9911796707
TMI Blog1994 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ncing from April 1, 1988 and ending with March 31, 1991 issued by the Government of India deals with Duty Exemption Scheme. Paragraph 219(1) of the said policy provides that the objective of the Duty Exemption Scheme is to make available to registered exporters the necessary inputs for export production at international prices without payment of customs duty so as to make the exports competitive in the international market. The Scheme provides for grant of three categories of licences, one of them being the advance licence. The Government of India published customs notification dated February 19, 1987 exempting goods imported into India against advance licence being materials required to be imported for the purpose of manufacture of product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the company. On October 6, 1989 the octroi officer passed an order determining the value of the consignment by loading the notional amount of customs duty which the company was liable to pay but for the exemption notification. The company paid the duty under protest and thereafter preferred Writ Petition No. 3055 of 1989 under Article 226 of the Constitution before the learned Single Judge sitting on the Original Side of this Court. 3. The company claimed that it is not permissible to load the amount of customs duty while determining the value of the articles where octroi is charged ad valorem. The Corporation sustained loading of the customs duty while determining the value of the article by claiming that the element of customs duty w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nicipal Act provides for tax to be imposed under the Act and one of the tax permissible is Octroi. Section 192 of the Act inter alia provides that the tax at rates not exceeding those specified in Schedule H shall be levied in respect of the articles mentioned in the Schedule on the entry of the said articles into Greater Bombay for consumption, use or sale therein and the said tax shall be called as octroi. The Corporation has framed rules known as Bombay Municipal Corporation (Levy of Octroi) Rules 1965. Rule 3 provides for levying assessment and collection of octroi on import by sea. Schedule H to the Act sets out the list of articles which are liable to the payment of octroi duty. The rules provide for determination of value of the arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing on behalf of the Corporation, submitted that the customs duty is loaded in the value of the article because the company may be liable to pay the customs duty in case the conditions of advance licence are not complied with. In our judgment, it is not permissible for the taxing authority to load the value of the article by including the customs duty because the customs duty was not payable at the time of charging tax. It is not open for the octroi authorities to include the customs duty in the value of the article merely because at some future point of time the company may be liable to pay customs duty in case the company commits a breach of the conditions of the advance licence. Shri Chandrachud submitted that in case such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the consignment crossing the octroi barrier. In our judgment, the learned Single Judge was in error in concluding that the customs duty was a charge which was liable to be incurred in future in case the exemption is withdrawn under the Customs Act and therefore the action of the Corporation in including the customs duty while determining value of the article was legal. The learned Single Judge was in error in declining the relevant claim made by the company. 6. Accordingly, appeal is allowed and the impugned judgment dated July 26, 1993 in Writ Petition No. 3055 of 1989 is set aside and the petition is made absolute in terms of prayers (a), (b)(i) and (b)(ii). The Corporation is liable to refund the excess amount of octroi duty recovere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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