[Order per : Jyoti Balasundaram, Member (J)]. - The appellants herein imported two air-conditioned cars under bills of entry dated 28-3-1996 and 3-4-1996 respectively and cleared them on payment of Customs duty as well as countervailing duty at the rate of 40% ad valorem in terms of Notification No. 64/93-C.E., dated 28-2-1993 (they also paid the appropriate customs duty thereon). They got the cars registered for use as taxis and filed two claims for refund of Rs. 1,91,685/- and Rs. 1,85,852/- respectively on account of 10% point of CVD in terms of the above mentioned Notification. Both the claims were rejected by the Assistant Commissioner on the ground that the notification is not applicable to imported cars and also that the appellants have not been able to prove that the burden of the amount claimed as refund, had not been passed to any other person. The Commissioner (Appeals) rejected the appeal of the importers holding that conditions No. (i) and (iii) under the proviso to Notification No. 64/93 have not been satisfied; hence this appeal.
2. We have considered the rival submissions. It is the submission of the appellants who are represented by their Counsel that for the purpose of levy of C.V. duty, the importer has to be treated as the manufacturer and since the condition of the notification regarding registration of vehicle for use solely as a taxi has been fulfilled in the present case, the appellants are entitled to the benefit of further exemption of 10% under the Notification and are liable to pay duty at the rate of 30% ad valorem only, and since they have paid duty at the rate of 40%, they are eligible to refund of 10%.
3. The prayer is opposed by the learned DR who submits that the further exemption of 10% points under the notification is available only to a manufacturer and not to an importer and that the importer cannot be put on par with a manufacturer in India so as to claim the further exemption.
We reproduce below Notification No. 64/93-C.E. for easy understanding and appreciation of the dispute in the appeal:
No. 87.03 - Motor Cars, Station Wagons etc 40%
“No. 64/93-C.E., dated 28-2-1993 as amended by No. 11/94-C.E. dated 1-3-1994 : In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under heading No 87.03 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from so much of the duty of excise leviable thereon which is specified in the said Schedule as is in excess of the amount calculated at the rate of 40 per cent ad-valorem.
Provided that in a case where a saloon car after clearance has been registered for use solely as a taxi, the manufacturer of the said saloon car shall be entitled to a further exemption of duty of 10 percentage points subject to the following conditions, namely :-
(i) the manufacturer at the time of clearance of such saloon car has paid excise duty calculated at the rate of 40% ad valorem.
(ii) the manufacturer furnishes to the Assistant Collector of Central Excise a certificate from an officer authorised by the concerned State Transport Authority in this behalf to the effect that such saloon car has been registered for use soley as a taxi, within three months of the date of clearance of the said saloon car from the factory of manufacture or such extended period as the said Assistant Collector may allow;
(iii) the manufacturer had not collected from the person in whose name such saloon car has been registered as a taxi or in a case had collected and has refunded to such person, the amount equivalent of such further exemption of duty, and
(iv) the manufacturer files a claim for refund of duty in terms of section 11-B of Central Excise and Salt Act, 1944 (1 of 1944).”
4. For the purpose of levy of C.V. duty, the imported cars were treated as cars manufactured in India and hence C.V. duty was charged at the rate of 40% as per Notification No. 64/93 but that cannot lead to the conclusion that the importer is to be treated as the manufacturer so as to claim further benefit under the proviso to the Notification. The decision of the Apex Court in the case of Thermax Pvt. Ltd. reported in (S.C.) relied on by the learned Counsel arose in the context of payment of additional duty of customs leviable under Section 3(1) of the Customs Tariff Act, 1975 which specifically mandates that C.V. duty will be equal to excise duty for the time being leviable on a like article if produced or manufactured in India. The Apex Court held that “we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of excise duty that he would have been called upon to pay in that event”. Applying the ratio of the above judgment to the facts of the present case, this is exactly what has been done by the lower authorities by levying C.V. duty at the rate of 40% in terms of the notification. But it would be stretching the ratio of the Apex Court too far to hold that the importer is to be treated as a manufacturer for the purpose of Notification No. 64/93 which extends further concession of 10% only to manufacturers. The judgment of the Apex Court in the case of Hyderabad Industries Ltd. v. Union of India reported in (S.C.), relied upon by the appellants herein is also distinguishable - that decision was rendered in a different context. The Apex Court held that additional customs duty (C.V. duty) is leviable under Section 3(1) of the Customs Act, 1962; that manufacture is necessary for the levy of C.V. duty; that if a imported article is one which has been manufactured or produced, then it must be presumed that such article and likewise if manufactured or produced in India and if the article cannot be subjected to levy because it is neither produced nor manufactured, then on the import of like articles, no additional duty can be levied. The Supreme Court also clarified that the words 'if produced or manufactured in India’, occurring in Section 3(1) of the Customs Tariff Act, 1975 does not mean that the like article should be actually produced or manufactured in India. The Apex Court decisions in the case of Motiram Tolaram reported in and Collector of Central Excise, Jaipur v. J.K. Synthetics reported in (S.C.) relied upon by the appellants are also distinguishable and not applicable to the facts of the present case. None of the decisions cited supra laid down the proposition that the importer is to be treated as a manufacturer in India. The decision of the Western Zonal Bench in the appellants own case (Final order No. C-II/3254-55/WZB/2000, dated 13-11-2000) wherein levy of duty at the rate of 30% in terms of Notification No. 64/93 has been upheld, does not consider the issue as to whether the proviso to Notification applies to a importer and only looks into the question of applicability of condition No. (iii) of the notification. Therefore, we are not persuaded to follow the same.
5. In the light of the above discussion, we hold that proviso to the notification by which further concession of 10% has been granted, is not attracted in favour of the appellants who are importers and not manufacturers, and hence uphold the impugned order and reject the appeal.