JINDAL STRIPS LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution of India, inter alia, praying for an order that:

(2.) The case of the petitioners is that the petitioner No. 1 Jindal Strips Ltd. is engaged in the manufacture and sale of steel strips and owns and operates several factories all over India including a large factory at Hissar in the State of Haryana. On 6th July, 1989 the said company placed an order for the generating set of Finish Make on an exporter in Bremen, East Germany and the said order was amended by an order dated 4th August, 1990 valued at Rs. 2,90,00,000/-. The Company was granted appropriate licence for the importation of the said generating set by the appropriate authority. The said generating set was required to be captively used in its factory at Hissar to generate electricity for running the factory at the time of power failure arising out of loadshedding. On 17th September, 1990 the foreign exporter shipped the said generating set from Bremen to Calcutta via Madras Port per M.V. "SUDA". Another identical generating set was also shipped in the same vessel which was imported by M/s. Chemicals & Plastics India Ltd., Madras. The relevant notification granting the benefit of exemption and fixing the effective rate of basic customs duty at 30% only, issued by the Central Government in exercise of power conferred by Section 25(1) of the Customs Act, 1962 is numbered 59/89 dated 1st March, 1989. Similarly substantial concession was also granted in respect of auxiliary customs duty by Notification No. 144/90 dated 20th March, 1990 fixing the effective rate of auxiliary duty at 30%. The condition for availing the benefit of exemption under the said notifications was to the effect that the benefit of exemption shall not apply to generating sets using motor spirit, kerosene, high speed diesel oil or diesel oil as fuel. The vessel M.V. SUDA entered the territorial waters of India and arrived at the Madras Port in the middle of November, 1990. The customs authorities at Madras cleared Heavy Fuel (LSHA/HPS) Engine Driven Electrical Power Generating Set of the type similar to one imported by the petitioner No. 1 by allowing duty at 30% basic duty and 30% auxiliary duty. The said vessel M.V. SUDA was expected to reach the port of Calcutta towards the end of November, 1990. The clearing agent of the petitioner No. 1 submitted the advance bill of entry on llth November, 1990 which was noted by the Import Department of Calcutta Custom House on 14th November, 1990. The arrival of the vessel was delayed due to circumstances over which the petitioners had no control and final entry inward was recorded in the customs register on 18-12-1990. The advance bill of entry which was submitted on 11-11-1990 and noted on 14-11-1990 was taken up for processing only after the final entry inward of the vessel i.e. on 18-12-1990. There were two subsequent notifications. By Notification No. 296/90 the earlier Notification No. 59/89 was superseded and the effective rate of basic customs duty was made 35% instead of 30% and the Notification No. 287/90 rescinded the earlier Notification No. 144/90 making the effective rate of auxiliary duty at 50% - thus making the effective rate of customs and allied duty @ 35% plus 50% i.e. 85%. The dates printed on the said Notification Nos. 296/90 and 287/90 are 18-12-1990 and 15-12-1990 respectively.

(3.) The said generating set was allowed to be cleared by the Calcutta Customs Authority on provisional assessment on production of fresh certificate from D.G.T.D. recommending benefit of Notification No. 296/90 and execution of personal bond for Rs. 2,90,00,000/- supported by a bank guarantee of Rs. 13,61,9857- furnished by State Bank of India. The provisional assessment was made @ 35% basic customs duty and 50% auxiliary duty in terms of the revised notifications which according to the respondents came into effect on 18-12-1990 i.e. the day the vessel entered into Calcutta Port. The case of the petitioners is that though the notifications are dated 18-12-1990 and 15-12-1990, they were published on 10-1-1991 and 14-1-1991. It is also the case of the petitioners that the said notification dated 18-12-1990 is not applicable in the case of importation of the said generating set and the petitioners are liable to pay 30% plus 30% i.e. total 60% duty and not 85% duty as assessed provisionally by the respondents. As per provisional assessment Rs. 2,48,96,500/- (Rs. 1,02,51,500/- basic plus Rs. 1,46,45,0007-auxiliary) was payable by the petitioners. Thus, according to the petitioners, an excess amount of Rs. 73,22,5007- was paid and/or the same was realised by the respondents as otherwise the goods could have incurred further demurrage. The further case of the petitioners is that the petitioners had no option but to make payment of the aforesaid sum of Rs. 2,48,96,500/- as provisionally assessed under protest on 31-1-1991 and the petitioners had to pay to the Port Trust Authorities a sum of Rs. 1,68,5407- as demurrage charges. On 15-2-1991 the petitioner No. 1 made a representation to the Assistant Collector, Calcutta, contending that the effective rate prescribed by the Notification No. 59/89 and 144/89 should be made applicable in the matter of assessment and as such the duty lawfully payable should be 60% (30% basic and 30% auxiliary) and not 85% (35% basic and 50% auxiliary) .................. as collected by the authorities. The petitioners claimed refund of the sum of Rs. 73,22,5007- which was realised in excess and for an interim order restraining the respondents and their servants and agents from treating the order/decision communicated in the letter of the Assistant Collector discharging the bond/guarantee and received on 30-9-1991 as finalisation of provisional assessment.