Holding

An importer can avail the concession under Rule 192 of Chapter X and the notifications under Section 8, provided the purchaser satisfies the licence/CT‑2 condition, and the CVD is limited to the concessional rate specified in the notification.

Summary

Thermax Private Ltd imported chillers and paid customs duty and counter‑valing duty (CVD) but later claimed exemption from the CVD under Section 3(1) of the Customs Tariff Act, 1975, relying on notifications issued under Section 8 of the Central Excises & Salt Act, 1944. The Collector of Customs allowed one of Thermax's appeals and dismissed the other; the Customs, Excise and Gold (Control) Appellate Tribunal upheld the revenue's position and rejected Thermax's claim. Thermax appealed to the Supreme Court, arguing that the procedural requirements of Chapter X of the Central Excise Rules, particularly Rule 192, could be complied with by an importer and that the exemption under the notifications should apply. The Court held that the benefit of Chapter X is available to any person, including importers, and that the exemption is available provided the purchaser holds the requisite licence (L‑6) or CT‑2 certificate. Consequently, the Tribunal was wrong to deny a refund of CVD on the ground that Chapter X could not be applied to an importer, and the concessional rate under the notification, not the highest rate, governs. The Court allowed Civil Appeal No. 4693/90 and dismissed Civil Appeal No. 4694/90.

Issues considered

The applicability of Rule 192 (Chapter X) of the Central Excise Rules, 1944 to an importer seeking exemption from CVD.
Whether the procedural condition of following Chapter X can be satisfied by an importer.
Whether the exemption under notifications issued under Section 8 of the Central Excises & Salt Act, 1944 extends to imported goods for CVD purposes.
Determination of the correct rate of CVD – the concessional rate under the notification versus the highest rate under the Explanation to Section 3(1).
The requirement of the purchaser holding an L‑6 licence or CT‑2 certificate for the concession.

Legislation cited

Central Excise Rules, 1944s. Rule 192, s. Rule 193, s. Rule 1BB
Central Excises & Salt Act, 1944s. 8(1)
Customs Tariff Act, 1975s. 3(1)

Subjects

Customs dutyCounter‑valing dutySection 3(1)Section 8 notificationRule 192Chapter XImporterExcise concessionRefundL‑6 licenceCT‑2 certificate

Judgment

THERMAX PRIVATE LIMITED A
-( v.
COLLECTOR OF CUSTOMS (BOMBAY) NEW CUSTOMS HOUSE

AUGUST 19, 1992

(S. RANGANATHAN, V.RAMASWAMI AND B.PJEEVEN B
REDDY, JJ.)

Customs Tariff Act, 1975/Central Excises & Salt Act, 1944:

Section 3(1)/Section 8(1)/Rules 8(1), and Rule 192 in Chapter X-Ad-
dional duty on article imported equal to excise duty leviable on a like
c
article-Exemption/concession granted to a like article under Rule 8(1) ~-
tends to additional duty-Procedure specified in Chapter X-Extends to ad-
ditional duty on import-Concession available to importer for supplying them
to Indian manufacturers-Explanation to S.3(1}-Applicable only where
goods of exactly the same description attracted different rates of duty-Highest D
rate of duty-Applicability of.

'lbe appellant-assessee imported certain goods and paid the cus-
toms duty and additional duty at the appropriate rate under the relevant
entry of the customs tariff but claimed exemption from the additional duty
of customs leviable under S.3(1) of the Customs Tariff Act, 1975 on the
E
basis of two notifications issued u/s. 8 of the Act, and refund of the
additional customs duty paid by it. Since the claim was rejected by the

-- Assistant Collector by his orders dated 25•.2.85 and 30.9.85 the assessee
preferred appeals to the Collector, who allowed one appeal and dismissed
the other. 'lbe assessee as well as the Revenue preferred appeals before
the Tribunal against the respective order which went against them. 'lbe
F
'l- Tribunal allowed the appeal preferred by the Revenue and dismissed the
assessee's appeal. Aggrieved by the Tribunal's orders, the assessee has
preferred the present appeals, contending that even if the tribunal was
right in its conclusion that the procedure of Chapter X of the rules cannot
G
be complied with, the exemption under the notification dated 27.7.87 could.
not be denied.
~·
On behalf of the Revenue it was contended that even assuming that
the goods fulfilled the conditions of the notification, the rate of duty
applicable would be 80% being the highest rate by virtue of Explanation to H
943
>-

