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2015 (12) TMI 1390 - HC - CustomsGoods imported against advance authorization scheme - claim of exemption towards (1) whole of the Customs Duty leviable thereon; (2) whole of the Additional Duty under section 3 of the CTA, 1975; (3) Anti- Dumping Duty under section 9A of the CTA, 1975; and (4) Safeguard Duty under section 8B of the CTA, 1975 subject to the terms and conditions set out in the said Notification. - Notification No.96/2009-Cus. dated 11th September, 2009 - Held that - in the Foreign Trade Policy 2015-2020, the Government for the first time in its Policy decided to also exempt the Transitional Product Specific Safeguard Duty (imposed under section 8C), in addition to Safeguard Duty (imposed under section 8B). This Transitional Product Specific Safeguard Duty is the duty imposed under section 8C of the CTA, 1975 for imports from the People s Republic of China. Up until 2015 no exemption was ever granted from payment of Safeguard Duty levied under section 8C of the CTA, 1975. Notification No.96/2009-Cus. dated 11th September, 2009 only granted exemption from payment of Safeguard Duty imposed under section 8B. This being the case, we, in our jurisdiction under Article 226 of the Constitution of India, cannot direct the Government to grant an exemption that was never granted earlier. No person has a vested right in the grant of an exemption. An exemption by its very nature is a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption under a statutory provision in a taxing statute is by its nature a concession granted by the Government so that the beneficiaries of such a concession are not required to pay tax or duty they were otherwise liable to pay under such statute. The recipient of the concession has no legally enforceable right against the Government to grant of such a concession, save and except to enjoy the benefits thereof during the period of its grant. Even if the Petitioner is called upon to pay the Safeguard Duty levied under section 8C on Carbon Black imported by it from the People s Republic of China, no prejudice would be caused to the Petitioner because the Petitioner could always claim a drawback of the same on establishing that the very same product imported on payment of Safeguard Duty was ultimately used in the manufacture of final products that were exported out of India. In fact, to be fair to the Respondents, this is also the stand taken by them in their affidavit in reply to this Writ Petition. We therefore do not think that in these circumstances, this is a fit case where we ought to exercise our equitable, extraordinary and discretionary jurisdiction under Article 226 of the Constitution of India in favour of the Petitioner. Provisions of sections 8B and 8C of the CTA, 1975 operate in two different fields. The Safeguard Duty imposed under section 8B is on a specific article that may be imported from any country. On the other hand, the Transitional Product Specific Safeguard Duty under section 8C is not only article specific but also country specific. In other words, the Safeguard Duty imposed under section 8C is on a particular article specifically imported only from the People s Republic of China. There is therefore a clear distinction between the Safeguard Duty imposed under section 8B and under section 8C. The two sections operate in a totally different fields and are a category by themselves. It is not as if by granting exemption from payment of Safeguard Duty imposed under section 8B and denying the exemption from payment of Transitional Product Specific Safeguard Duty imposed under section 8C, the Government has created any sub-classification excluding one sub-category even when both the sub-categories are of same genus. The Safeguard Duty imposed under section 8B and 8C fall in separate categories by themselves and can never be classified as sub-categories of the same genus. It is not as if the payment of Transitional Product Specific Safeguard Duty imposed under Section 8C was exempted under the Notification No.96/2009-Cus. dated 11st September, 2009 and the same was thereafter retracted without any justification. As stated earlier, this exemption was never granted by the Government. In fact, it is the case of the Petitioner that by not granting this exemption the Government has committed an error or mistake. A party can never have a vested right in claiming an exemption that was never granted in the first place as held by the Supreme Court in the case of J. K. Udyog. ( 2004 (9) TMI 381 - SUPREME COURT OF INDIA) In this view of the matter, we find that the reliance placed by Mr. Sridharan on the decision of the Supreme Court in the Indian Express Newspaper s case (1984 (12) TMI 65 - SUPREME Court) is of no assistance to the Petitioner. - Supreme Court held that there must be rational basis of discrimination between one commodity and another for the purpose of imposing or not imposing the tax. As stated earlier, in the present case, any Transitional Product Specific Safeguard Duty imposed under section 8C of the CTA, 1975 was never exempted under Notification No.96/2009- Cus. dated 11th September, 2009. It is not as if the exemption was initially granted and was thereafter withdrawn without any justification. In the case before us, the Petitioner seeks a mandamus, which in effect, would be to direct the Government to grant an exemption which was never granted earlier. In these facts, we find that the judgment of the Supreme Court in the case of Deepak Fertilizers (2007 (5) TMI 323 - SUPREME COURT OF INDIA) has no application to the facts of the present case and the reliance placed thereon is also wholly misplaced. It was only in the Foreign Trade Policy 2015-2020 that Transitional Product Specific Safeguard Duty imposed under section 8C of CTA, 1975 was sought to be exempted so long as the goods imported were used in the manufacture of final products that were exported out of India. Keeping in tune with this Foreign Trade Policy, a Notification was issued on 1st April, 2015 whereby apart from the Safeguard Duty imposed under section 8B, Transitional Product Specific Safeguard Duty imposed under section 8C was also exempted. It is in this light that we have come to the conclusion that there was no conflict between the Foreign Trade Policies framed by the Government of India from time to time and the corresponding Notifications issued to implement the said Policies. - There is no doubt that the exercise of power, whether legislative or administrative, would be set aside if there is a manifest error in exercise of such power or the exercise of the power is manifestly arbitrary. We do not find any such case before us. In fact, in the present case, the Petitioner in effect wants us to direct the Government to grant an exemption which was never granted in the first place until it framed the Foreign Trade Policy 2015-2020. - no merit in this Writ Petition - Decided against assessee.
