1986 (1) TMI 119 - HC - Customs

Summary

Issues:
Interpretation of customs duty exemption notification for Linear Alkyl Benzene, differentiation between Linear Alkyl Benzene and Dodecyl Benzene, applicability of clarification notification, entitlement to customs duty exemption.

Analysis:

The judgment involves the interpretation of a customs duty exemption notification issued by the Central Government regarding the import of Linear Alkyl Benzene. The petitioners, an association of Small Scale Industries Units engaged in manufacturing detergent washing powder, claimed that the duty on Linear Alkyl Benzene had been exempted from duty in excess of 70% ad valorem as per the notification. However, the respondents erroneously insisted on payment of 100% duty, assuming Linear Alkyl Benzene to be the same as Dodecyl Benzene. The court analyzed the relevant import policy, trade usage, and chemical characteristics to establish the distinction between the two products. It was noted that the import policy explicitly differentiated between Alkyl Benzene and Dodecyl Benzene, confirming that Linear Alkyl Benzene is distinct from Dodecyl Benzene.

The judgment further addressed the applicability of a clarification notification issued by the Government, which explicitly defined Dodecyl Benzene as 'branched chain Alkylate Benzene' and excluded Linear Alkyl Benzene from this definition. The court emphasized that this clarification notification confirmed the differentiation between the two products and was applicable to imports even before its issuance. The respondents' argument that the clarification notification only applied to subsequent imports was dismissed, as the clarification aimed to clarify an existing distinction known to all parties involved.

Ultimately, the court ruled in favor of the petitioners, declaring that they were entitled to the benefit of the customs duty exemption for Linear Alkyl Benzene as per the original notification. The respondents were directed to provide the relief sought by the petitioners, and costs were to be borne by the respondents. The judgment clarified that the relief would remain available as long as the initial notification of March 1, 1983, regarding the customs duty exemption, remained in operation.