944 SUPREME COURT REPORTS (1992) 3 S.C.R.

A S.3(1) of the Customs Tariff Act.
Disposing of the appeals, this court
)-

HELD:l.:f The benefit of Chaptex X of the Central Excise Rules,
1944 will no doubt generally be claimed by a manufacturer in which event
B . he will have. to make the application, get the licence and give lhe assuran-
ces, bond or guarantee required by the rules but it can also be claimed by
other persons. The language of the rule applies to any person, not neces-
sarily a manufacturer, wishing to obtain remission of duty sanctioned by
a notification under rule 8 on excisable goods in a specified industrial
process. (955-C]
c
1.2. There is nothing.in the scheme of the Rule 192 which makes it
inapplicable to an importer of goods. The assessee has imported the goods
and· is selling them for use in a factory, a use which qualifies for the
-
concession under the notifications issued u/s. 8. The types of use specified
D in the concessions notified ,,:ould be of any kind. Only, for claiming a
concession in excise duty the user should be the manufacturer himself or
+
he must have made the purchase from a manufacturer liable to pay excise
duty on the item whereas in regard to a claini for additional duty (CVD)
concession, the supplier will be an importer. The latter will be entitled to
sell the goods at the concessional rate of duty (or at nil rate if there is an
E exe~ption) if the purchaser from him who puts the goods to the specified
use (whether a manufacturer or not) fulfils the requirements of Rule 192.
Since the concession under Rule 192 turns only on the. nature and use to
which the goods are put by the user or purchaser thereof and oil whether
he has gone through the procedure outlined in Chapter X, it would bot be :=--
F correct to deny it to a supplier of such goods on the ground that he is an
importer and not a manufacturer. That aspect is provided for by S.3(1)
which specifically mandates that the CAV will be equal to the excise duty
for the time being leviab.le on a like article if produced or manufactured
-f
in India. If the person using the goods is entitled to the remission, the
importer will be entitled to say that the CVD should only be the amount
G
of concessional duty and, if he ha~ paid more, will be entitled to ask for a
refund. The Tribunal was in error in holding that the assessees could not
get a ·refund because the procedure of Chaptex X of the rules is inap-
plicable to importers as such. [955G,H; 956A-G] ~"
H· 1.3. The board is right in observing that the benefit of exemption or
THERMAX v. COLLECTOR OF CUS'{OMS 945

concession should be granted wherever the intended use of the materi~I A
. can be established by the importer or by other evidence. However, the
entitlement will depend on whether the purchaser is the holder of an ~
licence (or C.T.-2 certificate) or not. The goods were supplied by the
assessee to two firms of which one was the holder of an L-6 licence. The
grant of concession in respect of the firm having L-6 licenee is, therefore, B
correct. In respect of the other firm the assessee produced no material to
show that the "beneficiary" factory was eligible for the concession under
Rule 192, and so the benefit of such concession to the assessee was.
l- therefore rightly denied. [957G,H; 958A,B]

2. It is no doubt true that Item 29A of t~e Schedule to the Central C
Excises and Salt Act, 1944 is very wide and covers various articles. The
notification also deals with various categories of articles falling under that ·
item. But there has been no dispute at any stage that the goods in question •
fall under item with serial no. 8(3) of the notification. So far as this
category of goods is concerned, there is only one rate of duty mentioned in ·
the notification. The fact that certain other parts of refrigerating and · D
air-conditioning appliances and machinery may fall under item with S. ,
No. 4 (3) or elsewhere cannot attract the higher duty in n:spect of the
goods presently under consideration. The Explanation to the notification '
is applicable only where .goods of exactly the same description attract
different rates of duty. [958F-H] E
Collector of Customs v. Weste'?l India Plywood Manufacturing Co. ,
Ltd., [1989] Suppl. 2 SCC 515 and Collector of Customs v. Hansur
Plywood Works, [1989] Suppl. 2 S.C.C.520, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4693-94 f
(NM) of 1990.

