1980 (9) TMI 94 - HC - Central Excise

Countervailing duty - Nature and scope - Interpretation - Revision - Personal hearing not necessary - Appeal to Supreme Court

Summary

Issues Involved:
1. Interpretation of "countervailing duty" under section 2A of the Indian Tariff Act, 1934.
2. Validity of countervailing duty irrespective of domestic manufacture.
3. Necessity of personal hearing in revisional proceedings.
4. Classification of imported polypropylene fibre under the correct tariff item.

Detailed Analysis:

1. Interpretation of "countervailing duty" under section 2A of the Indian Tariff Act, 1934:
The principal question is whether the expression "countervailing duty" means what the statute (Indian Tariff Act of 1934) says. The petitioner argued that "countervailing duty" should be understood as a duty on goods manufactured within India, akin to the interpretation under Entry 51 of the State List of the Constitution of India. However, the court noted that section 2A of the Tariff Act explicitly defines countervailing duty as an additional customs duty levied irrespective of whether like articles are manufactured in India. The court emphasized that the term must be interpreted in light of the specific definition provided in the statute itself.

2. Validity of countervailing duty irrespective of domestic manufacture:
The petitioner contended that countervailing duty under section 2A should only apply if a like article is manufactured in India. The court rejected this argument, stating that section 2A, along with its Explanation, clearly indicates that the duty applies regardless of domestic manufacture. The court clarified that the duty is an additional import duty, not an excise duty, and the measure of this duty is equivalent to the excise duty on a like article if produced in India. The court concluded that the statutory definition must prevail over any other interpretations from different contexts or statutes.

3. Necessity of personal hearing in revisional proceedings:
The petitioner argued that the revisional order passed by the Government of India was invalid as it did not afford a personal hearing. The court dismissed this argument, stating that there is no legal requirement for a revisional authority to provide a personal hearing. The court found no authority supporting the claim that the absence of a personal hearing renders the order illegal or void.

4. Classification of imported polypropylene fibre under the correct tariff item:
The petitioner claimed that the polypropylene fibre imported should not fall under Item 18(1)(ii)(c) of the Central Excise Tariff. The court noted that the petitioner did not dispute the classification under Item 46(6) for import duty purposes. However, the court acknowledged that the petitioner should be given an opportunity to argue that the fibre falls under a different sub-item, potentially attracting a lower duty rate. Despite granting time for the petitioner to file an affidavit supporting this claim, the petitioner failed to do so. Consequently, the court proceeded on the basis that the classification under Item 18(1)(ii)(c) was correct and dismissed the petition.

Conclusion:
The court upheld the validity of countervailing duty under section 2A of the Indian Tariff Act, 1934, irrespective of whether like articles are manufactured in India. The court also ruled that a personal hearing is not mandatory in revisional proceedings and confirmed the classification of the imported polypropylene fibre under the specified tariff item. The petition was dismissed, and the request for a certificate of fitness to appeal to the Supreme Court was denied.