GEORGE JOSEPH FERNANDEZ Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) Petitioners are trading in "Outboard Motors" which they import from foreign countries and sell to users in India. Outboard motors are used for fitment with fishing boats and hence their consumers are the fishermen operating such boats for fishing operations. Duty is levied on such outboard motors under the Customs Act at the time of clearance when they reach Indian Ports. The Government of India, in exercise of power under S.25(1) of the Customs Act, issued notification dt 27-4-1988 exempting outboard motors imported into India by "any State Fisheries Corporation" from customs duty leviable in excess of the amount calculated at the rate of twenty five per cent ad valorem and also from the whole of the additional duty thereon payable under the Customs Tariff Act, 1975. The said notification is challenged in these original petitions on the ground that the exemption so granted is discriminatory, arbitrary and hence illegal. According to the petitioners, the classification envisaged in the notification as between the State Fisheries Corporations on the, one hand and other importers on the other is violative of Art.14 of the Constitution.

(2.) As per the import policy enunciated by the Government, outboard motor is an item allowed for import by all persons under open general licence. However, customs duty was imposed on the article at different rates during different years. Exemption under S.25(1) granted to the outboard motors imported by the State Fisheries Corporation (for short 'the Corporation') varied in percentage from year to year. In 1987 when the duty was fixed at 45% (basic duty) plus 40% (auxiliary duty), the Corporation was to pay duty only at the rate of 40% + 25% + 10% (additional C. V. duty). In a revision made during the same year when the total duty was

(3.) Though there is ' no Fisheries Corporation as such in the State of Kerala, a State level Apex Federation was formed which is called "Matsyafed" which made some imports of outboard motors to be sold to fishermen. The result is that Matsyafed can now sell outboard motors at a far reduced price when compared with the price offered by the petitioners and other similarly situated traders. Hence it became difficult for the petitioners to compete with Matsyafed in the matter of sale of outboard motors. It was in the aforesaid background that petitioners approached this Court praying for appropriate reliefs.