From the Order dated 11.S:1990 of the Customs, Excise and Gold
(Control), Appellate Tribunal, New Delhi in C/2636/86-JU and C/1281/85-
B2. (Order Nos. 283 & 284/90-B2).
G
V. Sridharan, R. Madhava Rao and V. Balachandran for the Appel-
Jr. Iant.
()

A.K. Ganguli, Dilip Tandon and P, Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by H
946 SUPREME COURT REPORTS (1992) 3 S.C.R.

A RANGANATHAN, J. These two appeals by Thermax (Pvt.) Ltd. )'-
(hereinafter referred to as 'the assessee') raise a question of interpretation
of two similar notifications issued under S.8 of the Central Excises & Salt
Act, 1944 ('the Act', for short).

The assessee imported goods described as "Sanyo Single Effect
B Chiller" from Japan for the purpose of using the same for refrigeration/air
conditioning of the factories of Indian Rayon Corporation at Veraval and
Nirlon Synthetics Fibre and Chemicals Ltd.. It paid the customs duty
leviable thereon at the appropriate rate under the relevant entry of the
customs tariff but claimed exemption from the additional duty of customs
c leviable under S.3(1) of the Customs Tariff Act, 1975 (C.T.Act, in short).
The relevant portion of the said section reads thus:

"3. (1) Any article which is imported into India shall, in addi-
tion, be liable to a duty (hereafter in this section referred to as
the additional duty) equal to the excise duty for the time being
+
D leviable on a like article if produced or manufactured in India
and if such excise duty on a like article is leviable at any
percentage of its value, the additional duty to which the im-
ported article shall be so liable shall be calculated at that
percentage of the value of the imported article.
E
Explanation : - In this section, the expression "the excise duty
for the time being leviable on a like article if produced or
manufactured in India" means the excise duty for the time being
in force which would be leviable on a like article if produced
or manufactured in India, or, if a like article is not so produced
F or manufactured, which would be kviable on a class or descrip-
tion of articles to which the imported article belongs, and where
such duty is leviable at different rates, the highest duty."

- (Underlining Ours)
G
In view of the language of the above provision, it is common ground
between the parties that notifications of exemption from central excise duty
issued from time to time under S.8.(1) 6f the Act would be applicable, in
the case of imported goods, for determining the leviability of the additional
duty under S.3(1) above-mentioned. In other words, if any goods are
H entitled to full or partial exemption from payment of central excise under
TIIERMAX v. COLLECTOR OF CUSTOMS [RANGANATIIAN, J.] 947

any such· notification, the exemption or concession would also extend to A
the additional duty payable under S3(1) of the C.T. Act, subject, of course,
~ to the fulfilment of any conditions or requirements that may have to be
complied with for availing the exemption under any particular notification.

The assessee, in the present case, cleared the imported goods after
paying the customs duty as well as the additional duty (hereinafter referred B
to as 'CVD') but, on second thoughts, decided that it should have claimed
a concession in respect of the CVD on the strength of notifications nos.
63/85 and 93/76 issued under S.8 of the Act. It, therefore, made applica-
)-
tions for refund of the CVD ·but these were, rejected by the Assistant
Collector of Customs by his orders dated 25.2.85 and 30.9.85. c
The assessee appealed to the Co.llector of Customs (Appeals) from
these orders. The Collector allowed the appeal from the order dated'
25.2.85 but his successor-in-office, who dealt with the appeal from the later

+ order of 30.4.85, took a different view and dismissed the assessee's appeal.
The assessee as well as the department preferred appeals from the respec-
tive order which went against them. The Tribunal accepted the
D

department's appeal but dismissed the assessee's appeal. Hence these two
appeals by the assessee.

