The Commissioner of Customs (Imports) v. M/s. Sujag Fine Chemicals (India) Ltd.

Being aggrieved by the order of the Commissioner of Customs (Appeals) dated 7/9/2000 the revenue preferred an appeal to the Tribunal. The Tribunal by its order dated 6th June, 2006 dismissed the revenue's appeal. The Tribunal held that the Notification No.32/97/Cus. dated 1/41997 required the value addition of at least 10% more in the value of resultant exported products than the value of the imported goods while the value addition was admittedly 32.15% in the present case. The other plea that the activity under taken by the respondent cannot be considered as job work in view of the decision of the Apex Court in the matter of Prestige Engineering (supra) was also negatived by holding that the above decision was rendered in the context of the excise notification and not in respect of the customs notification. Besides the Tribunal further held that indigenous raw material/inputs used in the export product is less than 30% and therefore, it cannot be held that the activity under taken by the respondent would not amount to job work. 5) Mr. Pradeep Jetly, Advocate for the appellant in support of the appeal submits as under : a) The activity undertaken by the respondent cannot be considered to be an activity of job work as substantial amount of work/activity was contributed by indigenous material which was not less than 30% of the exported product; ASN Custom Appeal-67.doc b) Reliance was placed upon the decision of the Apex Court in the matter of Prestige Engineering (supra) to contend that where the job worker contributes his own raw material to the article supplied by the customer and such raw material is substantial then the activity could not be classified as an activity of job work; and c) The value addition as provided in the notification is incapable of fulfillment as the export product also contained indigenous raw material. 6) As against the above Mr. Subodh Joshi, Advocate appearing for the respondent while opposing the appeal submits as under: a) The decision of the Apex Court in the matter of Prestige Engineering (supra) is inapplicable to the present facts as is dealt with an Central Excise Notification No. 119/95/CE dated 30/4/1997 which specifically defined job work for the purposes of central excise notification. b) The Customs Notification No.32/1997/Cus. dated 1/4/1997 does not define the word jobbing and consequently general meaning of the word job work/jobbing is to be applied and its meaning is not to be restricted in any manner; and - ASN c) Custom Appeal-67.doc The respondent-assessee has satisfied /fulfilled the requirement of value addition in the export product being at least 10% more then CIF value of the imported goods. In this case, the value addition is admittedly 32.15%. In view of the above, Mr. Joshi submits that the order of the Tribunal calls for no interference. 7) We have considered the above submissions. The Customs Notification No.32/97/Cus. dated 1/4/1997 exempted imported goods from payment of customs duty provided they are used for execution of export order on jobbing basis. The benefit of Notification No.32/97/Cus. dated 1/4/1997 is essentially being denied firstly on the ground that the activity undertaken by the respondent is not an activity of jobbing as substantial raw material i. e. 30% are locally procured and therefore, the activity carried out by the respondent would not be an activity of jobbing. The word jobbing has not been defined under the Customs Notification No.32/97/Cus. dated 1/4/1997 and therefore, one would have to apply general meaning of the word jobbing which would mean carrying out work i. e. predetermined job as directed by the supplier of raw material and returning the resultant product to the supplier. The aforesaid activity is admittedly being carried out by the respondent. However, the revenue's contention that the activity carried out by the respondent is not job work in view of the decision of the Apex Court in the matter of Prestige Engineering India Limited (supra) is misplaced. In the above ASN Custom Appeal-67.doc decision the Apex Court was dealing with Notification issued under the Central Excise Act namely Notification No.119/75 dated 30/4/1975. For the purpose of the aforesaid notification the word job work has been defined in the explanation to the notification. Explanation to the notification No.119/75 dated 30/4/1975 is a restricted definition and it requires job worker to work on the goods supplied by the supplier and return the same after the raw material has under gone manufacturing process. There is no such definition of jobbing provided in Notification No.32/97/Cus. dated 1/4/1997. In any event as held by the Supreme Court in the matter of Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders reported in 2004(165) ELT 481 it is impermissible to interpret one notification with the aid of another notification. It would therefore, be inappropriate to import definition of the job work given in excise notification No.119/75 dated 30/4/1975 while construing Customs Notification No.32/97/Cus. dated 1/4/1997. In view of the above, the decision of the Apex Court in the matter of Prestige Engineering (supra) would have no application while interpreting Notification No.32/97/Cus. dated 1/4/1997 and has rightly been disregarded by the Tribunal. The second ground taken by the revenue for not extending the benefit of Notification No.32/97 dated 1/4/1997 is that the value addition of at least 10% more in the exported product then the value of the goods imported is incapable of being fulfilled in view of the fact that indigenous material to the extent of almost 30% has been used in the process of jobbing to obtain the exported product. The ASN Custom Appeal-67.doc contention of the revenue requires one to add words to the Notification No.32/97/Cus. dated 1/4/19097 which is clearly not permissible. All that Customs Notification No.32/97/Cus. dated 1/4/1997 requires is that there should be value addition of 10% or more in the exported product than the value of the goods imported. In this case the admitted position is that there is value addition of 32.15 % more in the exported product than the value of the goods imported. Further, the Notification nowhere provides that the benefit of Notification No.32/97/Cus. dated 1/4/1997 would not be available where any indigenous material is used in the manufacture of export product. It is well settled principle of interpretation of fiscal status that exemption notification has to be strictly read and it is not permissible to either add or subtract words as found therein as held by the Apex Court in M/s. Hemraj Gordhandas v. H.H. Dave, Asstt. Commissioner of Central Excise and Customs, Surat and others reported in 1978 E.L.T. (J.350). 8) In view of the above, we answer the substantial question of law as framed for our consideration in the affirmative i.e. in favour of the respondent-assessee and against the appellant-revenue. 9) The appeal is disposed of in the above terms. No order as to costs. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)