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Peeraj Trade Linkers Vs. Union of India (Uoi) and - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberWrit Petition No. 677 of 1981
Judge
Reported in1989(20)LC57(Bombay)
AppellantPeeraj Trade Linkers
RespondentUnion of India (Uoi) And; K. Srinivasan, Collector of Customs and anr.
Excerpt:
.....3, any article which is imported into india shall, in addition, be liable to a duty .equal to the excise duty for the time being leviable on a like article if produced or manufactured in india'.the section explains that 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. if i may add, since the word used in section 3 is 'leviable',no additional duty can be levied unless excise duty on a like article manufactured in india can be levied; and..........'any article which is imported into india shall, in addition, be liable to a duty ...equal to the excise duty for the time being leviable on a like article if produced or manufactured in india'. the section explains that 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.4. there are three notifications relating to customs duty and one relating to excise duty on aluminium scrap which need to be mentioned.5. on 1st january 1981 the central.....
Judgment:

S.P. Bharucha, J.

1. This writ petition seeks to quash an assessment order made by the Customs authorities on 10th April 1981 in so far as it pertains to additional duty upon aluminium scrap imported by the petitioners.

2. The petitioners imported 46.940 metric tonnes of aluminium scrap and filed a bill of entry for the same on 2nd April 1981 through their clearing agents. The respondents assessed additional duty upon the aluminium scrap at the rate of 24 per cent ad valorem.

3. Section 2 of the Customs Tariff Act, 1975, provides that the rates at which Customs duty shall be levied under the Customs Act, 1962, are specified in the First and Second Schedules thereof. Under Section 3, 'Any article which is imported into India shall, in addition, be liable to a duty ...equal to the excise duty for the time being leviable on a like article if produced or manufactured in India'. The Section explains that 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.

4. There are three notifications relating to Customs duty and one relating to Excise duty on aluminium scrap which need to be mentioned.

5. On 1st January 1981 the Central Government issued a notification exempting aluminium scrap inter alia from the whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act. On 30th March 1981 the Central Government rescinded the notification of 1st January 1981. On the same date, i.e. 30th March 1981, the Central Government issued a notification exempting aluminium scrap from so much of that portion of the additional duty leviable thereon under Section 3 of the Customs Tariff Act as was in excess of 24 percent ad valorem,

6. On 1st March 1981 the Central Government issued a notification exempting, inter alia, aluminium scrap from the whole of the excise duty leviable thereon.

7. The respondents levied additional duty upon the aluminium scrap imported by the petitioners upon the basis of the notification dt. 30th March 1981. It is the petitioners' case that since aluminium scrap is, by reason of the notification dated 1st March 1981, wholly exempt from excise duty, no additional duty under Section 3 of the Customs Tariff Act can be imposed upon the aluminium scrap imported by them.

8. My attention has been drawn by Mr. Vahanvati, learned Counsel for the petitioners, to a judgment of a Division Bench of this Court, in Century Enka Limited v. Union of India 1982 E.L.T. 64 (Bom.) : 1982 ECR 177D. The learned Judges considered the argument on behalf of the Customs authorities that an exemption notification under the provisions of the Central Excise Rules could not be used for claiming an advantage under the provisions of the Customs Tariff Act. They noted that Section 3 of the Customs Tariff Act enabled the Customs authorities to levy countervailing (or additional duty) provided excise duty was leviable on the article concerned if manufactured in India. The plain reading of Section 3 made it clear that countervailing (or additional) duty under Section 3 could not be levied on an article imported into India if such article when manufactured in India was exempted from the payment of excise duty. The provisions of Section 3 had to be read long with the provisions of the Central Excise Act and the levy of countervailing (or additional) duty would depend upon whether the article was liable to excise duty. In the circumstances, it was futile to urge that an exemption notification issued under the Central Excise Act had no bearing on the determination of liability to pay countervailing (or additional) duty under the Customs Tariff' Act.

9. I am bound by and respectfully follow the Division Bench judgment in the Century Enka Ltd. case. If I may add, since the word used in Section 3 is 'leviable', no additional duty can be levied unless excise duty on a like article manufactured in India can be levied; and excise duty on a like article if manufactured in India cannot be levied if there is a notification in operation which exempts the payment of excise duty on that article.

10. Mr. Bulchandani, learned Counsel for the respondents, submitted that the identical point arises in Writ Petition No. 661 of 1982 (M/s. Texid Corporation Pvt. Ltd. v. Union of India) and has been referred to a Division Bench. Mr. Vahanvati urges that the identical point does not arise in that petition and, from a cursory reading thereof, 1 am inclined to agree with him. In any event, assuming that the identical point does arise, it has already been decided by a Division Bench in the Century Enka Ltd. case.

11. There is no other argument on behalf of the respondents.

12. In the result, no levy of additional duty can be made on the aluminium scrap imported by the petitioners, having regard to the exemption notification dated 1st March 1981. Inasmuch as that notification exempts aluminium scrap from excise duty, no additional duty under Section 3 of the Customs Tariff Act is leviable upon the aluminium scrap imported by the petitioners.

13. The petition is accordingly made absolute in terms of prayers (a) and (b), with costs.

14. Interim relief was granted to the petitioners on the condition that they pay 50% of the assessed additional duty and furnish a bank guarantee for the balance 50%. The petitioners have complied with this condition. In view of the relief now granted in the petition, the bank guarantee furnished by them shall stand discharged and the respondents shall repay to them the amount of 50% of the assessed additional duty within a period of four weeks from to-day.


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