Calcutta High Court Upholds Customs Circular on Special Additional Duty

The High Court of Calcutta upheld a Customs Circular on the levy of Special Additional Duty (SAD) following the Supreme Court judgment in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries. The court relied on the interpretation given by the Board in Nikhil Kumar v. Commissioner of Customs, dismissing the challenge to the circular. The court emphasized the finality of the Nikhil Kumar judgment and granted the petitioner the option to appeal within a fortnight, highlighting the availability of statutory remedies for further redress.

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Issues: Challenge to Customs Circular on Levy of Special Additional Duty (SAD) under Additional Duties of Excise Act, 1957; Interpretation of Circular in light of Supreme Court judgment; Applicability of different interpretation through notifications; Finality of judgment in Nikhil Kumar case.

In the judgment delivered by the High Court of Calcutta, the writ petitioner challenged a Customs Circular dated 27th June, 2002, concerning the levy of Special Additional Duty (SAD) on goods chargeable to duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The circular was issued following the examination of a Supreme Court judgment in the case of Collector of Central Excise, Vadodara v. Dhiren Chemical Industries. The key issue revolved around whether the circular was issued contrary to the provisions of sub-Section 5 of Section 3A of the Tariff Act. The court analyzed the Supreme Court judgment and noted that the circular aimed to levy special additional duty on goods not subjected to additional excise duty under the relevant Act.

The judgment in the case of Nikhil Kumar v. Commissioner of Customs, where the circular was upheld, played a crucial role in the decision. The court highlighted paragraphs 8 and 11 of the said judgment, emphasizing the interpretation given by the Board based on the Dhiren Chemicals case. The court agreed with the Board's interpretation, stating that applying a different interpretation would lead to unjust enrichment for the petitioner. The court dismissed the application based on this analysis.

The petitioner's counsel referred to the Dhiren Chemical Industries case, specifically paragraph 9, which mentioned that circulars issued by the Central Board of Excise and Customs with a different interpretation would be binding on the revenue. The petitioner argued that notifications issued post the Supreme Court judgment provided a different interpretation applicable to the case. However, the revenue's counsel opposed this argument, citing the finality of the judgment in the Nikhil Kumar case. The revenue contended that any different interpretation could only be applied prospectively from the date of the relevant notification.

In conclusion, the High Court disposed of the writ petition, granting the petitioner liberty to prefer a statutory appeal within a fortnight if permissible by law. The court refrained from delving into the merits of the matter, emphasizing the need for the petitioner to pursue the alternative efficacious remedy available through the statutory appeal process.

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