1988 (10) TMI 48 - HC - Customs

Summary

Issues Involved:
1. Maintainability of writ petitions.
2. Classification of blanched and roasted peanuts under the Customs Tariff Act.
3. Interpretation of fiscal statutes.
4. Refund of export duty.

Issue-wise Detailed Analysis:

1. Maintainability of Writ Petitions:
The respondents contended that the writ petitions were not maintainable because a further appeal lay before the Customs, Excise and Gold Control (Appellate) Tribunal under Section 129-A of the Customs Act. However, the petitioners argued that since the Tribunal had already decided a similar matter, filing an appeal was futile. The Court held that the availability of an alternative remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution of India. It is a matter of discretion rather than jurisdiction. Consequently, the Court exercised its jurisdiction to admit and entertain the writ petitions, and this objection was dismissed.

2. Classification of Blanched and Roasted Peanuts:
The core issue was whether blanched and roasted peanuts fell within the category of groundnut kernels under Heading 20(i) of the II Schedule - Export Tariff of the Customs Tariff Act of 1975. The Customs Authorities had demanded export duty on blanched and roasted peanuts as groundnut kernels. The petitioners argued that blanched and roasted peanuts are not groundnut kernels but an edible preparation made from them. The Court examined the preparation process and noted significant differences in physical properties, chemical changes, usage, trade name, value, shelf life, and availability between groundnut kernels and blanched roasted peanuts. The Court concluded that blanched and roasted peanuts are distinct from groundnut kernels and do not fall under Heading 20(i) of the Export Tariff.

3. Interpretation of Fiscal Statutes:
The Court referred to several Supreme Court rulings to elucidate the principles of interpreting fiscal statutes. It emphasized that the meaning of words in fiscal statutes should align with their popular or commercial sense, as understood by people in trade and commerce. The Court cited decisions such as Dunlop India Ltd. v. Union of India, Union of India v. Gujarat Woollen Felt Mills, and Atul Glass Industries Pvt. Ltd. v. Collector of Central Excise, which underscored that the functional character and commercial understanding of a product are crucial in its classification under fiscal statutes. Applying these principles, the Court determined that groundnut kernels, in common parlance, refer to raw nuts removed from their shells, whereas blanched and roasted peanuts are processed edible products distinct from raw kernels.

4. Refund of Export Duty:
The Court held that since blanched and roasted peanuts do not fall under the category of groundnut kernels, their export is not subject to duty. Consequently, the amounts of export duty collected from the petitioners were liable to be refunded. The Court noted that, as per its previous order, the petitioners had already furnished bank guarantees and executed personal bonds to obtain refunds. Therefore, the bank guarantees and personal bonds were to be cancelled.

Conclusion:
The writ petitions were allowed, and the impugned orders were quashed. The Court ordered the cancellation of the bank guarantees and personal bonds executed by the petitioners. There was no order as to costs.