1991 (6) TMI 85 - HC - Customs

Summary

Issues:
1. Interpretation of Tariff Items 82(3)(a) and 87 of the Indian Customs Tariff.
2. Claim for refund of excess import duty and countervailing duty.
3. Judicial review under Article 226 of the Constitution of India.

Analysis:

Issue 1: Interpretation of Tariff Items 82(3)(a) and 87
The petitioners, a Public Limited Company manufacturing polyester and nylon yarn, imported polyester chips for manufacturing polyester yarn. The dispute arose regarding the classification of the imported polyester chips under Tariff Item 82(3)(a) or residuary Item 87 of the Indian Customs Tariff. The petitioners contended that the polyester chips should be classified under Item 87, attracting duty at 60% ad valorem, rather than under Item 82(3)(a) which imposed a duty of 100% ad valorem. The authorities had levied duty under Item 82(3)(a) based on the description of "artificial or synthetic resin and plastic materials," which the petitioners disputed.

Issue 2: Claim for Refund of Excess Duty
The petitioners filed refund applications for the excess duty paid under protest, arguing that the levy of countervailing duty and duty at 100% ad valorem was incorrect. The Assistant Collector, Appellate Collector, and Government of India rejected the refund applications, upholding the duty imposition under Item 82(3)(a). The petitioners contended that the authorities failed to consider how the polyester chips were known in trade or commercial parlance, which they believed was essential in determining the correct tariff item for duty imposition.

Issue 3: Judicial Review under Article 226
The High Court, after considering the submissions of the petitioners' counsel, held that the duty imposition under Tariff Item 82(3)(a) was appropriate. The Court emphasized that the description of "synthetic resin" in the tariff item was clear, and the petitioners themselves declared the import of polyester chips as 'synthetic resin' in the bills of entries. The Court noted that the petitioners did not provide any material to support their claim regarding the trade parlance of polyester chips. Consequently, the Court dismissed the petition under Article 226 of the Constitution of India, ruling that the authorities' decisions were valid, and the refund applications were untenable.

In conclusion, the High Court upheld the duty imposition under Tariff Item 82(3)(a) for the imported polyester chips, rejecting the petitioners' claim for refund of excess duty. The judgment emphasized the clarity of the tariff item description and the petitioners' own declaration of the imported goods as 'synthetic resin.' The Court's decision highlights the importance of providing supporting evidence in challenging duty imposition and underscores the need for clarity in interpreting tariff items for customs duties.