2003 (10) TMI 62 - HC - Customs

Summary

Issues Involved:
1. Constitutionality of the notification dated 1-3-2001 under Articles 14 and 19 of the Constitution of India.
2. Quashing the order dated 6-1-2003 issued by the Deputy Secretary, Department of Revenue.
3. Refund of Rs. 13,07,07,730/- with interest.

Detailed Analysis:

1. Constitutionality of the Notification Dated 1-3-2001:
Petitioners' Argument: The petitioners challenged the notification dated 1-3-2001, which excluded manufacturers using Corex Furnace from the benefit of reduced customs duty on Metallurgical Coke, as arbitrary, discriminatory, and violative of Articles 14 and 19(1)(g) of the Constitution of India. They argued that both Corex and Blast Furnace technologies are essentially the same, supported by certificates from the Department of Metallurgy, Indian Institute of Science, and Mecon Ltd., which stated that both technologies fall in the same class.

Respondents' Argument: The respondents justified the exclusion as a conscious policy decision based on an explicit criterion, arguing that Corex Technology and Blast Furnace Technology are not similar. They emphasized that tax policy decisions cannot be questioned by the petitioners.

Court's Analysis: The Court noted the certificates from the Department of Metallurgy and Mecon Ltd., which confirmed the similarity between Corex and Blast Furnace technologies. The Court found that the differences pointed out by the respondents were not substantial enough to justify the exclusion. The Court concluded that the notification was discriminatory and violated Article 14, as it created an unjustified mini-classification among manufacturers.

2. Quashing the Order Dated 6-1-2003:
Petitioners' Argument: The petitioners contended that the rejection of their representation by the Deputy Secretary, Department of Revenue, was contrary to the Court's earlier direction to consider the certificates and other material.

Court's Analysis: The Court observed that the respondents failed to consider the expert opinions and certificates provided by the petitioners. The endorsement by the Ministry of Finance did not reference the certificates from the Department of Metallurgy and Mecon Ltd. The Court found that the respondents did not provide any expert material to counter the certificates, leading to the conclusion that the rejection of the representation was arbitrary and unjustified.

3. Refund of Rs. 13,07,07,730/- with Interest:
Petitioners' Argument: The petitioners sought a refund of the customs duty paid under the interim order of the Court, arguing that they were entitled to the benefit of the concessional duty.

Court's Analysis: The Court directed the respondents to extend the benefit of the notification to the petitioners, thus entitling them to a refund. The Court instructed the petitioners to file an appropriate application for the refund, which the respondents were directed to dispose of within four weeks from the date of filing.

Conclusion:
The Court allowed the writ petitions, holding that the notification dated 1-3-2001 was discriminatory and violated Article 14 of the Constitution. The order dated 6-1-2003 was quashed, and the respondents were directed to extend the benefit of the concessional duty to the petitioners. The petitioners were also directed to file an application for the refund of the customs duty paid, which the respondents were to process within four weeks.