1991 (7) TMI 88 - HC - Customs

Summary

Issues:
1. Interpretation of provisions regarding countervailing duty and additional duty of excise.
2. Whether exemption notifications affect the levy of countervailing duty and additional duty of excise.
3. Scope of the term "duty of excise" in relation to special excise duty and additional duty of excise.

Analysis:
The judgment by the High Court of Bombay involved the interpretation of provisions concerning countervailing duty and additional duty of excise. The petitioner, a Private Limited Company engaged in manufacturing synthetic fabrics, challenged the imposition of additional duties under the Tariff Act. The court examined the applicability of countervailing duty under Section 3 of the Customs Tariff Act, which is equivalent to the excise duty on similar domestically manufactured goods. It was argued that special excise duty and additional duty of excise are part of the excise duty leviable under the Excise Act and are subject to exemption notifications. However, the court held that countervailing duty and additional duty of excise can be levied irrespective of exemption notifications, as these duties are based on the concept of levy and not just collection.

Regarding the impact of exemption notifications on the levy of duties, the court rejected the petitioner's argument that if an exemption from excise duty is granted domestically, countervailing duty and additional duty of excise cannot be imposed on imported goods. The court clarified that exemption notifications do not eliminate the liability to pay duties but only exempt the manufacturer from payment. The distinction between levy and collection of duty was emphasized to refute the petitioner's contention that exemption notifications prevent the imposition of countervailing duty and additional duty of excise.

The court also addressed the scope of the term "duty of excise" concerning special excise duty and additional duty of excise. The petitioner argued that these additional duties should not be included in the term "duty of excise," citing a Supreme Court decision. However, the court disagreed with this interpretation, stating that the levy of countervailing duty and additional duty of excise under the relevant Act was valid. The court concluded that the petitioners were not entitled to relief, and the petition was dismissed with costs, upholding the imposition of countervailing duty and additional duty of excise as per the statutory provisions.