TMI Blog1994 (4) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... aced by the Division Bench of the Bombay High Court on Notification No. 184 is the correct one and warrants no interference at our hands. The appeal is accordingly dismissed. - 2589 (N.M.) of 1985 - - - Dated:- 13-4-1994 - B.P. Jeevan Reddy and B.L. Hansaria, JJ. [Judgment per : B.P. Jeevan Reddy, J.]. - The appellant-firm, Hind Plastics, is engaged in the manufacture of certain plastic goods. For that purpose, it has been importing P.V.C. from time to time, paying the customs duty and additional duty leviable thereon. In the year 1983; it filed a writ petition in the Bombay High Court, being W.P. (C) No. 906 of 1983, stating that it had been paying the duty on packages (in which the P.V.C. was imported), being unaware of the Notification No. 184-Cus., dated 2-8-1976 providing for their exemption from duty/additional duty. It complained that though the respondents were aware of the Notification and ought to have given the benefit thereunder to the appellant, they did not do so. It prayed for refund of the amount of customs duty and additional duty relatable to packages, besides asking for a direction restraining the customs authorities from levying the duty/additional du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any material, the material in which the goods are so packed would be exempt from the whole of the duty of customs including countervailing duty provided that the goods are packed in materials normally used in trade for packing such goods and the packing is not suitable for repeated use. In other words, the conditions prescribed in Notification No. 114 broadly corresponded to clauses (b) and (c) of the proviso in Notification No. 184 of 1976 concerned herein. On June 10, 1972, a Notification was issued in supersession of Notification No. 114, dated November 25, 1967 wherein an additional condition was provided to the effect that the value of the packing material should have been included in the invoice value of the goods imported. It is evident that the additional condition imposed by this Notification corresponded to clause (a) of the proviso in Notification No. 184. Then came the Notification No. 184 of 1976 with the aforesaid three conditions. 4.Now what does Notification No. 184 of 1976 say ? Insofar as it is relevant it says : (1) where any goods are imported into India in packages (we are using the expression `packages' as short form of the words `packages, containers or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they satisfy the requirements of Notification No. 184; the Notification does not contemplate or permit deduction of any portion of the invoice value of the imported goods; it merely saves the packages from a separate levy, provided of course that they satisfy the requirements prescribed. 7.Before we proceed to deal with the merits of the contentions urged by the counsel on both sides, it would be appropriate to briefly refer to the circumstances in which the batch of writ petitions (including the writ petition filed by the appellant) came to be referred to a Division Bench in the Bombay High Court. On 14/15th October, 1981 a learned Single Judge of the Bombay High Court, Pendse, J. allowed Writ Petition No. 1099 of 1978 filed by Kirloskar Cummins Limited. The learned Judge considered the Notification dated 10-6-1972 - and not the Notification No. 184 of 1976. In the invoice relating to the imports concerned therein, the value of the goods and the value of the packing charges were separately shown. The value of the packages was stated to be 4 per cent of the value of the machinery packed therein. Pendse, J. held that no duty/additional duty can be levied on the said value of pack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be, is presented under section 50; where such price is not ascertainable, the nearest(b) ascertainable equivalent thereof determined in accordance with the rules made in this behalf. Notwithstanding anything contained in sub-section (1), if(2) the Central Government is satisfied that it is necessary or expedient so to do it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. (Sub-section (3) omitted as unnecessary.) 10.(Clause (b) in sub-section (1) has been omitted by Act 27 of 1988 with effect from 16th August, 1988. We are, however, concerned with the position obtaining prior to the said omission.) 11.Sub-section (1) of Section 14 prescribed two bases for determining the value, viz., (a) the price at which such or like goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade, provided the seller and buyer have no interest in the business of each other and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the main issue which turns on the meaning and purport of clause (a) of the proviso. 13.The appellants' contention looks appealing at the first sight and we were indeed attracted by it. The submission is this : where the goods are imported in a package, the value of the imported goods does include the value of the package as well, whatever may be the value. It is immaterial whether the value of the package is separately mentioned in the invoice or not since it cannot be denied that every package has some or other value. In other words, clause (a) of the proviso is satisfied in every case where the goods are imported in packages. The only verification to be done by the proper officer in such a case is to ascertain whether clauses (b) and (c) of the proviso are satisfied. If they are satisfied, no duty/additional duty can be levied on the value of the packages. The value of the packages, whatever that may be, must have to be deducted from the invoice value and duty/additional duty levied only upon the value of the contents proper - in this case on the net value of the P.V.C. (excluding the value of packages). 14.It would immediately be seen that this interpretation has the effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to levy duty/additional duty under the appropriate entry and at the appropriate rate; it is this levy which is exempted by the exemption Notification; the Notification does not contemplate or provide - either expressly or by necessary intendment - for the value of the packages being deducted from out of the invoice value and exempting them from duty/additional duty; there are no such words in the Notification; if that were really the intention, it would have said so expressly - more particularly when such an interpretation has the effect of modifying the value of imported goods determined under and in accordance with Section 14. This interpretation of Revenue has been accepted and affirmed by the Division Bench of the Bombay High Court. 15.According to the assessee, however, the difficulty with the above reasoning is that it is premised upon the assumption that the law provides for double impost of duty/additional duty on packages - one as part of P.V.C. at the rate applicable to P.V.C. and the other as packages independently at the rate applicable to packages - and then bring in the Notification to exempt the second levy, i.e., the independent levy on the value of packages at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty is charged on the entire invoice value of P.V.C. (imported goods) at the rate applicable to P.V.C.; now if the assessee's contention is accepted, it means that the proper officer should separate the value of packages, calculate the duty/additional duty leviable thereon at the rate applicable to packages separately and give deduction (exemption) of such amount from the total amount; this two-rates' theory is inconsistent with the rule of valuation in Section 14(i). As a matter of fact, in the case of imports of P.V.C. concerned herein, the value of the packages was not separately shown. Duty/additional duty was levied upon the total invoice value at the rate applicable to P.V.C. In sum, we must say while there is force in both the view points, we are inclined, on a balance of several factors, to accept the interpretation placed by the Revenue. The Notification is designed to exempt levy of duty/additional duty on the packages separately, since in law there is also an import of packages and such import too is subject to I.T.C. restrictions. 17.For the same reasons, the decision of Andhra Pradesh High Court in Barium Chemicals v. Union of India [1988 (37) E.L.T. 327] has to be h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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