TMI Blog2017 (5) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty as unreasonable or illegal. The Court is not satisfied that in the impugned notification can be said to be arbitrary or irrational or that it has been issued by the government without taking into account all the relevant factors. Consequently, the Court is not inclined to interfere with the impugned notification dated 1st March 2002 which in any event has been superseded by the N/N. 23/2003-Cus dated 1st March 2003. Petition dismissed - decided against petitioner. - W.P.(C) 3606/2003 - - - Dated:- 25-5-2017 - S. MURALIDHAR CHANDER SHEKHAR JJ. Petitioner Through: Mr. Rakesh Tiku, Senior Advocate with Mr. Prakash Gautam, Mr. Vivek Ojha and Mr. Sandeep Kumar, Advocates. Respondents Through: Mr. Bhagwan Swarup Shukla, CGSC with Mr. Shambhu Chaturvedi, Advocate for R-1. Mr. Sanjeev Narula, Senior standing counsel with Mr. Abhishek Ghai, Advocates for R-2. O R D E R Dr. S. Muralidhar, J. 1. The Petitioner, Oswal Chemicals and Fertilizers Ltd., has filed the present petition under Article 226 of the Constitution seeking a declaration that the impugned Notification No. 23/2002-Cus dated 1st March 2002 issued by the Department of Revenue, Ministry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thstanding anything contained in Section 14 of the Customs Act, 1962 or Section 3 of this Act, be the aggregate of (i) the value of the imported article determined under subsection (1) of Section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the special additional duty referred to in sub-section (1) and (iii) the additional duty of customs chargeable on that article under Section 3 of this Act. (3) The duty chargeable under this Section shall be in addition to any other duty imposed, under this Act or under any other law for the time being in force. (4) The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties shall, so far as they may be, apply to the duty chargeable under this Section as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lieu of sales tax, gold and silver imported by passengers or other nominated agencies and life saving drugs that are free from customs duties. The levy would also not apply to goods which are currently exempt both from basic and additional duties of customs. Similarly, goods imported for subsequent trading have also been left out of its purview, since they bear the burden of sales tax at the time of first sale. The new levy will also not apply to inputs imported under export promotion schemes. In addition, there may be other sectors eligible for exemptions. These would be examined and if considered appropriate notified separately. 122. The gradual reduction of import duties in the past few years has resulted in certain distortions and anomalies. My proposals seek to correct them as far as found feasible without causing abrupt disruption in the duty structure. 5. Accordingly, it is submitted by the Petitioner that the intent and purpose of SAD was to afford a level playing field for indigenous manufacturers of goods which were also imported from outside, to protect the indigenous industry. It is pointed out that the various notifications were issued specifying rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed. The said notification was issued in supersession of Notification No. 19/2011-Cus. The impugned notification prescribed the fresh rates of SAD on sulphur and rock phosphate at 4% ad valorem. The relevant portion of the said impugned notification, reads as under: In exercise of the powers conferred by sub-section (1) of Section 3A of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Act), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 19/2001-Customs, dated the 1st March, 2001 [G.5.R. 118(E) dated the 1st March, 2001], the Central Government, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on the like goods on their sale or purchase in India, hereby specifies the rates of special additional duty as indicated in column (4) of the Table below in respect of goods, when imported into India, specified corresponding entry in column (3) of the said Table and falling within the Chapter, heading or sub-heading of the First Schedule to the said Act as are specified in the corresponding entry in column (2) of the said Table: P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) where an exemption was withdrawn, such withdrawal was open to challenge, in judicial review, on the basis that it did not serve public interest, (ii) in the event of such challenge, the onus would be on the Department to establish, before the Court, that the withdrawal of the exemption was in public interest, and (iii) in the absence of satisfactory discharge of this onus, the withdrawal of the exemption would have to be declared illegal. 11. Mr. Tiku submitted that the same logic would, pari passu, apply where an item in respect of which rate of SAD was specified as nil has been subjected to SAD @ 4% ad valorem. Mr. Tiku further submitted that the statutory power under Section 3 A CTA has to be exercised in accordance with the conditions stipulated therein. In other words, it is submitted that in deciding the make sulphur and rock phosphate amenable to 4% SAD, the Respondent had to strictly abide by Section 3A (1) of the CAT. In terms thereof, SAD had to be levied having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India. This according to Mr. Tiku was not done by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the levy of customs duty. The fact that there is a notification prescribing nil duty means that the goods is otherwise exigible to the levy of customs duty. However, in terms of the policy decision of the Government at the relevant time the rate of duty for those goods was fixed at 'nil' rate of duty. This is quite different from exempting any goods from the payment of the whole or part of customs duty. 16. The second aspect is the interpretation of Section 3A (1) of the CTA. The words having regard to occurring in the said Section indicates what the Government is expected to do while fixing the rates of SAD in exercise of its power under Section 3A of the CTA. It has to keep in view the maximum sales tax, local tax and any other charge for the time being leviable on a like article on its sale or purchase in India. It is to be interpreted purposively given the context in which the phrase other charges occurs. That expression cannot be confined to only charges that are similar to sales tax and local tax. To apply the rule of ejusdem generis to interpret the said expression would unnecessarily and unduly narrow the scope of the expression. In the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of customs duty especially in the case of those goods that were subject to 'nil' rate of duty. Again, this was not a rigid inflexible decision but obviously reviewable depending on the market conditions. In fact that is what has happened in the following year. The 'nil' rates of SAD for both sulphur and rock phosphate were restored. This is another factor which indicates that the decision was not unreasonable or irrational. The mere fact that there might be some inconvenience for a short period on account of the increase or decrease in rates of SAD is not by itself a reason to declare the fixation of the rate of duty as unreasonable or illegal. That decision is essentially a policy one of the government and the judicial review of such a decision is indeed in a narrow compass as already explained. Conclusion 20. The Court is not satisfied that in the impugned notification can be said to be arbitrary or irrational or that it has been issued by the government without taking into account all the relevant factors. Consequently, the Court is not inclined to interfere with the impugned notification dated 1st March 2002 which in any event has been superseded by th ..... 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