1992 (12) TMI 55 - HC - Customs

Summary

Issues:
Challenge to legality of judgment dated July 12, 1989 regarding exemption notification applicability under Tariff Item No. 90.02 and 85.15 of the Customs Tariff Act.

Detailed Analysis:
The case involves an appeal challenging the legality of a judgment delivered by a learned Single Judge regarding the applicability of an exemption notification dated August 8, 1977, under Tariff Item No. 90.02 and 85.15 of the Customs Tariff Act. The appellants, engaged in manufacturing closed circuit television cameras, imported lenses classified under Tariff Item No. 90.02, which are part of the cameras. The dispute arose when the Government of India questioned the benefit of the exemption notification for goods classified under Tariff Item No. 90.02, which led to a series of legal proceedings.

The appellants initially claimed exemption under the notification for lenses imported for manufacturing TV cameras, which was rejected by the Assistant Collector but allowed on appeal by the Collector of Customs (Appeal). Subsequently, the Government issued a show cause notice challenging the appellate authority's decision, leading to the Government setting aside the order and denying the exemption under Tariff Item No. 90.02. The appellants then filed a Writ Petition challenging the Government's decision, which was dismissed by the Single Judge.

The appellants argued that the duty payable for goods under Tariff Item No. 90.02 should be determined with reference to the rate applicable to goods under Tariff Item No. 85.15, making them eligible for the exemption under the notification. The Court found merit in this argument, stating that the exemption notification clearly specified the rate of duty applicable to goods under Tariff Item No. 85.15, which should also apply to goods under Tariff Item No. 90.02. The Court disagreed with the Single Judge's interpretation that the exemption did not extend to goods under Tariff Item No. 90.02, emphasizing the plain reading of the tariff items and the exemption notification.

Consequently, the Court allowed the appeal, setting aside the Single Judge's judgment and the Government's order, while restoring the Collector of Customs (Appeals) orders in favor of the appellants. The Court also discharged the bank guarantee furnished by the appellants, with no order as to costs.