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Judgment
The appellant is a public limited company carrying on business in manufacturing electrical equipments for automobile industry. In the course of
the business, it imported aluminium rods which were held by the Customs authorities to be liable to duties of customs under Item 70(1) contained
in the First Schedule to the Indian Tariff Act, 1934, hereinafter referred to as the Tariff Act. The Customs authorities also levied additional duty,
generally known as countervailing duty, which is equivalent to the excise duty leviable on aluminium rods under Item 27 of the First Schedule to the
Central Excises and Salt Act, 1944, hereinafter referred to as the Excise Act. Stating that no countervailing duty was payable, the appellant sought
a refund of the same and this was rejected by the Assistant Collector of Customs. However, on appeal the Appellate Collector of Customs
allowed the appeal and directed the refund of the countervailing duty levied on these goods. The Government of India issued a notice under s. 131
of the Customs Act to the appellant herein to show cause why the order of the Appellate Collector of Customs should not set aside. After hearing
the appellant herein, the order of the Appellate Collector of Customs was set aside and that of the Customs authorities was upheld. As against this
order passed by the Government on review, the appellant filed W.P. No. 2598 of 1973 to issue a writ of certiorari calling for the records relating
to the order passed by the Government of India, Ministry of Finance, Department of Revenue and Insurance, New Delhi dated 16-8-1972 and
made in Review No. 4025 of 1972 and to quash the same.
The learned single Judge of this court, after adverting to the relevant provisions of the Tariff Act, and also the Excise Act, found no warrant for
interference and dismissed the writ petition. It is against this order passed by the learned single Judge of this court, the present appeal has been
filed.
Mr. A. R. Ramanathan, learned counsel appearing for the appellant, submitted that inasmuch as the goods imported have been put under item
70(i) of the First Schedule to the Tariff Act, they will not attract additional duty called countervailing duty. The learned counsel further submitted
that goods coming under item 70(i) attract 30 per cent ad valorem duty and as such, it is absolutely unfair to impose countervailing duty on such
goods. According to the learned counsel, the goods which could come under Item 66(1) and which attract only 30 per cent ad valorem duty alone
could be subjected to countervailing duty as they squarely, by description, come under Item 27 of the First Schedule to the Excise Act. It is further
contended that Item 70(i) will not attract excise duty under Item 27 of the First Schedule to the Excise Act which is referred to as the basis of
levying the countervailing duty.
Mr. K. N. Balasubramaniam, learned Standing Counsel for the Central Government, submits that even for items coming under Item 70(i) of the
First Schedule to the Tariff Act, countervailing duty is attracted as per Section 2-A of the Tariff Act since the goods referred under Item 70(i)
could also come under the goods mentioned in Item 27 of the First Schedule to the Excise Act, and according to the learned counsel, the two
norms are different and they are not inter dependent.
We have carefully gone through the relevant provisions of the Tariff Act and also the Excise Act. The relevant provisions in the Tariff Act read
as follows -
Section 2 : The rates at which duties of Customs shall be levied under the Customs Act, 1962 (LII of 1962) are specified in the First and Second
Schedules"".
Section 2-A : Levy of countervailing duty :-
(1) Any article which is imported into India shall, in addition, be liable to duty (hereinafter in this 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 article is leviable at
any percentage of its value, the additional duty to which the imported article shall be calculated at the percentage of the value of the imported
article.
Items 66(1) and 70(1) of the First Schedule :
The First Schedule - Import Tariff
Provided that any such alloys or manufactures containing more than 97 per cent of aluminium shall be deemed to be aluminium in a crude form of
aluminium, manufactures as the case may be, and dutiable as such.
Item 27 of the First Schedule to the Excise Act is extracted below : The First Schedule
Explanation : ''Containers'' mean containers, ordinarily intended for packaging of goods for sale, including casks, drums, cans, boxes, cylinders and
pressure containers, whether in assembled or unassembled condition, and containers known commercially as flattened or folded containers.
As per Section 2-A countervailing duty is leviable for any article which is imported into India in addition to customs duty. The goods in question
imported by the appellant were treated as one coming under Item 70(i) of the First Schedule to the Tariff Act, since they contained less than 97
per cent aluminium, Item 27 of the First Schedule to the Excise Act will definitely cover goods imported by the appellant, as per the language
couched therein. The distinction between item 66(1) and item 70(i) of the First Schedule to the Tariff Act has no relevancy at all for the purpose of
item 27 of the First Schedule to the Excise Act. For the purpose of countervailing duty, the question is as to whether the goods in question would
attract excise duty under the Excise Act. It cannot be stated that the goods similar to the one imported by the appellant would not attract excise
duty, if produced or manufactured in India, and if so, Item 27 of the First Schedule would be attracted, in view of the fact that it is couched in
general terms. Customs duty and excise duty are different and they come to be levied in different spheres and under different statutes, each of
which is self-contained. Only for the purpose of levying countervailing duty under the Tariff Act, reference is made to the Excise Act and definitely
not on the ground that goods as such are liable to excise duty. For that, the Schedule to the Excise Act alone will govern, and there is no need to
refer to and rely on the ratio in the Schedule to the Tariff Act. For the purpose of the Tariff Act, the goods imported by the appellant attract item
70(i) of the First Schedule thereto, and definitely not Item 66(1) thereunder. For the purpose of excise duty under the Excise Act, which is
notionally invoked for levying countervailing duty, under the Tariff Act, item 27 of the First Schedule to the Excise Act will govern. The learned
single Judge of this Court has correctly held that the distinction between Section 2 and Section 2-A loses its relevance because what is to be seen
is whether the article imported is liable to duty under the Excise Act and for that purpose, reference will have to be made to the provisions of the
Excise Act alone. The learned single Judge has further held that if an article comes under the description of an item chargeable under the Excise
Act, it will be liable to countervailing duty which shall be equal to the excise duty payable for it. We are in complete agreement with the reasoning
given by the learned single Judge. The goods imported will definitely fall within the definition of ''aluminium'' in Item 27 of the Excise Act and that
would suffice for ascertainment of countervailing duty as contemplated u/s 2-A of the Tariff Act. The Central Government in its order in Review
No. 4025 of 1972, has correctly applied the principles and has upheld the levy of countervailing duty on the goods imported by the appellant
herein.
The writ appeal is dismissed. There will be no order as to costs.