ORDER
G. Sankaran (President)
1. The issue in both the appeals being the same, they were taken up for hearing together and are disposed of by this common order.
2. At the outset, after hearing both sides, we allowed the application filed by the appellants for change of the name of the appellants in the cause title from “May & Baker (India) Limited” to “Rhone Poulenc (India) Limited”.
3. The appellants imported “PHOLCODINE B.P., a narcotic drug, on which the customs authorities levied additional duty of customs corresponding to the central excise duty leviable on goods falling under Item 14E of the First Schedule to the Central Excises & Salt Act, 1944 (‘CET’, for short) read with the provisions of Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (M.T.P. Act, for short). The appellants filed claims for refund of the said duty on the ground that the goods being a bulk drug were exempted from payment of additional duty of customs in terms of Central Excise Exemption Notification No. 234/82 and 234/86. It was also contended that no additional duty of customs was leviable on the goods since no excise duty was leviable under Item 14E, CET read with Item l(iii) of the M.T.P. Act on the goods which were a bulk narcotic drug. In one case the Assistant Collector rejected the claim on the ground that exemption notifications issued under the Central Excises & Salt Act cannot be made applicable for the purpose of exemption from payment of additional duty of customs on imported goods. In the other case, the claim was rejected on the ground that the claimant did not produce a certificate from the Central Excise authorities to prove that the benefit of MODVAT had not been availed of in relation to the subject goods. The appeals filed against these orders were dismissed by the Collector (Appeals) by the impugned order. The Collector (Appeals) identified the issue for determination correctly as whether the goods “Pholcodine B.P.” are bulk drug attracting classification under Item 68, CET and whether the benefit of exemption Notification No. 234/82 in respect of bulk drugs would be applicable. He also considered the issue whether the imported substance was chargeable to excise duty under the M.T.P. Act and if so whether additional duty of customs could be charged on the subject goods in terms of Section 2(b) of the M.T.P. Act read with Section 3(3) of the Customs Tariff Act. In this connection, the appellants produced before the Collector (Appeals) this Tribunal’s order C-764/84 dated 10-10-1984 in CD(SB) (T) A. No. 110/81-C – Bochringer Knoll Ltd. v. Collector of Customs, Bombay. After going through the said order, the Collector (Appeals) came to the conclusion that the case of the appellants was similar and found that the goods, being imported in bulk, would be out of the ambit of the M.T.P. Act and, being a narcotic drug, would be out of the scope of Item 68 as well as 14E of the CET. The Collector observed that neither at the original stage nor at the appellate stage, the issue of excisability was at all raised by the appellants; they had only claimed exemption with reference to Central Excise Notification 234/82. Thereafter he proceeded to consider whether, in these circumstances, he, as appellate authority, could consider the claim and, after perusing certain authorities, concluded that the appellants were not precluded from claiming relief in terms of the correct classification and notification even at the Tribunal stage. After stating all this, he dismissed the appeals in the following words:
“The appellants are fairly organised and resourceful and yet they made no claim to this issue at the original or appellate stage and even did not pursue it when it came up in discussion during hearing it up through a letter. Therefore, I have no option but to reject the appeals.”
Needless to say the final order of the Collector (Appeals) runs contrary to his own observations and conclusions. What is even more amusing, and to be deprecated, is that in the earlier part of the order, he has criticised the Asstt. Collector on the ground that he (the Asstt. Collector) had not considered it necessary to discuss the merits of the important issue before rejecting the claim and that the “buck has been passed upwards” and passing the buck upwards is precisely what the Collector (Appeals) has done by his impugned order. He could have, and should have, disposed of the appeals in terms of the ratio of the Tribunal’s order cited before him. If there were any grounds to distinguish the facts of the present case, from the facts of the decided case, it would, of course, have been open to him to say so and come to a different conclusion than the one in the decided case. He does not say that. He also does not say that he is inhibited from deciding the matter because the issue was not properly put forward at the earlier stage of the proceedings. He is completely in error when he says that he had no option but to reject the appeals. There was the option (indeed the duty) to dispose of the appeals on their merits either in the light of the Tribunal’s order or, if the facts were distinguishable, on the basis of his own independent judgment. In the case of Bochringer Knoll Ltd. (supra), the issue was whether ‘Dihydrocodeinone Hydrochloride’ was liable to be charged with additional duty of customs. As in that case, there is no dispute in the present case also that the imported substance is a narcotic drug. Nor is there any dispute that the imported substance is a preparation. Applying the previous decision, we hold that in the present instance also, the product was not liable to be charged with additional duty of customs.
4. The impugned order is set aside and the appeals are allowed with consequential relief to the appellants.