ORDER
K.S. Venkataramani, Member (T)
1. This appeal is directed against the order dated 25-3-19861 passed by the Collector of Customs (Appeals)J”B°mkay. The facts are that the appellants imported a consignment of zinc dross, zinc ash and zinc residue between March 1980 to June 1980 and after clearance thereof, filed a refund claim on the ground that Additional duty of Customs (CVD) has been recovered in excess and that they were entitled to Notification 168/69 for the goods which had been classified for CVD purposes under Item 26B(1) of the Central Excise Tariff Act. The Assistant Collector (Refund Deptt.), Bombay Custom House rejected these refund claims saying that the exemption under Notification 168/69 is available only on production of evidence to the effect that the goods imported have been used for manufacture of zinc unwrought within the factory of production and that the appellants had not produced any such evidence. The appeal was filed against the Asstt. Collector’s order and at the appeal stage, they raised the issue of alternate classification of the goods under Item 68-CET and for exemption under Notification 48/79. The Collector (Appeals) rejected the claim for classification under Item 68 and also upheld the order of the Asstt. Collector that the imported products were not eligible for the exemption under Notification 168/69.
2. Appearing for the appellants, the learned counsel Shri A.N. Haksar submitted that the lower authorities ought to have considered and followed the Tariff Advice of the Central Board of Excise & Customs No. 82/81, dated 21-8-1981 and the connected Public Notice, dated 3-11-1981 issued by the Bombay Custom House that zinc dross/ashes were not excisable under Tariff Item 26B and were to be classified under Tariff Item 68-CET. The subordinate authorities to the Board are bound by the Tariff Advice and the learned counsel urged that the department cannot take a stand contrary to it in support of which, he relied upon the case law reported in 1977 (1) ELT (J 67) in the case of Nav Gujarat Paper Industries v. Superintendent of Central Excise. He also relied upon the decision of this Tribunal in the case of SKC Dye Stuff & Chemical Industries v. Collector of Customs, Madras – 1984 (18) ELT 633 in which it has been held that zinc ash would be classifiable under Item 68-CET for CVD purposes. The learned counsel pointed out that this decision was again followed by the Tribunal in the case of Ara Metal Industries (P) Ltd. v. Collector of Customs -1989 (43) ELT 536 subsequently. Therefore, it was urged that zinc dross, zinc ash and zinc residue imported should be classified under Item 68-CET, as these imports were prior to 1-3-1981 in the light of the Tribunal’s decisions, Board’s Tariff Advice and the Public Notice based thereon issued by the Bombay Custom House.
3. Shri M.K. Sohal, the learned DR contended that Item 68 is essentially a residuary item to which goods can be consigned only if they are not classifiable under any of the Items 1 to 67 of the Central Excise Tariff. The learned DR pointed out that the tariff description under 26B(1) at the material time specifically included zinc ash and zinc dross. Hence, there was no question of classifying such items as goods not elsewhere specified under Item 68-CET. As regards the reliance placed on the Board’s Tariff Advice, the learned DR cited the case of Maneklal Harilal Spg. & Mfg. Co. Ltd. v. Union of India – 1978 (2) ELT 618 to say that the Government cannot be estopped from a true and correct interpretation of the law. He also cited the case of K.T. Kuruvila v. Collector of Central Excise – 1990 (46) ELT 304 (Tribunal) to say that Board’s circulars and directions are not binding on quasi-judicial authority. The learned counsel, in reply, contended that even if zinc dross and ash were considered as being specifically covered by the tariff description 26B(1), yet zinc residue is still out of it.
4. We have carefully considered the submissions made by the learned counsel and the learned DR. The issue relates to classification of zinc dross, zinc ash and zinc residue for purposes of additional duty of Customs (CVD). The appellants claimed refund on the ground that the goods were classifiable under Item 68-CET and not under Item 26B prior to 1-3-1981. The imports are all prior to 1-3-1981. For this, in their refund claim they relied upon Custom House Public Notice No. 100, dated 3-11-1981 consequently they claimed duty exemption under 48/79, dated 1-3-1979. It will be useful therefore, to refer to the tariff description under Item 26B(1) relating to zinc prior to 1-3-1981 which was as follows :
26B. 1. Unwrought, including ingots, cakes, bars, blocks, hard or soft slabs, billets, plates, cathodes, anodes, pellets, spelter, dross, ashes and broken zinc.
