NEOMER LIMITED Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) The principal question is whether or not the expression countervailing duty means that the statute (Indian Tariff Act of 1934 i. e. Tariff Act) says:

(2.) "Countervailing duty" levied by sec. 24 of the Tariff Act must mean customs duty levied on like articles actually manufactured in India (regardless of the Explanation clause of sec. 24 which provides that it is leviable on such articles whether or not like articles are in fact manufactured at the relevant time) is the proposition canvassed by the petitioner Company. Why ? Because the expression has been so understood in the context of Entry 51 of the State List (List II) of the Constitution of India which empowers a State Government to levy excise on goods manufactured within the State. The competent authority having negatived the view inasmuch as the Explanation clause of sec. 2A in terms defines the levy as countervailing duty regardless of whether or not a like article is manufactured in India the petitioner Company has invoked the powers of this Court under Arts. 226 & 227 of the Constitution of India in the backdrop of facts and circumstances outlined hereafter.

(3.) The petitioner Company imported 22 bales of polypropylene fibre under a Bill of Lading dated December 23 1976 At the time of clearance a sum of Rs. 87 675 was levied and collected on the said goods as duty including countervailing duty under sec. 2A of the Tariff Act. The petitioner applied for refund of countervailing duty paid on these goods on the ground that like goods were not manufactured in India and countervailing duty could not be levied thereon. This contention was rejected by the Assistant Collector of Customs by his order dated May 12 1976 as per Annexure A. the petitioner Company preferred an appeal to the Appellate Collector of Customs at Bombay. The Appellate Authority by his order at Annexure B dated August 20 1976 negatived the contention viz. that since polypropylene fibre was not being made in India at the time of importation no question of levying countervailing duty could arise. The Appellate Authority placed reliance on the Explanation to sec. 2A of the Tariff Act as it stood at the material time and took the view that countervailing duty was payable on an article regardless of whether or ant the article in question or a like article was manufeatured India having regard to the Explanation to sec. 2A. The Appellate authority proceeded to observe that as polypropylene staple fibre was covered by item 18 (J) (ii) (c) of Central Excise Tariff and that the duty had been correctly levied. The petitioner Company thereupon invoked the revisional jurisdiction of the Government of India. The Joint Secretary of the Govt. of India rejected the revisional application by the impugned order at Annexure C dated June 22 1977 on the ground that the question whether or not the article in question or a like article was actually manufactured in India was immaterial for the purpose of levy of countervailing duty on the importation of the goods. Thereupon the petitioner Company has approached this Court by way of the present petition.