Issues Involved:
1. Exemption under Notification No.96/2009-Cus. 2. Validity of Show Cause Notice dated 3rd October, 2013. 3. Nature and applicability of Safeguard Duty under sections 8B and 8C of the Customs Tariff Act, 1975. 4. Alleged discrimination and violation of Article 14 of the Constitution of India. Issue-wise Detailed Analysis: 1. Exemption under Notification No.96/2009-Cus.: The petitioner sought a declaration that the China Specific Safeguard Duty imposed under section 8C of the Customs Tariff Act, 1975 (CTA, 1975) is exempted under Notification No.96/2009-Cus. dated 11th September, 2009. The petitioner contended that the nature of Safeguard Duty imposed under sections 8B and 8C is the same, and there is no intelligible differentia for granting exemption from one and denying exemption from the other. The petitioner argued that the omission of section 8C from the said Notification was a mistake or oversight by the Government. The court, however, found that the Foreign Trade Policies up to and including 2009-2014 did not contemplate exemption from payment of Transitional Product Specific Safeguard Duty under section 8C. This exemption came for the first time in the Foreign Trade Policy 2015-2020. The court concluded that there was no mistake or omission on the part of the Government in not granting exemption from payment of Safeguard Duty imposed under section 8C. 2. Validity of Show Cause Notice dated 3rd October, 2013: The petitioner challenged the Show Cause Notice dated 3rd October, 2013, issued by Respondent No.3, which proposed to deny the benefit of Notification No.96/2009-Cus. in respect of imports of Carbon Black from China. The court noted that the Show Cause Notice had not yet been adjudicated and that the petitioner had several other remedies under the Act to challenge the adjudication order, if aggrieved. The court declined to exercise its extraordinary, equitable, and discretionary jurisdiction under Article 226 of the Constitution of India to interfere with the Show Cause Notice. 3. Nature and applicability of Safeguard Duty under sections 8B and 8C of the Customs Tariff Act, 1975: The court examined the distinctions between sections 8B and 8C of the CTA, 1975. Section 8B is a general safeguard provision that allows the Central Government to impose Safeguard Duty on any article imported into India if it causes serious injury to the domestic industry. Section 8C, introduced after China's accession to the WTO, specifically deals with imports from China and allows the imposition of Transitional Product Specific Safeguard Duty to prevent market disruption. The court found that the two sections operate in different fields, with section 8B being article-specific and section 8C being both article-specific and country-specific. The court held that the Government's decision not to exempt Safeguard Duty under section 8C in Notification No.96/2009-Cus. was a policy decision and not arbitrary or capricious. 4. Alleged discrimination and violation of Article 14 of the Constitution of India: The petitioner argued that the Government's action of exempting Safeguard Duty under section 8B while denying exemption under section 8C was discriminatory and violative of Article 14 of the Constitution of India. The court, however, found that there was a clear distinction between the Safeguard Duty imposed under sections 8B and 8C, and the two sections were not sub-categories of the same genus. The court held that the Government's decision to exempt one and not the other was based on different parameters and was not an unreasonable classification. The court also noted that the petitioner could claim a drawback of the Safeguard Duty paid under section 8C if the imported goods were used in the manufacture of final products exported out of India. Conclusion: The court concluded that there was no merit in the Writ Petition and dismissed it, discharging the rule. The court left the parties to bear their own costs.
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