It is common ground that customs duty is payable and has been paid E
on the imported goods under customs tariff item no. 84.17(1) at 40% of
the value of the imported goods plus a surcharge of 25% thereon. The rate
of CVD, however has to be determined on the basis of item no. 29A of the
central excise tariff. It is common ground that "chillers" fall under sub-item
(3) of item 29A and that the basic excise duty payable thereon was at 80% F
of the value of the goods under the above item read with notification
42/84-C.E. dated 1.3.84.
~
However, the S.8. notifications referred to earlier provide a further
concession. Notification no. 93n6-C.E. is relevant for the purposes of the
first appeal while notification no. 63/85-C.E. is relevant for the purposes of G
the second. The notifications are somewhat differently worded. It is, how-
ever, common ground that the two notifications are worded alike in all
respects material for the purposes of the present appeals. It is therefore
sufficient if the terms of notification no. 63/85 dated 17.3.85 are extracted
here. It reads ! H
948 SUPREME COURT REPORTS [1992] 3 S.C.R.

A EFFECTIVE RATES
63/85-CE, Dt.17.3.1985

"Effective rates of duty on Refrigerators, Evaporative type of coolers,
Air-conditioning appliances, etc. and parts thereof prescribed.

B In exercise of the powers conferred by sub-rule (1) rule 8 of the
Central Excise Rules, 1944, the Central Government hereby exempts goods
of the description specified in column (3) of the Table hereto annexed and
falling under the sub-item specified in the corresponding entry in column
(2) of the said Table, of Item No. 29A of the First Schedule to the Central
Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise
C leviable thereon under the said Act at the rate specified in the correspond-
ing entry in column (4) of the said Table subject to the conditions, if any,
laid down in the corresponding entry in column (5) thereof.
TABLE

D Sl. Sub Description Rate Condition +
No. Item
No.
1. 2. 3. 4. 5.
1. (1) Refrigerators and other
refrigerating appliances-
E
(i) Water-coolers Nil -
(ii) Domestic refrigerators of Twenty five -
capacity not exceeding 165 per cent ad
litres valorem.
(iii) Others
- Fifty per cent
F advalorem
2. (2) Evaporative type of coolers Thirty per cent
ad va/orem If-
3. (2) Air conditioners and other air- Twenty-five (i) the said
conditioning appliances per cent goods are so
G including package type of air- ad valorem. used;
conditioners; split unit air- (ii) the said
conditioners, the cooling or goods are not
room unit and condensing unit resold within a
therefore required for use in period of five
any of the following, namely :- years from the
H
THERMAX v. COLLECTOR OF CUSTOMS [RANGANATHAN, J.) 949

-( SI. Sub Description Rate Condition A
No. Item
No.
(i) Computer Rooms. date cf imtallarion
(ii) Research and Development and
(iii) the proce- B
'

Laboratories.
(iii) Animal Houses. dure specified ,
(iv) Telephone Exchanges. in Chapter X of
(v) Broadcasting Studios. the Central
(vi) Trawlers. Excise Rules,
1944, is
(vii) Dams.
followed. c
(viii) Mines and Tunnels.
(ix) Thermal or hydel power
stations.
(x) Technical Building of
+ Military Engineering
Services and Mobile Tropo
D
and Mobile Radar Unit
under the Ministry of
Defence.
(xi) Any hospital nm by the Central
Govennnmt, State Gc:M!mment ,E
or a Local Auth<Xity.
(xii) Any hospital run by a Public
Charitable Institution, the
income from which is exempt
under sub-section (22.t\) of F
section 10 of the Income Tax
Act, 1961 (43 of 1961).
(xiii) Any factory.
(xiv) Electricity load despatch
centres.
(xv) Indian, Naval Ships. G
4. (3) Parts of refrigerating and air- Eighty
conditioning appliances and per cent
machinery, all sorts, the ad valorem.
following, namely:-
f

