ORDER
P.K. Kapoor, Member (T)
1. The appellants imported a consignment of Zinc Ash. After clearance of the goods, they claimed refund of additional duty paid on the goods on the grounds that the imported zinc ash being the product of smelting operations, it was exempt from additional duty in terms of Notification No. 104/73-C.E., dated 21-4-1973 as amended by Notification No. 32/81, dated 1-3-1981, which exempted Zinc Ash arising in the course of smelting operations from the whole of the duty of excise leviable thereon. The Asstt. Collector rejected the claim for refund on the grounds that goods were charged to additional duty in terms of Notification No. 238/78-Customs, dated 22-12-1978 and Notification No. 104/73-C.E., dated 21-4-1973 was not relevant since it was applicable only to indigenous Zinc Ash. The appeal filed against the order passed by the Assistant Collector was also rejected.
2. On behalf of the appellants, Shri R. Swaminathan, Ld. Consultant appeared before us. He submitted that the appellants had filed before the Asstt. Collector a certificate issued by the Shipper M/s. P&G International Pvt. Ltd., Australia and the Sydney Chamber of Commerce to the effect that the disputed Zinc Ash imported by the appellants had arisen during smelting operations. He contended that since Notification No. 238-Customs, dated 22-12-1978 and Notification No. 104/73-C.E., dated 21-4-1975 were equally applicable for the purposes of levying additional duty on imported Zinc Ash during the relevant time, the benefit of the notification conferring larger benefit could not be denied to the appellants when they had established by documentary evidence that the imported Zinc Ash had arisen out of smelting operations. He pleaded that the impugned order may be set aside and the appeal may be allowed.
3. On behalf of the respondents, Shri K.K. Jha, ld. SDR reiterated the findings of the lower authority and submitted that only Notification No. 238-Customs, dated 22-12-1978 which was unconditional, was applicable for the purposes of exemption of additional duty in respect of imported Zinc Ash. He contended that the Notification No. 104/73-C.E., dated 21-4-1973 being in respect of Zinc Ash arising during smelting operations was correctly held by the lower authorities as being applicable only to indigenous Zinc Ash arising during smelting operations. He further submitted that the certificates produced by the appellants could not be accepted as proof of the imported Zinc Ash having arisen out of smelting operations since one of the certificates was from the shipper himself and the other issued by the Sydney Chamber of Commerce states that it had been issued on the basis of the information supplied by the supplier.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that the only question that arises for consideration in this case is whether for the purposes of additional duty in respect of the imported Zinc Ash, the appellants were eligible for the benefit of exemption Notification No. 104/73-C.E., dated 21-4-1973 which exempted Zinc dross and Zinc ashes falling under sub-item (1) of Item 26B of the First Schedule to the Central Excises and Salt Act, 1944 if arising in the course of Zinc smelting operations in Zinc smelters, from the whole of the duty of excise leviable thereon.
5. We find that in the case of Arat Electro Chemicals Pvt. Ltd. v. Union of India reported in 1992 (58) E.L.T. 186 the Bombay High Court had held that in respect of the imported Zinc Ash benefit of exemption from the payment of additional duty of customs in terms of Notification No. 104/73-C.E., dated 21-4-1973 could be availed by the petitioners provided they were able to establish that the imported Zinc Ash had arisen in the course of smelting operations. Paras 12 and 15 of the said judgment being relevant are reproduced
“12. Under an excise Notification No. 104/73-CE., dated 21 -4-1973, an exemption was granted to zinc dross and zinc ash arising in the course of zinc smelting operations in Zinc smelters from the whole of the duty of excise leviable thereon. The Notn. states –
“…the Central Govt. hereby exempts such zinc dross and zinc ashes, falling under sub-item (1) of Item 26B of 1st Schedule to the CESA, 1944 as are arising in the course of zinc smelting operations in zinc smelters, from the whole of the duty of excise leviable thereon.”
This exemption notification has also been amended along with the amendment to Tariff Item No. 26B by a Notn. No. 32/81-C.E., dated 1-3-1981. As a result zinc dross and zinc ashes falling under sun-item (la) of Tariff Item No. 26B, as are arising in the course of zinc smelting operations are exempted from the whole of the duty of excise leviable thereon. Hence, at all material times, zinc dross and zinc ashes, arising as a result of zinc smelting operations, have been exempt from payment of excise duty. By virtue of this notification, similar zinc ash produced from zinc smelting operations, when imported into India, would also be exempted from the payment of additional customs duty under Section 3(1) of the Customs Tariff Act, 1975. It is, however, for the petitioners to establish that zinc ash, which is imported by them is zinc ash arising in the course of zinc smelting operations in zinc smelters. If they satisfy this requirement of the exemption notification, the benefit of such exemption should be extended to zinc ash imported into India. But in the absence of any material to this effect, the petitioners would not be entitled to this benefit.”
“15. If, in a given case, any of the petitioners are able to establish before the Customs Authorities that the zinc ash imported by them is produced in the course of smelting operation in zinc smelters, such petitioners will be entitled to claim exemption from the additional customs duty in view of the Notn. No. 104 of 1973, as amended from 1st March, 1981. The benefit of such exemption may be claimed by the concerned petitioners within three months from today. Their application shall be accompanied by evidence in support of their claim. The same to be decided by the respondents within three months thereafter. Whenever such claim is made by any of the petitioners, the bank guarantees submitted by them under interim orders shall be kept alive till the disposal of their application for exemption and the same shall not be encashed by the respondents until the disposal of their application.”
6. We find that in the case of S.K.C. Dyestuff and Chemicals Industries, Madras v. Collector of Customs, Madras reported in 1984 (18) E.L.T. 633 following the judgment of the Madras High Court in the case of Saigal Industries v. CBEC reported in 1980 (6) E.L.T. 547, the Tribunal had rejected the contention that the benefit of Notification No. 104/73, dated 21-4-1973 was available only to indigenous zinc ash. Para 3 of the said order is reproduced below :-
“3. Shri Lakshmikumaran, SDR had no objection to assessment of zinc ash under Item 68 in view of the Tariff Advice of the CBEC which has been incorporated in the Trade Notice issued by the Baroda Collectorate referred to above. Since it is a common point that the zinc ash in question has been imported before 1-3-1981, the countervailing duty should be levied under Item 68 at the appropriate rate. The orders of the lower authorities that the benefit of Notn. No. 104/73, dated 21-4-1973 (sic) is available only to indigenous goods produced locally, is clearly not supportable in view of the Madras High Court judgment in the matter of Saigal Industries v. CBEC reported in 1980 (6) E.L.T. 547. In the light of the above observations, we order the goods be assessed under the Item No. 68, GET for the purpose of countervailing duty. The appeal is thus allowed and the order passed by the lower authorities set aside.”
7. In view of the above discussion and having regard to the fact that there is no evidence on record to disprove the certificates of the shipper and the Sydney Chamber of Commerce to the effect that the imported zinc ash had arisen during the zinc smelting operations, we set aside the impugned order and allow the appeal with consequential relief to the appellants.