TMI Blog1983 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... arises for consideration is whether such exemption will also apply to levy of additional duty which is equal to excise duty leviable on the like article when produced or manufactured in India, such levy coming under Section 3 of the Customs Tariff Act, 1975. Mr. K.A. Nair, learned Counsel for the petitioners urged before me that Customs duty is a duty on the act of import and all the duty imposed on the act of import, whatever name by which they are called, is a customs duty. In other words auxiliary duty, additional duty or countervailing duty are all forming part of the Customs duty. Customs duty is a duty levied under the Customs Act. That Act is an enactment coming under Entry 83, List I of the Seventh Schedule of the Constitution of India which reads : "Duties of Customs including export duties". It has been held by the Supreme Court of India that duty of Customs is a tax on the act of importation or exportation. It is contended that duty of customs shall be levied under Section 12 of the Customs Act, at such rates as may be specified and/or the Customs Tariff Act or any other law for the time being in force on goods imported into India. Under Chapter 56 of the First Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act read with Section 2 of the Customs Tariff Act. The learned counsel for the respondents would also point out that while Section 3 of the Tariff Act declares the levy of additional duty on import items, to know which imports are dutiable and by how much reference is to be made to Central Excise Act. This Section adopts, as the rates of additional duty the very rates of Central Excise leviable like goods locally manufactured. The counsel would state that intention obviously is to afford a degree of protection to the local manufacturers by loading the imported variety with an additional import duty. Therefore it is argued that the additional import duty is levied independently under the Tariff Act at the rates and on the types of goods mentioned in the Central Excise Act, distinct from the basic customs duty which is leviable under the Customs Act on such goods and at such rates as are set out in the 1st and 2nd Schedules of the Customs Tariff Act. Section 25 of the Customs Tariff Act confers power on the Central Government to grant exemption of duty by notification. The exercise of this power may be selective as to goods, as to duties, and selective as to quantum of exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in this Act, or any other law for the time being in force, duties of Customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975, or any other law for the time being in force, on goods imported into, or exported from, India. Section 25 of the Customs Act provides power to grant exemption from duty. "If the Central Government is satisfied that it is necessary in the public interest so to do it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance), as may be specified in the notification goods of any specified description from the whole or any part of the customs leviable thereon". The Customs Tariff Act under Section 2 of the Act as enjoined under Section 12 of the Customs Act deals with the rates at which duties of customs shall be levied; that is specified in the First and Second Schedules of the Customs Tariff Act. As noted earlier customs duty can be levied apart from under Section 12 of the Customs Act, under any other law for the time being in force. I find that Section 3(1) of the Customs Tariff Act making such a levy. It provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taplic fibre and polynosic tow." It is to be noticed here that what is exempted is a particular goods falling under Chapter 56 of the First Schedule to the Customs Tariff Act, 1975, when imported into India, from so much of the duty of customs leviable thereon under the said First Schedule as in excess of........ Therefore exemption can will be said to be given only in respect of duty of customs leviable under the First Schedule of the Customs Tariff Act. If the levy under Section 3 of the Customs Tariff Act namely additional duty is something distinct from the basic customs duty leviable as per Section 12 of the Customs Act, the rate being specified under First Schedule of the Customs Tariff Act, it cannot be said that the exemption given under Section 25 and specified under the notification would exempt additional levy also. The wording is clear and exemption is given only in respect of duty of customs leviable under the First Schedule. It is certainly true that levying customs duty the power of the legislature the Parliament can only be traced to Item 83 of List I of the Seventh Schedule. But the Customs Act itself would indicate that a customs levy need not fall under the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said goods under the Finance Act, 1978. It is contended therein that the relief in excise duty under the notifications is intended to recover in its scope both the basic duty of excise and the special duty (auxiliary duty/additional duty) of excise. Stress was laid therein to the exemption notification issued by the Government from time to time and the language employed to effectuate the purpose of exemption. One set of notifications mentions the exemption as from the whole of the duty of excise leviable thereon under a specified sub-item of a particular item of the First Schedule to the Act. A second category of the exemption notifications grant exemption from so much of the special/additional/auxiliary duty leviable thereon under stated sub-section of stated section of the Finance Act or special Act as is in excess of the specified percentage of the duty of excise chargeable under that statutory provisions read with any notification. Here again the exemption is restricted and confined. The third category of notifications grant exemptions from the duty of excise leviable thereon by mentioning both under the Act and under the special Act or Finance Act. These sets of notifications, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls Limited v. Union of India (1983 ECR 1990 Madras). There the notification concerned is the same as one referred to here. Madras High Court disposed of the matter stating that : "In our country we now have various duties of Customs, called basic duty, additional duty, auxiliary duty and surcharge. The first two alone are in point for the present discussion. The Customs Act, 1962 deals with customs duty proper, which people refer to as the basic duty. The customs Act is a permanent code for the Customs. It establishes the administrative hierarchy for the management of duties of customs; it lays down the assessment procedure; it contains enforcement provision, such as penalties and privations, and confiscation of contraband; it also provides for exemptions, etc. And, perhaps most important of all, the Act also lays down or declares the charge of customs duty. Section 12 of Act is the charging section. Somewhat in the manner of the Income-tax Act, which relegates the actual rates of income tax to the annual Finance Acts, Section 12 of the Customs Act too relegates the enumeration of dutiable goods and the prescription of rates of duty to a different enactment called the Customs Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation holds that the notification does not cover the additional duty (countervailing duty) leviable under the Customs Tariff Act and that this duty has got to be paid by the petitioners. Reference was also made by the learned counsels for the respondents to the order of Delhi High Court in certain interlocutory applications referred to earlier. There the question that came up for consideration was the import of the notification dated 9-8-1978 and it is as follows : "157/78-Cus., dated 9-8-1978 G.S.R. 402(E). - In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do hereby exempts wood pulp falling within Chapter 47 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for the manufacture of paper, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of five per cent ad valorem". The Delhi High Court prima facie held that this notification obviously limits the exemption only to the duty of customs which is leviable und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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