TaxTMI 
TaxTMI 
2005 (9) TMI 102
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....rection directing the respondents to rationalise the existing import/customs duty structure for Crude Palm Oil (HS Code 15119010), RBD Palm Oil (HS Code No. 1511000) and Vanaspati (HS Code No. 15162091), and bring the same to the original position as existing in the year 2000-2001. (c) Pass such other further order or orders as this Hon'ble Court may deem fit and appropriate in the facts and circumstances of this case." 2.The factual backdrop, in which the above prayers have been made, may be summarised as under : 3.The petitioner Bhatinda Chemicals Pvt. Ltd. is engaged in the manufacture and sale of edible oil/vanaspati, whereas petitioners No. 2 & 3 are Associations of vanaspati producers....
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.... Palm Oil were substantially increased, the rate of duty for double refined oil/vanaspati was decreased to 30% which is, according to the petitioners, wholly arbitrary and irrational. The decrease in the rate of duty prescribed for vanaspati to 30% has, according to them, resulted in a situation in which it will be much cheaper to directly import vanaspati and sell the same domestically than to manufacture vanaspati from imported CPO after paying duty at the rate of 65%. According to the petitioners, there is a difference of almost Rs. 10,000/- per metric tonne between vanaspati manufactured within the country from CPO imported by paying 65% import duty and vanaspati directly imparted into India upon payment of duty at the rate of 30%. This....
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....th June, 2000, prescribed the maximum of 25% for the usage of vegetable oil imported for edible purposes. This, according to the petitioners, adds to the cost of a component in the manufacture of vanaspati, which component has no application to any person importing vanaspati into India. 6.The petitioners' plea in the above circumstances is that the respondents ought to enhance the customs duty payable on the import of vanaspati from outside the country. It is alleged that representations made by them to the respondents, seeking an upward revision of the customs duty payable on vanaspati imported from outside the country so as to protect the interests of domestic producers, have not evoked any response, leaving no option for them except t....
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....d by the learned Counsel upon the decisions of the Supreme Court in Ayurveda Pharmacy & Anr. v. State of Tamil Nadu, 1989 (40) E.L.T. 273 (S.C.) = (1989) 2 SCC 285, I.D.L. Chemical Ltd. v. Union of India & Ors., 1996 (86) E.L.T. 182 (S.C.) = (1996) 5 SCC 373 and Dai Ichi Karkaria Ltd. v. Union of India & Ors., 2000 (119) E.L.T. 516 (S.C.) = (2000) 4 SCC 57. 8.The essence of the grievance made by the petitioners is that a higher duty on the import of CPO in comparison to a lower duty levied on the import of Vanaspati creates a situation where those depending on import of CPO are placed at a disadvantage in the matter of competitive marketing of their products. In other words, the power to levy duty has been, according to the petitioners, ....
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....2138. 10.It is equally well settled that in the field of taxation, the legislature enjoys the greatest freedom in matters of classification. The State does not have to tax everything in order to tax something. It is allowed to pick and chose districts, objects, persons, methods and even rates for taxation if, it does so reasonably. The State enjoys a greater discretion and play at the joints when classification is under a taxing statute. That is so because of the inherent complexity of fiscal adjustment of diverse elements that go into the levy of a tax. Even unequal taxes have been held permissible if there is a rational basis underlying the same. See Khyerbari Tea C. Ltd. & Anr. v. State of Assam & Ors., AIR 1964 SC 925, Kunnathat That....
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....ining and hydrogenization. So long as the two commodities are different, the legislature or the Government as its delegate was competent to prescribe different rates of duty on the import thereof. 12.Secondly because the prescription of a duty is a matter which falls squarely within the competence of the legislature or its delegate. What objects should be taxed, what method of taxation should be adopted and at what rate should the tax be levied are matters for the State to determine. Courts would not interfere with the choice of the object, or the rate of tax levied so long as the levy is not demonstrably unreasonable. There is no apparent or demonstrable unreasonableness in the levy, whether in relation to the import of CPO or of Vanasp....