1981 (1) TMI 66 - HC - Central Excise

Summary

Issues:
Petition seeking quashing of orders refusing refund of additional excise duty on imported lubricating oils.

Analysis:
The petitioner imported lubricating oils not manufactured in India and claimed refund of countervailing duty. The Central Government's order stated that countervailing duty is levied on imported articles equivalent to excise duty on similar locally produced articles. The petitioner argued that the purpose of countervailing duty is to promote local production and discourage competition with local products. The Counsel contended that if similar goods are not manufactured in India, levy of additional excise duty is unauthorized.

To understand the contentions, the provisions of the Indian Tariff Act, 1934, specifically Section 2A, were examined. Section 2A mandates countervailing duty on imported articles that would attract excise duty if produced in India. The explanation clarifies that duty is based on the highest applicable rate for similar locally produced articles. The petitioner imported lubricating oils not manufactured in India, while low-grade spindle oils were produced domestically. Countervailing duty was imposed in line with Item 11-A of the First Schedule, covering all types of lubricating oils, including those imported by the petitioner.

The judgment concluded that the imported lubricating oils fell under the category specified in Item 11-A of the Schedule, subject to countervailing duty. Despite the petitioner's argument, the court found no basis to quash the orders refusing the refund of additional excise duty. Consequently, the writ petition was dismissed with no costs awarded.