9911796707
TMI Blog1980 (1) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... c current through a tank containing sodium or potassium chloride. As a result of the passage of the electric current, sodium chloride becomes sodium chlorate and potassium chloride becomes potassium chloride. This process is done in a tank known as "electrolytic cell", in which the electric current is passed through electrodes. The electrodes which are at positive potential are known as "anodes", and electrodes which are at negative potential are known as "cathodes". Several types and designs of such cells are ordinarily employed for such electrolysis and different varieties of materials are used for the purpose of anodes and cathodes. Anodes can be of graphite, magnetite, platinum or its alloys, etc. In the electrolytic cells used by the petitioner at its Ambernath plant, the petitioner employs magnetite anodes. Magnetite is a special kind of iron oxide consisting of ferric iron and ferrous iron in the ratio of 1.9 to 2. Such magnetite is superior to graphite as it lasts longer and enables a higher temperature of electrolysis to be maintained. 2. After iron oxide of a specific composition is smelted in an electric arc furnace, the same becomes magnetite. This magnetite is cast in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er paying a sum of Rs. 1,09,154.92 and executing, the requisite bank guarantee for the difference of Rs. 1. 1,29,002/- arising from the fact that under entry 87 the duty was 60% whereas under entry 72(c) or 72(3) the duty was 27%. On 9th February, 1970, the petitioner filed Miscellaneous petition No. 121 of 1970, in this Court challenging the decision of the Customs Authorities levying duty on this consignment under the residuary entry 87. 4. In March, 1970, the petitioner imported another consignment of 434 cases of the same substance. This consignment was also assessed by the Customs Authorities to duty under the residuary entry 87. Thereupon on 9th April, 1970, the petitioner field Miscellaneous Petition No. 256 of 1970 challenging this assessment made by the Customs Authorities under entry 87. 5. On 11th April, 1975 both the Miscellaneous Petitions Nos. 121 of 1970 and 256 of 1970 came up for hearing. On that day both the petitions were allowed and the impugned orders were set aside on the ground that no reasons had been given. 6. Thereafter ten other consignments of the same substance were imported by the petitioner and were allowed to be cleared on the petitioner giving t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner referred to the earlier demonstration given to the Assistant Collector and the Appraiser on 30th December, 1975 and the subsequent withdrawal of one notice by the Assistant Collector and requested for a clarification as the matter had been pending for a long time. On 13th February, 1976, the petitioner attended the personal hearing before the 2nd respondent, who by his impugned order dated 9th/30th March, 1976 classified the petitioner's goods as assessable to duty under the residuary entry 87 and ordered that the differential amount of duty be recovered forthwith in terms of the bonds executed by the petitioner. 11. As the petitioner desired to appeal against that order, it addressed a letter, dated 12th April, 1976 to the Collector of Customs, viz., the 2nd respondent, resulting for a stay of the enforcement of the guarantees given by the petitioner until the matter was finally decided by the highest authorities under the Customs Act, 1962. No reply was vouchsafed to this letter. Hence the present petition. 12. The only controversy between the parties is whether entry 72 (c)/72 (3) is applicable to the petitioner's goods as claimed by the petitioner or whether the residuary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) and not otherwise specified, namely, such parts only as are essential for working of the machine or apparatus and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose..." The residuary entry 87 reads as under :- "87. All other articles not otherwise specified." 16. It is difficult to agree with the premise of the Collector that the electrodes imported by the petitioner are not in the form in which they can be readily fitted or with his generalisation that no industrial establishment would use the electrodes without the copper coating. At the demonstration given by the petitioner it was shown to the Assistant Collector, K.K. Kalra and the Appraiser M.V.S. Shastri that not only could these electrodes be readily fitted but also that the copper coating was not indispensable to the electrodes, which were demonstrated to function equally well even without the copper coating. Coating the electrodes with a thin copper coating so as to improve the distribution of the electric current over the surface of the electrodes cannot be confused with holding that without the copper coating the electrodes could not be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not indispensable to the functioning of the electrodes with the result that the essential nature and character of the electrodes remain the same irrespective of the copper coating and copper strip. It is futile for Mr. Mehta to urge that the demonstration given by the petitioner in its factory was unauthorised or that the demonstration should have been given not to the Assistant Collector but to the Collector himself. Significantly, no such grievance has been made at any time in the past nor does it find a place anywhere in the affidavit-in-reply and at best is an ipse dixit assailed across the Bar, for what it is worth, which is nothing. 18. The Collector has denied to the petitioner the benefit of entry 72(3) on the ground that electrodes are consumable material. I suppose that way all material is consumable some time or the other and at some stage or the other Mr. Setalvad is, however, correct when he says that this finding, such as it is in violation of the principles of natural justice inasmuch as this aspect of the matter had neither been alluded to in the show-cause notice nor was any opportunity given to the petitioner to meet the same. 19. None of the factors taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s actually withdrawn by the Assistant Collector. Mr. Mehta's contention also does not take into account the fact that the question of the electrodes being "consumable" material was not even the subject-matter of the show cause notice and was introduced for the first time in the impugned order without giving the petitioner any opportunity to meet the same. 23. Mr. Mehta urged that the petitioner had not exhausted all the remedies available under the Act and on that ground invited me to dismiss the petition. This contention of Mr. Mehta is also without substance, and ignores the fact that it was by reason of the Collector not even caring to send a reply to the petitioner's letter dated 12th April, 1976 asking for a stay of enforcement of the guarantees as the petitioner desired to exhaust its remedies under the Act, that left the petitioner with no alternative but to file the present petition and obtain the requisite interim relief. 24. In the result, the petition is allowed in terms of prayer (a) The Bank guarantees given by the petitioner shall stand discharged. This is a fit case where the respondents should pay to the petitioner the costs of the petition. The respondents shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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