(emphasis supplied)
In the budget of 1981, this sub-item was substituted by the following:
(1) Unwrought, including ingots, cakes, bars, blocks, hard or soft slabs, billets, plates, cathodes, anodes, pellets, spelter, and broken zinc.
At the same time, a separate sub-item (la) “waste and scrap” was also introduced. An Explanation was also added to the Tariff Item regarding scope of “waste and scrap”. From a perusal therefore, of tariff description under Item 26B-CET its amendment on 1-3-1981 would clearly show that since with that amendment and introduction of sub-item for waste and scrap, the new sub-item would cover zinc ash and zinc dross and so these materials had been deleted from sub-item (1) of Item 26B in the Finance Bill of 1981. It will be now useful to refer to the case law on the subject. The appellants have cited before us the Tribunal’s decision in the case of SKC Dye Stuff and Chemical Industries v. Collector of Customs, Madras -1984 (18) ELT 633 in which liability of zinc ash imported to CV duty under Item 26B was contested by the appellants therein who made an alternate plea that it should be assessed under Item 68-CET relying on Baroda Col-lectorate Trade Notice 201/82, dated 6-11-1982 according to which zinc ash was assessable under Item 68-CET prior to amendment of Item 26B-CET on 1-3-1981 and the SDR in that case had also no objection in view of the Trade Advice of the Central Board of Excise & Customs incorporated in the Baroda Collectorate Trade Notice. The Tribunal thereafter held, “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 appellants have also cited before us another order of the Tribunal in the case of Ara Metal Industries v. Collector of Customs -1989 (43) ELT 536 where the Tribunal disposed of the appeal by merely following the earlier decision in the SKC Dye Stuff case. However, in the case of Chemtech Industries v. Collector of Customs, Bombay – 1983 (12) ELT 551, the Tribunal considered the submissions that the item “ashes” occurring in Item 26B(1)-CET relates to zinc unwrought and would cover zinc ash arising only at unwrought stage, that is, the smelter stage, and that zinc ash arising during rolling etc. process would be free of duty, as also the submission that Bombay Custom House had issued a Public Notice, dated 3-11-1981 classifying zinc ash under Item 68-CET for the period prior to 1-3-1981 which is also relied upon by the appellants in this appeal and hence eligible for exemption under Notification 48/79. After examining the tariff description under Item 26B(1), the Tribunal held “It is evident from the above that whatever be the nature and character of zinc ash, the law makers have chosen to mention it by name as a taxable product in the Tariff. In such a situation it is not permissible to bring in any argument which would frustrate the manifest legislative intention to tax this product”. It further observed, “As regards the third argument of the appellants, zinc ash is zinc ash., whether it arises at smelter stage or rolling stage. In name, character and use, the two ashes are not different”. The claim for classification under Item 68-CET based on the Bombay Custom House Public Notice was disposed of thus : “So far as the grievance of discrimination based on Bombay Custom House Public Notice dated 3-11-1981 is concerned, we can only say that in our view, it would be wrong to consign zinc ash to the residuary Item 68 of the Tariff when Item 26B(1) specifically covered it. It is for the departmental authorities to remove this discrimination, if any, in their assessment practices”. The Tribunal, therefore, upheld charging of CVD on zinc ash under Item 26B(1).
5. In a subsequent decision in the case of Testeels Ltd. v. Collector of Customs & Central Excise, Ahmedabad -1983 (14) ELT 1676, the Tribunal, following the above decision, held that zinc ash, dust and dross were classifiable under Item 26B(1) during the period 1975-76 to 1980-81 and not under Item 68-CET. It also held that though zinc dust was not specifically mentioned in Item 26B(1), it is similar to zinc dross and ash and that it too, therefore, was classifiable under that Item. It further noted the SDR’s submission that he had come across a Trade Notice, dated 3-6-1983 of the Guntur Collectorate accepting that zinc dross and ash were classifiable under Item 26B cancelling an earlier Trade Notice of November 1981 classifying the goods under Item 68-CET.
