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Issues:
1. Interpretation of notification dated August 2, 1976 issued under sub-section (3) of Section 3 of the Customs Tariff Act, 1975. Detailed Analysis: The judgment delivered by the High Court of Judicature at Bombay involved the interpretation of a notification issued by the Government of India under sub-section (3) of Section 3 of the Customs Tariff Act, 1975. The counsel for the petitioners acknowledged that two out of three questions raised in the petition were already decided by a previous Division Bench decision. The remaining contention for consideration was regarding the notification dated August 2, 1976, which specified the additional duty on imported articles containing synthetic fiber or yarn. The petitioners argued that it was not permissible under Section 3(3) of the Customs Tariff Act to levy additional duty on raw materials equivalent to the duty paid on synthetic fiber and yarn. However, the court disagreed with this argument, emphasizing that the purpose of sub-section (3) of Section 3 is to counter-balance the advantage gained by importers compared to indigenous manufacturers. The court referred to a Supreme Court decision which clarified that the provision for additional duty under sub-section (3) of Section 3 aims to balance the excise duty leviable on similar indigenous articles or raw materials used in their production. The court highlighted that the intention behind this provision is to safeguard the interests of manufacturers in India. The judgment emphasized that the concept of levying additional duty is to neutralize any advantage that importers might have over domestic manufacturers. The court rejected the petitioner's argument that the additional duty recovered under sub-section (3) should not merely counter-balance but also include additional costs beyond what indigenous manufacturers would pay for raw materials in India. Ultimately, the court found no merit in the challenge to the notification and ruled in favor of upholding the notification. In conclusion, the court discharged the rule with costs, indicating that the petition failed to establish any valid grounds for challenging the notification issued under sub-section (3) of Section 3 of the Customs Tariff Act, 1975.
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