Full Judgment Text
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CASE NO.:
Appeal (civil) 8308 of 1995
PETITIONER:
COLLECTOR OF CUSTOMS, MADRAS
RESPONDENT:
INDIA ORGANIC CHEMICALS LTD.
DATE OF JUDGMENT: 03/05/2000
BENCH:
S.P. BHARUCHA & SHIVARAJ V. PATIL
JUDGMENT:
JUDGMENT
2000 (3) SCR 946
The following Order of the Court was delivered :
The respondent imported a diesel engine set. The invoice thereof showed the
price of Rs. 8,50,740 for the said set along with standard spares and
accessories. The Customs Department assessed the said set for the purposes
of additional duty of Customs under T.I. 68 of the Central Excise Tariff
and, accordingly, charged additional duty at the rate of 8 per cent ad
valorem. The respondent filed a refund claim. It state mat the said set
comprised of a diesel engine and an alternator. It provided the break up of
the price of the said set, namely, Rs. 5,95,540 for the diesel engine and
Rs. 2,55,200 for the alternator. It claimed that the additional duty should
have been charged separately on each of the two components of the said set
and the benefit of exemption notifications in this regard should have been
given. The refund claim was rejected by the Assistant Collector of Customs.
The respondent’s appeal to the Collector of Customs (Appeals) failed.
The respondent carried the matter to the Tribunal. The Tribunal applied
Section 19 of the Customs Act and came to the conclusion that the two main
components of the said set, namely, the diesel engine and the generator,
should have been separately assessed to additional duty and the benefit of
the applicable exemption notifications given. Against the order of the
Tribunal, the Customs authorities have preferred this appeal.
In the first place, Section 19 of the Customs Act is inapplicable to the
assessment of additional duty under the Customs Tariff Act. Section 19
applies to "duty" that is, "duty under the Customs Act", as is clear from
Section 2(15) of the Customs Act. The method of determination of Customs
duty thereunder where goods consist of articles liable to different rates
of Customs duty is not applicable for the purposes of assessment of
additional duty under the Customs Tariff Act.
As is clear from the order of the Tribunal, what respondent had imported
was the said set. That was what the invoice referred to and it gave the
price for it. That the said set comprised of a diesel engine and an
alternator was of no consequence for the purposes of assessment of
additional duty. There is no dispute that for the purposes of such
assessment of the said set, Tariff Item 68 was applicable.
We think, in the circumstances, that the appeal should be allowed and the
order of the Tribunal set aside. The order of the authorities below shall
regulate the assessment of additional duty on the said set.
Order on the appeal accordingly. No order as to costs.