TMI Blog1994 (3) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ated under the Companies Act, 1956. It is claimed that they have a factory at Station Road, Raichur, Karnataka State and they manufacture Phthalic Anhydride (hereinafter referred as `finished product). For the purpose of manufacturing the above referred to finished products the petitioner require orthoxylene (hereinafter referred to as the "imported goods). The imported goods which is sought to be subjected to countervailing duty, is stated to be totally exempt from excise duty in the country by virtue of a notification issued under Rule 8(1) of the Central Excise Rules, 1944 read with Section 3(3) of the Oil (Additional Duties of Excise and Customs) Act, 1958 in Notification No. 276 of 67, dated 21-12-1967. There is no serious controversy over the fact that under the said notification exemption has been granted in respect of goods falling under Tariff Item Nos. 6 to 11A of the First Schedule which would include the imported category of goods from the entire excise duty payable thereon subject to the terms and conditions stipulated therein and that it cannot be also disputed that if the goods are produced by the petitioners in India for the manufacturing activity the said goods wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 1-9-1984 disclosing the details of import and also requesting the respondents to forbear from levying the countervailing duty on the import of the said goods. The interim orders obtained in similar matters from various courts prohibiting such collection was said to have been brought to the notice of the authorities. It is claimed that the petitioners were informed that unless specific orders of this court was also obtained, the question of clearing the goods without pre-payment of countervailing duty cannot be complied with. Hence the above writ petition. 4.Along with the writ petition the petitioner filed WMP. No. 14914 of 1984 praying for injuction forbearing the respondents from collecting the additional duty under Section 3(1) of the Customs Tariff Act, 1975 and though initially interim injuction was granted on 18-9-1984 by a subsequent order dated 18-3-1987 this court made absolute the interim orders subject to the condition of the petitioners furnishing a bank guarantee in respect of the additional duty as and when the consignments are cleared and keep the said bank guarantees alive periodically by renewing the same till the disposal of the writ petition. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the liability of an importer to pay the countervailing duty under the Indian Tariff Act, 1934. While construing Section 2A of the Customs Tariff Act, 1934, the learned Judge held that in order to attract the liability for payment of countervailing duty, an excise duty shall be leviable on a like article if produced or manufactured in India, no countervailing duty would be payable. In Century Enka Limited v. Union of India [1982 (10) E.L.T. 64 (Bom.)], a Division Bench of the Bombay High Court had an occasion to deal with the question of levying countervailing duty under Section 3(1) of the Customs Tariff Act, 1975 in respect of a commodity imported from outside the country which commodity stood exempt from payment of excise duty if manufactured and sold inside the country. While holding that the additional duty contemplated for levy under Section 3 of the Customs Tariff Act, 1975 is not, in any manner, different from the countervailing duty the Division Bench expressed the view that the countervailing duty cannot be levied on an article imported into India if such an article manufactured in India is exempt from payment of excise duty. The Division Bench also expressed the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and held that there is nothing in the scheme of the Act or the Rules under which the exemption is granted, which makes it inapplicable to the importer of the goods and held as hereunder :- "It will at once be seen that there is nothing in the scheme of the rule which makes it inapplicable to an importer of goods. The assessee here has imported the goods and is selling them for use in a factory, a use which qualifies for the concession under the S. 8 notifications. The types of use specified in the concessions notified could be of any kind and even in the notification under our consideration, they are many and varied, in respect of items falling under S. Nos. 3 and 8, in particular, the actual users may be private individuals or authorities and need not necessarily be manufacturers using the goods in question is an `Industrial Process' in a narrow sense of that term. For instance, any computer room, hospital or factory purchasing parts of refrigerating and air-conditioning appliances and machinery for use in the computer room, hospital or factory would be entitled to claim the concession by following the prescribed procedure. Only, for claiming a concession in excise duty th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act should be considered to be exemption available for the beneficiaries of the exemption notification and cannot be extended further to others who are not covered by the notification and to levy imposed under a different enactment and consequently, the petitioner could not absolve of his liability under the Act. It may be noticed even at this stage that the passages quoted and relied upon in paragraph 11 of the decision of Division Bench of the Karnataka High Court has relevance only in understanding the nature of the additional duty and the Apex Court was really not concerned in 1985 (20) E.L.T. 222 (SC) with an issue or a problem of the nature which directly arose before the learned Judges of the Division Bench of the Karnataka High Court or in this case before me. The decision reported in B.S. Kamath and Co. v. Union of India (1986 (24) E.L.T. 456) of a Division Bench of the Karnataka High Court relied upon by the respondents can be of no assistance to the stand taken for the petitioners in this case. Even a cursory perusal of the reported judgment would go to show that the petitioners in the said case sought to press into service the exemption granted in respect of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taka High Court in the decision reported in 1992 (61) E.L.T. 252 which as noticed earlier, and, in my view, run directly contrary to the subsequent pronouncement of the Supreme Court in 1992 (61) E.L.T. 352. For the reasons stated above, the petitioner is entitled to succeed and their imports of the product Orthoxylene cannot be subjected to levy of Additional duty under Section 3(1) of the Customs Tariff Act, 1975 so long as the identical or same product stood exempt from excise duty under any exemption notification issued under the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder, when locally manufactured and sold. The learned counsel for the petitioner represents that the goods have been permitted to be cleared provisionally from time to time by furnishing bank guarantees and that the liability of the petitioner has to be finally assessed. In the light of the view taken by me and the relief granted. I direct the respondent to finally assess the liability of the petitioner in respect of the imports effected through the Port at Madras in accordance with the declaration of law in this order within three months from this date and the validity of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
