EASTERN PERIPHERALS LTD. Vs. BRIHANMUMBAI MAHANAGAR PALIKA

JUDGEMENT

(1.) By common judgment rendered by the High Court of Bombay, the two writ petitions filed by the appellants herein have been dismissed accepting the contention of the respondent, Brihanmumbai Mahangar Palika, that for the purpose of payment of octroi duty when the goods are to be valued, customs duty shall also be added. The entire dispute in these appeals is, therefore, as to whether such customs duty is to be added to the value of goods for the purpose of payment of octroi under Bombay Municipal Corporation (Levy of Octroi) Rules, 1965 (hereinafter referred to as 'Rules'). This issue has arisen in the following background:

(2.) It is the case of the appellants that in terms of the relevant Export-Import policy, the appellants were entitled to clear 25 per cent of its production into domestic area on payment of excise duty calculated at the rate of 50 per cent of each of the duty of customs payable on the like goods manufactured outside India and the appellants, accordingly, during the period in question, i.e., April, 1992, to November, 1994, cleared the computer systems manufactured in the export processing zone in the domestic tariff area. For the purpose of octroi that is to be paid under the aforesaid Rules, the respondent-Corporation included the customs duty component as well for the purpose of arriving at the value of the goods on which the octroi duty is payable. This is so done by the respondent taking aid of Rule 2(7)(a) of the Rules 1965. This Rule reads as under: -

(3.) As per the respondent-Corporation, since duty was paid on the said 25 per cent of produced articles which were released in the domestic area, customs duty became payable and, therefore, the Corporation was within its rights to include the said duty while arriving at the value of the goods.