GOPALSAMY INDUSTRIES Vs. M M T C

JUDGEMENT

(1.) THIS Writ Petition coming on for hearing on this day upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated 4. 8. 1981 and made herein, and the counter affidavit filed herein and the records relevant to the relating to the order in prayer aforesaid on the file of the respondents herein comprised in the return of the said respondents herein to the Writ made by the High Court, and upon hearing the arguments of M/s. Raj & Raj, Advocates for the petitioner, and of Mr. K. Gopal, Advocate for the 1st respondent, and of Mr. P. Narasimhan, Senior central Government Standing Counsel on behalf of the 2nd respondent, and the 3rd respondent not appearing in person or by the advocate, the Court made the following Order :- The writ petition is for the issue of a writ of certiorari to call for the records of the 1st respondent in Met/ss/strips/81 dated 7. 7. 1981 and quash the same.

(2.) IT isinter aliastated in the affidavit sworn to by the managing Partner of the petitioner firm that the petitioner is engaged in manufacturing stainless steel utensils, watch straps and pen nibs and the raw materials for the said manufacture are imported through the 1st respondent. For this purpose the 3rd respondent sponsored the petitioner as being eligible for the allotment of imported stainless steel sheets. The said small strips are eligible for a concessional rate of customs duty. The 1st respondent while fixing the price for the stainless steel strips, takes note of the concessional rate of customs duty and the sale-note will prescribe that if the goods are actually used for the manufacture of watch straps and pen nibs, the price will be in accordance with the concessional rate of duty. Otherwise the price will be in accordance with the non-concessional rate of customs duty. The goods are allowed to be cleared on the basis of the concessional rate of duty provided the petitioner executes a bond with a bank guarantee undertaking to produce an end-Use Certificate from the sponsoring authority to the effect that the stainless steel strips supplied to the petitioner has been utilised for the manufacture of watch straps and pen nibs only, and in default the petitioner has to pay the difference between the concessional and non-concessional duty. As per the above terms the petitioner had agreed to buy. 500 M. T. and 1. 500 m. T. of stainless steel strips respectively from the 1st respondent for the manufacture of watch straps. The petitioner paid the price of the goods at the concessional rate and lifted the same. The goods were fully utilised for the manufacture of watch straps. IT is further submitted that the finished product of watch straps in the first case weighs 397. 550 kgs. as against. 500 M. T. of stainless steel supplied and 1189. 890 kgs. in the case of second item of manufacture as against 1. 500 M. T. supplied. The differences in weight as indicated above were due to wastage in manufacturing process. While so, the petitioner received a letter dated. 7. 7. 1981 from the 1st respondent stating that the Customs authorities are demanding differential duty for the wastage quantity mentioned in the End-Use Certificate and that the petitioner should remit the difference of Rs. 8152. 56 and further threatening the petitioner to recover the amount from the bank which gave bank guarantee for the amount. According to the petitioner the said demand notice Met/ss/strips/81 dated 7. 7. 1981 of the 1st respondent is illegal and in violation of the principles of natural justice. Hence the present writ petition.

(3.) IN the result, the writ petition is allowed. No costs.