Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 1063 - SUPREME COURT

2016 (7) TMI 1063 - SUPREME COURT - 2016 (338) E.L.T. 164 (SC) - Effective Rate of duty - Import of Compound alcoholic preparations of a kind used for the manufacture of beverages - the grievance of the appellant is that the rate which has been prescribed for goods falling under Tariff Sub-Heading 2208.10 is higher than that was authorized in the Budget Proposals during financial years 1993-94 and 1994-95. The appellant took recourse to the provisions of the Right to Information Act in order to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al year and it is the financial policy of the Central Government. The Finance Minsterís speech only highlights the more important proposals of the budget. Those are not the enactments by the Parliament. The law as enacted is what is contained in the Finance Act. After it is legislated upon by the Parliament and a rate of duty that is prescribed in relation to a particular Tariff Head that constitutes the authoritative expression of the legislative will of Parliament. - Now in the present fa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 25(1) and he is also entitled to such a notification in respect of the commodities falling under the category 2208.10. When the appellant alleges discriminatory action on the part of the respondents, he has to establish that there is no rational basis for making classification between the goods which are notified and the goods of the appellant which are not notified. It is also a firmly established principle that the legislature understands and appreciates the needs of its people. A Taxing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

JUDGMENT N. V. Ramana, J. 1. These appeals, by special leave, have been filed against the impugned judgment and order dated 02.09.2011 in Writ Petition No.1761 of 2009 and order dated 24.11.2011 in Review Petition No.24 of 2011 in Writ Petition No.1761 of 2009 respectively, of the High Court of Judicature at Bombay, by which the High Court has dismissed the Writ Petition filed by the appellant herein and also dismissed the Review Petition by holding that no error apparent on record has been made .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pect of Sub-Heading 2208.10 of the Customs Tariff for 1993-94 and 1994-95. The appellant claims to have deposited the amount of duty provisionally assessed on the assessable value declared in the eight bills of entry. According to the appellant, he cleared the goods for home consumption during financial years 1993-94 and 1994-95. Between the years 1994 and 2001 the appellant addressed several communications, inter alia, to the Central Board of Excise and Customs and to the Tariff Research Unit ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation. 3. Not satisfied with the attitude of the authorities, the appellant preferred a Writ Petition before the High Court seeking the following reliefs: (a) a writ of Mandamus directing the first and second respondents herein to issue a notification u/s.25(1) of the Customs Act, 1962 (for short the Act ) in order to exempt goods falling under Tariff Sub-Heading 2208.10 so as to give effect to the Budget proposal announced by the Finance Minister (FM) in Parliament for financial years l993-94 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) an order for the payment of interest at the rate of 12% p.a. on the refund that is ordered. 4. The High Court has dismissed the Writ Petition by the impugned judgment and order dated 2.9.2011. Being dissatisfied with the dismissal of his writ petition, the appellant preferred a Review Petition, which was also dismissed by the High Court by the impugned judgment and order dated 24.11.2011. 5. Heard the appellant, appearing in person, and learned Senior Counsel for the respondents. 6. The appell .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to 65% except, inter alia, on alcoholic beverages. CAP of a kind used in the manufacture of beverages falling under sub-heading 2208.10 of the Act are not covered by the said exceptions dried grapes, almonds, alcoholic beverages, ball and roller bearings and passenger baggage as mentioned in the Budge proposal appearing at Sl.No.B 1. Hence the import duty on CAP of a kind used in the manufacture of beverages falling under sub-heading 2208.10 should have been read as 85% for the financial year 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ance Bill and Finance Act for 1993-94 and 1994-95; Budget proposals announced by the FM in the Parliament are duly passed and/or approved by the Parliament, no person, executive, bureaucrat or any authority or Court of Law has the authority and/or power to alter or amend the same. If the executives are allowed to prescribe any tariff rates contrary to the Budget Proposals duly authorized by the Parliament, then the Budget Proposals duly passed by the Parliament will have no meaning and will be r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sed and legislated by the Parliament should have been prescribed as 85% for the year 1993-94 and as 65% for the year 1994-95. The statutory term Compound alcoholic preparations of a kind used for the manufacture of beverages clearly explains that it covers compound alcoholic preparations for the manufacture of beverages and that it is a product that precedes the consumable alcoholic beverage and hence it cannot, by any stretch of imagination, be equated to and or termed as alcoholic beverages in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ub-heading 2208.10 in the Customs Tariff Act, 1975. He would further submit that Harmonized System of Nomenclature (HSN), an International Regulation evolved in 1986 by the Customs Co-operation Council, Brussels, which is adopted by the Govt. of India, clearly recognizes that CAP of a kind used in the manufacture of beverages are distinct and different products from alcoholic beverage which are intended for immediate consumption and in the said HSN Explanatory Notes dealing with sub-heading 2208 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

