabs Ltd. v. A.K. Bandyopadhyay [1981 E.L.T. 684 (Bom.), Godrej & Boyce Manufacturing Co. Pvt. Ltd., Bombay & Another v. Union of India & Ors. [ (Bom.)] and J.K. Synthetics Ltd. v. Collector of Central Excise, Delhi [ (Del.)]. (This decision was also cited for the argument that even though the Revenue may have filed appeals against decision of Bombay High Court, this would not affect the binding nature of the decision).

6.  Shri Nankani, in particular, drew attention of the Bench to observations of Bombay High Court in 1981 E.L.T. 684 (para 13) where the Hon’ble High court cautioned the authorities in the following words :-

“Needless to state that all the officers in all the departments must stand warned that in the event of their refusal to follow findings made on question of law by this Court, a very strict view will be by the Court and necessary steps will be also taken.”

Continuing further he also relied as to the binding nature of precedents of decisions of High Court on the following decisions of the Tribunal :-

(1) Atma Steels Pvt. Ltd. & Ors. Vs. Collector of Central Excise, Chandigarh & Ors. ;

(2) Hindustan Petroleum Corporation Limited Vs. Collector of Customs, Bombay .

(3) Indian plywood Manufacturing Co. Ltd. Vs. Collector of Central Excise, Bangalore .

(4) M/s. Maltex Malsters Ltd., Patiala Vs. Collector of Central Excise, Chandigarh 1986 (7) ECR 233 (Cegat).

He submitted that having regard to decision of the Bombay High Court in Pan Asia case (supra) and in appellants own case concession under the notification must be granted.

Shri B.C. Sarang, Consultant representing the appellants M/s. Neomer Limited submitted that though in the case of these appellants the goods imported were polypropylene and not HDPE, the same treatment would apply and he adopted in toto the arguments of Shri Nankani.

