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AUTHORITY FOR ADVANCE
RULINGS
(CUSTOMS, CENTRAL EXCISE & SERVICE TAX)
NEW DELHI
PRESENT
Hon'ble Mr.Justice Syed Shah
Mohammad Quadri (Chairman) |
Mr. Somnath Pal (Member) |
Dr. B.A. Agrawal (Member) |
Order No.AAR/CE/05/2004 |
Application No.AAR/104/CE/2004
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Applicant |
M/s.Crystal
Interior Products
Plot No.41, GIDC, Ichhapore
Sachin-Hazira Road,
Bhatpore Village,
Surat-394510 |
Commissioner concerned
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Commissioner, Central Excise,
Surat-I |
Present : for the
applicant for the Commissioner concerned
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Shri J.D.Shah,
Advocate
Shri A.K.
Roy, Joint CDR
CESTAT, New Delhi .
Shri Sanjay Singh, Supdt.
Central Excise Commissionerate
Surat-I |
O R D E R
(Hon'ble Mr. Justice Syed Shah Mohammad Quadri)
This is an application under
section 23C of the Central Excise Act, 1944, (for short the "Act" ),
seeking advance ruling of the Authority on the following question :-
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Whether the products in question are
classifiable under Chapter Heading 7323.90 or 7326.19 or any other Chapter
Head or more than one Chapter Head. |
2
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The applicant is a resident Indian partnership
firm which is a S.S.I unit. It claims to be in the process of
setting up a joint venture. It is engaged in the manufacture and sale of the
iron and steel wire products. It says that the products in question are
classified by the excise department under Chapter heading 7326.19 and states
that by its letter dated 7.4.2004, it has accepted the classification
provisionally subject to final ruling by the Advance Rulings Authority, which
the department has also accepted. |
3. |
Heard the learned counsel for the applicant
and the Commissioner. |
4. |
After examining the application and the
comments of the Commissioner, the Authority issued a notice to the
applicant on 4th June 2004 requiring the applicant to explain as to
why the application should not be rejected on any one or more of the following
grounds :- |
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(i) |
the
details and documentary evidence in respect of the non-resident co-venturer in the proposed joint
venture have not been provided in the application; |
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(ii) |
the question raised in the application appears to fall under clause (a) of
the first proviso to sub-section (2) of section 23D of the Act;
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(iii) |
the
applicant appears to have already commenced the activity of manufacture of
goods which are the subject matter of the advance ruling application. |
5. |
In so far as the first ground is concerned,
the applicant has complied with the requirement of the notice.
Regarding grounds (ii) and (iii), the application is listed today for
hearing the applicant and the Commissioner. |
6. |
To appreciate the point involved in the second
ground, it would be useful to refer to sub-section (2) of section 23D
which is in the following terms: |
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" (2) |
The Authority may, after examining the
application and the records called for, by order, either allow or reject
the application: Provided that the Authority shall not allow
the application where the question raised in the application is, -
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(a) |
already pending in the applicant's case before
any Central Excise Officer, the Appellate Tribunal or any Court;
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(b) |
the same as in a matter already decided by the
Appellate Tribunal or any Court: Provided further that no application shall
be rejected under this sub-section unless an opportunity has been given to the
applicant of being heard: Provided also that where the application is
rejected, reasons for such rejection shall be given in the order".
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7. |
A perusal of the provisions, extracted above,
would show that under clause (a) of the first proviso to sub-section (2)
of section 23D, the Authority cannot allow the application (cannot
entertain for pronouncing advance ruling under sub-section (4) thereof),
if the question raised in the application is already pending in the
applicant's case before any Central Excise Officer or Appellate Tribunal
or any Court. The letter of the Assistant Commissioner of Central
Excise, Division -IV, Surat-I
dated 26th April 2004, addressed to the applicant implies that the
question of classification is pending before the Division-IV, Surat-I. The
applicant, it appears, has approached the Commissioner for classification of the
goods and addressed letters dated 29/11/2003
and 7/4/2004 .
It was in response to those letters that the aforementioned letter of the
Assistant Commissioner was issued. A reading of that letter as well as the
letter of 25th May 2004 leaves no doubt in our mind that the question
of classification is pending before the Central Excise Authority and a situation
postulated in clause (a) of the first proviso to sub-section (2) of section 23D
exists. On this ground alone, the application is liable to be rejected.
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8. |
However, as we have referred to ground (iii)
in our notice, we would take up that point as well. This relates to
commencement of activity of manufacture of goods. A reference to the
definition of "advance ruling", in this connection, would be pertinent.
Clause (b) of section 23A of the Act defines "advance ruling" thus:
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"advance ruling" means the determination, by
the authority of a question of law or fact specified in the application
regarding the liability to pay duty in relation to an activity proposed to be
undertaken, by the applicant." |
9. |
A plain reading of the definition makes it
clear that "advance ruling" means the determination, by the Authority, of
a question of law or fact specified in the application regarding liability
to pay duty in relation to an activity proposed to be undertaken by the
applicant. The question that arises here is whether the applicant is at the
stage of proposing to undertake the activity or has already commenced the
activity of manufacture of goods. |
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10
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In response to the letter issued by the
Secretariat of the Authority on 14th May 2004, seeking
clarification in that regard, the applicant replied by its letter dated 22nd
May 2004. Para '4' of that letter is
relevant here and reads thus - |
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" 4. The point regarding the manufacture
of the excisable items for which advance ruling is applied, please refer to the
statements of fact given with application in which we have stated that yes we
do manufacture the said goods at present."(emphasis supplied) |
10. |
It is categorically admitted in the para, referred to above, that the applicant has already started manufacturing
the goods in question. In view of this factual position, the activity cannot be
said to be an activity proposed to be undertaken. Therefore, in respect of the
aforementioned goods, no question seeking advance ruling can be entertained by
the Authority. |
11. |
For the aforementioned reasons, we reject the
application. |
Sd/-
(Somnath Pal)
Member |
Sd/-
(Justice S.S.M.Quadri)
Chairman |
Sd/-
(B.A.Agrawal)
Member |
Dated 12th
October, 2004.
F.No.AAR/44/104/04
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