2008 (11) TMI 262 - HC - Customs

Higher rate of duty - Relevant date - Held that - On the basis of the changes introduced by the Finance Bill and the notification dated 1-3-89 the Customs assessed the Bill of entry and the duty levied has rightly been levied. Further the notification is perfectly valid as the increase in duty came into effect from 28th Feb., 1989 and the taxable event occurred on 2-3-89. The Supreme Court by virtue of its judgment dated 9-12-1992 had already fixed 2-3-1989 as the effective date on which the applicable rate of duty was to be ascertained. That being the position, any other submissions contrary thereto made by the petitioner cannot be entertained or at least could not have been entertained by the Government while considering the matter sympathetically. W.P. dismissed.

Summary

Issues:
Challenge of higher rate of duty on imported goods due to delay in berthing, interpretation of Sections 15 and 32 of the Customs Act, rejection of representations seeking duty exemption, applicability of Provisional Collection of Taxes Act, 1931, consideration of sympathetic relief by the Government post-Supreme Court judgment.

Analysis:
The petitioner imported inner and outer rings of ball bearings, facing higher duty due to delay in berthing caused by a port strike. The entry inward certificate was issued after the budget introduction, significantly increasing the duty payable from Rs. 15.73 lacs to Rs. 1.96 crores, leading to a grievance against the unfair liability imposition.

The petitioner challenged Sections 15 and 32 of the Customs Act before the Supreme Court, seeking relief. The Supreme Court directed sympathetic consideration by the Government due to the circumstances, emphasizing the need for a reasonable correlation between duty and imported goods' value. The petitioner's subsequent representations for duty exemption were rejected by the Central Government, leading to a prolonged legal battle.

The applicability of the Provisional Collection of Taxes Act, 1931 was highlighted, indicating the immediate effect of duty increase from the budget introduction date. The Central Government's notification on duty rates further supported the duty levied post the budget changes, aligning with the Supreme Court's judgment on the effective duty date.

The Court emphasized that the Supreme Court's judgment had already determined the duty's effective date as 2-3-1989, dismissing any contradictory submissions by the petitioner. The Court held that it couldn't direct the Government on sympathetic consideration, as it had already rejected the petitioner's representations. Consequently, the writ petition was dismissed, aligning with the Supreme Court's decision on the duty calculation date.