1978 (7) TMI 115 - HC - Customs

Summary

Issues Involved:
1. Validity of the extra duty demand by Customs authorities.
2. Correctness of the assessment of export duty.
3. Jurisdiction and legality of reassessment of duty.
4. Compliance with notification No. 137-Customs dated 23rd June, 1966.
5. Violation of Article 31(1) of the Constitution.

Issue-wise Detailed Analysis:

1. Validity of the Extra Duty Demand by Customs Authorities:
The petitioner, Surendra Nath Nundi Private Limited, challenged the extra duty demand of Rs. 2032.19 and later Rs. 2429.38, issued by the Assistant Collector of Customs after the shipment of goods. The petitioner contended that the duty was already assessed and paid correctly based on the information provided in the shipping bill and invoice. The Customs authorities' demand for additional duty was therefore unauthorized and amounted to reassessment of what was already duly assessed.

2. Correctness of the Assessment of Export Duty:
The petitioner argued that the export duty should have been assessed at .75 paise per kilogram as per Item 24 of the Second Schedule of the Indian Customs and Central Excise Tariff. However, the Customs authorities assessed the duty at 20% ad valorem. The petitioner contended that this assessment was incorrect and illegal, as the duty should have been based on the weight of the tobacco, not its value.

3. Jurisdiction and Legality of Reassessment of Duty:
The petitioner claimed that the reassessment of duty by the Customs authorities was without jurisdiction and not maintainable under the provisions of the Customs Act, 1962. The petitioner argued that once the duty was assessed and the goods were allowed to be exported, any further reassessment in the absence of wrong information was illegal. The Customs authorities' action of demanding extra duty was therefore beyond their jurisdiction.

4. Compliance with Notification No. 137-Customs Dated 23rd June, 1966:
The petitioner contended that the Customs authorities failed to comply with the Government of India's notification No. 137-Customs, which exempted unmanufactured tobacco from so much of the duty of customs leviable thereon as is in excess of the duty leviable at 20% ad valorem. The petitioner argued that the authorities realized more duty than what was actually leviable under the Customs tariff, despite the weight of the tobacco being specifically mentioned in the export documents.

5. Violation of Article 31(1) of the Constitution:
The petitioner claimed that the excess duty demand and realization deprived them of property without the authority of law, violating Article 31(1) of the Constitution. The petitioner argued that the impugned assessment and levy of duty were illegal, irregular, and void, and thus violated their constitutional rights.

Conclusion:
The High Court made the Rule absolute, directing the case to be sent back to the respondent No. 1 for determination of the petitioner's claim based on the rate mentioned in Item No. 24 of the tariff, i.e., .75 paise per kilogram of unmanufactured tobacco. The respondents were entitled to check and consider the evidence and the petitioner's case in defense, and to pass appropriate orders in accordance with law. The Court also noted that the same order would govern another related proceeding (Civil Rule No. 1983(W) of 1973). The prayer for stay of operation of the order was refused.