WAVIN INDIA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is a public limited company, having its registered office at Ambattur Industrial Estate, Madras. It has imported as per the bill of lading and the packing certificate dated 22-10-1984, on high sea sale basis, materials valued at Rs. 1, 00, 05, 000/-. It has been assessed and accordingly subjected to a demand of customs and other duties, according to it, in all Rs. 4, 24, 025/-. THE duty, as listed by it, is : (a) additional customs duty (countervailing duty) at 35% and surcharge at 8% (in all aggregating to 26. 75%) under Section 3 of the Customs Tariff Act, 1975; (b) cost of packing material at Rs. 450/- per metric tonne for calculating the customs duty at 75%; (c) landing and stevedoring charges for calculating the customs duty; (d) cost of packing material, landing and stevedoring charges in the assessable value for the levy of additional customs duty and surcharge thereon; (e) customs duty in the assessable value for the purpose of levy of additional customs duty and surcharge thereon. It is acknowledged, however, by the petitioner that the materials that it has imported are chargeable to customs duty under Chapter 39. 01/06 of the First Schedule of the Customs Tariff Act. According to him, however, in exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962, read with the relevant rules, the Central Government has exempted the duty on P.V.C. Resins, in these words : "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 30/82-Customs dated the 28th February, 1982, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods, falling under heading No. 39. 01/06 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in column (2) of the Table hereto annexed, when imported into India, from so much of that portion of the duty of Customs leviable thereon which is specified in the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table :Provided that nothing contained in this notification shall affect the exemption granted under any other notification of the Government of India for the time being in force, from the duty of customs specified in the said First Schedule in respect of the goods referred to in this notification. TABLE S. No. Description of goods Rate of duty (1) (2) (3) 1.2. 3. 4. . . . . . . . . . .Polyvinyl Chloride Resins. . . . . . . . . .. . . . . . . . . . 150 per centad valorem THE Government, according to the petitioner, has also issued a notification bearing No. 342-Cus. dated 2-8-1976, which has been amended from time to time, to the effect that when the goods are imported into India from Romania, there is a further exemption equal to 50% of the standard duty of customs. According to it, the effective rate of duty of customs on P.V.C. Resins is 75% (i.e. 50% of 150%ad valorem).

(2.) THE petitioner's main contention in the instant petition is that the notifications aforementioned make provisions for the levy of customs duty at 75% on P.V.C. Resins not only to basic customs duty, but also to the ancillary duty of customs under the provisions of Section 3 of the Customs Tariff Act and surcharge thereon. In the petition, as such, the petitioner has designed objections to the inclusion of the cost of packing materials, landing and stevedoring charges, etc. also. Learned counsel for the petitioner has, however, to concede that the issues in this behalf, are already settled and the only question that has survived in the instant case is the question, whether the afore-quoted exemption notifications make the petitioner eligible for getting exemption in the additional duty, as envisaged under Section 3(1) of the Customs Tariff Act, 1975.

(3.) THE two relevant provisions in the Customs Tariff Act are Sections 2 and 3 thereof, Section 2 generally as to the rates at which the duty of customs shall be levied under the Customs Act, 1962 as specified in the first and second schedules, and Section 3 as to duty in addition to the prescriptions in the first and second schedules on duties, in these words : "3. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereinafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation.- In this section, the expression 'the excise duty for the time being leviable on a like article if produced or manufactured in India' means the excise duty for the time being in force which would be leviable on like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty. (2) For the purpose of calculating under this section, the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962, be the aggregate of -(i) the value of the imported article determined under sub-section (1) of the said Section 14 or the tariff value of such article fixed under sub-section (2) of that Section, as the case may be, and (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the duty referred to in sub-section (1). (3) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article (whether on such article duty is leviable under sub-section (1) or not) such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf. (4) In making any rules for the purposes of sub-section (3), the Central Government shall have regard to the average quantum of the excise duty payable on the raw materials, components or ingredients used in the production or manufacture of such like article; (5) THE duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force. (6) THE provisions of the Customs Act, 1962, and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties, shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.'According to the learned counsel for the petitioner, the duty as envisaged under Section 2 of the Customs Tariff Act as well as the duty in addition to the duty envisaged under Section 2, for which a mention is made in Section 3 of the Customs Tariff Act, are nothing but customs duty on goods identified as dutiable under Section 12 of the Customs Act, . THE words 'rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975)' fully cover the rates as contained in the two schedules under Section 2 of the Customs Tariff Act as well as the duty in addition, as envisaged in Section 3 of the Customs Tariff Act. According to him, therefore, when a notification, as one in the instant case, is issued by the Central Government, it is issued in respect of such items as are dutiable goods under Section 12 of the Customs Act and in respect of the customs duty as such, it must include both the duties as specified in the two schedules as under Section 2 of the Customs Tariff Act as well as the duty in addition, as envisaged under Section 3 of the Customs Tariff Act.