VARELI WEAVES PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) A common question arises in the Civil Appeal and the writ petition. The Civil Appeal is directed against the order of a Division Bench of the Delhi High Court summarily rejecting the appellants, writ petition upon the ground of lack of jurisdiction.

(2.) The appellants imported partially oriented yarn (POY). They claimed for the purposes of countervailing duty (additional duty) the benefit of an exemption notification dated 28th February,1982, issued under Rule 8(1) of the Central Excise Rules whereby man-made fibres and yarns were exempted from excise duty as therein stated. The controversy was whether the POY imported by the appellants should be taken to fall within item (iv) under the head Polyester Yarn relating to POY of 75 deniers and above but below 100 deniers or within item (iii) relating to POY of 100 and above but not above 750 deniers. It was the case of the appellants that the POY imported by them was entitled to exemption upon the basis that it was of 100 deniers and above but not above 750 deniers. The authorities treated the POY imported by the appellants as falling within the slot of 75 deniers and above but below 100 deniers and they did so upon the basis of a circular dated 24th September, 1980,issued by the Central Board of Excise and Customs which stated that POY was assessable to countervailing duty and excise duty at the final denierage stage, that is to say, after the POY had been texturised.

(3.) Learned counsel for the appellants submitted that there was no warrant for levying countervailing duty upon imported goods at a stage they would reach subsequent to their import after undergoing a process. They had to be subjected to duty in the state in which they were when imported. Reference was made to the judgment of a single Judge of the Bombay High Court in Krislon Texturiser Pvt.Ltd.v.Union of India,(1989) 44 ELT 448. (S.P. Bharucha, J.) which was followed by a Division Bench of the High Court of Gujarat in Special Civil Application No.1165 of 1983,Vareli Exports Pvt. Ltd.v.Union of India, where it was so held.