Weaves Pvt. Ltd. & Anr Vs. Union of India
& Ors  INSC 328 (27 February 1996)
S.P. (J) Bharucha S.P. (J) Hansaria B.L. (J)
1996 AIR 1543 1996 SCC (3) 318 JT 1996 (3) 242 1996 SCALE (2)626
PETITION (C) NO.3881 OF 1983
O R D
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
appellants imported partially oriented yarn (POY).
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.
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 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.
counsel for the respondents fairly stated that the view taken in these
judgments was unassailable.
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.
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.
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.
regard to the order made upon the Civil Appeal, no order upon the Writ Petition
is requisite and it is disposed of accordingly.
order as to costs.