1989 (10) TMI 67 - SC - Customs

Interpretation of Notification Nos. 59/83 and 126/84 - Held that - Considering the language of the notification the result of reading the First Schedule along with the relevant notifications is that imports of timber into India from most countries is charged to effective basic customs duty as per the tariff in the Schedule whereas in respect of imports from Burma Nepal Bhutan and Bangladesh the rate of effective basic duty is nil. The position therefore is that the article in question is liable to two or more different rates of effective basic duty based on the country of origin for the import. It therefore follows that the auxiliary duty is to be determined with reference to the higher of the two effective rates of duty. Allow the appeals and restore the orders of the Assistant Collector rejecting the claims of refund filed by the assessees.

Summary

Issues: Interpretation of Notification Nos. 59/83 and 126/84 under Customs Act

Analysis:
1. The appeals under Section 130E(b) of the Customs Act were filed by the Collector of Customs challenging the order of the Customs, Excise and Gold Appellate Tribunal in the cases of M/s. Hunsur Plywood Pvt. Ltd. and M/s. Veneer Mills. The issue involved the interpretation of Notification Nos. 59/83 and 126/84, which were similar to Notification No. 265/Cus., dated 8-12-1982. The judgment in Civil Appeal Nos. 2644-48 of 1987 (Collector of Customs v. Western India Plywood Manufacturing Co. Ltd.) was cited as directly relevant to the present case, leading to the conclusion that the appeals had to be allowed, and the orders of the Assistant Collector rejecting the claims by the respondents had to be upheld.

2. The interpretation of the Customs Tariff Act, specifically Section 5, was raised during the proceedings. The contention was made that exemptions or concessions for goods imported from certain countries are granted based on agreements with those countries. The argument presented was that the expression "country of origin" has a specific meaning and determination governed by special provisions. The explanation to the Notification in question was argued to apply only to a comparison of rates applicable under concession notifications for goods imported from specific "countries of origin." However, the argument was rejected based on previous judgments, including the case of Western India Plywood Manufacturing Co. Ltd.

3. The argument that the interpretation given by the court would be inconsistent with any agreement for concessional treatment between the Government of India and the countries of import was addressed. It was clarified that there was no evidence to show that the notification under Section 25 was issued pursuant to an agreement under Section 5 of the Customs Tariff Act. The court emphasized that the auxiliary duty should be determined by reference to the highest effective rate of duty applicable to all imports, even if imports come from countries with varying degrees of exemption under different notifications.

4. The court analyzed the language of the notification and explained that while most countries had a specific effective basic customs duty for timber imports, countries like Burma, Nepal, Bhutan, and Bangladesh had a nil rate of effective basic duty. This difference in duty rates based on the country of origin led to the conclusion that the auxiliary duty should be determined with reference to the higher of the two effective rates of duty, as per the notification.

5. In conclusion, the court upheld its previous decision in the case of Western India Plywood Manufacturing Co. Ltd. and allowed the appeals, restoring the orders of the Assistant Collector rejecting the refund claims by the assessees. No costs were awarded in the appeals.