2016 (7) TMI 1063 - SC - Customs

Effective Rate of duty - Import of Compound alcoholic preparations of a kind used for the manufacture of beverages - the grievance of the appellant is that the rate which has been prescribed for goods falling under Tariff Sub-Heading 2208.10 is higher than that was authorized in the Budget Proposals during financial years 1993-94 and 1994-95. The appellant took recourse to the provisions of the Right to Information Act in order to procure relevant information from the concerned authorities. According to the appellant, the authorities have not furnished the relevant information. Held that - Every legislation is done with the object of public good as said by Jeremy Bentham. Taxation is an unilateral decision of the Parliament and it is the exercise of the sovereign power. The financial proposals put forth by the Finance Minister reflects the governmental view for raising revenue to meet the expenditure for the financial year and it is the financial policy of the Central Government. The Finance Minster s speech only highlights the more important proposals of the budget. Those are not the enactments by the Parliament. The law as enacted is what is contained in the Finance Act. After it is legislated upon by the Parliament and a rate of duty that is prescribed in relation to a particular Tariff Head that constitutes the authoritative expression of the legislative will of Parliament. Now in the present facts of the case, as per the finance bill, the legislative will of the Parliament is that for the commodities falling under Tariff Head 2208.10, the tariff is ₹ 300/- per litre or 400% whichever is higher. Even assuming that the amount of tax is excessive, in the matters of taxation laws, the Court permits greater latitude to the discretion of the legislature and it is not amenable to judicial review. According to the appellant, the Central Government has issued notifications under Section 25(1) and he is also entitled to such a notification in respect of the commodities falling under the category 2208.10. When the appellant alleges discriminatory action on the part of the respondents, he has to establish that there is no rational basis for making classification between the goods which are notified and the goods of the appellant which are not notified. It is also a firmly established principle that the legislature understands and appreciates the needs of its people. A Taxing Statute can be held to contravene Article 14 of the Constitution if it purports to impose certain duty on the same class of people differently and leads to obvious inequality. Such a material is not placed before us to come to a just conclusion that the action of the respondents is discriminative. Hence, the same is held against the appellant. Appeal dismissed - Decided against the appellant.

Issues Involved:
1. Whether the budget proposals, as alleged by the appellant, are duly passed and approved by the Parliament and whether the tariff rates fixed by the TRU are contrary to the legislative mandate.
2. Whether this Court can direct the Central Government to issue a notification under Section 25(1) of the Customs Act.
3. Whether the compound alcoholic preparations of a kind used for the manufacturing of beverages fall under the category of alcoholic beverages.
4. Whether there is any discrimination on the part of the Central Government in issuing a notification under Section 25(1) of the Customs Act in respect of other goods and contrary to Article 14 of the Constitution of India.

Detailed Analysis:

Issue 1: Budget Proposals and Legislative Mandate
The appellant argued that the budget proposals for 1993-94 and 1994-95, which stipulated reduced import duty rates, were duly approved by Parliament and should have been applied to the goods he imported. However, the Court found no evidence that these proposals were accepted by Parliament. The Finance Act passed by Parliament specified a higher tariff for goods under Tariff Sub-Heading 2208.10, which the appellant failed to contest appropriately. The Court emphasized that the Finance Minister's speech and budget proposals are not equivalent to enacted law, which is contained in the Finance Act. The Court concluded that the appellant's claim lacked merit, affirming that the legislative will, as expressed in the Finance Act, prescribed the higher tariff rates.

Issue 2: Court's Authority to Direct Notification Issuance
The appellant contended that the Central Government should issue a notification under Section 25(1) of the Customs Act to rectify the tariff rates. The Court clarified that Section 25 of the Customs Act grants the Central Government discretionary power to exempt goods from duty in the public interest, either generally or under exceptional circumstances. This power is subject to parliamentary oversight. The Court held that it cannot compel the Central Government to issue such notifications, as this falls within the executive's discretion. The Court found no grounds for directing the issuance of a notification, especially since the appellant's claim of discrimination was unsupported.

Issue 3: Classification of Compound Alcoholic Preparations
The appellant argued that compound alcoholic preparations used for manufacturing beverages should not be classified as alcoholic beverages, citing previous judgments. The Court refrained from making a determination on this classification issue, suggesting that it should be resolved before the appropriate forum if necessary.

Issue 4: Alleged Discrimination in Notification Issuance
The appellant claimed discriminatory treatment by the Central Government, which issued notifications for other goods but not for his. The Court stated that to prove discrimination, the appellant needed to show that there was no rational basis for differentiating between the notified goods and his goods. The Court found no evidence to support the appellant's claim of discrimination, concluding that the appellant failed to establish a violation of Article 14 of the Constitution.

Interest Aspect
Since the appellant was not entitled to the primary relief sought, the Court did not address the issue of interest on the alleged excess duty paid.

Conclusion
The Court dismissed the appeals, finding them devoid of merit. The Court acknowledged the appellant's efforts in presenting his case but ultimately upheld the legislative and executive actions regarding the tariff rates and notification issuance.

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