ORDER
T.K. Jayaraman, Member (T)
1. Revenue has filed this appeal against the OIA Ho. 37/2003(H-II)Cus dated 15.12.2003 passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad.
2. The respondents exported a machine for exhibition purpose under Bond from their factory on 13.08.2002. They re-imported the said machinery by filing Bill of Entry dated 10.12.2002 and sought benefit of Notification Sl. No. 1(d) of 94/96-Cus dated 16.12.1996. The goods were assessed to Central Excise Duty of 16% amounting to Rs. 3,17,123/- and Special Additional Duty (SAD) of 4% amounting to Rs. 91,966/-. The respondents protested the levy of SAD. The AC, in his order dated 27.03.2003, held that there is no specific exemption for SAD under the said Notification though the notification 23/2002 dated 01.03.2002 at Sl. No. 56 covers exemption of SAD for the goods exempted wholly from Basic Customs Duty and Additional Duty of Customs. The above Notification No. 23/2002 cannot be applied as the goods were charged to Additional Duty of Customs. Aggrieved over the order of the original authority, the respondents appealed to the Commissioner (Appeals). The Commissioner (Appeals) held that the goods should have been allowed to be cleared under a transit bond without payment of Central Excise Duty when they have sought exemption under the Customs Notification No. 94/96. As the goods have been received into the factory, the requirement of transit bond for exempting is nullified. Since the goods have reached the appellants’ premises, levy of Central Excise Duty as prescribed in the said Notification is incorrect. Therefore, under the Customs Notification No. 23/2002 dated 01.03.2002, the appellants are entitled for exemption from SAD. Hence, SAD is refundable. Thus, the Commissioner (Appeals) allowed the appeal of the respondent.
3. Revenue is aggrieved over the impugned order on the following grounds:
The observation of the Commissioner (Appeals) that the goods should have been cleared under a ‘Transit Bond’ seems to be completely misplaced and imaginary as the very wording of the Notification No. 94/96 makes it very clear that the amount of duty payable are indicated in Corresponding entry in column 3 against the categories specified in column 2 of the table annexed. The ‘Transit Bond’ facility is provided for category 1(e) goods i.e. goods exported under DEEC or EPCG Schemes whereas the subject goods fall under category 1(d). The importers have correctly paid the CVD and SAD on re-importation. While CVD is explicitly mentioned in the Notification 94/96 in the corresponding entry to 1(d), SAD was paid, as it was not exempted under Notfn. 23/2002, which is the principal notification for its exemption.
4. Shri K.S. Bhatt, the learned SDR appeared for the Revenue and the respondents are not present and have requested to decide the case on merits.
5. The learned SDR reiterated the Grounds of Appeal.
6. We have gone through the records of the case carefully. The respondents exported the machinery for exhibition purpose under Bond without payment of Central Excise Duty. When the goods were re-imported, they availed the benefit of Notification No. 94/96-Cus dated 16.12.1996. The said goods are exempted from the following duties on re-import:
(i) Basic Customs Duty, which is leviable as specified in the First Schedule;
(ii) The Additional Duty leviable under Section 3 of the Customs Tariff Act;
(iii) Special Duty of Customs leviable under Sub-section 9(1) of Section 68 of the Finance Act, 1996. These goods, in the instant case, fall under para 1(d) of the Table annexed to the Notification. When these goods are imported as per para 1(d), Central Excise Duty, which was not paid at the time of removal from the factory should be paid. In other words, when the goods were re-imported, the Central Excise Duty was paid. The fact remains that the goods were exempted from Basic Customs Duty as well as Additional Duty of Customs, which is also known as CVD.
(iv) Notification 23/2002-Cus dated 01.03.2002 Entry No. 56 in the Table annexed to the above Notification reads as follows:
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Sl. Chapter heading or Description of goods Standard
No. sub-heading Rate
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56 Any Chapter All goods which are exempt from - Nil
(a) the whole of the duty of
customs leviable thereon under
the First Schedule; and
(b) the whole of the additional duty
of customs leviable thereon under
Sub-section (1) of Section 3 of the
Customs Tariff Act.
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7. It is clear that as per Notification No. 23/2002-Cus, goods which are exempted from Basic Customs Duty and Additional Duty of Customs are also exempted from SAD. In the present case, as per Notification 94/96, the impugned goods are exempted both from Basic Customs Duty and Additional Duty of Customs. Hence, by virtue of Notification 23/2002, the impugned goods are exempted from the SAD also. The fact that the impugned goods, on re-importation paid Central Excise Duty should not be taken to mean that they are not exempted from payment of Additional Duty of Customs (CVD). Revenue has equated Central Excise Duty with CVD. CVD is only equal to Central Excise Duty. Central Excise Duty is levied under the Central Excise Act, but CVD or Additional Duty of Customs is leviable under Section 3 of the Customs Tariff Act. Hence, Revenue’s contention that CVD is mentioned against entry 1(d) of Notification No. 94/96-Cus. is not correct. Against entry 1(d), what is mentioned is Central Excise Duty. In fact, they are exempted from payment of Additional Duty of Customs. In that case, they are also exempted from SAD by Notification 23/2002-Cus. Revenue’s appeal has no merits. Hence the same is dismissed.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)