Countervailing duty must be assessed on imported goods as imported, not by later post-import processing.

Delhi High Court jurisdiction was upheld because the impugned circular supporting the levy was issued in Delhi, providing sufficient territorial nexus. On countervailing duty, the Court held that imported goods must be assessed in the condition in which they are brought into India under section 3 of the Customs Tariff Act. Duty could not be levied by treating partially oriented yarn as falling into a different category after texturising, and the assessee was entitled to the claimed exemption classification.

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Issues: (i) Whether the Delhi High Court had jurisdiction to entertain the writ petition. (ii) Whether countervailing duty could be levied on imported partially oriented yarn on the basis of its denierage after texturising, rather than on the condition in which it was imported.

Issue (i): Whether the Delhi High Court had jurisdiction to entertain the writ petition.

Analysis: The impugned circular on which the levy was founded had been issued in Delhi, and that was sufficient to found territorial jurisdiction in the Delhi High Court to hear the writ petition.

Conclusion: The Delhi High Court had jurisdiction to entertain and decide the writ petition.

Issue (ii): Whether countervailing duty could be levied on imported partially oriented yarn on the basis of its denierage after texturising, rather than on the condition in which it was imported.

Analysis: Countervailing duty is chargeable on imported goods as imported. Section 3 of the Customs Tariff Act requires levy on the goods in the state in which they are brought into India. The imported POY fell within the higher denier range claimed by the assessee, and duty could not be imposed by treating it as falling in a different category on the basis of a later manufacturing process.

Conclusion: Countervailing duty was not leviable on the basis adopted by the revenue, and the assessee was entitled to the exemption classification claimed.

Final Conclusion: The levy based on post-import processing was unsustainable, and the assessee succeeded in the civil appeal and writ petition.

Ratio Decidendi: Countervailing duty must be assessed on imported goods in the condition in which they are imported, and not by reference to a subsequent process or altered condition after import.

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