- (1.) These appeals arise out of a common judgment rendered by the Customs, Excise and Gold (Control) Appellate tribunal, New Delhi, by which it disposed of ten appeals in all. Civils Nos. 4013-ISA of 1985 challenge that part of the order of the tribunal by which the appeals of the common appellant, namely, M/s Bombay Oil Industries Pvt. Ltd. were dismissed by the tribunal; while the remaining four appellants seek to challenge the other part of the tribunal's order by which four appeals moved by the Collector of Customs, Bombay, against the present appellants concerned came to be allowed by the tribunal.
(2.) The facts leading to these appeals may be noted at the outset to appreciate the grievance of the appellants. All these appellants had imported tallow being bleachable fancy tallow from foreign countries between 2/8/1976 and 2/9/1978 by different consignments. So far as common appellant M/s Bombay Oil Industries Pvt. Ltd. in CA Nos. 4013-13a of 1985 is concerned, it imported bleachable mutton tallow while the rest of the appellants imported bleachable fancy tallow which according to them was not mutton tallow. These imports were subject to customs duty under the provisions of the Customs Act, 1962. As per the applicable customs tariff as laid down in the First Schedule to the Customs Tariff Act, 1975, the imported tallow was liable to customs duty under sub-heading of Heading No. 15. 01/06 at the rate of 35 per cent ad valorem. A partial exemption was given by the central government from the payment of customs duty so far as imported tallow was concerned by an exemption notification dated 2/8/1976 being Notification No. 141-Cus/76 issued in exercise of powers conferred on the central government by sub- section (1 of Section 25 of the Customs Act, 1962. The said notification provided that the central government being satisfied that it is necessary in the public interest so to do, exempts tallow having the specifications mentioned hereunder and falling under sub-heading 2 of Heading No. 15. 01/06 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975, when imported into India, from payment of so much of that portion of duty of customs leviable thereon which is specified in the said First Schedule as is in excess of 15 per cent ad valorem. The notification further laid down the specifications of the exempted tallow. It was provided that the imported tallow meeting the indicated specifications was entitled to partial exemption of customs duty to the extent of 30 per cent ad valorem. These specifications read as under: "Specifications 295. htm297 The said notification was amended later on by a notification dated 2/9/1978 whereby specification No. 2 was deleted from the earlier notification dated 2/8/1976 being Notification No. 141-Cus-76. The said latter notification dated 2/9/1978 being Notification No. 168/f No. 370/24/78 Cus I provided that in exercise of the powers conferred by Ss. (1 of Section 25 of the Customs Act, 1962 (52 of 1962, the central government being satisfied that it is necessary in the public interest so to do hereby makes the following amendment in the notification of the government of India in the Department of Revenue and Banking No. 141-Customs dated 2/8/1976, namely: "in the specifications mentioned under the said notification, Item 2 and the entries relating thereto shall be omitted. "
(3.) It, therefore, became clear that the importers of tallow after coming into operation of the latter notification dated 2/9/1978 had not to satisfy the customs authorities that their imported tallow met the requirement of erstwhile Item 2 in the earlier notification of 2/8/1976. We have seen that the second condition of the notification dated 2/8/1976 referred to the colour of imported tallow. The imported tallow under the earlier notification was required to stand the test of having colour not deeper than 20 in one inch cell on the Lovibond scale as Y+5r. It is this requirement which the latter notification gave up. It is not in dispute between the parties that import of tallow after the notification dated 2/9/1978 having given partial exemption up to 30% ad valorem, customs duty on imported tallow covered even that imported tallow which did not meet any colour requirement but so far as present proceedings are concerned as the appellants had imported tallow during the time the earlier notification dated 2/8/1976 held the field, they had to meet the colour specification No. 2. The appellants contended before the Customs Authorities that they were entitled to get refund of customs duty paid by them in excess of 15 per cent as their imported tallow satisfied Notification of Customs dated 2/8/1976. The samples of imported tallow were examined by Custom House and were found not meeting the colour test specification as laid down by the notification dated 2/8/19766. Consequently, their request was rejected by the Assistant Collector of Customs. They went in appeal to the Collector of Customs. The Collector of Customs, Bombay, took the view that so far as common appellant in Civil Appeals Nos. 4013-13a of 1985, namely, M/s Bombay Oil Industries Pvt. Ltd. was concerned, it had imported tallow on 4/4/1978 when the earlier Notification No. 141-Cus/76 was operative. The Custom House had tested the samples by applying the correct method of IS 548 and as it was found that the tallow imported by M/s Bombay Oil Industries Pvt. Ltd. did not satisfy the colour specification as per Condition 2 of Notification of 1976, the appellants cannot be said to have earned any exemption under the said notification on the imported tallow and accordingly the appeals of the appellant, M/s Bombay Oil Industries Pvt. Ltd. , were dismissed. However, so far as appeals by the remaining four appellants in the present case are concerned, the Appellate Collector took the view that these appellants had imported tallow which were not mutton tallow but bleachable fancy tallow which was a mixture of beef and other animal tallow and so far as these imports were concerned, proper tests were not carried out by the Custom House. The Appellate Collector noticed that the specifications given by Customs were word for word and figure for figure inis 887 for Type 1 and that referred to mutton tallow and that the method prescribed for mutton tallow as per IS 548 could not have applied for testing colour of imported tallow of these remaining four appellants and that the correct method for testing samples should have been the method recommended by American Oils Chemists' Society wherein samples should have been first bleached and then got tested. In view of the Appellate Collector as the goods imported by these four appellants were not Indian tallow for which the IS 887 and IS 548 were designed but foreign tallow and most probably beef tallow, it was reasonable to say that the standard of the tallow should be gauged in accordance with the grades or standards prescribed by the American Fats and Oil Association and if that was done the colour specification as found in Condition 2 of the notification was likely to be satisfied and for that purpose the samples were required to be re-tested by following the method recommended by American Oils Chemists' Society and accordingly the remaining four respondents' appeals were allowed and the proceedings were remanded to the Assistant Collector directing that the test should be done only after refining and bleaching the samples as prescribed in the said American Oils Chemists' Society official method Cc 8d-55. It was further observed that if it passes the colour test on such refining and bleaching, the benefit of Notification No. 141- Cus/76 shall be extended, otherwise not.;