P of a kind used in the manufacture of beverages are not consumable as such, have to be sold to the distilleries where they undergo a process and cannot be treated as Whisky, Gin or Brandy as known in the trade. Against the said decision, Union of India has preferred S.L.P.(C) Nos.13194-210/1991 in this Court wherein this Court has dismissed the aforesaid SLPs upholding the decision of the Bombay High Court. 10. He also places reliance on a judgment of the High Court of Delhi in Seagram Manufact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d notifications for all other erroneous tariff rates prescribed by them in the Customs Tariff Act, Finance Bill and Finance Act 1993-94 and 1994-95 to give effect to the Budget proposals duly passed and legislated by the Parliament and the respondents cannot discriminate in the case of the appellant and refuse to issue notifications. 12. He further submits that he is seeking a suitable notification prescribing Customs Tariff of 85% and 65% on goods falling under sub-heading 2208.10 to give effec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessment for imports made during the years 1993-94 and 1994-95 with simple interest @ 12% p.a. On the point of interest, he would submit that the respondents are liable to pay interest on the excess duty unlawfully collected from him since 1993-94 and 1994-95 and having retained the same since the last 20 years. In this connection, he places reliance on Sandvik Asia Ltd. Vs. Commissioner of Income Tax, Pune, reported in [(2006) 150 TAXMAN, 591 (SC)]. 13. He would further submit that the Courts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dents/revenue have illegally collected import tax/import duty without any authority of law and deprived the appellant of profits of the said amount of ₹ 5,62,46,726/- since 1993-94 and 1994-95 and thereby put an unreasonable restriction on the appellant s fundamental right as guaranteed by Article 19(1)(g) of the Constitution, to carry on his trade and business since 1993-94 and 1994-95. In support of this contention, he places reliance on a Judgment of this Court in Mohammed Yasin Vs. Tow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ort of goods, is derived from the First Schedule of the Customs Tariff Act, 1975 read with notifications issued u/s.25(1) of the Act. If any changes in the rates were intended by Parliament it would have been reflected in the respective Finance Bills. 16. He further submits that there was no error or discrepancy between the budget proposals announced by the Finance Minister and the Finance Bill. According to him, the High Court has rightly held that the appellant did not dispute the fact that th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d a rate of duty is prescribed in relation to a particular tariff heading that constitutes the authorities expression of the legislative will of Parliament; the speech of the Finance Minister and the financial/budget proposals duly passed by Parliament are two separate and distinct documents; the law as enacted is what is contained in the Finance Act after it is legislated upon by the Parliament. Budgetary proposals constitute legislative material antecedent to the enactment of law. The rates of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n as adopted by the Parliament. 17. In his submission, the Court cannot undertake a scrutiny of whether there was an error on the part of the Parliament in legislating to provide a particular rate of duty. The power to issue a notification u/s. 25(1) of the Act has been conferred upon the Central Government where it is satisfied that it is necessary in the public interest so to do. Under sub-section (2) of Section 25, the Central Government may, where it is satisfied that it is necessary in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t trade. Accordingly, the power is conferred upon the Central Government to provide for exemption from duty of goods, either wholly or partly and with or without conditions, as may be called for in public interest. We see no warrant for reading any limitation into this power. 18. According to him, the Government of India i.e. the TRU is fully empowered to decide the quantum of levy of duty on a particular commodity and to define it. Therefore, no wrong was committed by the TRU when it held that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rated extracts . Compound Alcoholic Preparations are used in the manufacture of various beverages and are not for immediate consumption. The claim of the appellant-importer that duty should have been imposed at the rate of 85% for 1993-94 and 65% in 1994-95 and the claim that he had paid excess duty of ₹ 5,62,46,726/- cannot be sustained since all these consignments were assessed provisionally and the goods were classified under Chapter Tariff Heading No.2208.10 of the First Schedule to th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mporter that during the impugned period, the peak rate of duty was 150% as announced by the FM in his Budget Speech also cannot be sustained because the proposed rate of maximum 150% was applicable to goods other than alcoholic beverages and passenger baggage. The speech of the FM in this regard was very clear and there is no ambiguity in the speech. Alcohol beverages and passenger baggage have been taken out of the cover of maximum 150% rate duty. Hence the contention of the appellant-importer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and the findings recorded by the Court below, we deem it appropriate to extract the relevant Tariff Entry 2208.10 under the Customs Tariff 1993-94 and 1994-95, which reads: Heading No. Subheading No. Description of article Rate of duty Stand- Preferential ard areas 22.08 2208.10 Compound alcoholic preparations of a kind used for the manufacture of beverages. Rs.300 per litre or 400% whichever is higher…. 