ORDER
V.P. Gulati, Member (T)
1. This is an appeal against the order of Collector of Customs (Appeals), Bombay. Brief facts of the case are that the appellants imported Needle Cages described in the Bill of Entry as components for gear box assembly and the same were assessed the duty under Tariff Heading 84.62 (3) as applicable at the relevant time. The appellants cleared the goods on payment of duty as assessed. Thereafter, they filed the refund claim claiming the benefit of Notification 179/80 dated 4-9-1980 under which the goods which are component parts of the machinery specified in the Notification and falling under Heading 87.01(1) of the Customs Tariff were exempted.
2. The benefit of notification is available subject to the condition that the authorities, mentioned in the subject part of the publication, are satisfied and certified in each case, the parts, in question, or will be required for the purpose, specified and recommended the grant of the exemption.
3. Secondly, the importer, in terms of this notification, is required to execute a bond to bind himself to pay duty in respect of such parts as are not proved to the satisfaction of the Assistant Collector (Customs) to have been used for the said purpose. It is seen at the time, the appellants cleared the goods, neither they had produced the certificate, as mentioned above, nor they executed any bond and they chose to clear the goods on payment of duty as leviable on imports. In fact, at the time of import of the goods, the certificate from the concerned authority as required under the notification, was not available with the appellants.
4. Before the learned Collector (Appeals), the appellants submitted the certificate from the DGTD and the authorities specified in the notification. But the learned Collector, after examining the scope of the notification and the appellants’ eligibility under that hold as under :
“The appellant has failed to execute the end use bond and to furnish the duty exemption certificate in terms of the notification No. 179/80, which are condition precedent for the exemption to apply. The duty already paid at appropriate time cannot, therefore, be refunded as the conditions precedent to the grant of exemption were not satisfied at the time of clearance of goods in question. The C.E.G.A.T., New Delhi in its Order No. B-539/83 in the case of M/s. Hindustan Aeronautics Ltd., Bangalore v. C.C., Bombay has taken a similar view.”
5. The learned Consultant, for the appellants, pleaded that the original authority had rejected their claim for the reason that the certificate of the DGTD produced could not be co-related with the items in question.
6. While both the lower authorities held them ineligible for the benefit of notification for not having executed the end use bond. He pleaded that the Hon’ble High Court of Madras in their judgment in the case of L.M. Ven Moppes Diamond Tools India Ltd., Madras v. Govt. of India -1981 (8) E.L.T. 165 (Madras) have held that in case in a notification execution of a end use bond was envisaged and the same was not executed, but full amount of duty was paid then in that case the refund claim of the appellants is not vitiated in the absence of that so long as the appellant produces evidence at the time of claiming the fund of excess duty that the item imported had been used in the manufacturing of the product mentioned in the notification.
7. He pleaded that the original authority’s findings that the certificate produced could not be co-related, is not correct as the co-relation can be done in the catalogue. In this connection, he referred to the catalogue with him and showed the co-relation of some items. He pleaded that as the suppliers upgraded their equipments, the same part number was given a changed number.
8. The learned JDR, for the department, pleaded that part number given in that invoice and the DGTD Certificate do not tally. He further, pleaded that the consignment was cleared in July while the DGTD Certificate was signed in September, 1982. He pleaded it is a requirement of the notification that a certificate should be produced at the time of importation. He, further, pleaded, that the benefit of the notification is available only where the equipment in which the same are to be used falls under Tariff Heading 87.01 (1). He pleaded that the goods imported have been stated to have been used in the tractors which fall under Tariff Heading 87.01 (2) and on that ground als6, therefore, the benefit of notification was not available.
9. The learned Consultant, for the appellants, pleaded, in reply, that the appellants had applied for this certificate required from the DGTD on 2-5-1982 and he took some time for the issue of the same and in the meanwhile the import took place and the certificate was received late. He also pleaded that the tractors manufactured by them fall under Tariff Heading No. 87.01 (1).
10. We observe that the issues for consideration are – (i) whether benefit of notification can be given when no end use bond was executed at the time of clearance; (ii) whether the certificate produced after the clearance of the goods can be accepted in the facts and circumstances above; & (iii) whether a certificate would be taken to cover the goods in question with reference to the details in the DGTD certificate.
11. We observe that the Hon’ble High Court of Madras in a similar case have clearly held that a non-execution of the end use bond does not vitiate the claim required to be executed in terms of the notification. The Hon’ble High Court observed as under this regard:
“The substance of the notification is that if an imported material is intended for use in the manufacture of some other product, then concessional rate of duty should be available. So construed, if the petitioner had paid the full amount, there is no duty on its part to execute a bond and if it wants to claim the concessional rate it is enough if it produces evidence at the time of claiming refund of the excess duty paid on the ground that the raw material which it had imported had been used in the manufacture of the products mentioned in the notification. In the circumstances, therefore, the refund application could not be rejected on the ground that the petitioner had not executed a bond at the time of import.”
12. In view of this, we hold that the non-execution of the bond so long there is acceptable evidence regarding specified end use does not vitiate the appellants’ claim for refund.
13. The next point for consideration is whether the certificate produced after the clearance of the goods and which had been issued after the importation of the goods can be accepted for the purpose of the notification.
14. The appellants have pleaded that they had applied for the certificate before the importation and it took some time for the D.G.T.D. authorities to issue the same.
15. We observe that much before the importation took place, the appellants had taken the necessary steps to obtain the certificate and in case the certificate is in respect of the goods covered by the importation and can be co-related the refusal to admit such a certificate for the purpose of notification would be penalising the appellants for no fault of theirs. It would have been different matter in case the certificate had been applied for after the importation.
16. Here, we observe the appellants have done what was required by them to do to get the certificate and right from the beginning it could, therefore, be seen that their case is that the importation was intended for the purpose for which the DGTD certificate was applied for. In case the DGTD certificate applied for was for the goods imported and the same was issued for that purpose, we see no reason why this certificate should not be accepted. No doubt, the notifn. envisages a certificate to be produced certifying that the goods imported are required or will be required for the purpose specified in the notification, above. It is only by inference that it can be said that the certificate should be produced at the time of importation. All that the notification require is whether the certificate should be endorsed in terms that these goods are or will be required for the specified purpose.
17. We hold, therefore, that in case the certificate was applied for before importation and the same was issued by the concerned authorities after the importation, it can be taken to be admissible for the purpose of notification.
18. The next point for consideration whether the certificate as it is produced before us can be co-related with the goods and whether the goods imported are intended for the manufacture of the machinery falling under T.I. 87.01 (1) or 87.01 (2).
19. We observe that no definite exercise in this regard has been done by the lower authorities and it is desirable that this could be done and the appellants given full opportunity to establish their claim in this regard, with reference to the catalogue and other literature that they have in their possession. It is not possible to go into all these and at this stage before us as the position will be required to be examined in depth and which best can be done at the Assistant Collector’s level.
20. We, therefore, in the facts and circumstances and pleas made, hold that it is a fit case for remand.
21. We, therefore, allow the appellants’ appeal by remand and set aside the order of the lower authorities and direct that the matter should be adjudicated de novo by the Assistant Collector in the light of our findings and observations above after giving the appellants an opportunity to put forth their case.