2000 (12) TMI 921 - SC - Indian Laws

Summary

Issues:
Interpretation of countervailing duty - Date of chargeability - Rate at the time of permit issuance vs. rate at the time of actual import.

Analysis:
The Supreme Court considered the issue of whether countervailing duty is chargeable at the rate prevailing on the date of permit issuance or at the rate on the date of actual import of liquor into the State. The appellants held distributor licenses and import permits under the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970. The permits were granted at a specific duty rate, but before the actual import of liquor, an amendment was made increasing the countervailing duty. The appellants were asked to pay the differential duty based on the enhanced rate. The appellants contended that since duty was paid at the time of permit issuance, the enhanced duty should not apply to their imports made within the permit validity period. However, the Court held that countervailing duty is levied at the rate prevailing on the date of actual import into the State, irrespective of the rate at the time of permit issuance. The Court emphasized that countervailing duty is imposed at the time of import to counterbalance excise duty on similar goods manufactured within the State.

The Court examined Section 21 of the Andhra Pradesh Excise Act, which empowers the government to levy countervailing duty on imported excisable articles at specified rates. It distinguished excise duty, a tax on manufacture, from countervailing duty, a duty on imported goods. The Court clarified that countervailing duty is chargeable at the time of import into the State, based on the prevailing duty rate. The Court cited the case of S.K. Pattanaik v. State of Orissa, highlighting the difference between excise duty and countervailing duty, emphasizing that countervailing duty is attracted at the time of entry of goods into the State.

The Court rejected the appellant's argument that duty should be based on the rate at the time of permit issuance, emphasizing that countervailing duty is payable at the rate in force on the date of actual import. Therefore, the demand for the differential amount of duty from the appellant was deemed justified. The Court upheld the High Court's decision to dismiss the writ petition challenging the duty demand. Consequently, the appeal was dismissed, affirming that countervailing duty is chargeable at the rate prevailing on the date of actual import into the State, regardless of the rate at the time of permit issuance.