DAI ICHI KARKARIA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) By Notification No. 210/82 dated September 10, 1982 (as amended by Public Notice dated September 20, 1983) issued under Section 25(i) of the Customs Act the Government of India exempted from payment of customs duty and additional duty customs on all raw materials and components imported for the manufacture of goods to be supplied to various organisations such as I.D.A. that is, the International Development Association, International Bank for Reconstruction and Development (I.B.R.D.) or bilateral or multilateral aided projects. The said notification stated that it would be in force till September 10, 1987. By Notification No. 513/86 dated December 30, 1986 issued under Section 25(i) of the Customs Act the Central Government exempted raw materials and components required for the manufacture of the goods to be supplied to the O.N.G.C. or G.A.I.L. from so much of that portion of the duty of customs leviable thereon which is specified in the First Scheduled to the Customs Tariff Act, 1975 as is in excess of the amount calculated at the rate of 25% ad valorem and whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975 subject to certain conditions. By another Notification No. 516/86 of the same date the Central Government exempted goods imported in connection with off-shore oil exploration or exploitation from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975 subject to certain conditions. By another Notification No. 517/86 dated December 30, 1986 it was notified that Noticiation No. 210/82 dated September 10, 1982 stood amended by omitting the words "or Oil and Natural Gas Commission or Oil India Limited or Gas Authority of India Limited." As a result thereof the appellant who is manufacturer and supplier of certain goods to O.N.G.C. in connection with oil exploration viz. Flow Improver under the trade name "Daitrolite" became liable to pay duty to the extent of 25% for the period between December 30, 1986 and September 10, 1987.

(2.) Though several contentions had been raised in the High Court in challenging the action of the respondents, in the appeal before us what is urged in only one contention which is as follows:

(3.) In the writ petition before the High Court the contention raised by the appellant is that the fact that many persons, including the petitioners have undertaken importation of materials on the basis that no duty was leviable or payable on the imported material and that there have been no new events nor any supervening circumstances which could form a basis for or justify the withdrawal of the benefit contained in the exemption Notification No. 210/82 as amended in 1983 after being satisfied that public interest required that there should be no duty of customs nor additional duty of customs in respect of raw materials and components imported for supplies therefrom to O.N.G.C. for a fixed and definite period up to September 10, 1987; that the policy of the first respondent is to indigenise production as is the policy of O.N.G.C. to indigenise; that the appellant had secured orders for supply of goods against global tenders where foreign suppliers also participated and in the teeth of international competition the company had been awarded the contracts by O.N.G.C; that pursuant to the exemption that has been granted the company had invested since 1983 a large amount of money in respect of its plant for manufacture of goods to be supplied to O.N.G.C; that public interest which prompted the first respondent to issue the exemption notification No. 210/82 remains unaltered and no new supervening circumstances have justified reversal of the said policy and, in fact, such a reversal to encourage foreign manufacturers at the cost of Indian manufacturers is per se contrary to public interest drain on foreign exchange.