TaxTMI 
TaxTMI 
1994 (7) TMI 93
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate of Maharashtra. Chapter XIX of the Import Export Policy for the period commencing from April 1, 1988 and ending with March 31, 1991 issued by the Government of India deals with Duty Exemption Scheme. Paragraph 219(1) of the said policy provides that the objective of the Duty Exemption Scheme is to make available to registered exporters the necessary inputs for export production at international prices without payment of customs duty so as to make the exports competitive in the international market. The Scheme provides for grant of three categories of licences, one of them being the advance licence. The Government of India published customs notification dated February 19, 1987 exempting goods imported into India against advance licenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities detained the consignment and disputed the value of the consignment as claimed by the company. On October 6, 1989 the octroi officer passed an order determining the value of the consignment by loading the notional amount of customs duty which the company was liable to pay but for the exemption notification. The company paid the duty under protest and thereafter preferred Writ Petition No. 3055 of 1989 under Article 226 of the Constitution before the learned Single Judge sitting on the Original Side of this Court. 3. The company claimed that it is not permissible to load the amount of customs duty while determining the value of the articles where octroi is charged ad valorem. The Corporation sustained loading of the customs duty whil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....merit in the submission urged on behalf of the company. Section 139 of the Bombay Municipal Act provides for tax to be imposed under the Act and one of the tax permissible is Octroi. Section 192 of the Act inter alia provides that the tax at rates not exceeding those specified in Schedule H shall be levied in respect of the articles mentioned in the Schedule on the entry of the said articles into Greater Bombay for consumption, use or sale therein and the said tax shall be called as octroi. The Corporation has framed rules known as Bombay Municipal Corporation (Levy of Octroi) Rules 1965. Rule 3 provides for levying assessment and collection of octroi on import by sea. Schedule H to the Act sets out the list of articles which are liable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of customs duty while ascertaining the value of the article. Shri Chandrachud, learned counsel appearing on behalf of the Corporation, submitted that the customs duty is loaded in the value of the article because the company may be liable to pay the customs duty in case the conditions of advance licence are not complied with. In our judgment, it is not permissible for the taxing authority to load the value of the article by including the customs duty because the customs duty was not payable at the time of charging tax. It is not open for the octroi authorities to include the customs duty in the value of the article merely because at some future point of time the company may be liable to pay customs duty in case the company commits a breach....