950 SUPREME COURT REPORTS (1992) 3 S.C.R.

A Sl. Sub Description Rate Condition
No. Item '>-
No.
(i) Cooling coils or evaporator.
(ii) Compressor.
B (iii) Condenser.
(iv) Thermostat.
(v) Cooling unit (excluding the
room unit of split unit air- ~
conditioner}, and in the case of
absorption types of
c refrigerators in which there is
no compressor, heater
including burners and baftles
in a karosene operated

D
absorption type refrigerator.
(vi) Starting relay controls
+
(including expansion valve
and solenoid valves) and
pressure switches.
(vit) Overload protection/thermal
relay.
E
5.
I. (viii) Cabinet.
(3) Parts of refrigeratjng and air- Nil
r
conditioning appliances and
machinery, all sorts, other than
those specified in S.No. 4 above.
F 6. (3) Parts of refrigerating machinery Twenty five If-
as si)ecified in S.No.4 above and per cent (i) the said
required for use in a cold storage ad valorem. parts are used i
for storage and preservation of in the said cold
the food stuffs specified in storage; and
G paragraph 3 of the Cold Storage (ii) the procedure
Order, 1964 dated the 3rd specified in
September, 1964 Chapter X of the
Central Excise :-.
Rules, 1944 is fol-
lowed.
H
TIIERMAX v. COLLECTOR OF CUSTOMS {RANGANATIIAN, J.] 951
.f

SI. Sub Description Rate Condition A-
No. Item
No.
7. (3) Parts of refrigerating Twenty five If-
appliances and machinery of per cent ,, (i) the said
'the description specified in ad valorem . .,~parts are so B
S.No.4 above and required for }' used; and '
use in the manufacture of- (ii) the procedure
(a) refrigerating vans, including specified in
wagons for transport of Chapter X of the
Perishables, food and dairy ' Central

-- products;
(b) ships, including frigates where
provision is made for the
Excise Rules,
1944 is followed.
C

preserv~ion of perishable
-+ goods in transport.
D
8. (3) Parts of refrigerating and air- Twenty five If- 1

conditioning appliances and per cent (i) the said
machinery of the description ad valorem. parts are so
specified in S.No.4 above and used; and
required for use in refrigerating (ii) tM procedure E
or air-conditioning appliances or specified in
machinery conditioning Chapter X of the
appliances or machinery-in any Central Excise
of the following, namely:- Rules, 1944 is
followed.
(i) Computer Rooms. F
(ii) Research and Development
Laboratories.
(iii) Animal Houses.
(iv) Telephone Exchanges.
(v) Broadcasting Studios. G
(vi) Trawlers.
(vii) Dams.
(viii) Mines and Tunnels.

H
952 SUPREME COURT REPORTS (1992] 3 S.C.R.

A SI. Sub Description Rate Condition
No. Item
No.
(ix) Thermal or hydel power
stations.
B (x) Technical Building of
Military Engineering
Services and Mobile Tropo
and Mobile Radar Unit
under the Ministry of
Defence.
c (xi) Any hospital run by the
Central Government, State
Government or a Local
Authority. I

D
(xii) Any hospital run by a
Public Charitable
+
Institution, the income from
which is exempt under sub-
section (22A) of section 10
of the Income Tax Act, 1961
E (43 of 1961):
(xiii) Any factory.
(xiv) Electricity load despatch
centres.
(xv) Indian Naval Ships.
9. (3) Compressors used in the Nil If such use is
F manufacture of water coolers. elsewhere than in
the factory of
production of the
said compressors
then procedure
G prescribed under
-· Chapter X of the
Central Excise
Rules, 1944 is
followed.
H
-'
\

1HERMAX v. COLLECTOR OF CUSTOMS [RANGANAIBAN, J.] 9,53

It will be seen that the goods set out in the notification are mostly A
exigible to excise duty at the concessional rate of 25% ad valorem provided
that they fulfill the conditions set out in column (5) of the above table. It
I

is again common ground that the item of goods presently in question is tjne
of those mentioned in S.No.8, sub-item no. (3) of the notification and tllat
it also conforms to the description of the said item as set out in column B
(3) of the above table. Turning to column (5), it requires the fulfilment of
two conditions to enable the assessee to get the concession :
(i) that the said parts should be so used i.e. used in· refrigerating
or air-conditioning appliances or machinery in any one of the
places set out as items (i) to (xv)of column (3) against item
c
8(3); and