16 24. Though it was already discussed in the preceding paragraphs about the reliefs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessment of the eight bills of entry after a notification is issued by the first and second respondents under Section 25(1) of the Customs Act, 1962; (3) a writ of Mandamus directing the second respondent to issue a notification under Section 25(2) of the Customs Act, 1962, for granting exemption from customs duty for goods falling under Tariff Heading 2208.10 for financial years 1993-94 and 1994-95; (4) an order to refund after assessments are finalized and (5) an order for the payment of inter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was an error on the part of the Parliament in legislating a particular rate of duty. Further, the High Court observed that there is no discriminatory conduct which would compel the interference of the court. The appellant, unsatisfied with the order, has preferred a revision before the High Court which ended up in dismissal as no error apparent on record has been made out. 26. In those circumstances, the appellant is before us by way of these appeals; one arising out of the original order and on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pay 12% simple interest for having willfully and deliberately refused to rectify the error. 27. The appellant has come up before this Court with a voluminous record and made submissions at length. The gist of the first and foremost grievance of the appellant appears to be that he was charged with the duty @ ₹ 300/- per litre or 400% which was already paid by him for the goods he imported as per the provisional assessment. 28. According to him, the Finance Minister has presented the budget .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er the tariff rates are erroneously prescribed, the 2nd respondent is issuing notification and in fact they have issued 85 notifications for the financial year 1993-94 and 94 notifications for the financial year 1994-95. The 2nd respondent is discriminating the appellant by refusing to issue a circular in respect of his goods; as such their action is discriminatory and violative of Article 14 of the Constitution of India. 30. In view of the aforesaid rival submissions, the issues that fall for c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y discrimination on the part of the Central Government in issuing a notification under Section 25(1) of the Customs Act in respect of other goods and contrary to Article 14 of the Constitution of India? 31. In Re Issue No.1: The whole thrust of the appellant is that the proposals of the Finance Minister were duly approved by the Parliament. No doubt, the appellant has placed before this Court the proposals of the Finance Minister which discloses the intention of the Government but there is no ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sion enacted by the Parliament, because the process of Taxation involves various considerations and criteria. Every legislation is done with the object of public good as said by Jeremy Bentham. Taxation is an unilateral decision of the Parliament and it is the exercise of the sovereign power. The financial proposals put forth by the Finance Minister reflects the governmental view for raising revenue to meet the expenditure for the financial year and it is the financial policy of the Central Gove .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Parliament is that for the commodities falling under Tariff Head 2208.10, the tariff is ₹ 300/- per litre or 400% whichever is higher. Even assuming that the amount of tax is excessive, in the matters of taxation laws, the Court permits greater latitude to the discretion of the legislature and it is not amenable to judicial review. In view of the foregoing discussion, we are unable to concur with the submission of the appellant that the budget proposals are duly passed and approved by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his case, the 2nd respondent refused to issue such a notification and it is nothing but mala fide and corrupt practice on the part of the respondents. According to him, the budget proposals passed and approved by the Parliament are paramount and the Executive or Central Government cannot prescribe Tariff rates contrary to the budget proposals and he finds fault with the way the 2nd respondent officials are functioning. A thorough look at the relevant provisions reveals that the source of power .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r any part of duty of customs leviable thereon. (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable. Section 25 of the Act delegates power to the Central Government i.e. the executive branch to grant exemption generally from duty whenever it finds that it is necessary to do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns are issued basing on the whims and fancies of the 2nd respondent is misconceived. Whereas, notifications are issued generally in the larger public interest, the Legislature has given the power to exempt duty to the 2nd respondent subject to the amending power. In these circumstances, it is not appropriate on our part to issue any orders directing them to issue a notification under Section 25 (2) of the Act except on the grounds of discrimination. In the matter of taxation, the Court gives a g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version