9911796707
TMI Blog2003 (10) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... ny without payment of customs duty in view of the exemption granted by the Government of India to the petitioner-company. 2.. The brief facts, giving rise to the present petition, are that the petitioner is a Public Limited Company, duly registered and incorporated under the provisions of Companies Act, 1956 and is engaged in the business, inter alia, of manufacture of roller bearings and rerolling equipment and for the said purpose the company is having its factory at Maneja, Baroda. 3.. The petitioner-company was granted exemption by the Government of India, Ministry of Industries, Department of Industrial Policy and Promotion, being the EOU section of the Secretariat for Industrial Approvals, sanctioning the application of the petitioner No. 1 company and granted facilities and privileges as admissible to 100 per cent EOU. Pursuant to the said exemption/recognition granted by the Government of India the import of capital goods, raw materials and components for production under the said scheme were are entitled to the exemption from payment of customs duty for a period of 10 years and that on debonding after the period of export obligation, the petitioner-company would be lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods and raw materials meant for "EOU". However, the respondent-corporation has levied and sought to levy and recover the octroi duty from the petitioner-company on the invoice value of the capital goods as well as raw materials plus customs duty leviable on the said goods. 7.. Being aggrieved by the said action of the respondent-corporation, the petitioner-company made applications on November 2, 1996 and November 4, 1996 highlighting the fact of non-payment of octroi duty on customs duty component and seeking exemption from payment of octroi duty in respect of the goods brought within the limits of the respondent-corporation by the petitioner-company. However, without giving any reason whatsoever or without according any opportunity of being heard, the respondent-corporation vide its letter dated November 6, 1996 rejected the applications moved by the petitioner No. 1 company. 8.. The petitioners, thereafter, moved other two applications on February 11, 1996 and February 19, 1996 to the respondent-corporation praying, inter alia, for refund of octroi duty wrongly collected by the respondent-corporation in respect of the customs duty component included for the said pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only be the depreciated value of the capital goods and also the value of unused imported materials at the end of exemption period of 10 years. 12.. Mr. Kaji has further submitted that on the date of filing of the petition, the petitioner-company has imported capital goods worth Rs. 20 crores and octroi duty illegally collected by the respondent-corporation at the rate of 3.5 per cent ad valorem worked out to Rs. 50 lakhs and hence the corporation should be directed to refund the said amount of octroi duty collected from the petitioner No. 1 Company. Mr. Kaji has further submitted that since the imported raw materials would be consumed fully by the large, without attracting any liability of customs duty, the impugned levy by the respondent-corporation is absolutely without jurisdiction and without any authority of law. 13.. In support of his submissions Mr. Kaji relied on the judgment of Bombay High Court in the case of Ceat Tyres of India Ltd. v. Municipal Corporation of Greater Bombay (1994) 73 ELT 39 (Bom), wherein it is held as under: "Octroi-valuation-value of goods not to be loaded with the Customs duty which was not payable at the time of entry of the goods within the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed thereto, which are only applicable to the said scheme and it has nothing to do with the levy and collection of octroi from the petitioner-company by the respondent corporation. Mr. Desai has further submitted that the levy and collection of octroi is governed under the provisions of Octroi Rules and Octroi Standing Orders. Mr. Desai has further submitted that in the Bill of Entry for warehousing, the customs authorities, after considering the value of goods and other miscellaneous charges, arrived at the assessable value in Indian rupees and fixed up the amount of duty. The customs duty is determined by the concerned Customs Authorities. As per the provisions contained in rule 2(19) of the Octroi Rules, the amount of customs duty would be payable only after taking into consideration the depreciated value of the capital goods on the expiry of the said 10 years' period. 16.. Mr. Desai has submitted that two decisions of the Bombay High Court relied upon by the petitioner are not applicable to the facts of the present case as in the Bombay case there was total exemption and no quantification of liability was made. He has further submitted that the scheme in Bombay case as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponent. In this connection, he relies on the decision of the honourable Supreme Court in the case of Agricultural and Processed Food Products v. Oswal Agro Furane AIR 1996 SC 1947, wherein the honourable Supreme Court has held that under no circumstances, Oswal Agro was entitled to any order, interim or final, which could have allowed it to clear the goods without payment of excise duty. The Supreme Court clearly observed that the Oswal Agro has overlooked the statutory provisions of sections 3 and 5A of the Act and got an unfair and undue advantage as a result thereof. It was, therefore, not only liable to pay the amount of excise duty which was due and payable, but it also has to pay interest thereon. 19.. Initially, this Court has not granted interim relief. The petitioner, therefore moved a Civil Application No. 4382 of 1998, and while disposing of the said application, the court has observed that the matter strikes at the very root of the jurisdiction of the Court, and even if prima facie case is shown by the petitioner, it may happen that ultimately the prima facie case may turn out to be fully devoid of any merits and in such situation the court has to guard against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001 seeking prayer against the respondent-corporation to restrain it from levying and collecting octroi duty from the petitioner-company on the notional amount of customs duty on the capital goods, raw material and stores and spares etc., imported by the petitioner for its 100 per cent EOU since the petitioner has been exempted from payment of customs duty. This civil application was ordered to be heard along with main petition. This is how the court has heard the main petition and the civil application together. 22.. The court has examined the rival contentions of the parties and also gone through the relevant statutory provisions contained in the Act as well as in the Rules and the authorities cited by both the parties. Though Mr. Desai has strenuously argued that the Bombay cases are not applicable to the facts of the present case and they are clearly distinguishable, this Court however is not inclined to accept the said proposition as the issue before the Bombay High Court as well as before this Court are more or less on the same compass. In the Bombay case, the issue was with regard to value of goods not to be loaded with the customs duty which was not payable at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includible in the value of the goods for the purpose of levy and recovery of octroi duty. 23.. In the above view of the matter, this Court is in full agreement with the view taken by the Bombay High Court, and is of the opinion that the customs duty component is not includible in the value of the goods, and the respondent-corporation is not entitled to levy and recover the octroi duty on such customs duty component which is shown in the value of the goods. It is further made clear that the Court has not made any factual ascertainment of the respective claims of the parties, and it is open for the respondent-corporation to call all the details and finalise the assessment as expeditiously as possible, and after the assessment is made, as per the interim order passed by this Court, the corporation is directed to refund the excess amount of octroi duty which was levied and collected by it from the petitioner. The petitioner is also directed to furnish an undertaking to this Court with a copy thereof to the respondent-corporation stating that in case in future any amount is found to be due and payable on account of customs duty on the capital goods so imported as a result of any br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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