MCDOWELL AND COMPANY LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners manufacture styrene from ethyl benzene. By reason of the notification dated 1st March, 1973 issued under Rule 8 of the Central Excise Rules, 1944, ethyl benzene is exempted from such excise duty thereon as is in excess of Rs. 472.50 per kilo litre. The notification states that this exemption is applicable if the Excise authorities are satisfied that the ethyl benzene is intended for the uses therein mentioned and, where such use is elsewhere than in the factory of production, the procedure laid down in Chapter X of the Central Excise Rules has been followed.

(2.) Between January 1981 and September 1982 the petitioners imported 9 consignments of ethyl benzene. Before so doing the petitioners wrote to the Customs authorities at Bombay. They referred to the notification and sought confirmation that only Rs. 472.50 per kilo litre would be chargeable as additional duty on the ethyl benzene to be imported by them. On 22nd December, 1980 the Enquiry Officer in the Office of the Assistant Collector of Customs, Public Relations, wrote to the petitioners that additional duty on ethyl benzene was chargeable at the concessional rate of duty of Rs. 472.50 per kilolitre having regard to the notification, subject to end-use confirmation.

(3.) In regard to the first and second consignments imported by the petitioners, bonds regarding the differential duty and end-use certificates of the appropriate authorities were furnished by the petitioners to the Customs authorities. The bonds were thereafter cancelled by the Customs authorities. Then a show cause notice was issued to the petitioners regarding the first consignment. The only reason given in it for such issuance was an audit objection.