NAVIN CHIMANLAL SUTARIA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner carries on business in the name and style of National Chemical Corporation and manufactures various chemicals including laboratory chemicals. For the manufacture of the chemicals different types of raw materials are required, one of them being N-Propyl Alcohol, which is an imported item. On 9th October, 1973, the petitioner imported six drums containing 960 kgs. of N-Propyl Alcohol. In the Bill of Entry, the petitioner classified it under Item 28 oF the Indian Tariff Act, 1934. This classification was approved by the Customs Authorities and the goods were cleared on 13th November, 1973 by the petitioner after payment of duty at 60% ad valorem under Item 28.

(2.) On 22nd December, 1973, a notice of demand was addressed to the petitioner by the Assistant Collector of Customs for Rs. 67,961.50 said to be short-levy of duty on the ground that the proper classification was under Item 22(4)(a). On 24th December, 1973, the petitioner sent a reply to that notice of demand stating that when the goods were cleared he was under the genuine impression that the proper classification was under Item 28 and that he now understood that the goods were chargeable to duty at a higher rate under Item 22(4). By this letter the petitioner made a request to allow him to denature the goods as a special case. After a personal hearing given to the petitioner by the Assistant Collector (namely, the 2nd respondent), the 2nd respondent passed an order dated 30th September, 1975 confirming the demand notice dated 22nd December, 1973. On 26th December, 1975, the petitioner preferred an appeal to the Appellate Collector (namely, the 3rd respondent) which was rejected by the 3rd respondent by his order dated 24th March, 1976. The petitioner's revision application to the Central Government was also rejected on 15th April, 1977 by the 4th respondent on behalf of the Central Government. Hence the petitioner has filed the present petition for setting aside the notice of demand dated 22nd December, 1973 and the impugned orders dated 30th September, 1975, 24th March, 1976 and 15th April, 1977 passed by the Assistant Collector, the Appellate Collector and the Central Government respectively.

(3.) At the outset, it would be pertinent to advert to the relevant items, namely, Items 22(4) and 28. Item 22(4), which is under the heading "Products of the Food preparing Industries; Beverages, Alcoholic Liquors and Vinegars; Tobacco;" reads as under :-