2011 (9) TMI 27 - HC - Central Excise

Court Upholds Customs Duty Rates despite Budget Discrepancies

Amin Merchant of Bombay Versus The Chairman, Central Board of Excise and Revenue, Ministry of Finance & Others

The Court held that the prescribed customs duty rates for goods under Tariff Heading 2208.10 during financial years 1993-94 and 1994-95, as legislated by ... Classification - Since the authority did not cooperate in explaining, why a certain Ahmedabad Advanced Mills were being given the benefit of the exemption, while the same was not granted to the petitioners, they had engaged in discriminatory conduct without just cause - In the instant case, there is no such discriminatory conduct which would compel the interference of the Courts. In the matter of granting or not granting of an exemption, Government has been given significant discretion by the Supreme Court unless the provisions of Article 14 of the Constitution come into play - An importer cannot as a matter of right insist on exemption from levy or payment of duty as a matter of course. In fact, the Supreme Court, in M.Jhangir Bhatusha V. Union of India (1989 (5) TMI 61 - SUPREME COURT OF INDIA), has gone further and held that there can be discriminatory treatment, where such treatment is done with just reasons, in the public interest - Decided against the assessee. Issues:1. Interpretation of customs duty rates for goods under Tariff Heading 2208.10 during financial years 1993-94 and 1994-95.2. Whether the Court can direct the Central Government to issue notifications under the Customs Act, 1962 for exemptions from customs duty.Issue 1: Interpretation of customs duty rates for goods under Tariff Heading 2208.10 during financial years 1993-94 and 1994-95:The petitioner imported goods under Tariff Heading 2208.10 and claimed that the prescribed rate of duty was higher than that authorized in the Budget Proposals for the respective financial years. The petitioner argued that compound alcoholic preparations were not alcoholic beverages and should not be subject to the exceptions mentioned in the Budget Proposals. However, the Finance Acts of 1993 and 1994 prescribed specific rates of duty for Tariff Heading 2208.10, which were duly legislated by Parliament. The Court emphasized that budgetary proposals are not enacted law, and the law as enacted by Parliament through the Finance Acts is binding. The Court held that it cannot scrutinize the correctness of the legislative will expressed in the enacted law and dismissed the petitioner's claims regarding the duty rates.Issue 2: Court's authority to direct the Central Government to issue notifications under the Customs Act, 1962 for exemptions from customs duty:The petitioner sought writs of Mandamus directing the Central Government to issue notifications under section 25(1) and 25(2) of the Customs Act, 1962 to exempt goods under Tariff Heading 2208.10 from customs duty for the relevant financial years. The Court clarified that the power to issue such notifications lies with the Central Government based on public interest grounds. It stated that the Court cannot usurp this jurisdiction vested in the Central Government and cannot direct the issuance of notifications unless the exercise of such power is challenged on specific grounds. The Court distinguished previous cases where directions were given to the Central Government based on discriminatory conduct, which was not present in the current case. Ultimately, the Court held that the relief sought by the petitioner fell outside the jurisdiction conferred upon the High Court under Article 226 of the Constitution and dismissed the petition, leaving parties to bear their own costs.In conclusion, the judgment clarified the interpretation of customs duty rates for goods under Tariff Heading 2208.10 and affirmed the limitations on the Court's authority to direct the Central Government to issue notifications for exemptions from customs duty under the Customs Act, 1962. The Court emphasized the primacy of enacted law over budgetary proposals and upheld the legislative will expressed through the Finance Acts passed by Parliament.