TMI Blog1979 (11) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... 7th March, 1979 : "Subject : Import of vegetable oils by State Trading Corporation—Exemption from duty thereof. I am directed to say that in view of high international prices of vegetable oils and in order to keep the domestic prices of vanaspathi at reasonable levels, it has been felt that certain specified vegetable non-essential oils imported by S.T.C. would need to be exempted from part of the customs duty. 2. Having regard to the circumstances of exceptional nature as mentioned above and in exercise of the powers conferred by sub-section (2) of Section 25 of the Customs Act, 1962 (52 of 1962) read with sub-section (4) of clause 31 of the Finance Bill, 1979, which clause has by virtue of the declaration made in the said Bill under the provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts in all a total quantity of three lakh tonnes of soyabeen oil, sunflower oil, rapeseed oil, palm oil and palm oleine falling within Chapter 15 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and to be imported by M/s. State Trading Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing from before 2nd December, 1978 and thereafter. It is likely, therefore, that the purchases made by the petitioners from the foreign sellers may be at prices lower than the prices which would be paid by the S.T.C. to the foreign sellers after 2nd December, 1978. 3. It is against the above background that we have to understand the powers exercised by the Central Government from time to time under Section 25(1) and Section 25(2) of the Customs Act in regard to the customs duty payable on these commodities. The Customs Tariff Act, 1975, Schedule I, Section 1, Entry 15.07 imposed a duty on these commodities at 60% on the value of the goods to be imported. On 1st July, 1977, however, the Government ordered under Section 25(1) of the Customs Act, a total exemption of these commodities from the payment of customs duty on imports. Thus for some time these commodities were imported totally without payment of duty. The reason was obvious. For some time there has been a shortage of vanaspathi in the country and edible oils had to be imported from abroad to help manufacture of vanaspathi at a cheaper rate by reducing the level of prices of the edible oils inside the country. This policy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty if the writ petitions were to be eventually dismissed. At that stage and indeed till the date of the argument, the impugned notifications were never placed before us and our attention was never drawn to Section 25 and the difference between sub-section (1) and sub-section (2) thereof. When we became aware of them we decided to finally hear the writ petitions and dispose them of even though the respondents could not file the counter-affidavits. It was because of the interim relief that had been granted and that it became urgent to decide the writ petitions expeditiously. 6. The main attack by the writ petitioners on the impugned notifications is based on Article 14 of the Constitution. It is argued for them that the action of the Government in charging only 5% duty on goods imported by the S.T.C. while charging 12½% duty on the goods imported by the petitioners in contrary to Article 14 of the Constitution and as such discriminatory against the petitioners. 7. The burden to prove discrimination is on the petitioners. To discharge this burden, they have first to prove that they and the S.T.C. are similarly situated in respect of the imports of these commodities and the liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it clear that there was no bar to the imposition of customs duty on goods belonging to the Government. This had to be made explicit so that the provisions of the Customs Act would be made applicable to goods imported by the Government. Otherwise, it could have been argued that no customs duty could be imposed on goods imported by the Government inasmuch as the customs duty is imposed by the Government and it could not be imposed on the goods belonging to the Government itself. The object of Section 25 was thus limited and did not go beyond this. Section 25 does not mean that the customs duty must be the same on the goods belonging to the Government as the goods belonging to the other persons. 8. This becomes clear when Section 25 is read dutifully. Sub-section (1) of Section 25 gives the Government a general power of exemption of customs duty on the import of goods. Such exemption may be either partial or total. An order made under Section 25(1) pre-supposes that the entry imposing customs duty in the Schedule to the Customs Tariff Act, 1975 remains unchanged. The operation of the said entry is only modified by the notification issued under Section 25(1). Section 25(2) differs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of an exceptional nature. These circumstances are the necessaity to maintain the vanaspathi prices at a reasonable level in the country. This object could be achieved by the Central Government in either of the two ways. The Government could either impose a control on the price of the imported oils and of the price of the vanaspathi or the Government could reduce the customs duty on the import of the oils, so that the costs of production of the vanaspathi would be reduced, thus producing the result of keeping the vanaspathi prices at a reasonable level. The Government has chosen the latter way of bringing about this result. Can the petitioners contend that they were similarly situated with the S.T.C. and the Government was thus bound to treat them equally in respect of the reduction of duty as was done with the S.T.C.? As already stated, the petitioners have already failed to show that they had purchased the oils abroad on the same price at which the S.T.C. purchased it after 2-12-1978. Secondly, the petitioners have also failed to show that they would be willing to sell the oils imported by them in the Indian market at the same price as the S.T.C. would sell it. Unless th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners have not shown that the effect of the reduction of the price of oils which would be brought about by the reduction of the customs duty payable by the S.T.C. would result in the petitioner incurring huge losses or in a threat to put them out of business. Article 19(6)(ii) of the Constitution makes it constitutional for the Government to enable the S.T.C. which is a Corporation owned or controlled by the S.T.C. to carry one trade or business whether to the exclusion complete or partial or citizens or otherwise. This would show that the monopoly granted to the S.T.C. and the concession granted to it on the payment of import duty to the exclusion of the petitioners is conclusively deemed to be free from any objection so far as Article 19(6)(ii) is concerned. The import of Article 19(6)(ii) is also felt on the challenge based by the petitioners on Article 14. 10. That the classification between the Government or a Government Corporation like the S.T.C., on the one hand, and the petitioners and other private persons, on the other hand, is reasonable is settled by a series of decisions ending in the seven-Judge Bench decision in Maganlal Changanlal (P) Ltd. v. Municipal C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
