TMI Blog1989 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... have made out that their business will be crippled or ruined in view of the rate of customs duty visited on their imports. The material before us is not sufficient to warrant any conclusion in their favour. As the private importers are not entitled to relief, no question arises of considering whether the exemption orders should be struck down or their benefit extended in favour of the private importers also. Appeal dismissed. - 1924-27 of 1980 - - - Dated:- 17-5-1989 - R.S. Pathak, CJI, Sabyasachi Mukharji, J., S. Natarajan, J., M.N. Venkatachaliah, J. and S. Ranganathan, J. [Judgment per : Pathak, CJI.]. - These appeals by special leave are directed against the judgment and order of the High Court of Delhi dismissing writ petitions complaining of discriminatory treatment between the appellants and the State Trading Corporation in regard to the rate of customs duty levied on the import of edible oils. A number of writ petitions have also been filed directly in this Court by other private importers based on the same complaint. They pray for relief in terms of the same rate of customs duty as has been applied to the import of edible oils effected by the State Trading Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on 12th May, 1981 the import of edible oil was exempted from the levy of auxiliary duty. 5. On 18th July, 1981, the Government reduced the exemption granted to the import of the specified oils by private operators by raising the customs duty to 42 per cent. The exemption in favour of the State Trading Corporation continued without change. Thereafter on 26th July, 1981, by Ordinance No. 9 of 1981 the Government raised the tariff rate of customs duty to 200 per cent ad valorem by amending the Customs Tariff Act, 1975. At the same time exemption was granted in so far that the effective rate of duty on the import of the specified edible oils, except Rapeseed oil and Soyabean oil, was fixed at 125 per cent. The exemption from auxiliary duty was withdrawn. In the result a private importer had to pay a basic duty of 125 per cent and auxiliary duty of 25 per cent on the import of edible oils. The oil seeds imported by the State Trading Corporation continued to attract customs duty at 5 per cent. 6. Writ petitions were filed in the High Court of Delhi by private importers complaining of the differential treatment accorded between the private importers and the State Trading Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The reasons set forth in this statement have been analysed by learned Counsel for the private importers and an attempt has been made to establish that there is no justification for relying on the international prices of vegetable oils nor the stated desirability of keeping the domestic prices of vanaspati at reasonable levels as grounds for making the impugned exemption orders in favour of the State Trading Corporation. In detailed argument, learned Counsel for the private importers urges that the public interest which could be contemplated under Section 25(2) must be the reduction of the landed cost in order to reduce the domestic prices of the oils. That object, it is said, is not served by conferring an advantage upon a particular importer even if it be the State Trading Corporation, who is engaged in the same activity in respect of the same goods. It is pointed out that the concession must relate to the goods and not to the personality of the importer. Further, it is argued, the allegation that the international prices of edible oils were high is inconsistent with the reality of the situation; on the contrary, it is pointed out, there had been a fall in the international ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other traders. Learned Counsel has placed before us the observations of this Court in L.I.C. v. Escorts Ltd. - (1986) 1 SCC 264, 344. There is no rational basis, it is urged, for making a distinction in the imposition of customs duty in respect of the goods imported by the private importers and the State Trading Corporation as both purchased the same commodity in the open market for direct consumption, that the sales effected by them are on a commercial basis, and there is nothing to show that the State Trading Corporation sold these oils at a price lower than the market price or at subsidised prices. It is asserted that the Central Government, like any other importer, is liable to customs duty, and we are referred to Section 12 of the Customs Act. It is also complained that the differential proceeds on excessive classification, and that results in violating the doctrine of equality enshrined in Article 14 of the Constitution. Reliance is placed on State of J K v. T.N. Khosa - (1974) 1 SCR 771, 792, Mohammad Shujat Ali v. Union of India - (1975) 1 SCR 449, 478 and In Re The Special Courts Bill, 1978 - (1979) 2 SCR 476, 561-2. And, finally, the private importers claim that inasmu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question in order to honour their commitment. In other words, contracts by private importers concluded before 2nd December, 1978 were allowed to be worked out after that date without affecting the principle that as from 2nd December, 1978, the business of importing such oils belonged exclusively to the State Trading Corporation. This is the background in which the questions raised before us need to be considered. 12. First, as to the contention that both the reasons set forth in the exemption notifications under Section 25(2) of the Act are without foundation. It seems to us that the two reasons set forth in the exemption notifications can constitute a reasonable basis for those notifications. It does appear from the material before us that international prices were fluctuating, and although they may have shown a perceptible fall there was the apprehension that because of the history of fluctuations there was a possibility of their rising in the future. The need to protect the domestic market is always present, and, therefore, encouragement had to be given to the imports effected by the State Trading Corporation by reducing the rate of customs duty levied on them. This invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a trader when it enters the field of commercial activity and ordinarily it can claim no favoured treatment. But there may be clear and good reason for making a departure. Viewed in the background of the reasons for granting a monoply to the State Trading Corporation, acting as an agent or nominee of the Central Government in importing the specified oils, it will be evident that policy considerations rendered it necessary to make consummation of that policy effective by imposing a concessional levy on the imports. No such concession is called for in the case of the private importers who, in any event, are merely working out contracts entered into by them with foreign sellers before 2nd December, 1978. 14. We are also not satisfied that any of the private importers have made out that their business will be crippled or ruined in view of the rate of customs duty visited on their imports. The material before us is not sufficient to warrant any conclusion in their favour. 15. As, in our opinion, the private importers are not entitled to relief, no question arises of considering whether the exemption orders should be struck down or their benefit extended in favour of the private imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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