AMAR STEEL INDUSTRIES Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The relevant facts of this case have been set out in this Court's order dated 26th March, 1993 passed at the time of granting interim reliefs to the petitioners. The Court now is called upon to determine finally whether the petitioners are liable to pay additional duty in respect of the vessel brought in by them for breaking up. The petitioners have based their submission that no such additional duty is payable, on the language of the notification in question being Notification No. 74/93-Cus., dated 28-2-1993 and on the Notification No. 167/86-C.E., dated 1-3-1986 as amended, listed as General Exemption No. 41 to the Central Excise Tariff Act, 1985.

(2.) As far as the first ground is concerned the petitioners have reiterated their arguments made earlier. It has been submitted that the Notification No. 74/93 granted exemption to duties of customs specified in the First Schedule to the Customs Tariff Act, 1975 in respect of Ships imported for breaking. It is submitted that both the preconditions subject to which the benefit had been granted had been fulfilled namely, additional duty formed part of "duties of customs" and secondly additional duty was specified in the First Schedule. That additional duty comes within the phrase "duty of customs" is, it is submitted, borne out by the decision in Khandelwal's case. The Finance Minister's speech was again referred to, to emphasise the fact that the object of the notification was to give relief to the ship breaking industry. It is also submitted that although Paragraph 82 of the Finance Minister's speech referred to the merger of auxiliary duty and basic duty, the word "merger" used in the Finance Minister's speech in Paragraph 91 should be construed as meaning merger between additional duty and basic duty as no auxiliary duty had been leviable in respect of ships brought in for breaking for several years. It is also contended that the Customs Authorities were wrongly seeking to rely on an earlier notification being Notification No. 142/87 dated 27-3-1987 which had been in force prior to Notification No. 74/93 which drew a distinction between "duties of Customs" and "additional duty". It is said that the earlier notification had been wholly superseded by Notification No. 74/93 and should be construed independently on the basis of the language used. It is said that reliance upon the earlier notification which had been superseded was inadmissible.

(3.) As far as the second condition is concerned it is submitted that the additional duty had been referred to in Annexure 1 to the First Schedule of the Customs Tariff Act, 1975. The annexure would therefore come clearly within the description of "the First Schedule". It was however, fairly pointed out to this Court that what was described as Annexure 1 in the copy of R.K. Jain's Customs Tariff of India 1993-94 did not find place in other publications of the Customs Tariff Act and its Schedule. An alternative argument was therefore made that the additional duty should be deemed to form part of the Schedule. It is submitted that the levy of additional duty was under Sections 1 and 2 of the Customs Act, 1962. Section 12 referred to the leviability of duties of Customs at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force. It is stated that the Supreme Court in Khandelwal's case had held that additional duty was leviable under Section 12. There was as such no question of it being leviable under any other law. Section 12 read with Section 2 of the Customs Tariff Act, 1975 would show that the levy of additional duty could only be under the First Schedule to the Tariff Act, 1975.