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PETITIONER: VARELI WEAVES PVT.LTD. & ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       27/02/1996

BENCH: BHARUCHA S.P. (J) BENCH: BHARUCHA S.P. (J) HANSARIA B.L. (J)

CITATION:  1996 AIR 1543            1996 SCC  (3) 318  JT 1996 (3)   242        1996 SCALE  (2)626

ACT:

HEADNOTE:

JUDGMENT:                             WITH              WRIT PETITION (C) NO.3881 OF 1983                          O R D E R      A common  question arises  in the  Civil Appeal and the Writ Petition.  The Civil  Appeal is  directed  against  the order of  a Division Bench of the Delhi High Court summarily rejecting the  appellants’ writ  petition upon the ground of lack of jurisdiction.      The appellants  imported partially oriented yarn (POY). They  claimed   for  the  purposes  of  countervailing  duty (additional duty)  the benefit  of an exemption notification dated 28th  February, 1982, issued under Rule at 8(1) of the Central Excise  Rules whereby man-made fibres and yarns were exempted from excise duty as therein stated. The controversy was whether  the POY  imported by  the appellants  should be taken to fall within item (iv) under the head Polyestor Yarn relating to  POY of  75 deniers  and  above  but  below  100 deniers or  within item (iii) relating to POY of 100 deniers and above  but not above 750 deniers. it was the case of the appellants that  the POY  imported by  them was  entitled to exemption upon  the basis  that it  was of  100 deniers  and above but not above 750 denirs. The authorities treated the POY  imported by  the appellants  as falling  within the slot of 75 deniers and above but below 100 deniers and they did  so  upon  the  basis  of  a  circular  dated  24th September, 1980,  issued by  the Central  Board of  Excise & Customs  which   stated   that   POY   was   assessable   to countervailing duty  and excise  duty at the final denierage stage, that is to say, after the POY had been texturised.      Learned counsel for the appellants submitted that there was no warrant for levying countervailing duty upon imported goods at a stage they would reach subsequent to their import after undergoing a process. They had to be subjected to duty in the state in which they were when imported. Reference was made to  the judgment  of a  Single Judge of the Bombay High

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Court in  Krislon Texturiser  Pvt. Ltd.  vs. Union of India, (1989) 44 ELT 488 [S.P. Bharucha, J.1, which was followed by a Division  Bench of  the High  Court of Gujarat in Special] Civil Application No. 1165 of 1903, Vareli Exports Pvt. Ltd. and another  vs. Union  of India  and others where it was so held.      Learned counsel  for the respondents fairly stated that the view taken in these judgments was unassailable.      The circular  upon the  basis of  which  the  duty  was levied having been issued in Delhi, the Delhi High Court had jurisdiction to  entertain  and  try  the  appellants’  writ petition.      Countervailing duty  must be  levied on  goods  in  the state in which they are when they are imported. Section 3 of the Customs  Tariff Act so mandates. The POY imported by the appellants fell in the slot of 100 deniers and above but not above 75O deniers. It was, therefore, liable to that rate of countervailing duty  as was  provided for in the said clause (iv) of the exemption notification. There was no warrant for the levy of countervailing duty as provided for in the said clause (iii)  upon the basis that, subsequent to the process of texturising  the POY  that was  imported would  have  the denierage therein stated.      The Civil  Appeal is,  therefore, allowed and the order of the  Delhi High  Court is  set aside.  The Writ  Petition filed by  the appellants  before the  Delhi  High  Court  is allowed. The  bank guarantee  furnished  by  the  appellants pursuant to  the order  of this  Court dated  2nd May, 1983, shall stand discharged.      Having regard  to the order made upon the Civil Appeal, no order  upon the  Writ Petition  is requisite  and  it  is disposed of accordingly.      No order as to costs.