(ii) that the procedure specified in Chapter X of the Central
+ Excise Rules, 1944 is followed.
D
Here parties are agreed that the chillers imported by the asses~e
. '
are used in a factory- vide item (xiii) - and that, therefore the first of these
conditions has been fulfilled.
The assessee's claim for concession has, however, bee~ rejected not
on the ground that the second of the above conditions has not been fulfilled E
f but on the broader ground that the procedure of Chapter X is designed to
facilitate clearances only for the purposes of central excise and that the
said procedure cannot be fulfilled at all in the case of an importer. In other
-:
words, the view was that the second condition was such that it was attracted
only for purposes of central excise and could not at all be invoked t~ claim
F
a concession in CVD. It is the correctness or otherwise of this conclusion
~
that has to be determined in these appeals.

This takes us to a consideration of the provisions of Chapter X :of
G
the Central Excis~ Rules, 1944. This Chapter provides for a "remission ·of
(central excise) duty on goods used for special industrial purposes". Rule
c .
'¥ 192 is the principal rule in this Chapter which reads thus:
"Rule 192. - Application for concession - Where the Central
Government has, by notification under rule 8 sanctioned the H
;.

[1992) 3 S.C.R.

,,
954 SUPREME COURT REPORTS

A remission of duty on excisable goods other than salt, used in a
specified industrial process any person wishing to obtain remis-
sion of duty on such goods, shall make application to the
Collector in the proper Form stating the estimated annual
quantity of the excisable goods required and the purpose for
B and the manner in which it is ·intended to use them and
declaring that the goods will be used for such purpose and in
such manner. If the Collector is satisfied that the applicant is
a person to whom the concession can be granted without
......_
danger to the revenue, and if he is satisfied, either by personal
inspection or by that of an officer subordinate to him that the
c premises are suitable and contain a secure store-room suitable
for the storage of the goods, and if the applicant agrees to bear
the cost of such establishment as the Collector may consider
necessary for supervising operation his premises for the pur-
poses of this Chapter, the Collector may grant the application, I

D and the applicant shall then enter into a bond in the proper -t"-
Form with a surety or sufficient security, in such amount and
under such conditions as the Collector approves. Where, for
this purpose, it is necessary for the applicant to obtain an Excise
Licence, he shall submit the requisite application along with
E the proof for payment of licence fee and shall then be granted
a licence is the proper Form. The concession shall, unless
renewed by the Collector, cease on the expiry of the Licence.

Provided that, in the event of death, insolvency or insuf- ~
F ficiency of the surety, or where the amount of the bond is
inadequate, the Collector may, in his discretion, demand a fresh
bond: and may, if the security furnished for a bond is not
adequate, demand addition;U security". 't

Rules 193 to 1%-BB make provisions for proper packing and
G
transport of the goods in question to the premises of the applicatit, their
storage in a distinct and separate place under the control of the applicant,
the maintenance of proper accounts in respect thereof, controls over their

H
transfer .and movement and finally regarding the disposal of such goods
where they are found to be in surplus or defective or damaged and even
"
•
~

