Bombay High Court
Nirlon Synthetic Fibres & Chemicals ... vs Union Of India on 27 June, 1991
Equivalent citations: 1991ECR597(BOMBAY)
JUDGMENT M.L. Pendse, J.
1. The petitioners are Public Limited Company and inter alia manufacture polyester and nylon yarn in their factory. The petitioners import textile spinning-grade raw material called Polyester chips for the purpose of manufacturing polyester yarn. The petitioners imported textile spinning-grade raw material and the bills of entry were filed in July, 1970. The petitioners were called upon to pay import duty of Rs. 4,19,937/- at 100% of the CIF value under Tariff Item 82(3)(a) of the Indian Customs Tariff, 1970. The petitioners were also required to pay countervailing duty and surcharge of Rs. 78,406.20 at the rate of Rs. 1.80 per Kg. under section 2A of the Indian Tariff Act, 1934 and Entry 15A of Schedule 1 of the Central Excises and Salt Act read with notifications issued by the Government from time to time. The petitioners paid the duty under protest and thereafter filed applications for refund of excess duty. The refund applications were filed on August 14, 1970 and September 8, 1970 before the Assistant Collector of Customs.
2. The petitioners claimed that the imported polyester chips do not fall under Entry 15A of Schedule I of the Central Excise Act and are liable to pay import duty only at 60% of the CIF value under residuary Item 87 of Indian Customs Tariff. The petitioners also claimed that the levy of countervailing duty as well as duty at the rate of 100% ad valorem under Item 82(3)(a) of the Indian Customs Tariff was not in accordance with law. The petitioners demanded refund of countervailing duty as well as excess duty then due under Tariff Item 87. The Tariff Item provided for duty at 60% ad valorem instead of 100% ad valorem under Item 82(3)(a) of the Indian Customs Tariff.
2A. The Assistant Collector by order dated May 20, 1971 rejected both the refund applications holding that the imported goods were correctly levied with duty under Item 82(3)(a) of the Indian Customs Tariff and the countervailing duty and surcharge. The Assistant Collector also noticed that the petitioners did not produce any documents in support of the claim that the polyester chips are not known in the trade circle as artificial or synthetic resin and plastic materials. The petitioners carried two appeals before the Appellate Collector of Customs, but the appeals ended in dismissal by order dated August 27, 1971. The revision application preferred by the petitioners before the Government of India also met with the same fate by order dated December 3, 1971. These orders have given rise to filing of the present petition under Article 226 of the Constitution of India.
3. Before adverting to the submissions urged by Shri Sanklecha, learned Counsel appearing on behalf of the petitioners, it would be convenient to set out Item 82(3)(a) and Item 87 of Indian Customs Tariff :
"82(3)(a) : Artificial or synthetic resin and 100% ad valorem plastic materials in any form plus 36% whether solid, liquid or pasty, or as powder, granules or flakes or in the form of moulding powders ......
"87 : All other articles not otherwise 60% ad valorem". specified.
It is not necessary to set out provisions of section 2A of the Indian Tariff Act as well as Entry 15A of Central Excise Schedule, because the grievance of the petitioners in respect of the payment of countervailing duty and surcharge is negatived by decision of Division Bench of this Court reported in 1982 (10) E.L.T. 917 = 1982 ECR 492D, Chemicals and Fibres India Ltd. v. Union of India & Ors. We are in respectful agreement with the view taken by the Division Bench, and consequently Shri Sanklecha very fairly stated that the challenge to the levy of countervailing duty and surcharge does not survive for consideration.
4. The only contention urged by Shri Sanklecha, in support of the claim is that the duty could have been levied only under residuary Item 87 and not under Item 82(3)(a), because the polyester chips do not attract the expression "artificial or synthetic resin or plastic materials in any form". The learned Counsel urged that the polyester chips are neither artificial or synthetic resin or plastic material and consequently Tariff Item 82(3) is not attracted and the duty is leviable only under residuary Item 87. Shri Sanklecha urged that it was incumbent upon the authorities below to take into consideration as to how the polyester chips are known in trade or commercial parlance and then conclude that Tariff Item 82(3)(a) is not attracted. It is now well settled by catena of decisions of the Supreme Court and this Court that it is not necessary to examine as to how the item is known in trade parlance unless the Tariff Entry is ambiguous and it is not possible to conclude whether the item falls or not within the Tariff Item. In our judgment, the Tariff Item is extremely clear and we fail to appreciate why polyester chips do not fall within the expression "synthetic resin". Indeed the petitioners themselves have declared the import of polyester chips as 'synthetic resin' in the bills of entries. The decision of the Division Bench of this Court clearly holds that the polymer chips are synthetic resins and the finding though recorded while examining the liability to pay duty under Item 15A of the Central Excise Schedule, still the conclusion is equally applicable to the application of Tariff Item 82(3)(a) of Indian Customs Tariff. It is also interesting to note that though the petitioners are claiming that it was incumbent upon the authorities below to examine how polyester chips are known in trade parlance, still the petitioners did not produce any material before the authorities below in support of their claim. We inquired from Shri Sanklecha as to whether the petitioner had any material even at this juncture, and the learned Counsel very fairly stated that it is not so available. It is therefore futile to urge that the authorities below were not right in considering how polyester chips are known in the trade circles. In our judgment, the decisions recorded by the authorities below do not suffer from any infirmity and the applications for refund made by the petitioners were clearly untenable.
5. Accordingly, petition fails and rule is discharged with costs.