19 September 1996
Supreme Court
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DELHI CLOTH & GENERAL MILLS CO. LTD. & ANR. Vs UNION OF INDIA & ANR.

Bench: BHARUCHA S.P. (J)
Case number: Appeal Civil 626 of 1972


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PETITIONER: DELHI CLOTH & GENERAL MILLS CO. LTD. & ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ANR.

DATE OF JUDGMENT:       19/09/1996

BENCH: BHARUCHA S.P. (J) BENCH: BHARUCHA S.P. (J) VENKATASWAMI K. (J)

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      A limited  argument is  addressed in  this appeal  that impugns the  judgment and  order of  a Division Bench of the High Court of Rajasthan.      The appellants  manufacture tyre  yarn cord  and fabric for which  purpose they import tyre cord grade woodpulp from the United State of America. The appellants were called upon to pay  additional duty  thereon  under  the  provisions  of Sections 3 of the Customs Tariff Act.      Among other  contentions raised  by the  appellants was this: The  said woodpulp was not produced or manufactured in India. Under  the terms  of Section  3 additional  duty had, therefore, to  be calculated on the basis of the excise duty that would  be leviable  on  the  class  or  description  of articles to  which the  said woodpulp belonged. There was no entry in  the Tariff  that related to an article of the like of the  said woodpulp.  Entry 68,  being a  residuary  entry relating to no class or description of goods, did not apply. No additional  duty was,  therefore, leviable  on  the  said woodpulp.      The said  contention  was  rejected  by  the  Assistant Collector and  by the  High Court in the writ petition filed the appellants.      It is the only contention raised before us.      Section 3  of the  Customs Tariff  Act, so far as it is relevant, reads thus:-      "S.3.-  Levy   of  Additional  Duty      equal to Excise Duty:      (1) Any  article which  is imported      into India  shall, in  addition, be      liable to  a duty  (hereinafter  in      the  section  referred  to  as  the      additional  duty)   equal  to   the      excise  duty  for  the  time  being      leviable  on   a  like  article  if      produced or  manufactured in  India      and if  such excise  duty on a like

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    article   is    leviable   at   any      percentage  of   its   value,   the      additional  duty   to   which   the      imported article shall be so liable      of  the   value  of   the  imported      article.      Explanation:- In  this section, the      expression the  excise duty for the      article if being leviable on a like      article if produced or manufactured      in India  means the excise duty for      the time being in force which would      be leviable  on a  like article  if      produced or  manufactured in India,      or if  a like  article  is  not  so      produced  or   manufactured,  which      would be  leviable on  the class or      description of  articles  to  which      the imported  article belongs,  and      where  such  duty  is  leviable  at      different rates, the highest duty,"      It  is   the  Explanation   which  is   important.  The expression "the excise duty for the time being leviable on a like article  if produced  or manufactured  in India used in the body  of sub-section (1) is explained to mean the excise duty for the time being in force (a) which would be leviable on a  like article if produced or manufactured in India, the excise  duty   that  would  be  leviable  on  the  class  or description  of  articles  to  which  the  imported  article belongs.      Where a like article is not produced or manufactured in India additional  article upon  the basis of the excise duty that is  leviable on the class or description of articles to which the  imported article  belongs. Articles which are not elsewhere described,  falling under  the residuary Entry 68, form a  class by themselves. Hence, if a like article is not described in  the Tariff, additional duty is leviable on the imported article  upon the  basis of the levy of excise duty under the provisions of Entry 68.      The only contention raised before us is rejected.      The appeal is dismissed, with no order as to costs.