1. Heard the learned Counsel for the parties exhaustively.
2. These appeals are filed against the judgment and order dated 12-9-2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Eastern Bench, Calcutta (hereinafter referred to as "the Tribunal") in Appeal Nos. C-7-9/97. The Tribunal arrived at the conclusion that on imported low ash coking coal, respondent was not liable to pay additional customs duty under Section 3 of the Customs Tariff Act, 1975 (hereinafter referred to as 'the Act'). Feeling aggrieved by the said decision of the Tribunal, the Department has preferred these appeals.
3. The question for consideration in the present appeals is as to whether the respondent is liable to pay additional customs duty as provided in Section 3 of the Customs Tariff Act, 1975 on the imported low ash coking coal. There is no dispute about the respondent having paid the basic customs duty on the imported item at the rate of 5%. Section 3 of the Customs Tariff Act, 1975 provides for levy of additional duty equal to excise duty. The same is reproduced as under : "Levy of additional duty equal to excise duty:
(1) Any article which is imported into India, shall, in addition, be liable to a duty (hereinafter in this Section referred to as the additional duty) equal to the excise duty for the time being 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 imported article shall be so liable shall be calculated at the percentage of the value of the imported article.
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 or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty."
4. Sub-section (5) of the said provision further lays down that "duty chargeable shall be in addition to any other duty imposed under this Act or under any law for the time being in force".
5. Section 3 quoted above is the charging Section for purposes of levy of additional excise duty under the Customs Tariff Act, 1975. The said Section also provides the basis for calculation of the additional customs duty. The additional duty is equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. At the relevant time, the goods in question were exempted from payment of Central Excise duty under Notification No. 75/84-CE, dated 1-3-1984. However, the Revenue relied upon the provisions of the Coal Mines (Conservation and Development) Act, 1974 (hereinafter referred to as "The Coal Mines Act"). In order to urge that additional excise duty under Section 3 of the Customs Tariff Act was still leviable, reliance was placed on Section 6 of the Coal Mines Act which provides for levy of excise duty on all coal raised and dispatched and on all coke manufactured and dispatched from the collieries in India, While Section 6 talks of imposition of excise duty, Section 7 of the Coal Mines Act provides for imposition of customs duty on all coal (including soft and hard coke) imported or brought into India. Sections 6 and 7 are reproduced as under :
"Section 6 : Imposition of Excise duties :
(1) With effect from ihe appointed day, there be levied and collected on all coal raised and dispatched, and on all coke manufactured and dispatched from the collieries in India, such duty of excise, not exceeding rupees ten per tonne, as may be fixed from time to time by the Central Government by notification, and different rates of duty may be levied on different grades or description of Coal or coke:
Provided that the Central Government may, by general or special order, except any special grade or grades or description of coal or coke from the levy of such duty of excise.
(2) For the purposes of sub-section (1), coal shall be graded by the Central Government in accordance with such specifications as may be laid down by that Government from time to time.
(3) All Notifications issued under this Section shall be laid, as soon as may be, before both Houses of Parliament.
Section 7 Imposition of Customs duty :
During the period in which any duty of excise is being levied under Section 8, the Central Government may, by notification, impose on all coal (including soft and hard coke), imported or brought into India from any place outside India, a duty of customs (which shall be in addition to any duty of customs for the time being leviable under any other law), at the rates equivalent to the rates of duty of excise levied under Section 6."
6. The learned Counsel for the appellant argued that since excise duty on coal and coke was imposed under Section 6 of the Coal Mines Act, even though coal and coke were exempted from general excise duty as per the notification referred to above, the respondent was still liable to pay additional customs duty under Section 3 of the Customs Tariff Act. The excise duty levied under Section 6 of the Coal Mines Act was an excise duty as envisaged under Section 3 of the Customs Tariff Act which rendered the respondent liable to pay the additional customs duty. So far as imposition of additional customs duty under Section 7 of the Coal Mines Act is concerned, it need not detain us because admittedly the Central Government has not issued any notification which is sine qua non for imposition of customs duty under the said Act.
