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Issues: Interpretation of Customs Tariff Act - Applicability of exemption notification to imported goods - Rate of duty for closed circuit television lenses.
Analysis: The judgment by the High Court of Judicature at Bombay involved a dispute regarding the classification and duty rate applicable to imported closed circuit television lenses. The petitioners, who manufactured CCTV cameras, imported these lenses from Japan and contended that the lenses should be charged duty at the same rate as CCTV cameras, i.e., 60% ad valorem. The Customs Tariff Act specified different headings for lenses and cameras, with distinct duty rates under Heading No. 90.02 and Heading No. 85.15, respectively. The Court examined an exemption notification from 1977 that applied to goods falling under Heading No. 85.15.1, which included television cameras. The notification granted an exemption from customs duty exceeding a specified rate. However, the lenses imported by the petitioners fell under Heading No. 90.02, not covered explicitly in the exemption notification. The Assistant Collector of Customs initially held the lenses liable for duty at 100% ad valorem, a decision later upheld by the Government of India. The petitioners challenged this decision, arguing that the exemption notification should extend to components of instruments covered by the notification. The Court analyzed relevant provisions of the Customs Act, emphasizing the necessity for goods to be explicitly specified in exemption notifications to benefit from duty exemptions. The Court also referred to a Supreme Court judgment emphasizing strict adherence to the language of tax exemptions without room for interpretation. Ultimately, the Court dismissed the petition, ruling that the lenses were subject to duty at 100% ad valorem, as specified for goods under Heading No. 90.02. The Court highlighted that past clearance of similar goods at a lower duty rate did not alter the interpretation of relevant provisions. The judgment allowed the respondents to encash bank guarantees provided by the petitioners, with no order as to costs. Additionally, the Court granted a specific timeline for encashment of bank guarantees upon the application of the petitioners' counsel.
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