6. In a much later decision in the case of Devidayal Agro Metal Industries v. Collector of Customs, Bombay 1988 (33) ELT 467, the Tribunal was considering a case wherein the appellants contested levy of CVD on zinc dross under Item 26B(1) and it was held, following the ratio of Supreme Court decision in the case of Khandelwal Metal & Engineering Works v. Union of India – 1985 (20) ELT 222 that “This finding would eliminate Shri Beri’s argument that there is no manufacture at all. Shri Beri, of course, advanced that argument only to resist classification under Tariff Item 68-CET. Once an item is included in any Tariff heading, questions regarding its manufacture, origin etc. do not arise. This is what Supreme Court said in paragraph 10 of their order in Khandelwal Metal & Engineering Works (supra). We reproduce a part of the paragraph for the sake of clarity.
“The argument that the articles imported by the appellants have been reduced to scrap by reason of damage, wear and tear, is quite irrelevant. The true test is as to what is the description of the articles imported. If the articles are brass scrap, the limited inquiry which has to be made is whether brass scrap can come into being during the process of manufacture. If the answer is in the affirmative, the imported brass scrap will be chargeable to additional duty in accordance with Section 3(1) of the Tariff Act”.
In this case, the only question that can be put, in the light of what the Supreme Court said, is whether zinc dross can come into existence during the process of manufacture. It is obvious that it can so come into existence. Besides, Item 26B(1)-CET specifically mentioned dross under the heading zinc. Therefore, we hold that additional duty of Customs was correctly levied under Heading 26B(1)-CET. All other arguments of both sides become irrelevant”.
7. Coming to the facts of the present case before us, the case law cited and relied upon by the appellants is the SKC Dyestuff case, wherein, as we have seen, the Tribunal largely went by the agreed position before it by both the parties, based on Baroda Collectorate Trade Notice No. 201/82, dated 6-11-1982 that prior to 1-3-1981, zinc ash was assessable to duty under Item 68-CET. But it is found that the two earlier decisions of the Tribunal (Chemtech Industries & Testeels) holding the goods classifiable under Item 26B(1) and also not accepting the Departmental Public Notice classifying the goods under Item 68-CET had not been noticed. We further observe that by a Trade Notice No. 61/83, dated 1-6-1983 – 1983 (11) ELT (T 113) the Baroda Collectorate had withdrawn the earlier Trade Notice No. 201/82, dated 6-11-1982. It was stated therein, “The matter regarding the classification of the above products (zinc dust/powder zinc dross ash and skimmings) has been re-examined. It is considered that zinc dust powder and zinc dross/ash/skimmings are properly classifiable under Tariff Item 26B and not under Tariff Item 68. The instructions contained in the Trade Notice No. 201/82, dated 6-11-1982 are accordingly withdrawn”. The other case law cited before us in the case of Ara Metal Industries had merely followed the SKC Dyestuff case. However, it is also noticed that the Tribunal while passing its subsequent order in the case of Devidayal Agro Metal Industries had the advantage of the Supreme Court’s decision in the case of Khandelwal Metal Industries case, which was not available when the earlier decisions of the Tribunal had been passed, and, following the Supreme Court decision, the Tribunal had confirmed the classification of zinc dross under Item 26B(1), in line with the view already taken in the earlier decisions of the Tribunal in the Chemtech Industries case and in the Testeels case. In view of this position, we hold that during the period prior to 1-3-1981, the goods zinc dross, zinc ash and zinc residue had been correctly assessed to CV duty under Item 26B(1)-CET. Though zinc residue is not specifically mentioned under Item 26B(1), it is similar to zinc dross and ash and hence that also is classifiable under 26B(1) during the period. As regards applicability of Notification 168/69, it has already been held by the Tribunal in the Chemtech Industries case (supra) that it is a conditional notification fulfilment of which cannot be proved in case of imported goods and as such, we hold that it has been correctly held by the lower authorities that the goods imported are not eligible for the exemption under this notification. In the result, we see no reason to interfere with the order passed by the lower authorities and the appeal is, therefore, rejected.