Court validates Customs Duty Notification on Bearings; dismisses challenge.

PANKAJ JAIN AGENCIES Versus UNION OF INDIA

PANKAJ JAIN AGENCIES Versus UNION OF INDIA - 1994 (72) E.L.T. 805 (SC), 1995 AIR 360, 1994 (1) Suppl. SCR 602, 1994 (5) SCC 198, 1994 (5) JT 64, 1994 (3) ... Issues Involved:
1. Validity and applicability of Notification No. 142/86-Cus., dated 13-2-1986.
2. Whether the impugned notification was ultra vires the powers of the Central Government under Section 25(1) of the Customs Act, 1962.
3. Whether the duty imposed by the notification constituted an unreasonable restriction on the petitioner's fundamental rights under Article 19(1)(g) of the Constitution.

Detailed Analysis:

1. Validity and Applicability of Notification No. 142/86-Cus., dated 13-2-1986:

The petitioner, M/s. Pankaj Jain Agencies, challenged the vires of Notification No. 142/86-Cus., dated 13-2-1986, which amended the earlier Notification No. 70/85, dated 17-3-1985, concerning rates of customs duty on parts, components, and sub-assemblies of Ball Bearings and Roller Bearings. The petitioner argued that the higher rates of duty indicated in the impugned notification could not be applied to two consignments as the notification was not duly promulgated or brought into force on the day the import occurred. The Court held that the relevant date for determining the rate of duty was the date of the Bill of Entry, which was 19th February 1986, and the notification dated 13th February 1986, published in the Gazette on the same day, was valid and enforceable.

2. Whether the Impugned Notification was Ultra Vires the Powers of the Central Government Under Section 25(1) of the Customs Act, 1962:

The petitioner contended that the impugned notification, in so far as it prescribed import duty on parts of Ball Bearings, was ultra vires the powers of the Central Government under Section 25(1) of the Customs Act, 1962, as no duty was contemplated for spare-parts or components of Ball Bearings under the Customs Tariff Act, 1975. The Court found that the impugned notification did not impose a new duty but merely reduced the extent of the earlier exemption. The notification did not prescribe a rate higher than the statutory duty, and the parts and components of Ball and Roller Bearings were not excluded under the Tariff provisions. Therefore, the contention that the notification was ultra vires was devoid of force.

3. Whether the Duty Imposed Constituted an Unreasonable Restriction on the Petitioner's Fundamental Rights Under Article 19(1)(g) of the Constitution:

The petitioner argued that the enhancement of duty brought about by the impugned notification constituted an unreasonable restriction on their fundamental rights under Article 19(1)(g) of the Constitution. The Court held that a tax, particularly customs duties, is not per se violative of Article 19(1)(g). Mere excessiveness of a tax does not violate Article 19(1)(g), and there is no absolute right to import, much less a fundamental right. The petitioner failed to demonstrate how the impost destroyed their right to carry on trade or business. This contention was also found to be without merit.

Conclusion:

The Court dismissed the writ petition with costs, holding that none of the contentions urged by the petitioner deserved to succeed. The impugned notification was valid, within the powers of the Central Government, and did not constitute an unreasonable restriction on the petitioner's fundamental rights.