7. Strongly controvering Shri Nankani’s submissions, Shri Sundar Rajan, JDR submitted that in the appellants own case the Bombay High Court had not given any reasons for the decision and it appeared that the decision in Pan Asia’s case had been followed. The foundation of Pan Asia case was the earlier decision of Bombay High Court in Century Enka’s case (1982 E.L.T. 64). He submitted that Century Enka’s case was concerned with notification No. 38/73, dated 1-3-1973.This notification, inter alia, exempted polyamide chips from the payment of excise duty on condition that it is used in the manufacture of nylon yarn in the factory of production. According to Shri Sundar Rajan this was a matter of procedure whereas conditions imposed under Notification No. 302/79, dated 4-12-1979 were substantive in nature. The two notifications were not pari materia. Non-fulfilment of the two conditions under the notification would disentitle a manufacturer of the concession under the notification. He submitted that the Tribunal in a number of decisions had followed the Bombay High court decision in Century Enka’s case where matters of procedure were concerned and there was substantial compliance with the requirement of the procedure. Such was not the case in the present appeals. He emphasised that Century Enka’s case and Pan Asia’s case were concerned with two different notifications not pari materia with one another. The presidential force of the decisions was shaken due to subsequent pronouncements of the Supreme Court. For this submission he referred to two decisions - (1) Khandelwal Metal & Engineering Works & Another v. Union of India & Ors. (S.C.), where the Supreme Court held that additional duty under Section 3(3) of Customs Tariff Act is not countervailing duty and partakes of the same character as the Customs duty. This finding is contrary to the finding of Bombay High Court in Century Enka’s case where the Bombay High Court held that additional duty referred to in Section 3 of the Customs Tariff Act, 1975 is not different from countervailing duty; and (2) Coromondal Fertilisers Ltd. v. Collector of Customs, Madras (S.C.) where the Supreme Court in para 12 of the decision held “We are afraid, we are not to ascertain the intention of the Government by a comparison of the expression used in the two different Notifications.” Shri Sundar Rajan submitted that regard being had to these observations, the decision in Century Enka’s case could not be a precedent to be followed for decision of Notification No. 302/79 in Pan Asia’s case. Heavily relying on judgment dated 18-8-1986 in Union of India & Ors. v. Modi Rubber Limited &: Ors. 1986(25) E.L.T. 849 (SC), he submitted that duty of excise has nexus with Rule 8 of Central Excise Rules, 1944 and Entry 81 of List I of Seventh Schedule to Constitution of India. Exemption from duty of excise under a notification issued under sub-rule (1) of Rule 8 of Rules cannot in absence of reference to any other statute to which provisions of Central Excises &: Salt Act, 1944 and the Rules made thereunder may be applicable would have to be limited to its meanings only to duty of excise payable under the Central Excises & Salt Act, 1944. Such reference or words were lacking in the notification. The expression ‘duty of excise’ used in the notification cannot be extended to being a concession in respect of additional duty under Customs Tariff Act, 1975 which, as already submitted, according to Khandelwal’s case (supra) is not countervailing duty but Customs duty. He submitted that the Supreme Court decision in Khandelwal’s case had impliedly overruled the Bombay high Court decision in Century Enka’s case and the Bombay High Court while taking decision in Pan Asia’s case (supra) had not noticed the Supreme Court decision in Khandelwal’s case (supra). This apart the Explanation to Section 3 of Customs Tariff Act, 1975 ends with the clause “and where such duty is leviable at different rates, the highest duty.” HDPE manufactured in India was leviable to duty at different rates one the standard rate and the other the concessional rate. The concession under the Notification 302/79 was conditional and not absolute or unconditional. One could visualise the position where the conditions of the notification were not fulfilled and in such an event HDPE would not get the concession and would be subject, to standard rate of duty and on the conditions of the notification being fulfilled to the concessional rate of duty. Looking to this position as there were different rates of duty the highest duty was applicable under the Explanation. This aspect besides the Supreme Court decision in Khandelwal’s case (supra) were not noticed by the Bombay High Court, the decision in Pan Asia’s case was thus per incurium. For the argument that when different rates of duty are in force, the rate of duty applicable would be the highest rate of duty, Shri Sundar Rajan relied on two decisions of the Tribunal Final order No. 143 to 172/86-C M/s. Parekh Dyechem Industries (P) Limited v. Collector of Customs, Bombay and M/s. Radhika India (P) Ltd. v. Collector of Customs, Bombay Order No. 619/1986. In the first decision the Tribunal, inter alia, following the decision of the Tribunal in Collector of Customs, Bombay v. M/s. Parekh Dye Chem Industries (P) Ltd., Bombay [1986 (6) ECR 325 (CEGAT) and Collector of Customs, Bombay v. M/s. Texplast Engineers Pvt. Ltd., Thane (Order No. 222 to 226/84-C) held that where there are different rates of duty the highest rate, which in that case was the statutory rate, would be applicable as additional duty. In Order No. 619/1986 M/s. Radhika India (P) Ltd. case the Bench following the Karnataka High Court decision in 1986(24) E.L.T. 456 (Karnataka) held that exemption granted under Central Excises & Salt Act, 1944 cannot be the basis for claiming exemption under Customs Act, 1962 and dismissed the claim for refund and the appeal. Proceeding further Shri Sundar Rajan relying on A.R. Antulay v. Ramdas Sriniwas Nayak & Another (AIR 1984 S.C. 718) a Five Member Bench decision - argued that “It is a well-established canon of construction that the Court should read the section as it is and cannot rewrite it to suit its convenience; nor does any canon of construction permit the Court to read the section in such manner as to render it to some extent otiose” and he submitted that the Bombay High Court had not kept this principle in mind in interpreting Section 3(1) of the Customs Tariff Act, 1975. For the same submission he also relied on another Constitution Bench decision of Supreme Court in R.S. Nayak v. A.R. Antulay (AIR 1984 S.C. 684). His further submission relying on Mohd. Yunus v. Mohd. Mustaqim & Ors. (AIR 1984 S.C. 38) was that the High Court in exercise of supervisory jurisdiction under Article 227 of Constitution of India could not correct errors of law and therefore the High Court was not correct in deciding Pan Asia case in favour of the importers. He drew attention in this connection to a decision of the Tribunal in Collector of Customs, Bombay v. New India Industries, Bombay (Trib.) and submitted that this decision had not followed the decision in 1982 ECR 728D (Bom.) (The New India Industries Ltd. v. The Union of India & Another) [The decision is not referred to in the Tribunal decision in but it appears that the principles enunciated in that decision have, in fact, not been followed. The decision, however, in para 16 relying on East India Commercial Co. Ltd. case (AIR 1972 S.C. 1893) says that Collector of Customs (Appeals) Bombay situated within the territorial jurisdiction of Bombay High Court was bound to follow the decision of the High Court]. Shri Sundar Rajan also relied on M/s. Amar Nath Om Prakash & Ors. v. State of Punjab & Ors. (AIR 1985 S.C. 218).

