TMI Blog1988 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... for a declaration that the explanation to Section 3(1) of the Customs Tariff Act of 1975 is unconstitutional. 2. Learned Counsel for the Petitioner states that in view of the decision of the Supreme Court in Khandelwal Metal Engg. Works v. Union of India - [1985 (20) E.L.T. 222 (S.C.) = AIR 1985 S.C. 1211] the points raised by him regarding the validity of the explanation to Section 3(1) of the Customs Tariff Act cannot be seriously urged, but requests that the point may be taken as argued so that if and when any occasion arises the Petitioner can pursue his attack on the validity of the explanation to Section 3(1) of the Customs Tariff Act. 3. Section 3 of the Customs Tariff Act reads as follows :- "Levy of additional duty equal to excise duty. (1) Any article which is imported into India shall, in addition be liable to a duty (hereafter in this Section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of the goods. Under Section 3(1) of the Customs Tariff Act, the excise duty for the time being leviable on a like article if produced or manufactured in India is only the measure of the duty leviable on the imported articles. While referring to the explanation to Section 3 of the Customs Tariff Act, it was held that the explanation furnishes a dictionary for the interpretation of Section 3(1) of the Customs Tariff Act and it provides a clue to its understanding. 7. Since the premise on which the learned counsel for the Petitioner advanced his argument that the levy under Section 3 of the Customs Tariff Act is in the nature of a countervailing duty has not been accepted by the Supreme Court, the attack on the validity of the explanation to Section 3 of the Customs Tariff Act based on a similar contention would fail. Consequently, W.P. No. 799 of 1982 is dismissed. 8. The contention of the learned counsel for the Petitioner in W.P. No. 798 of 1982 requires stating of a few facts for the disposal of this case. Section 12 of the Customs Act which is the charging Section states that duties of Customs shall be levied at such rates as may be specified in the Customs Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the liability for payment of countervailing duty, an excise duty shall be leviable on like article, if produced or manufactured in India. If no excise duty was payable on a like article if produced or manufactured in India, no countervailing duty also would be payable." In M.R.F. Limited v. Union of India and Others -1987 (32) E.L.T. 465 (Mad.) it was held that, "Hence, there must be an excise duty for the time being in force and which is leviable on the goods then only there could be the levy of additional duty under Section 3(1) of the Act. If no excise duty is in force and could be levied on the goods, then there is no question of the levy of additional duty under Section 3(1) of the Act. When there is no excise duty in force and leviable on the goods, by virtue of the exemption notifications, it is not possible to bring in a fiction that the goods is amenable and liable for levy of excise duty and the exemption notification have only suspended such levy and on that basis there could be levy of additional duty under Section 3(1) of the Act. When the very measure for the additional duty is not available, it would be doing violence to the express language and implications of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition to these averments found in the affidavit of the Petitioner it is also submitted by the counsel for the Petitioner that in the import control policy for the period April, 1978 to March, 1979 the relevant entry reads as palm oil excluding palmolein. It is the contention of the Petitioner's counsel that if palmolein was not included within the meaning of the word palm oil, there would have been no necessity to expressly exclude palmolein. He refers to a notification issued by the Ministry of Commerce dated 17-1-1977 where palm oil was described as one of the items which was allowed import for direct human consumption. By another notification dated 24-1-1977 the same Ministry clarified that import of palm oil will also cover import of palmolein. He further refers to Notification No. 42-Cus, dated 1-3-1979 under which the Government had granted exemption from the whole of additional duty leviable under Section 3 of the Customs Tariff Act both for palm oil and palmolein. Learned counsel relies upon these three circumstances, namely, the import policy, the notifications issued by the Ministry of Commerce and the exemption granted under the Customs Tariff Act by notification dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-rule (1) of R. 5 equal to the value of the groundnut and/or kernel, purchased by him and converted into oil and cake if he has paid the tax to the State on such purchases." 13. The petitioner in Thungabhadra Industries v. Commercial Tax Officer (AIR 1961 S.C. 412) was a manufacturer of groundnut oil/raw, refined and hydrogenated. He claimed exemption under Rule 18(2) of the Rules in respect of raw groundnut oil, refined groundnut oil and hydrogenated groundnut oil manufactured by him. His claim was allowed only in respect of raw and refined groundnut oil and not for hydrogenated oil. When the matter came up before the Supreme Court, it was held that by hydrogenation groundnut oil does not cease to be groundnut oil and, therefore, the benefit under Rule 18(2) is available to hydrogenated groundnut oil also. Learned counsel for the Petitioner states that on a similar reasoning it should be held in the present case that palmolein being a product of fractionation of palm oil by which stearin is removed from palm oil so that the oil is rendered more fit and digestible palm oil does not cease to be palm oil when palmolein results by fractionation. Learned counsel also relies up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y known as palmolein which is distinct from palm oil. The Government refers to the ISI specification for these two products, namely, palmolein and palm oil and stated that two different standards are prescribed. Their chemical properties vary particularly in respect of iodine value. The physical appearance of these two products is not the same in that in palmolein the solid portion in palm oil which is known as stearin is separated and taken away by the process of fractionation. They finally referred to the fact that in the trade these two products are quoted indented, invoiced and marketed under two different names. 15. None of the above averments in the order of the Government is controverted on behalf of petitioner. It is admitted that palmolein is produced by fractionation; that the iodine value is different, physical appearance is different; Stearin is not found in palmolein, and in the trade they are separately quoted and marketed. It is also not in dispute that it was only for the first time in the year 1979 by Notification No. 42-Cus., dated 1-3-1979 apart from granting an exemption of the whole of the additional duty in respect of palm oil, a similar exemption was grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 150/64-C.E., dated 19-9-1964 manufacture of palm oil was granted exemption from the payment of the whole of the duty of excise which would otherwise be leviable thereon. The Notification is very specific and it exempts only palm oil. There is no similar exemption granted in favour of palmolein, since palm oil and palmolein have already been held to be not identical and because exemption Notification No. 150/64-C.E., dated 19-9-1964 covers only palm oil, it follows that the levy under Section 3 of the Customs Tariff Act of an additional duty is well-founded in respect of palmolein. Before parting with this case, it is necessary to refer to the judgment of this Court in Appraiser, Madras Customs v. Tamil Nadu Newsprint Paper Ltd. - 1988 (36) E.L.T. 272 (Mad.) on which learned counsel for the petitioner placed reliance to contend that in a fiscal law the interpretation should be in favour of the tax-payer and not in favour of the revenue whenever two views are possible. But the same judgment is the authority for the position that this Rule of interpretation will apply only if there is an ambiguity in the language. If the concerned provision is clear enough, it is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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