TIIERMAX v. COLLECTOR OF CUSTOMS [R~GANATHAN, J.] 955

~ of the refuse resulting from their use in the specified industrial process. It A
is unnecessary to go into the details of these provisions for our present
purposes. Though the latter part of Rule 192 also enables an applicant,
where necessary, to obtain a licence in Form L-6 and also prescribes a form
of application (Form AL-6) for grant of duty concession on goods pur-
chased for the process of manufacture during the period of currency of the B
licence, the opening words of the rule are very wide and general. The
benefit of Chapter X will no doubt generally be claimed by a manufactu~er
in which event he will have to make the application, get the licence and
give the assurances, bond or guarantee required by the rules but it can also
be claimed by other persons. The language of the rule applies to any
c
person, not necessarily a manufacturer, wishing to obtain remission of duty
sanctioned by a notification under rule 8 on excisable goods in a specified
+ industrial process. The industrial processes specified in Column (2) are
also not very complicated or elaborate in every case. Even a purchase by D
a person for use of the part in question in a factory could be covered by
the scope of Column (2}~ Such a person has only to make an application
setting out the quantity of goods required as well as the manner and
purpose of their use and give a declaration that they will be used for the
specified purpose. Thereupon the Collector, if satisfied that the concession E
can be granted without danger to the revenue may grant the application
subject to the conditions set out in the section. He may grant a licence in
-= Form L-6 in appropriate cases and, in others, direct the grant of a certifi-
cate in Form CT-2. The possession of the licence or the production of tlte
F
CT-2 certificate enables the applicant to secure the necessary concession.

It will at once be seen that there is nothing in the scheme of the rule
which makes it inapplicable to an importer of goods. The assessee here has
imported the goods and is selling them for use in a factory, a use which
qualifies for the concession under the S.8 notifications. The types of uke
G
specified in the concessions notified could be of any kind and, even in the
~
notifications under our consideration, they are many and varied. In respect
of items falling under S.Nos. 3 and 8, in particular, the actual users may be
H
,;._

956 SUPREME COURT REPORTS [1992) 3 S.C.R.

A private individuals or authorities and need not nece!!sarily be manufac-
~
turers using the goods in question in an "industrial process" in a narrow
sense of that term. For instance, any computer room, hospital or factory
purchasing parts of refrigerating and air-conditioning appliances and
machinery for use in the computer room, hospital or factory would be
B entitled to claim the concession by following the prescribed procedure.
Only, for claiming a concession in excise duty the user should be the
manufacturer himself or he must have made the purchase from a manufac- ~-
turer liable to pay excise duty on the item whereas in regard to a claim for
CVD concession, the supplier will be an importer. The latter will be
c entitled to sell the goods at the concessional rate of duty (or at nil rate if ~

there is an exemption) if the purchaser from him who puts the goods to
the specified use (whether a manufacturer or not) fulfils the requirements
or Rule 192. Since the concession under Rule 192 turns only on the nature ..,.._
'
D and use to which the goods are put by the user or purchaser thereof and
on whether he has gone through the· procedure outlined in Chapter X, it
would not be correct to deny it to a supplier of such goods on the ground
that he is an importer and not a manufacturer. That aspect is provided for
by S.3(1) of C.E.T. Act which specifically mandat~s that the CAV will be
E equal to the excise duty for the time being leviable on a like article if
produced or manufactured in India. In other words, we have to forget that
the goods are imported, imagine that the importer had manufactured the
goods in India and determine the amount of excise duty that he would have ~

been called upon to pay in that event. Thus, if the person using the goods
F
is entitled to the remission, the importer will be entitled to say that the
CVD should only be the amount of concessional duty and, if he has paid "t
more, Will be entitled to ask for a refund. In our opinion, the Tribunal was
in error in holding that the assessees could not get a refund because the
G procedure of Chapter X of the rules is inapplicable to importers as such.

Learned counsel. for the assessee however contended that, even if the
conclusion of the Tribunal that the procedure of Chapter X of the rules
x ....

cannot be complied with in such cases is correct, the exemption under the
H
THERMAX v. COLLECTOR OF CUSTOMS [RANGANATIIAN, J.] 957

notification cannot be denied. He relied, in support of this submission on A
a letter of the Central Board of Excise & Customs (F.No.332/65/86 TRV
dated 27.7.87) the relevant portion of which runs as under :
"The Board is of the view that it would legally not be correct
to levy additional (counter-valing) duty is actually payable ~
respect of such goods when manufactured in India (sic). It B
follows therefore, that when there is no excise duty, there can
be no additional (counter-valing) duty. The condition in the
relevant Central Excise Notifications that in respect of use of
the material elsewhere than in the factory of manufacture, the
procedure set out in Chapter .X of the Central Excise Rules C
should be followed is condition relating to procedural require-
ment which obviously _cannot be satisfied by the imported
goods.

