WIMCO LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner seeks an appropriate writ to set aside the order dated 9th March, 1976 passed by the Collector of Customs, viz., the 2nd respondent. The 1st respondent is the Union of India.

(2.) The petitioner is a public limited company carrying on business of manufacturing matches. The petitioner also manufactures sodium chlorate and potassium chlorate at its factory at Ambernath. The sodium chlorate manufactured by the petitioner by the petitioner is intended mainly for the bleaching of pulp and oxidation in the manufacture of dyestuff, etc. The potassium chlorate manufactured by the petitioners is an important constituent of match heads and is used by the petitioner for coating its match-sticks. Sodium and potassium chlorates are manufactured by the petitioner by a process known as "electrolysis" which involves inter alia the passing of direct electric current through a tank containing sodium chloride becomes sodium chlorate and potassium chloride becomes potassium chloride. This process is done in a tank known as "electrolytic cell", in which the electric current is passed through electrodes. The electrodes which are at positive potential are known as "anodes", and electrodes which are at negative potential are known as "cathodes". Several types and designs of such cells are ordinarily employed for such electrolysis and different varieties of materials are used for the purpose of anodes and cathodes. Anodes can be of graphite, magnetite, platinum or its alloys, etc. In the electrolytic cells used by the petitioner at its Ambernath plant, the petitioner employs magnetite anodes. Magnetite is a special kind of iron oxide consisting of ferric iron and ferrous iron in the ration of 1.9 to 2. Such magnetite is superior to graphite as it lasts longer and enables a higher temperature of electrolysis to be maintained.

(3.) Prior to 1967 the petitioner imported from Sweden magnetite electrodes which were cast in dimensions suitable for use in the electrolytic cells of the petitioner's factory. These magnetite electrodes had copper plating and the fixing of the copper strip was done in Sweden. In 1967 the petitioner started importing magnetite electrodes without the copper plating and the copper strips. In September 1969, the petitioner imported 363 cases of such magnetite electrodes from Sweden of the total assessable value of Rs. 2,96,927. The Customs Authorities took up the contentions that these goods fell within the residuary entry 87 of the Indian Customs and Central Excise Tariff. This contention was refuted by the petitioner by its letters dated 7th and 13th October, 1969. According to the petitioner, duty on these goods was assessable not under the residuary entry 87 btu under entry 72(c) or 72(3). However, on 27th October 1969, the Customs Authorities allowed clearance to the petitioner on the letter paying a sum of Rs. 1.09, 154.92 and executing, the requisite bank guarantee for the difference of Rs. 1.1,29,002.00 arising from the fact that under entry 87 the duty was 60% whereas under entry 272(c) or 72(3) the duty was 27%. On 9th February 1970, the petitioner filed Miscellaneous petition No. 121 of 1970, in this Court challenging the decision of the Customs Authorities levying duty on this consignment under the residuary entry 87%.