M/S. LOHIA SHEET PRODUCTS versus COMMISSIONER OF CUSTOMS, NEW DELHI

Citation: [2008] 3 S.C.R. 948 · Decided: 05-03-2008 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2008] 3 S.C.R. 948 
A 
M/S. LOHIA SHEET PRODUCTS 
' 
II. 
-
COMMISSIONER OF CUSTOMS, NEW DELHI 
(Civil Appeal No. 2411 of 2002) 
B 
MARCH 5, 2008 
[ASHOK BHAN AND J.M. PANCHAL, JJ.] 
t 
' 
Customs Tariff Act, 1975 - s.3 - Levy of additional duty 
equal to excise duty-Assessee importing copper/brass waste 
c and scrap - Benefit of exemption from duty under the 
Notification/Tariff Heading - Entitlement of - Assessing 
Authorities as well as tribunal holding that only copper/brass 
waste and scrap generated in the factory of production entitled 
to the benefit - Held: Not sustainable - Assessee satisfied all 
D the conditions of Entry 7 4. 04 as they had used copper/brass 
waste and scrap within the factory of production for manufacture 
.... 
f 
- Entry nowhere uses word 'generated' or 'imported' -
Assessee paid amount equivalent to excise duty at the time 
of import of waste or scrap- Mere fact that goods were imported 
E would not make any difference - Intention behind grant of 
exemption is to prevent double payment of duty - Thus, 
assessee entitled to benefit of Notification - Notification No. 
8196 CE dated 23. 7.1996 - Central Excise Tariff Act, 1985 -
Tariff Heading 7 404. 10. 
Appellants imported copper/brass waste and scrap 
,,.. 
F 
for use in the manufacture of handicrafts. They claimed 
r 
benefit of exemption from duty under the Notification No. 
8/96-CE dated 23.07.1996. However, they paid the duty on 
the scrap Imported under protest and filed refund claim. 
G Authorities below and the tribunal rejected the refund 
claim. The tribunal held that the copper waste and scrap 
used by the appellants had been imported and not 
generated in the factory of production, thus the appellants 
' 
' 
were not entitled to exempti~n Notification. Hence the . 
H 
948 
M/S. LOHIA SHEET PRODUCTS v. COMMISSIONER 
949 
OF CUSTOMS, NEW D.ELHI 
present appeals. 
A 
) 
Allowing the appeals, the Court 
HELD: 1.1 The explanation to the sub-section (1) of 
Section 3 of the Customs Tariff Act, 1975 clarifies the 
expression, 'the excise duty for the time being leviable 8 
on a like article if produced or manufactured in India' used 
+ 
in the said section to mean the excise duty for the time 
being in force which would be leviable on a like article if 
produced or manufactured in India. It further clarifies that 
if a like article is not so produced or manufactured which c 
in turn clarifies that for the purpose of levy of additional 
duty actual production or manufacture of like article is not 
necessary. [Para 14] [955-0, E, F] 
1.2 The sum and substance of the Entry 7 4.04 is that 
if a manufacturer uses copper waste and scrap within the D 
.. 
factory of production for the manufacture of unrefined or 
t 
unwrought c.opper, copper sheets or circles and 
handicrafts, then it would be entitled to the exemption 
under the impugned notification. In the instant case, the 
appellants satisfied all the three conditions as they had E 
used the copper/brass waste and/or scrap within the 
factory of production, and for the manufacture of 
handicrafts. The entry nowhere uses the word 'generated' 
or 'imported'. The condition that only that scrap would be 
y 
entitled to exemption which has been generated in the F 
factory of production is, therefore, unwarranted and 
~ 
unsustainable. The word, 'within' occurs after the word, 
'used'. The assessing authority as well as the tribunal 
have arrived at the finding that only that scrap/waste of 
copper would be entitled to the exemption which had 
G 
been generated in the same factory because of the word, 
'within' used in the heading 74.04. According to them, the 
word, 'within' pre-supposes thaf the copper waste and 
1 
' 
scrap was generated in the same factory. The entry cannot 
be read in the manner as suggested by the Revenue. 
[Para 15] [955-F, G, H; 956-A, B, C] 
H 
950 
SUPREME COURT REPORTS 
[2008) 3 S.C.R. 
A 
1.3 The test laid down by the tribunal that the benefit < 
of the notification/tariff heading would be admissible to 
only that copper waste and scrap which is generated in 
the factory of production and not the imported waste and 
scrap, is not supported either by the text of the exemption 
8 notification, heading 74.04 or any other authority. 
[Para 16) [956-D] 
1.4 In the instant case, an amount equivalent to the 
excise duty had been paid by the appellants at the time of 
import on the waste and scrap. Mere fact that the goods 
C were imported would not make any differen

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