+ In view of the above, it would not be correct to deny the1 D
benefit of exemption notification to imported goods only be-\
cause the procedural condition in the notification is not satis-
fied by the imported goods. It has therefore, been decided that
wherever the intended use of the material can be established
by the importer who may be the manufacturer of chemicals or
from other evidence, the benefit of exemption under the ex- E
emption notification 'should not be de~ed to imported goods
only because the procedural condition of following Chapter X
procedure is not complied with."
It will be seen that this letter also proceeds on the'; same view as that
of the Tribunal that Chapter X procedure _cannot be satisfied in the case
F
of imported goods. This is at variance with the interpretation which we :I.
have placed on rule 192. We, however, agree with the observation of the ·
Board that the benefit of exemption or concession should be granted
wherever the intended use of the material can be established by the G
importer or by other evidence.

X · This conclusion however does not entitle the assessee to the conces-
sion claimed in both these appeals. Its entitlement will depend on whether
the purchaser is the holder of an L-6 licence (or C.T.-2 certificate) or not. H
958 SUPREME COURT REPORTS (1992) 3 S.C.R.

A The Tribunal has pointed out that the goods were supplied by the assessee
to Indian Rayon Corporation and M/s Nirlon Synthetics Fibre and Chemi- ~
cals Ltd., of which the latter was the holder of an L-6 licence. The position
in regard to the former is not known. The grant of concession in respect
of the former by the Collector (Appeals) in the first appeal is, therefore,
B correct and is upheld. So far as the other appeal is concerned, the assessee
produced no material to show that the "beneficiary'' factory was eligible for
the concession under rule 192. The benefit of such concession to the
assessee must therefore be held to have been rightly denied in that appeal.

C Shri A.K. Ganguly, on behalf of the Revenue, raises a contention
that, even assuming that the goods fulfil the conditions of the notification
referred to earlier, the CVD rate applicable would be 80% by virtue of the
Explanation to S.3(1) of the C.E.T. Act. He submits that the goods im-
D ported by the assessee are "parts of refrigerating and air-conditioning +
equipment". They are chargeble at different rates of duty accordingly as
they fall under item with serial no.4 (80%) or that with serial no. 5 (Nil)
or that with serial no. 6 (20%) or that with serial no 7 & 8 (25%). In such
a situation, he says, the provisions of the Explanation to S.3(1) are attracted
_E and hence the assessee will be liable to duty at the highest rate of 80% we
are loth to permit the Department to raise at this stage a fresh contention )'
not taken before the Tribunal or earlier. That apart, we do not think it is
well-founded.· It is no doubt true that Item 29A 6f the Schedule to the C.E.
Act is ve~,Mde and covers various articles. The notification also deals with
F various categories of articles falling under that item. But there has been no
dispute at any stage that the goods we are concerned with fall under item
with serial 8(3) of the notification. So far as this category of goods is
concerned, there is only one rate of duty mentioned in the notification. The
G fact that certain other parts of refrigerating and air-conditioning appliances
and machinery may fall under item with S.No.4(3) or elsewhere cannot"
...
attract the higher duty the goods .presently under consideratiAn~ The Ex-
planation to the notification is applicable only where goods of exactly the X
same description attract different rates of duty. See, in this connection, the
H
THERMAX v. COLLECTOR OF CUSTOMS (RANGANATHAN, J.) 959

decisions on analogous provision in Collector of Customs v. Western India A ·
Plywood Manufacturing Co. Ltd. and Collector of Customs v. Hansur
Plywood Works, (1989] Suppl. 2 S.C.C. 515 and 520. We, therefore, reject
this contention.

For the reasons stated above, we allow C.A. 4693/90 treating it as t4e B
appeal arising out of the order passed by the Tribunal from the. order of
the Collector of Customs dated 16.4.85. C.A. 4694/90 will however stand
dismissed but, in the circumstances, without costs.

G.N. C.A. 4693/90 allowed,
C.A. 4694/90 dismissed.
I

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