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Issues Involved:
1. Whether the exemption notifications under Section 25 of the Customs Act, 1962 extend to additional duty (countervailing duty) under Section 3(2)(ii) of the Customs Tariff Act, 1975. 2. Validity of the levy of countervailing duty on the imported PVC Resins. Issue-wise Detailed Analysis: 1. Exemption Notifications and Additional Duty: The petitioner sought a writ of mandamus to prevent the Assistant Collector of Customs from loading the value of 1750 metric tonnes of PVC Resins with customs duty for levying additional duty under Section 3(2)(ii) of the Customs Tariff Act, 1975. The petitioner also sought a declaration that the levy of countervailing duty on these goods was ultra vires the Constitution of India. The petitioner relied on three notifications dated 2-8-1976, 31-1-1979, and 11-5-1984. The learned single Judge, following the Supreme Court decision in Khandelwal Metal & Engg. Works v. Union of India, held that additional duty was not exempted under the aforementioned notifications. The notifications did not cover additional duty, even though it was a customs duty. The exemption remained confined to the duty as calculated on the basis of the rate in the First Schedule of the Tariff Act and did not extend to the additional duty leviable under Section 3(1) of the Tariff Act. The learned counsel for the appellant argued that since additional duty is leviable under Section 12 of the Customs Act and the exemption of customs duty can be granted under Section 25, the exemption should also apply to additional duty. However, the respondents contended that the notifications should be strictly construed and that specific mention of additional duty was required for exemption. The court examined the notifications and concluded that they only referred to the duty of customs as specified in the First Schedule and did not mention additional duty. Therefore, the exemption granted under the notifications did not extend to the additional duty of customs. 2. Validity of Levy of Countervailing Duty: The court referred to Section 2 of the Customs Tariff Act, 1975, which provides for the duties specified in the Schedule to be levied under the Customs Act, 1962. Section 3 of the Act deals with the levy of additional duty equal to excise duty. The Supreme Court in Khandelwal Metal & Engg. Works v. Union of India held that additional duty is a duty of customs and is leviable under Section 12 of the Act, with Section 3 of the Customs Tariff Act providing the measure of calculation. The court also referred to a Full Bench decision of the Bombay High Court in Apar Private Ltd. v. Union of India, which held that a notification under Section 25(1) exempting goods from basic customs duty does not by itself exempt them from additional duty unless specifically mentioned. The court agreed with this view and held that the notifications relied upon by the petitioner did not refer to additional customs duty and therefore could not be construed as extending exemption to additional customs duty. The court also considered other relevant judgments, including Modi Rubber Ltd. v. Union of India and Government of India v. Madras Aluminium Co. Ltd., Coimbatore, and concluded that the words used in the notifications must be construed in their ordinary and natural meaning. The exemption dependent on the duty of excise on the manufacture or production of goods did not extend to additional duty unless specifically mentioned. Conclusion: The appeals were dismissed, and the court held that the exemption notifications did not extend to additional duty (countervailing duty) under Section 3(2)(ii) of the Customs Tariff Act, 1975. The levy of countervailing duty on the imported PVC Resins was valid. The court emphasized the need for specific mention of additional duty in exemption notifications for such exemptions to apply.
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