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of <h1>Supreme Court: Customs duty not included in octroi valuation. Exemption granted under Notification No. 133 of 1994.</h1> <h3>Eastern Peripherals Ltd. & Another Versus Brihanmumbai Mahanagar Palika</h3> Eastern Peripherals Ltd. & Another Versus Brihanmumbai Mahanagar Palika - 2016 (339) E.L.T. 497 (SC) Issues:Interpretation of Bombay Municipal Corporation (Levy of Octroi) Rules, 1965 regarding the inclusion of customs duty in the valuation of goods for octroi payment.Analysis:The Supreme Court addressed the dispute arising from the inclusion of customs duty in the valuation of goods for octroi payment under the Bombay Municipal Corporation (Levy of Octroi) Rules, 1965. The case involved the import of computer parts by the appellants, who claimed exemption from customs duty under Notification No. 133 of 1994. The notification allowed exemption if the goods were re-exported or cleared domestically on payment of excise duty. The bone of contention was paragraph 3 of the notification, which detailed the conditions for exemption. The respondent Corporation included customs duty in the valuation of goods for octroi payment under Rule 2(7)(a) of the Rules.The Court analyzed Rule 2(7)(a) and the notification to determine the inclusion of customs duty. It noted that the rule required the inclusion of various charges in the value of goods, but the respondent's position on adding customs duty for cleared articles lacked legal basis. The Court emphasized that the excise duty paid on manufactured articles did not establish a liability for customs duty on the imported goods. The exemption granted by customs authorities and the fulfillment of conditions under the notification supported the appellants' claim for exemption from customs duty.Consequently, the Court allowed the appeals, setting aside the High Court's order. The appellants were granted the consequential relief of a refund. Additionally, a related appeal by the Municipal Corporation was dismissed in light of the main judgment. The judgment clarified the legal interpretation of the Rules and the notification, affirming the appellants' entitlement to exemption from customs duty for the imported goods, thereby resolving the dispute regarding octroi payment valuation.
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