1986 (5) TMI 118 - AT - Customs

Summary

Issues:
- Correctness of rejection of refund of additional duty (countervailing duty) collected from the appellants in respect of three consignments of P-Aminodiphenylamine.
- Liability to additional duty with reference to the date of entry of goods into territorial waters of India.
- Interpretation of Notifications No. 364-Cus/76 and No. 63-Cus dated 2-8-1976 and 1-3-1979.
- Applicability of Tariff Item 68 and the definition of goods manufactured in a factory as per the Factories Act, 1948.
- Distinction between basic customs duty and additional duty.
- Precedent decisions by the Bombay High Court, Supreme Court, and Delhi High Court.

Analysis:
1. The case involved the rejection of refund of additional duty collected from the appellants for three consignments of P-Aminodiphenylamine. The issue was whether the liability to additional duty should be determined based on the date of entry of goods into territorial waters of India or the date of removal from the warehouse.

2. The appellants argued that they were not liable for additional duty as the goods entered Indian waters before the rescission of Notification No. 364-Cus/76. They relied on a Bombay High Court decision, which was overruled by the Supreme Court in a different case. The lower authorities upheld the rejection of the claim based on the date of goods' removal from the warehouse.

3. The appellants contended that the earlier Tariff Item 68 referred to goods manufactured in a factory, which did not apply to imported goods. However, the respondent argued that duty was leviable based on the class or description of the imported article. The Supreme Court's decision clarified that duty is determined based on the like article that could be produced or manufactured in India.

4. The Bombay High Court's distinction between basic customs duty and additional duty was challenged, with the respondent relying on Supreme Court and Delhi High Court decisions. The Supreme Court's ruling that additional duty is akin to customs duty was emphasized, leading to the dismissal of the appellants' claim for refund.

5. The Tribunal upheld the lower authorities' decision, stating that the liability for additional duty should be determined based on the date of goods' clearance from the warehouse. The appellants' arguments regarding the definition of goods under Tariff Item 68 were deemed insufficient in light of the Supreme Court's interpretation. The appeals were dismissed, affirming the rejection of the refund claim.