8.  Shri Sundar Rajan also placed reliance on Salmond’s jurisprudence Twelfth Edition (Tripathi) para 27 “Circumstances destroying or weakening the binding force of precedent” and submitted that :-

(1) The ratio of the decision(s) has been over-ruled by the Supreme Court by the doctrine of implied overruling it is not binding;

(2) The judgment is per incuriam, being in ignorance of statutory provisions;

(3) The judgment was arrived at sub silentio;

(4) It is inconsistent with the earlier and later decisions of the Supreme Court; and

(5) In view of the conflicting decision of the Karnataka and Bombay High Courts Tribunal is free to follow any decision.

9. Shri Sundar Rajan further submitted that the Karnataka High Court decision in B.S. Kamath & Co. & Ors. v. Union of India & Ors. and Tribunal decisions in Texplast Engineers Pvt. Ltd., Thane (Order No. 222 to 226/84-C), M/s. Parekh Dye-Chem Industries (P) Ltd., Bombay and M/s. Radhika India (P) Ltd. (Order No. 619/86) were more to the point and these should be followed in preference to Pan Asia decision on which the appellants have placed reliance. Shri Sundar Rajan further submitted that unlike Pan Asia case in the present set of appeals there was no argument or affidavit that the two conditions in the notification were fulfilled in respect of the imported goods.

10. Summing up Shri Nankani controverted the arguments of Shri Sundar Rajan and reiterated his earlier submissions. He also submitted that it is not necessary that every party approaches the High Court for a decision. A decision given by the High Court in the case of any party would be binding to cases of other parties involving identical issues. The decision of the Bombay High Court in Pan Asia was not an ex-parte order and it had binding force. He also referred to principles of estoppel by judgment as set out in Stroud’s Judicial Dictionary Fourth Edition Volume 2 page 944. He also referred- in this connection to a decision of the Tribunal in Amritlal Lalubhai v. Collector of Central Excise, Allahabad (Trib.) where the Tribunal held that in absence of a Supreme Court judgment or a contrary judgment of any other High Court the Tribunal follows the judgment of any High Court leaving it open to the parties to avail of their further legal remedies. He stated that in view of this the Pan Asia decision should be followed in the present appeals.

11. During arguments the Bench referring to Pan Asia case put it to Shri Nankani that a reading of the Bombay High Court judgment showed that the High Court came to the conclusion that two conditions of the notification were fulfilled with respect to consignments relating to the matter. This finding was due to the state of respondents pleadings as also certain concession and failure to answer the query made by the High Court. This did not appear to be the case in the present set of appeals. Could it not be said that this conclusion or finding regarding conditions of the notification having been fulfilled would require examination with respect to every consignment of HDPE, Shri Nankani submitted that the High Court had laid down the law that for a new consignment the Customs authorities could only examine whether it was made from out of raw naphtha and not whether the raw naphtha or chemicals derived therefrom had discharged the excise duty liability.

12. We do not propose to make this order an Essay or Composition on precedents or to record findings in respect of every conceivable plea advanced by the parties and precedents cited. We will content and confine ourselves in recording findings only in respect of the arguments which appear material for a decision of these set of appeals and would refer only to those decisions that appear necessary for the purpose.

For proper appreciation the notifications are reproduced below :-

302/79-C.E., dated 4-12-1979 : In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts artificial or synthetic resins and plastic materials specified in column (2) of the Table below, falling under sub-item (1) of Item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and manufactured from raw naphtha or any chemical derived therefrom, on which the appropriate amount of duty of excise has already been paid, from so much of the duty of excise leviable thereon as is in excess of the duty of excise specified in the corresponding entry in column (3) thereof.

THE TABLE

2.   This notification shall be in force upto and inclusive of the 30th day of November, 1980.

Notification No. 184/80-C.E., dated 29-11-1980 : In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue) specified in column (2) of the Table hereto annexed shall be amended in the manner specified in the corresponding entry in column (3) of the said Table.

THE TABLE

Note : In this notification, paragraph 2 of Notification 302/79-C.E. was omitted.

