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Customs, Excise and Gold Tribunal – Tamil Nadu
Wipro Ge Medical Systems Ltd. vs Commr. Of C. Ex. on 17 October, 2000
Equivalent citations: 2001 (128) ELT 256 Tri Chennai


S.L. Peeran, Member (J)

1. This appeal is against the order of the Collector (Appeals) dated 30-9-93 by which he has held that the benefit of exemption Notification 116/88 dated 1-3-88 cannot be extended to parts and the said exemption is available only for complete system. Appellants are manufacturers of various products i.e. Diagnostic Ultra Sound Systems of various nature and had filed classification list 1/92-93 and the same was approved by the Assistant Collector granting the benefit. However, the Collector of Central Excise authorised the Asstt. Collector to file an application under Section 35 before the Collector (Appeals) against such approval of the classification list and granting the benefit to parts also. The Collector of Central Excise, later on took over as Collector (Appeals) and decided the matter and held that the Notification extends benefit only to complete syslem and not to the parts and as the notification has to be strictly construed, the benefit cannot be given to parts which are not specified in the Notification. He has also taken the view that in consequence of the denial of the benefit to the appellants, the demands are required to be restricted to six months period from 11-8-92 to 31-1-93 as he found that there was no suppression of fact. There was no quantification of duty done for six months period in the order.

2. Shri R. Chander Kumar, learned Counsel for the appellants submits that the authorisation to file appeal before the Co lector (Appeals) was given by the Collector to the Assistant Collector. The said Collector later on took over as Collector (Appeals), and he had already formed an opinion in the matter and decided the case in that light hence there is violation of principles of natural justice. He contends that Nos. 2, 49 & 56 under category “other medical equipment” reads as follows:

“2. High powered X-ray unit with special attachments for” paediatric patients, Image Intensifier, TV system & Cut film camera.

49. Urulogical X-ray examination table

56. Computerised ultrasound imaging body sector scanner”.

He contends that when the complete system is granted the benefit of the Notification, it implies that parts are also included. He furtHer contends that chapter note 2 to chapter 90 clearly lays down mat parts are squired to be classified along with main equipment and when the main equiptient itself is classified under chapter 90, it follows that parts are also required to be classified along with it. Hence initially the benefit granted by the Assti. Collector was correct and his findings are required to be upheld. He contend 5 that the duty had not been quantified and therefore the Collector (Appeals)’s finding that the demands are required to be restricted to six months is bjyond the terms of the application filed by the Collector in the matter.

3. Shri S. Kannan, learned DR points out that Section Note and Chapter note cannot be relied upon for interpretating the Notification as this aspect has been well laid down in a large number of Tribunal judgments and in this regard he relied upon the judgment in the case of Reflect Option Pvt. Ltd. v. CCE as reported in 1997 (91) E.L.T. 637 (T), He furthersubrmts that a plain reading of the Notification is required to be done and the Notiiication clearly indicates only specified goods that the complete system and parts are hot mentioned therein. Therefore, the Tribunal cannot read parts wrien the same are not included in the said Notification. As regards confirmatia”v of duty for six months, the DR pointed out that it is a consequential relief which the appellants got when the benefit being denied in terms of the approval to the classification list by the Asstt. Collector and there is no infirmity in trte order. He further submits that there is no violation of the principles of natural justice as in terms of Section 35 any person aggrieved by a decision or ord”:r passed under this Act, by a Central Excise Officer lower in rank than the Collector may appeal to the Collector (Appeals). The Collector being the reviewing officer was justified in filing appeal before the Collector (Appeals) in his capa city as Collector in terms of Section 35 and the said Collector was later transferred as Collector (Appeals) and there is no bar under Section 35A to hear appeals filed by the Collector under the Act. The Act does not contemplate that the Collector who has filed the appeal should not hear the appeal when he becotiies Collector (Appeals) in the matter. Therefore, plea raised that there is violation of principles of natural justice is not justified.

4. On consideration of the submissions made, we agree with the DR that there is no bar for the Collector to file application for review of the order passed by any officer of the Central Excise below in rank, in terms of Section 35. In terms of Section 35A, Collector (Appeals) is required to determine and pass an order in respect of such appeal filed before him. In the present case, the Collector was transferred as Collector (Appeals) and he has decided the case in his capacity as Collector (Appeals). Merely because he had authorised his subordinate officer to file application before the Collector (Appeals) and he later became the Collector (Appeals) and decided the matter by virtue of Section 35A, it cannot be said that he was prejudiced in the matter and there was violation of principles of natural justice in the matter. We are also further not able to agree with the contention of the Counsel that Chapter note and Section note are required to be read for the purpose of interpretating the terms of the Notification. It is well laid down that chapter note and Section note are required to be applied only for the purpose of classification. In so far as interpretation of the Notification is concerned, a plain reading is required to be done and the extracted portion of the Notification does not include parts for granting the benefit of the Notification. Therefore, the view expressed by the Collector (Appeals) that the benefit is available in respect of complete system and not for the parts is required to be upheld. The demand of duty restricting to a period of six months period was rightly done by the Collector (Appeals); i,e. prior to the issue of show cause notice, hence the lower authority shall quantify the amount which are required to be paid by the assessee in terms of this order after hearing the appellants; otherwise there is no merit in the appeal and hence the appeal is rejected.

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