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High Court Of Delhi
BHARTIYA PLASTIC UDYOG - Appellant
Versus
UNION OF INDIA - Respondent
Decided On : 01/07/1983
CUSTOMS TARIFF ACT, 1975 - SECTION 3(1) - CONSTITUTIONALITY - ADDITIONAL DUTY ON IMPORTED GOODS - CALCULATION OF VALUE - INCLUSION OF CUSTOMS DUTY - VALIDITY.
Fact of the Case:
Petitioners, importers of various items, challenged the constitutional validity of section 3(1) of the Customs Tariff Act, 1975, which imposed an additional duty on imported goods, calculated on the assessable value as per section 3(2) of the Act. The main contention was that the inclusion of customs duty in the assessable value for calculating the additional duty was ultra vires the legislative powers of Parliament under Entry 83 of List I of the 7th Schedule of the Constitution.
Finding of the Court:
The Court held that the impugned provision was within the legislative competence of Parliament under Entry 83 of List I of the 7th Schedule. The customs duty levied under the Customs Act, 1962, was not a post-importation expense but an importation expense. The additional duty under section 3(1) was also attracted at the time of importation and was not a post-importation charge. The Parliament had the power to increase the rate of customs duty, and the additional duty could be regarded as a surcharge on customs duty.
Issues: 1. Whether the inclusion of customs duty in the assessable value for calculating the additional duty under section 3(1) of the Customs Tariff Act, 1975, was ultra vires the legislative powers of Parliament under Entry 83 of List I of the 7th Schedule of the Constitution? 2. Whether the additional duty under section 3(1) was a post-importation charge?
Ratio Decidendi: 1. The customs duty levied under the Customs Act, 1962, was not a post-importation expense but an importation expense. The additional duty under section 3(1) was also attracted at the time of importation and was not a post-importation charge. 2. The Parliament had the power to increase the rate of customs duty, and the additional duty could be regarded as a surcharge on customs duty.
Final Decision: The writ petitions challenging the constitutional validity of section 3(1) of the Customs Tariff Act, 1975, were dismissed.
( 1 ) THE common question which arises for consideration in this and the connected writ petitions, which are being disposed of by this judgment, is regarding the Constitutional validity of section 3 (1) of the Customs Tariff Act, 1975 (hereinafter referred to as the said Act ).
( 2 ) THE petitioners are importers of various items from abroad. The petitioners of Civil Writ No. 3563 had imported acrylic plastic scrap. Civil Writ No. 3678 is concerned with import of ball bearings, while in C. W. Nos. 3663 and 3645 the items which are imported by the petitioners are blank video casettes. There is no dispute regarding the validity of the import. On the goods arriving in India the petitioners filed the bills of entry. The Customs Authorities required the petitioners to pay the customs duty and, in addition there to, have also asked the petitioners to pay duty levied under section 3 (1) of the said Act. This duty has been calculated not on the C. I. F. value of the goods but on their assessable value as arrived at in accordance with the terms of section 3 (2) of the said Act.
( 3 ) AS already noted above, the principal contention of the petitioners is that the provisions of section 3 of the said Act are ultra vires and, therefore, the aforesaid duty, levied under section 3 (1), cannot be collected from the petitioners. Though other contentions were raised in the petitions, except in C. W. 3678, the only contention argued was regarding the validity of the said provision.
( 4 ) BEFORE noting the rival contentions, it is necessary to refer to the impugned provision. Customs Tariff Act, 1975 was enacted with a view to consolidate and amend the law relating to customs duty. While section 2 of the said Act provides that duties of custom shall be levied under the Customs Act, 1962 at the rates which are specified in the First and the Second Schedule of the Customs Tariff Act, 1975. section 3 of the said Act imposes a levy of additional duty. The said provision reads as under :
"3. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter 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 so leviable shall be calculated at that percentage of the value of the imported article Explanation. In this section, the expression "the excise duty for the time 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. (2) For the purpose of calculating under this section the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962, be the aggregate of (i) the value of the imported article determined under sub-section (1) of the said section 14 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the duty referred to in sub-section (1 ). "sub-section (1) of section 3 thus provides for the levy of a duty on an article which is imported into India in addition to the customs duty which is levied under the Customs Act, 1962. Sub
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