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TMI Blog1996 (3) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... e out of the writ petitions, in which the prayer is for refund of the duty paid : 2161 and 2162 of 1987, 315 and 316 of 1988, 355 toW.A. Nos. 360 of 1988, 763 of 1988, 765 of 1988, 766 of 1988 and 830 of 1990. The other Writ Appeals arise out of the Writ Petitions for a declaration that the levy is illegal or for a writ of mandamus, forbearing the Authorities from collecting the duty. 2.The learned Judge, who heard the Writ petitions has accepted the contentions of the petitioners in the writ petitions and allowed the same. The reasons given by the learned Judge are as follows : 1. The duty under Section 3(1) of the Customs Tariff Act, 1975 should be equal to excise duty for the time being leviable on a like article, if produced or manufactured in India. No duty has been levied on natural rubber under the Central Excises and Salt Act, 1944 for the reason that there is no such item in the first Schedule to the said Act and that by a notification under Rule 8(1) of the Central Excise Rules, all items under item 68 of the Schedule which were manufactured outside a factory did not invoke a levy of central excise; 2. There is no manufacturing process involved in bringing into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning contained in the Judgment under Appeal. 5.Insofar as the first contention is concerned, reliance is placed on the Judgment of the Supreme Court in Khandelwal Metal Engg. Works v. Union of India [1985 (20) E.L.T. 222 (S.C.)], in which the Supreme Court held that the duty under Section 3(1) of the Customs Tariff Act is not the countervailing duty. In that Judgment it is held that the charging Section is Section 12 of the Customs Act, under which the duty of customs is leviable on the import and export of the article, which is relatable to Entry 83 in List 1 of the Seventh Schedule to the Constitution and that the taxable event is not the manufacture of goods, but the import. The Court observed that Section 3(1) of the Customs Tariff Act does not require that the imported article should be such as to be capable of being produced or manufactured in India, but the assumption has to be that an article imported in India can be produced or manufactured in India and upon that basis, the duty has got to be determined under Section 3(1) of the Customs Tariff Act. The following propositions were laid down in that Judgment among others : ....... "(1) The charging Section under whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt as he then was held that a notification under the Central Excise Act having exempted the drug in question in that case, the goods if manufactured in India would be exempted from the levy of excise duty and consequently, they were not leviable for the additional duty under Section 3(1) of the Customs Tariff Act. 8.In Thermax Private Ltd. v. Collector of Customs [1992 (61) E.L.T. 352], the Supreme Court prescribed the relevant test to be applied in the following words "we have to forget that the goods are imported, imagine that the importer had manufactured the goods in India and determine the amount of excise duty that he would have been called upon to pay in that event". If that test is applied in the present case, there can be no doubt that the natural rubber would not have been subjected to any duty under the Central Excise Act, in view of the notifications issued thereunder. 9.Incidentally, our attention has also been drawn to a Judgment of the Supreme Court in Hyderabad Industries Ltd. v. Union of India [1995 (78) E.L.T. 641]. The Court held that the view expressed in Khandelwal Metal Engineering Works requires reconsideration and referred the matter for the considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Chief Justice for appropriate administrative directions...." 10.Insofar as natural rubber is concerned, the definition under the Encyclopaedia Britannica has been referred to by the learned Judge in his Judgment and it is not necessary for us to repeat the same. It is very clear that smoked rubber sheets will also fall under the category only and no manufacturing process is involved to bring them into existence. Further, under Rule 8(1) of the Central Excise Rules, a notification was issued in Notification No. 46/81-C.E., dated 1-3-1981 with effect from 1st April, 1981 in the following terms : "In exercise of the powers conferred by Sub-Rule (1) of Rule 8 of the Central Excise Rules, and in supersession of the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 85/79-Central Excises, dated the 1st March, 1979, the Central Government hereby exempts all goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), other than goods manufactured in a factory, from the whole of the duty of excise leviable thereon." ....... 11.Under Section 11C of the Central Excises and Salt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant period. So, the additional duty which could be levied under Section 3 of the Customs Tariff act can if at all be only zero and nothing more than that. Hence, the Authorities are in error in seeking Tariff Act. These contentions urged on behalf of the writ petitioners are well founded and there is no difficulty in granting the declaration as prayed for by them that the levy is illegal or the mandamus, as prayed for by them forbearing the Authorities from collecting any additional duty on the imported natural rubber. 13.Now, we turn to the question of refund of duty already paid. We have already set out the numbers of the Appeals, in which that question has arisen. The contentions of the appellants that the only procedure to be followed by the persons who had paid the duty was to apply for refund under Section 11B of the Central Excise Act or under Section 27 of the Customs Act, as the case may be. It has been held by the Supreme Court that the said two sections are applicable even to pending proceedings. [See Union of India v. ITC Ltd. [1993 (67) E.L.T. 3 (SC) = 1993 Supp. (4) SCC 326] and Oswal Agro Mills Ltd. v. Assistant C.C.E. [1994 (70) E.L.T. 48 (SC) = (1994) 2 SCC 546)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of Customs, Madras v. Madras Electro Castings Private Ltd. [1994 (71) E.L.T. 646] and submitted that the writ petitioners could have obtained any other relief or the relief which they prayed for before the Authorities constituted under the Act themselves and there was no question of non-availability of an efficacious remedy under the provisions of the Act. But, as pointed out by learned Counsel for the respondents/writ petitioners, this Court has taken a view that existence of alternative remedy is not a bar to the entertainment of writ petitions (see Union of India v. Pillaiyar Soda Factory [1992 (57) E.L.T. 261]. One of us sitting singly (Srinivasan, J.) expressed the same opinion in Bush Boake Allen India Ltd. v. Union of India [1995 (77) E.L.T. 529]. It was pointed out in that case that the writ petition was pending for fourteen years and that there was no justification for dismissing the writ petitions on the ground of availability of alternative remedy and driving the petitioner to another forum. It was also observed that it will be grave injustice, if the petitioners were driven to work out their rights under the provisions of Section 36 of the Central Excise Act. Refere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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