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Issues Involved:
1. Whether Phosphoric Acid imported for the manufacture of fertilizer was liable to pay auxiliary duty of customs at the rate of 15% or 5% under Notification No. 14 dated 1st March, 1974. 2. The maintainability of the petitions in light of preliminary objections raised by the respondents. 3. The interpretation of the expression "rate of duty of customs specified in the said First Schedule read with any relevant notification of the Government of India." Detailed Analysis: Issue 1: Rate of Auxiliary Duty on Phosphoric Acid The primary issue was whether the auxiliary duty on Phosphoric Acid imported for the manufacture of fertilizer should be 15% under Serial No. 1 or 5% under Serial No. 2 of the Notification No. 14 dated 1st March, 1974. The court examined the relevant provisions of the Indian Tariff Act, 1934, and the Customs Act, 1962. The standard rate of duty for Phosphoric Acid under Item 28(16) was 60% ad valorem, with a preferential rate of 10% if imported from Burma and 30% if imported for the manufacture of fertilizer. The court noted that Section 25 of the Customs Act allows the Central Government to exempt goods from customs duty, and such exemptions do not change the nature of the goods. The court concluded that the highest rate of duty specified in the First Schedule for Phosphoric Acid was 60%. Therefore, under the Explanation to the Table in the notification, the auxiliary duty should be 15% as per Serial No. 1. The court rejected the petitioner's contention that the duty should be 5% under Serial No. 2, stating that the nature of the goods does not change due to the exemption. Issue 2: Maintainability of the Petitions The respondents initially raised several preliminary objections regarding the maintainability of the petitions, including: - The petitions abated due to the Constitution (Forty-Second Amendment) Act, 1976. - The petitions were not maintainable due to the availability of an efficacious remedy under the Customs Act. - The petitions were barred by principles analogous to those in Order 23 Rule 1 of the CPC, 1908, as the petitioners had withdrawn an earlier petition on the same cause of action. - The conduct of the petitioners in filing a revision application during the pendency of the petitions was questionable. However, during the hearing, the respondents did not press these preliminary objections, and the court proceeded to consider the main issue regarding the auxiliary duty. Issue 3: Interpretation of Relevant Notification The court examined the interpretation of the expression "rate of duty of customs specified in the said First Schedule read with any relevant notification of the Government of India." The petitioner argued that due to the exemption notification, the rate of duty should be considered as 30%, falling under Serial No. 2 of the Table. However, the court held that the goods (Phosphoric Acid) remain the same irrespective of the exemption, and the highest rate of duty (60%) should be considered for determining the auxiliary duty. The court emphasized that exemptions granted under Section 25 of the Customs Act do not create a new item in the First Schedule of the Indian Tariff Act. Conclusion: The court agreed with the reasoning of Ahmadi J. in the earlier judgment and concluded that the auxiliary duty on Phosphoric Acid imported for the manufacture of fertilizer should be 15% under Serial No. 1 of the Table in Notification No. 14 dated 1st March, 1974. Both petitions were rejected, and the rule was discharged with costs quantified at Rs. 2500/- in each matter.
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