GUJARAT DETERGENT MANUFACTURERS ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are an association of Small Scale Industries Units and are engaged in the manufacture of detergent washing powder and Acid Slurry. The raw material required for manufacture of detergent washing powder includes 'Linear Alkyl Benzene' and 'Dodecyl Benzene'. Both these products are canalised through State Trading Corporation. The State Trading Corporation enters into various contracts with foreign suppliers for the purchase of Linear Alkyl Benzene. The actual users of the products are required to register their requirements with the State Trading Corporation and when the vessels carrying the items are about to arrive, the Corporation gives information to the actual users requiring to complete the formalities and clear the material. The petitioners accordingly registered their requirement with the State Trading Corporation for the period April 1983 to March 1984. On April 4, 1984 the Corporation informed the petitioners of the arrival of the vessel and allotment of certain quantity of Linear Alkyl Benzene to the petitioners.

(2.) In exercise of the powers conferred under sub-section (1) of Sec. 25 of the Customs Act, 1962 the Central Government issued Notification dated March 1, 1983, inter alia, exempting the goods falling under the sub-heading No. 38.01/19 when imported into India from so much of the payment of duty of customs leviable thereon which is specified in the First Schedule, as is in excess of the amount calculated at the rate specified in Column (3) of the Table. The relevant entry in the exemption notification reads as under : <IMG>JUDGEMENT_58_LAWS(BOM)1_1986.jpg</IMG>

(3.) It is the claim of the petitioners that in view of the Notification dated March 1, 1983 duty on the Linear Alkyl Benzene has been exempted from duty in excess of 70% ad valorem. The petitioners complain that the respondents took an erroneous stand that the import of Linear Alkyl Benzene would not be entitled to the benefit of exemption notification and insisted on payment of 100% duty on a wrong assumption that Linear Alkyl Benzene is not different from Dodecyl Benzene. Shri Andhyarujina, learned counsel appearing on behalf of the petitioners, submitted that the perusal of the relevant import policy, trade usage, chemical characteristics and commercial meaning would establish beyond any doubt that the two products are separate. The learned counsel urged that the Notification dated March 1, 1983 specifically prescribes that the advantage of the notification would not be available for import of Dodecyl Benzene only. The submission of the learned counsel is correct and deserves acceptance. Item 24 in Appendix 8 of the relevant import policy reads as under :