UNION OF INDIA Vs. GOODYEAR INDIA LIMITED

JUDGEMENT

(1.) THESE Writ Appeals have been taken up together at the request of all the Counsel, as common questions arise for consideration. The short facts necessary for the purpose of this Judgment are that the appellants imported natural rubber, known as smoked rubber sheets either directly or through the State Trading Corporation. The Customs Department insisted that the importers are liable to pay additional duty, as per Section 3 (1) of the Customs tariff Act, 1975. In several cases, the State Trading Corporation had paid the duty and collected from the importers and in such cases, the importers have sought for refund. In cases, where the importers had not already paid the duty, they have sought for either a declaration that the levy of duty is illegal or for a writ ofmandamus, forbearing the Authorities from collecting such duty. The following Appeals arise out of the writ petitions, in which the prayer is for refund of the duty paid : W. A. Nos. 2161 and 2162 of 1987, 315 and 316 of 1988, 355 to 360 of 1988, 763 of 1988, 765 of 1988, 766 of 1988 and 830 of 1990. The other Writ Appeals arise out of the Writ Petitions for a declaration that the levy is illegal or for a writ ofmandamus, forbearing the Authorities from collecting the duty.

(2.) THE learned Judge, who heard the Writ petitions has accepted the contentions of the petitioners in the writ petitions and allowed the same. THE reasons given by the learned Judge are as follows : 1. THE duty under Section 3 (1) of the Customs Tariff Act, 1975 should be equal to excise duty for the time being leviable on a like article, if produced or manufactured in India. No duty has been levied on natural rubber under the Central Excises and Salt Act, 1944 for the reason that there is no such item in the first Schedule to the said Act and that by a notification under Rule 8 (1) of the Central Excise Rules, all items under item 68 of the Schedule which were manufactured outside a factory did not invoke a levy of central excise; 2. THEre is no manufacturing process involved in bringing into existence natural rubber. Hence, no excise duty is leviable. In this regard, the facts set out in the affidavits filed in support of the writ petitions have not been rebutted in the counter affidavits filed by the department. Further, the definition of natural rubber as found in the encyclopaedia Britannica would include smoked rubber sheets and the definition makes it clear that no manufacturing process is involved; 3.Even as per the Tariff Advice dated 23-6-1981 issued by the Central Board of Excise and Customs, smoked rubber sheets are included in the items of natural rubber; and 4.Under Section 11c of the Central Excises and Salt Act, a notification was issued, by which exemption was granted from duty for natural rubber including smoked rubber sheets for the period from 1-3-1975 to 7-7-1983. On the aforesaid reasons, the writ petitions were allowed.

(3.) IN Tata Exports Ltd. v. Union of INdia, Justice bharucha of Bombay High Court as he then was held that a notification under the central Excise Act having exempted the drug in question in that case, the goods if manufactured in INdia would be exempted from the levy of excise duty and consequently, they were not leviable for the additional duty under Section 3 (1)of the Customs Tariff Act.