13.  The sheet anchor of the appellants case is the decision of the Bombay High Court in Pan Asia case (Bom.) which was also followed in the case of appellants M/s. Motiram Tolaram. The main discussion is to be found in paras 2 and 3 of the decision of Bombay High Court and for ease of reference whole of para 2 and material portion of para 3 are reproduced below :

“2. Dr. Kantawala, the learned Counsel appearing on behalf of the petitioners, submitted that the controversy in this petition stands concluded by the decision of the Division Bench of this Court in the case of Century Enka Limited and Others v. Union of India and two others reported in 1982 Excise Law Times 64 where it was’ held that since polyamide chips are exempt from payment of excise duty as per notification dated March 1, 1973, it is not permissible for levying countervailing duty under Section 3 of the Customs Tariff Act, 1975. Shri Bulchandani, learned Counsel appearing on behalf of the respondents, did not dispute that the decision of the Division Bench of this Court supports the claim of the petitioners, but submitted that the Exemption Notification on which reliance is placed in the present case is a conditional one and as the petitioners have not complied with the conditions, the benefit of exemption is not available.”

“3. ..........Shri Bulchandani submitted that there is no material to indicate that HDPE imported by the petitioners is manufactured from raw naphtha. The submission is entirely misconceived. The petitioners have specifically stated in paragraph 5 of the petition that M/s, Polyolefins Industries Limited is the only Company in India which manufactures HDPE. The HDPE is manufactured only from the excise duty paid raw Naphtha or any chemicals derived therefrom. It is further stated that the excise duty is leviable both on the HDPE manufactured in India. In the affidavit on which Shri Bulchandani relies, the averments in paragraph 5 are not even denied. Shri Bulchandani submits that in paragraph 13 of the affidavit, it is stated that the duty has been levied as the petitioners were not able to satisfy that the goods are not manufactured from raw Naphtha or any chemical derived therefrom. I enquired from Shri Bulchandani as to whether this fact was mentioned on the Bills of Entry while levying the duty and the learned Counsel very fairly stated that it was not so done. I further enquired from the learned Counsel as to whether HDPE can be manufactured from any material other than raw Naphtha and the learned Counsel has no answer to give. Shri Bulchandani strenuously urged that even assuming that HDPE is manufactured from raw Naphtha, there was no material that excise duty was paid on such raw Naphtha. Shri Bulchandani was unable to answer on what basis such statement was made and more so when there is not even a denial of the averment in paragraph 5 of the petition. In my judgment, Shri Bulchandani has shown great courage in defending the action of the respondents when it was wholly unsustainable and indefensible. The petitioners are entitled to the relief’s sought. ”

14. In the instant appeals, the Collector (Appeals) found and it is not disputed that imported HDPE is made from out of raw naphtha. What has to be seen is whether in the Pan Asia case the Bombay High Court dispensed with the necessity of appropriate amount of duty of excise having been paid on such raw naphtha or any chemicals derived therefrom. From the portions extracted it would be seen that the Bombay High Court found this condition fulfilled for failure of Shri Bulchandani to give out the basis of his this statement and specific denial of the petitioners averment in the counter to the petition. It is not that the Hon’ble High Court said that even if raw naphtha or chemicals derived therefrom had not paid .appropriate amount of duty of excise then also benefit of concession under the notification is to be given, Bombay High Court found the condition fulfilled due to peculiar state of pleadings and the arguments advanced. This decision could be only with respect to consignments relating to that decision and does not lay down any law that every consignment of HDPE on the strength of the decision has to be given concession under the notification.

15. In the instant appeals there is neither any averment nor proof that raw naphtha or chemicals derived therefrom which went into manufacture of HDPE had paid appropriate duty of excise. In fact, as the goods are imported they could not have done so. Therefore, decision with respect to the consignments relating to the present appeals before the Tribunal would not help the appellants.

16. We do not agree with Shri Nankani’s argument that for every subsequent consignments Customs should only examine whether HDPE is manufactured out of raw naphtha and not whether excise duty in respect of the same has been paid and ignore the second condition. It may be pointed out that according to Shri Sundar Raj an HDPE may be made not only from raw naphtha but also from natural gas from which ethylene is manufactured.

