PAN ASIA COMMERCIAL ENTERPRISES Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner No. 1 is a Partnership firm of which petitioner No. 2 is a partner. The firm is engaged in import of various goods including HDPE i.e. High Density Polythelene Moulding Powder. The petitioners placed order for import of approximately 450 Metric tonnes of HDPE from M/s. Avin Exports, New York and part of the goods were shipped and arrived at Port of Bombay on March 8, 1982. The petitioners filed the Bill of Entry for clearance of the goods for home consumption. At the time of clearance of the consignments, the petitioners claimed benefit of Exemption Notification dated December 4, 1979 for the purpose of countervailing/additional duty. The Assistant Collector of Customs denied the benefit of the Exemption Notification and levied countervailing duty. The petitioners, feeling aggrieved, has filed present petition under Article 226 of the Constitution of India in this Court on May 25, 1982. The petition was admitted on May 26, 1982 and by interim order, the goods were cleared by the petitioners and in respect of duty in dispute, Bank guarantee was furnished.

(2.) Dr. Kantawala, learned counsel appearing on behalf of the petitioners, submitted that the controversy in this petition stands concluded by the decision of the Division Bench of this Court in the case of Century Enka Limited and others v. Union of India and two others reported in 1982 Excise Law Times 64 where it was held that since polyamide chips are exempt from payment of excise duty as per notification dated March 1, 1973, it is not permissible for levying countervailing duty under Section 3 of the Customs Tariff Act, 1975. Shri Bulchandani, learned counsel appearing on behalf of the respondents, did not dispute that the decision of the Division Bench of this Court supports the claim of the petitioners, but submitted that the Exemption Notification on which reliance is placed in the present case is a conditional one and as the petitioners have not complied with the conditions, the benefit of exemption is not available.

(3.) A copy of the Exemption Notification dated December 4, 1979 is annexed as Ex. "B" to the petition and it inter-alia prescribes that exemption is granted to items set out in the Table provided the same are manufactured from raw naphtha or any chemical derived therefrom and on which the appropriate amount of duty of excise has already been paid. Shri Bulchandani submitted that there is no material to indicate that HDPE imported by the petitioners is manufactured from raw naphtha. The submission is entirely misconceived. The petitioners have specifically stated in paragraph 5 of the petition that M/s. Polyolefins Industries Limited is the only Company in India which manufactures HDPE. The HDPE is manufactured only from the excise duty paid raw Naphtha or any chemicals derived therefrom. It is further stated that the excise duty is leviable both on the HDPE manufactured in India. In the affidavit on which Shri Bulchandani relies, the averments in paragraph 5 are not even denied. Shri Bulchandani submits that in Paragraph 13 of the affidavit, it is stated that the duty has been levied as the petitioners were not able to satisfy that the goods are not manufactured from raw Naphtha or any chemical derived therefrom. I enquired from Shri Bulchandani as to whether this fact was mentioned on the Bills of Entry while levying the duty and the learned counsel very fairly stated that it was not so done. I further enquired from the learned counsel as to whether HDPE can be manufactured from any material other than raw Naphtha and the learned counsel has no answer to give. Shri Bulchandani strenuously urged that even assuming that HDPE is manufactured from raw Naphtha, there was no material that excise duty was paid on such raw Naphtha. Shri Bulchandani was unable to answer on what basis such statement was made and more so when there is not even a denial of the averment in paragraph 5 of the petition. In my judgment, Shri Bulchandani has shown great courage in defending the action of the respondents when it was wholly unsustainable and indefensible. The petitioners are entitled to the reliefs sought.