Bombay High Court
S.R. Patkar Assistant Collector Of ... vs Krishna Oilcake Industries on 1 January, 1800
Equivalent citations: 1987(32)ELT660(BOM)
JUDGMENT Pendse, J.
1. This is an appeal preferred by the Collector of Customs against the judgment dated September 20, 1982 delivered by Mr. Justice Bharucha in Miscellaneous Petition No. 959 of 1979 striking down the assessment order dated March 27, 1979 and directing the appellants to refund amount of Rs. 2,78,792.25 collected by the appellants after deducting the amount of countervailing duty of. Rs. 38,107.86 together with interest on the net amount of Rs. 2,41,685.39 at the rate of 12% per annum from March 27, 1979 till the date of refund. The facts which gave rise to the filling of the petition are not in dispute and are stated hereinafter.
2. In exercise of powers conferred by sub-setion (1) of Section 25 of the Customs Act, 1962, the Central Government exempted Palmoleine falling under Chapter 15 of the First Schedule to the Customs Tariff from the whole of the duty of the Customs leviable thereon. The importer was liable to pay additional or countervailing duty at the rate of Rs. 105 per merit tonne on the imported plamoleine. The respondents are a partnership firm carrying on business in oil and oilcakes and run a refinery and solvent extraction plant. The respondents entered into a firm contract with the party at London to import 350 metric tons of refined bleached and deodorised palmoleine. The vessel entered territorial waters of India on January 18, 1979. On March 1, 1979, the Central Government published Notification No. 42 levying basic Customs duty on the import of palmoleine at the rate of 12.5% ad valorem. The countervailing duty in existence prior to the date of notification in respect of import of palmoleine was removed with effect from March 1, 1979. The respondents filed bill of entry for home consumption on March 9, 1979 and the Customs authorities passed assessment order on March 27, 1979 levying basic Customs duty at the rat of 12.5% and countervailing duty at the rate of Rs. 105/- per metric tonne. The respondents paid the duty under protest and there after filed Miscellaneous Petition No. 959 of dk1979 on April 20, 1979 challenging the order of assessment and seeking refund of the amount paid under protest. It is required to be stated that the respondents did not dispute the payment of countervailing duty though the Customs authorities were not entitled to recover the same.
3. The respondents claim that as the goods had enterd Indian territorial waters on January 18, 1979 when basic Customs duty was not payable in palmoleine, it was not permissible for the Department to levy the basic Customs duty merely because notification was issued on March 1, 1979. The contention raised by the respondents was accepted by the learned Single Judge and the order of assessment was struck down and the order is under challenge.
Mr. Sethna, learned counsel appearing on behalf of the appellants, very fairly stated that in view of the decision of the Full Bench in the case of Apar Private Ltd. v. The Union of India reported in 88, Bombay Law Reporter 355 = 1985 (22) ELT 644, the Department is not entitled to recover basic Customs duty. The question which arose before the Full Bench was at what point of time or date the Customs duty was liable to be determined under the Customs Act and whether it would make any difference whether on the date of import of goods, there was total exemption of either basic or additional duty, but on date of clearance for home consumption, the exemption was only partial. The Full Bench held that :
"If the goods were wholly exempt from basic Customs duty leviable under the Customs Act, when they entered the territorial waters of India, on basic duty of Customs would be leviable thereon even if such exemption were withdrawn under Section 25(1) of the Customs Act before the goods are released for home consumption. Even if such goods were not exempt from the levy of countervailing duty under Section 2A of the Tariff Act, or additional duty under Section 3 of the Customs Tariff Act, they would still be treated as goods wholly exempt from Customs duty for type purpose of the lvey of basic Customs duty."
In view of the dictum laid down by the Full Bench and with which we are bound, the action of the Customs authorities in recovering basic Customs duty cannot be sustained. Mr. Sethna submitted tha the Customs authorities have preferred and appeal before the Supreme Court challenging the decision in Apar's case (supra), but that fact, in our judgment, would make no different to the result of this appeal. In our judgment, the decision recorded by the learned Single Judge is in accordance with law and cannot the disturbed.
4. Accordingly, the appeal fails and is dismissed with costs. The appellants are directed to make refund as directed by the learned Single Judge within a period of three months from today.