1987 (10) TMI 53 - HC - Customs

Summary

Issues Involved:
1. Determination of assessable value for countervailing duty.
2. Applicability of reduced countervailing duty rate as per exemption Notification No. 302/79.
3. Inclusion of landing charges in C.I.F. value for customs duty.
4. Constitutional validity of Section 3(2) of the Customs Tariff Act, 1975.

Summary:

1. Determination of Assessable Value for Countervailing Duty:
The petitioner contended that the Assistant Collector of Customs should not determine the assessable value for countervailing duty by loading customs duty on C.I.F. value. The Court referred to Section 3(2) of the Customs Tariff Act, 1975, which clearly states that the value of the imported article shall be the aggregate of the value determined u/s 14(1) of the Customs Act and any duty of customs chargeable on that article. The Court concluded that the customs duty can be loaded on C.I.F. value while determining the assessable value for the purpose of countervailing duty.

2. Applicability of Reduced Countervailing Duty Rate as per Exemption Notification No. 302/79:
The petitioner argued that the countervailing duty should be reduced to 27% as per exemption Notification No. 302/79. The Court noted that the exemption is available only if the conditions in the notification are satisfied, specifically that the goods are manufactured from raw naphtha and that the appropriate excise duty has been paid on it. Since the imported goods could not satisfy the second condition, the Court ruled that the exemption notification does not apply, and the countervailing duty at the rate of 42% is justified.

3. Inclusion of Landing Charges in C.I.F. Value for Customs Duty:
The petitioner claimed that the C.I.F. value should not include landing charges levied by the Port Trust. The Court found no evidence in the petition to support the claim that C.I.F. value includes landing charges. The Court held that landing charges are not post-import charges but pre-import charges, as they are necessary for clearing the goods for home consumption. Therefore, the inclusion of landing charges in the C.I.F. value for customs duty is valid.

4. Constitutional Validity of Section 3(2) of the Customs Tariff Act, 1975:
The petitioner challenged the constitutional validity of Section 3(2) of the Customs Tariff Act, 1975, claiming it violated Articles 14 and 265 of the Constitution. The Court rejected this argument, stating that imported goods and locally manufactured goods are distinct categories and cannot be compared. The Court also dismissed the claim of double taxation, noting that different methods for calculating duties are permissible. The Court upheld the constitutionality of Section 3(2) of the Customs Tariff Act, 1975.

Conclusion:
The petition was dismissed, and the rule was discharged with costs, as all contentions raised by the petitioner were turned down.