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Issues:
1. Exemption from Customs Duty for imported raw materials and components. 2. Validity of Notification Nos. 513/86 and 517/86 amending the original exemption notification. 3. Government's power to withdraw or modify exemption notifications in public interest. 4. Interpretation of exemption notifications in the context of public interest. Analysis: Issue 1: Exemption from Customs Duty The petitioners sought a declaration that raw materials imported against an import license for goods to be supplied to Oil India Limited were fully exempt from Customs Duty and additional duty under a specific notification. The exemption was initially granted for five years, but subsequent notifications amended the exemption terms. The petitioners argued that the government could not revoke the exemption as it was granted for a specific purpose related to supplying goods to public sector organizations like Oil India. They emphasized that the exemption was project-based, not goods-related. Issue 2: Validity of Amending Notifications Notification Nos. 513/86 and 517/86 amended the original exemption notification, making Customs duty partially payable while providing full exemption for additional Customs duty. The petitioners contended that the government's modification was not justified as the exemption was granted based on a specific scheme for public interest. They argued that the government's actions were not supported by any change in public interest. Issue 3: Government's Power to Modify Exemptions The court held that under Section 25 of the Customs Act, the government had the authority to grant, withdraw, or modify exemptions in public interest. The original exemption was issued in public interest, and the subsequent modifications were also deemed to be in public interest. The court emphasized that notifications issued in public interest could be withdrawn or modified accordingly, as established in previous judgments. Issue 4: Interpretation of Exemption Notifications The court rejected the petitioners' argument that the exemption was project-based, stating that the distinction did not affect the government's power to modify exemptions in public interest. Citing the Supreme Court's ruling in a similar case, the court emphasized that the government's actions were presumed to be in accordance with the law and public interest unless proven otherwise. The court concluded that the government had the authority to modify the exemption notifications, and the petition was dismissed. In conclusion, the court found no merit in the petition, and it was dismissed with no order as to costs. The judgment reaffirmed the government's power to modify exemptions in public interest and upheld the validity of the amended notifications affecting Customs duty exemptions for imported goods.
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