1991 (7) TMI 81 - HC - Customs

Summary

Issues:
1. Inclusion of expenses after import in customs duty calculation
2. Levying countervailing duty on imported goods
3. Validity of circular issued by Central Board of Excise and Customs
4. Entitlement to refund of countervailing duty

Analysis:
1. The petitioners, a company engaged in importing chemicals, contested the customs authorities' practice of including post-import expenses in customs duty calculation. The company imported 2-Ethylhexanol and filed Bills of Entry for clearance, arguing that such expenses should not be included. The customs authorities, however, insisted on including customs duty in the assessable value for additional duty calculation. The petitioners sought relief through a petition under Article 226 of the Constitution of India. The court noted previous decisions supporting the customs authorities' approach, leading to the dismissal of the petitioners' claim.

2. The company later discovered that countervailing duty was not applicable to the imported alcohol. Despite the company's objection, the customs authorities levied the duty, prompting the company to seek a refund. The court acknowledged the company's entitlement to the refund based on a previous judgment that deemed the levy of countervailing duty unlawful. The court rejected the Department's argument that a circular issued by the Central Board of Excise and Customs altered the legal interpretation, emphasizing that the circular could not override established judicial decisions.

3. The court emphasized that the circular's issuance date preceded the relevant judgments, questioning why it was not presented earlier. The court deemed the circular as an attempt to circumvent the judicial decisions and clarified that it could not redefine the legal scope. Ultimately, the court ruled in favor of the petitioners, directing the respondents to verify and refund the countervailing duty amount within four weeks. The court allowed the customs authorities to enforce the bank guarantee furnished by the petitioners for any unrecovered duty. The judgment concluded without any cost orders.