17. The above apart, it is seen from the notification that it is issued by the Central Government in exercise of powers conferred by sub-ruled) of Rule 8 of Central Excise Rules, 1944. As already observed in Khandelwal Metal & Engineering Works & Another v. Union of India & Ors. 1985(20) E.L.T. 222 (S.C.), the Supreme Court held that additional duty under Section 3(3) of the Customs Tariff Act is not countervailing duty but partakes of the same character as Customs duty. The notification does not refer to any other statute. The Supreme Court in Union of India & Ors. v. Modi Rubber Limited & Ors. (S.C.) held - “It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8(1) simpliciter, without anything more, it must, by reason of the definition of ‘duty’ contained in Rule 2 clause (v) which according to the well-recognised canons of construction would be projected in Rule 8(1), be read as granting exemption only in respect of duty of excise payable under the Central Excises and Salt Act, 1944.” The decision directly in point, however, is a Division Bench judgment of Karnataka High Court in B.S. Kamath’s case (supra). As already observed the Bombay High Court decision in Pan Asia case and Dhoot Compack Pvt. Ltd.’s case was based on its earlier decision in Century Enka Ltd.’s case (1982 E.L.T. 64). The Karnataka High Court in paras 22 to 27 of the decision referred to the Bombay High Court decision in Century Enka’s case and in paras 26 and 27 observed that the decision of the Bombay High Court was opposed to enunciation made by the Supreme Court in Khandelwal’s case. In para 24 of the decision the High Court held, “The exemptions granted under the Excise Act which regulates the levy of excise duty or a tax on manufactured goods in the country is a separate and distinct enactment. The exemptions granted under the Excise Duty either in whole or in part are for the purpose of that Act only and they cannot on any principle be the basis for claiming exemptions under the Customs Act.” Thus, in view of this decision the appellants could not lay claim in respect of additional duty which is Customs duty on the strength of an Exemption Notification issued under Rule 8(1) of Central Excise Rules.

18. The above apart the Tribunal in Collector of Customs Bombay v. M/s. Parekh Dye-Chem Industries (P) Ltd., Bombay (Trib.) dealing with a similar condition about input having paid appropriate amount of duty of excise, following Supreme Court decision in Hemraj Gordhandas (1978 E.L.T. 3352) held that if for whatever reasons the input, in that case monomer, used is not duty paid then the notification does not apply. The decision found support from another decision of the Tribunal in Collector of Customs, Bombay v. M/s. Texplast Engineers Pvt. Ltd., Thane. This decision was concerned with the very same notification 302/79-C.E., dated 4-12-1979 and HDPE. The Tribunal held, “For taking the benefit of this exemption notification both these conditions must be fulfilled. As the respondents have failed to show and prove that the raw naphtha used for the manufacture of the imported goods had already paid the appropriate amount of excise duty leviable under the Central Excises & Salt Act, 1944, so they are not entitled to take the benefit of exemption notification No. 302/79-C.E., dated 4-12-1979. ”The Tribunal again in another case M/s. Parekh Dyechem Industries (P) Ltd. v. Collector of Customs, Bombay, Final Order No. 142 to 172/86-C, dated 18-3-1986 a case of Polyvinyl Alcohol under Notification No. 185/83-C.E. held that in view of the notification there were two rates of duty, the statutory rate and the concessional rate. Section 3(1) of the Customs Tariff Act makes it abundantly clear that in such an event highest rate which in the case was the statutory rate would be applicable to imported goods for additional duty. The Tribunal in another decision M/s. Radhika India (P) Ltd.’s case (Order No. 619/86 Special Bench-B2, a case of zinc ash - following the Karnataka High Court decision (supra) held exemption granted under Central Excises & Salt Act, 1944 are for that Act only and could not be the basis for claiming exemption under the Customs Act, 1962.

19. We have looked into Stroud’s Judicial Dictionary page 944 for Shri Nankani’s argument as to ‘Estoppel by Judgment’. It is well-settled that in taxation matters there is no estoppel. We find nothing in the same to preclude the Revenue from contending that the subsequent consignments had not fulfilled the conditions of the Notification.

20. Both according to Section 3 of the Customs Tariff Act, 1975 and the decision of the Supreme Court in Khandelwal’s case excise duty for the time being leviable on a like article is the measure of additional duty which is a duty under the Customs Act. If the Exemption Notification issued under Rule 8(1) of the Central Excise Rules, 1944 be unconditional whether the measure of additional duty would be quantified taking into consideration such an Exemption Notification or ignoring the same? This question, however, does not directly arise for decision in the present appeals and therefore no answer to the same is necessary.

21. From the above discussion it would be seen that Pan Asia’s decision would also not help the appellants because they have failed to show that raw naphtha or chemicals derived therefrom had paid excise duty. In fact, they could not have paid excise duty being imported goods, and on the test of Karnataka High Court and other Tribunal decisions referred to above they could not succeed in their claim for exemption from additional duty on the strength of notification issued under Rule 8(1) of Central Excise Rules, 1944. Besides, there being different rates of duty, one the statutory rate and the other the concessional rate, the highest rate would be applicable for quantifying additional duty. On any test the appeals must fail.

22. As a result of the aforesaid discussion, we find that HOPE Moulding Powder imported by the appellants are not eligible for concession under the Notification.

The appeals therefore fail and are hereby dismissed.