Case: Auto Tractors Limited, Pratapgarh Vs. Collector Of Customs (Appeal), Bombay

The appellant, M/s. Auto Tractors Limited, is a company manufacturing tractors. For purposes of manufacture, the company imports certain parts and components from abroad. 2. There are two notifications of the Government of India granting certain concessions from the levy of customs duty which are applicable to such goods as have been imported by the appellant. The first of these, namely, Notification No. 200/79 dated 28.9.1979 (as amended from time to time) exempts components "required for the manufacture of heavy commercial motor vehicles..... or of tractors" from so much of the customs duty as is in excess of 25 per cent ad valorem and the whole of the additional duty leviable thereon. The grant of the concession was subject to the fulfilment of certain conditions specified in the notification. The second notification was Notification No. 179/80 dated 4.9.1980 (as amended from time to time). This notification confers an exemption in respect of parts of articles falling under specific headings in the First Schedule to the Customs Tariff Act, 1975. These admittedly included parts required for the purposes of the initial setting up or for the assembly or manufacture of "tractors", this being an article falling under Heading No. 87.01(1) of the First Schedule above referred to. This exemption was in respect of so much of the customs duty as is in excess of the rate applicable to the said article (i.e. tractor) when imported complete. This concession was again subject to a certificate and recommendation from certain specified authorities, one of whom is the Directors General of Technical Development (DGTD). The relief available to the assessee under the first notification of 1979 is, apparently, larger than the one available under the second notification of 1980. 3. The appellant company imported three consignments. Each of the consignments was cleared after production of a certificate from the DGTD in the following terms : "Certified that M/s. Auto Tractors Ltd., Lucknow are holding a valid Industrial Licence for the manufacture of agricultural tractors and have an approved manufacturing programme. It is further certified that the above components of agricultural tractors, which fall under ICT No. 87.01(1) qualify for concessional rate of import duty in terms of Customs Notification No. 179/F No. 370/99/79-Cus. I dated 4.9.1980."Apparently, since the certificates of the DGTD referred only to Notification No. 179/80, the appellant was granted the concession available under the said Notification. The appellant cleared the goods, availing itself of the said concession, in March, May and June,the appellant appears to have realised that it was entitled to the larger concession available under Notification No. 200 of 1979 and that it had erred in clearing the goods after payment of duty subject only to the smaller concession available under Notification No. 179 of 1980. The appellant therefore filed three refund applications in August, September and October 1981 claiming refund to the extent of Rs. 1, 55, 342.50, Rs. 1, 28, 350.05 and Rs. 6, 45, 415.44, being the difference between the entitlements of concession under the two notifications in question. It also appears that the appellant subsequently applied to the DGTD for an amendment of the original certificates to make it clear that the goods imported by the appellant were eligible for the concession under Notification No. 200 of 1979. The DGTD on such application issued a certificate to the following effectthat M/s. Auto Tractors Ltd. Pratapgarh are holding an Industrial Licence to manufacture Agricultural Tractors and have an approved manufacturing programme. It is further certified that the items listed above are components of agricultural tractors falling under ITC No. 87.01(1) and are eligible for concessional rate of import duty under Custom Notification No. 200/79 and 52/81 as extended by Customs Notification No. 81/81 and 82/81 both datedsupersedes the earlier duty concession certificate issued by this office vide Notification No. 179/F. No. 370/99/79-Cus. I dated 4.9.1980 under this office letter No. DD-II/5(49)/79 Ag dated 16.1.1981."These amended certificates were also produced before the Customs authorities.4. The assessees prayer for refund was however rejected by the Assistant Collector of Customs on the ground that the assessee had failed to produce "end-use" certificates. The assessees appeals to the Collector of Customs (Appeals) also failed. There were further appeals to the Customs, Excise and Gold (Control) Appellate Tribunal, which by its order dated 23.10.1987, dismissed the appeals of the Appellants and hence the present appeals.

Court's reasoning:
There is a fallacy in this approach, for, even ignoring the subsequent amendment of the certificates, we are of the opinion that the production of the original set of certificates at the time of clearance of the goods was sufficient compliance with the terms of the notification in question. We have extracted the terms of this certificate earlier. It is an unequivocal certificate by the DGTD that the appellant holds a valid industrial licence for the manufacture of agricultural tractors and that it is also has an approved manufacturing programme. This is all the second set also says. There is therefore no doubt that the assessee had produced evidence, in the form of the said certificate, of the fact that the appellant had an approved industrial programme. This was the only requirement of the notification and this requirement has, in our opinion, been complied with. The further words in the first set of certificates that the assessee was eligible for the concession under of the 1980 notification were mere surplusage. The omission of the assessee to request the DGTD to refer to the assessees entitlement under the 1979 notification or the omission of the DGTD to refer to the assessees entitlement under the 1979 notification cannot take away the assessees rights. The grant concession depends on a certificate that the assessee had an approved manufacturing programme - which is there - and not the reference therein to the notifications that can be availed of by the assessee.We are therefore of the opinion that the order of the Tribunal should be set aside and that the assessee should be held entitled, in respect of the three consignments referred to earlier, to the concession available under Notification No. 200 of 79.We direct accordingly. The appeals are allowed but having regard to the circumstances we make no order as to costs.