1981 (11) TMI 63 - HC - Customs

Heat resistance stainless steel strips in coils of 48 width Liability to duty Classification & interpretation - Fiscal statutes

Summary

Issues Involved:
1. Classification of imported goods under Indian Customs Tariff.
2. Applicability of concessional duty rate.
3. Interpretation of trade and commercial terms.
4. Adoption of definitions from different standards (ISI vs. Brussel's Tariff Nomenclature).
5. Refund of excess customs duty paid.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods under Indian Customs Tariff:
The petitioner imported heat-resistant stainless steel strips in coils from Switzerland. The goods were initially classified under Item No. 63(20A) of the Indian Customs Tariff (ICT), which pertains to "Stainless steel plates, sheets and strips" and carries a 100% ad valorem duty. The petitioner argued that the goods should be classified under Item No. 63(14) of the ICT, which pertains to "Iron and steel hoops and strips, not otherwise specified," with a duty of 40% ad valorem. The petitioner sought a refund based on the claim that the goods were incorrectly classified, leading to an overpayment of customs duty.

2. Applicability of Concessional Duty Rate:
The petitioner contended that under Notification No. 118/65, dated 20-8-1965, as amended by Notification No. 138/65, dated 25-8-1965, the duty on "cold rolled hoops and strips of stainless steel 250 mm width or more" was reduced to 10% ad valorem. The goods imported were 48" wide, and the petitioner argued that they should benefit from the concessional duty rate applicable to strips.

3. Interpretation of Trade and Commercial Terms:
The court examined the definitions of "strip" and "sheet" as understood in trade and commercial parlance. The court referenced the Supreme Court judgments in *Dunlop India Ltd. v. Union of India* and *India International Industries v. S.T. Commissioner, U.P.*, which emphasized the importance of interpreting terms in fiscal statutes according to their popular meaning in trade and commerce.

4. Adoption of Definitions from Different Standards (ISI vs. Brussel's Tariff Nomenclature):
The court noted that the definitions of "strip" and "sheet" given by the Indian Standards Institution (ISI) should be preferred over those in Brussel's Tariff Nomenclature. The ISI defined "strip" and "sheet" based on width and form (coiled or straight lengths). The court found that the first respondent erred in relying on Brussel's Tariff Nomenclature, which defined "strip" as a rolled product of width not exceeding 500 mm and "sheet" as a rolled product of a width exceeding 500 mm. The court held that the ISI definitions, which were more relevant to Indian commercial parlance, should prevail.

5. Refund of Excess Customs Duty Paid:
The court quashed the order of the first respondent, which had dismissed the petitioner's revision application. The court directed the respondents to refund the excess customs duty collected from the petitioner. The court found that the goods should have been classified as "strips" under Item No. 63(14) of the ICT, and the petitioner was entitled to the concessional duty rate of 10% ad valorem as per the notification.

Conclusion:
The court allowed the writ petition, quashing the order of the first respondent and directing the refund of the excess customs duty collected. The court emphasized the importance of interpreting trade terms according to their popular meaning in commercial parlance and preferred the definitions provided by the ISI over those in Brussel's Tariff Nomenclature. The court found that the goods imported by the petitioner were "strips" and not "sheets," and thus eligible for the concessional duty rate.