7. In reply to the argument advanced on behalf of the Revenue, taking aid of Section 6 of the Coal Mines Act for imposition of additional customs duty for purposes of Section 3 of the Customs Tariff Act, the learned Counsel for the respondent submitted that Section 6 of the Coal Mines Act is not attracted at all in the facts of the present case. He submitted that coal is an item which is neither produced nor manufactured. Section 3 of the Customs Tariff Act which is the charging Section used the words "produced or manufactured" in India while Section 6 of the Coal Mines Act uses the words "coal raised" and dispatched. The item on which additional customs duty was sought to be levied under Section 3 of the Customs Tariff Act is low ash coking coal imported into India by the respondent. Coal being an item which is not manufactured, neither Section 6 of the Coal Mines Act nor Section 3 of the Customs Tariff Act would be attracted and therefore no additional customs duty was leviable on the imported material. To highlight the distinction, the learned counsel for the respondent submitted that Section 6 of the Coal Mines Act uses the word "raised" for coal while for coke the word used is "manufactured". This according to the learned Counsel shows that the legislature was aware of the fact that coal is not manufactured and for coal it has used the expression "raised" instead of "manufactured". According to the learned Counsel for the respondent, the controversy is concluded as per the decision of this court in Hyderabad Industries Limited v. Union of India [1999 (108) E.L.T. 321] which is a Constitution Bench decision of this court. Hyderabad Industries was a case of import of asbestos fibre into India. The additional customs duty was sought to be levied under Section 3 of the Customs Tariff Act. The court observed that an earlier three Judges Bench of this court in Hyderabad Industries Limited v. Union of India [1995 (78) E.L.T. 641] had already concluded that separation of asbestos fibre from the parent rock was not result of process of manufacture and was not a new and commercially viable article and was therefore not liable to excise duty. Likewise, it was submitted that coal which is raised from the ground in the collieries could not be said to have been manufactured in India and was therefore not liable to imposition of additional customs duty under Section 3 of the Customs Tariff Act. Section 3 which is the charging Section uses the words "produced or manufactured". Coal is neither produced nor manufactured and therefore the same is out of the purview of Section 3.
8. The CEGAT decided the appeal purely on the basis of Section 7 of the Coal Mines Act holding that since there was no notification issued by the Central Government under Section 7 of the Act, there was no liability of paying additional customs duty on the import of coal. The learned Counsel for the appellant tried to argue that the duly leviable under Section 3 of the Customs Tariff Act is a countervailing duty which is levied merely on the import of goods and no other consideration should come in the picture. This contention is totally without any merit. In any cause, it stands concluded against the appellant as per the decision of this court in Hyderabad Industries case (supra). Similar argument raised on behalf of the Revenue in the said case was repelled by the Constitution Bench in the said judgment.
9. In the present case also Section 6 of the Coal Act as quoted above specifically provides that excise duty is levied on the coal raised and dispatched. Therefore, the Legislature specifically understood that there is no question of manufacturing or producing coal. Coal is required to be raised and hence a different phraseology has been used in the said Section. Even Section 7 of the Act only empowers the Central Government to impose on all coal imported or brought into India a duty of customs at the rates equivalent to the rates of duty of excise leviable under Section 6. It nowhere provides that coal is produced or manufactured in India.
10. Learned Counsel appearing for the Department, however, submitted that in imported coal ash is removed by washing process and, therefore, it would amount to manufacturing process. In our view, this submission is also without any substance because washing of coal would not amount to production or manufacture of a new item. Section 4 of the Coal Act also provides that for the purpose of conservation of and for development of coal, the Central Government may require the agent or manager of all coal mines to take measures which may include washing of coal with a view to reducing the ash contents of the coal. Washing of coal or reducing the ash content of the coal was not considered by the Parliament as a manufacturing activity. Even if coal is washed and ash contents are reduced, Section 6 uses the phraseology ("of all coal raised") and "on all coke manufactured and dispatched", which would mean that coke is manufactured while coal is only raised. It is not manufactured. In this view of the matter, there is no substance in the argument raised by the learned Counsel of the appellant.
11. For these reasons, the appeals are dismissed being without any merit. There shall be no order as to costs.