APAR LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) A limited controversy is involved in this petition. The first petitioner is a company. The second petitioner is an officer of the first petitioner- company. The first petitioner is carrying on business of manufacturing and distribution of transformers which are used in distribution of electricity. During the course of business, the first petitioner imported transformer oil which is used as raw material in the manufacture of transformers. The transformer oil is being imported under valid import licences.

(2.) An order was placed by the first petitioner for supply of 1,000 MT of transformer oil. Invoice dated 23rd October 1989 was issued. The goods arrived at Mumbai under the Bill of Lading dated 23rd October 1989. A copy of the Bill of Entry for warehousing dated 23rd November 1989 is annexed to the petition. The first petitioner paid basic custom duty and auxiliary duty. In addition, additional duty under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (for short "the said Act of 1975") was assessed at Rs.1,000/- per KL and additional duty under subsection (3) of section 3 of the said Act of 1975 was assessed at Rs.900/- per KL. The contention is that the petitioners are liable to pay additional duty leviable under sub-section (1) of section 3. Reliance is placed by the petitioners on the notification no.75/84 C.E. dated 1st March 1984 under which exemption was granted to the goods specified in Column-2 of the table annexed to the said notification from so much of the duty of excise leviable under the Central Excise and Salt Act,1944 (now Central Excise Act, 1944), at the rate specified in the said schedule, as is in excess of the amount calculated at the rate specified in the corresponding entry in Column-3 of the said table, subject to the intended use or the conditions, if any, laid down in the corresponding entry in column-4 of the table.

(3.) The submission is that the transformer oil has been exempted under the said notification and, therefore, the additional duty under subsection (1) of section 3 of the said Act of 1975 is not payable. The petitioners made a representation dated 30th November 1989 to the Collector of Customs, Mumbai in which it is stated that in view of interim order dated 22nd December 1988 passed in Writ Petition No.3806/1988, the goods be cleared subject to first petitioner furnishing bank guarantee of 50% of the differential duty and bond for the balance amount.