COLLECTOR OF CUSTOMS, BANGALORE & ANR. versus HANSUR PLYWOOD WORKS AND ANR.

Citation: [1989] SUPP. 1 S.C.R. 775 · Decided: 26-10-1989 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

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COLLECTOR OF CUSTOMS, BANGALORE & ANR. 
v. 
HANSUR PL YwOOD WORKS AND ANR. 
OCTOBER 26, 1989 
A. 
[S. RANGANATHAN AND KULDIP SINGH, JJ.] 
B 
Customs Tariff Act, 1975: Schedule Heading No. 44.01 and 
Notifications No. 265 of 1982, No. 59 of 1983 and No. 126 of 1984-
Timber from Burma exempted from customs duty-Levy of auxiliary 
duty-Determination of. 
Import of timber is charged to effective basic customs duty at 60 
per cent under the Customs Tariff Act, 1975. The Government of India 
had, however, issued notification under s. 25 of the Customs Act, I962 
absolutely exempting timber imported from Burma. But the importers 
are liable to pay auxiliary duty in terms of Notification No. 265 dated 
December 8, 1982 and its successor Notification Nos. 59 of 1983 and 126 
of 1984, which prescribed two rates with reference to the rate of duty of 
customs. The explanation thereto provides that where there are two 
effective basic rates applicable in respect of any article and the 
differentiation in rates is attributable to the country of origin of the 
goods imported, then the auxiliary duty payable will be .the higher of 
the two rates. 
The respondents had imported certain consignments of timber 
from Burma which were assessed to auxiliary duty at the higher rate as 
per notification. The Appellate Tribunal held in favour of the assessee-
respondents. 
c 
D 
E 
F 
In these appeals by the Revenue under s. 130E(b) of the Customs 
Act, it was contended for the respondents that exemptions or com~es­
sions in respect of goods imported from certain countries were generally 
granted in pursuance of trade agreements entered into with those 
countries· under s. 5 of the Tariff Act, that the expression "country of 
origin" in the notification had a special meaning and its determination 
G 
governed by special provisions, and that, therefore, the explanation to 
the notification in question had to be confined in its application only to a 
comparison of the rates applicable under notification of concession and 
.basic auxiliary duty determined accordingly. 
Allowing-the appeals, 
775 
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B 
c 
D 
B 
p 
G 
H 
776 
SUPREME COURT REPORTS 
(1989] Supp. 1 S.C.R. 
HELD: The auxiliary duty, in a case where imports from diffe-
rent countries attract different degrees of exemption under different 
notifications in pursuance of agreements under s. S of the Customs 
Tariff Act should be determinable separately by reference to the effec-
tive basic duty notified in respect of each such country. But, if there are 
different rates of effective duty notified for goods imported from diffe-
rent countries of origin, then, notwithstanding the agreem~nt with each 
of these countries, the auxiliary duty under such a notification will not 
be determined, in respect of the import from each of such countries, by 
reference to the effective basic duty leviable in respect thereof, but will 
be determined with reference to the highest of the effective rates of duty 
applicable to all the imports. [778A-C] 
In the instant case, there is no material to show that the notifica-
tion was issued in pursuance of an agreement. It is a case where the 
imports come from two sets of countries the imports from which attract 
two different effective basic rates of duty. The differentiation arises 
because in respect of one set of countries there is no notification of 
concession while in relation to the other there is a complete exemption 
granted under a notification. There is nothing in the language of the 
explanation that excludes such a case from its purview. The auxiliary 
duty is, therefore, to he determined with reference to the higher of the 
two effective rates of duty. [777H, 778C-D, Fl 
Collector of Customs v. Western India Plywood Manufacturing 
Co. Ltd., [1989] Supp. 1 SCR 779, applied. 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 
3820-24 of 1988. 
From the Order dated 2.6.1988 of the Customs, Excise and Gold 
(Control) Appellate Tribunal, New Delhi in Order No. 410-414/88-D, 
Appeal Nos. CD/SB./659/86-D; C/1526/84-D, CD/SB/1522/86-D; C/ 
1565/84-D and C/422/86-D. 
V.C. Mahajan, and P. Parmeshwaran for the Appellants. 
V. Sridharan, A.R. Madhav Rao and V. Balachandran for the 
Respondents. 
The Judgment of the Court was delivered by 
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COLLCT. OF CUSTOMS v. HANSURPL YWOOD [RANGANATHAN, J.] 
777 
RANGANATHAN, J. These are appeals under section 130E(b) A 
of the Customs Act from an order passed by the Customs, Excise and 
Gold Appellate Tribunal

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