LexHYDERABAD INDUSTRIES LTD. AND ANR. ETC. versus UNION OF INDIA AND ORS.
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HYDERABAD INDUSTRIES LTD. AND ANR. ETC. A v UNION OF INDIA AND ORS. JULY 21, 1995 [AM. AHMADI, CJ, S.P. BHARUCHA AND K.S. PARIPOORNAN, JJ.] B Custom Tariff Act, 1975-Se.ction 3(1), Entry 25.01.32-Nature of duty mentioned in section 3(1 )-Levy of additional duty on an imp01ted ar- ticle-Expression excise duty for the time being leviable on a like aiticle if C produced or manufactured in India' in section 3(1)-Meaning of. The appellants used to separate asbestos fibre from the rock in which it was embedded, by manual and mechanical means and the asbestos fibre that was so removed from the parent rock was in every respect the asbestos that was embedded in it and so no process of manufacture was D said to have been employed by the appellants nor was a new or a distinct commodity realised therefrom and therefore, what the appellants were importing was asbestos fibre that had been separated from its parent rock. They were paying Customs duty under entry 25.01.32. The appellants disputed the levy on the imported asbestos fibre of additional duty u/s 3(1) E of the Customs Tariff Act, 1975 and liability to pay excise duty under Tariff item 22f. The Revenue submitted that the asbestos fiber imported by the appellants was exigible to additional duty regardless of the fact that it was not the result of manufacture and, therefore, not exigible to excise duty. Disposing of the matter, this Court F HELD : 1. According to the Explanation to Section 3(1) of the Custom Tariff Act, Excise duty is leviable on the class or description of G article to which the imported article belongs if articles of that class or description are exigible to excise duty, having undergone production or manufacture, If they have not undergone production or manufacture they are not exigible to excise duty. Articles of that class or description of goods when imported are then not liable to additional duty. The assumption underlying the Explanation to Section 3(1) would appear to be that an H W7 288 SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R. A imported article which is the result of production or manufacture can be produced or manufactured in India. The emphasis in the assumption is on the words "in India". If the imported article is the result o_f production or manufacture, it must be assumed that it can be produced or manufac- tured in India. In this context the Statement of Objects and Reasons state B c that the levy of additional duty on an imported article is provided for the counterbalance the excise duty leviable on the like article made indigenous- ly. Therefore, the decision in the case of Khandelwal Metal & Engineering Works requires the consideration of a large Bench. It also requires recosideration why insofar as additional duty is concerned, Section 3 of the Tariff Act is not the charging Section. [297-H, 298-A-C-D] Khandelwal Metal & Enginee1ing Works and another Etc. v. Union of India & Others, (1985) Suppl. 1. SCR 750, referred to. Mineral & Metal Trading Corporation of India Ltd. v. Union of India, (1973) 1 SCR 997 and Moti Laminates Pvt. Ltd. v. Collector of Central D Excise, (1009) 78 ELT 241 (SC), relied on. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1354 of 1980 Etc. Etc. From the Judgment and Order dated 23.5.80 of the Delhi High Court E in C.W.P. No. 48 of 1978. F M. Chandrashekharan, Additional Solicitor General, Shanti Bhushan, AK. Ganguli, AK. Sen, R.F. Nariman, V.A. Bobde, H.N. Salve Dr. V. Gaurishanker, Soli J. Sorabjee and V.C. Mahajan, N.K. Bajpayee, S.D. Sharma G. Prakash P.Parmeshwaran, V.K. Verma, Ravinder Narain, Ms. Amrita Mitra, Rajan Narain for JBD & Co. Assem Mehrotra, Darshan. Singh, Suman Khaitan, Shalini Lums, Rahul Roy, for Khaitan & Co., Satish Agarwal, Ms. P. Gautam, Pramod B Aggarwala, D.A. Dave, R.N. Kar- najawala, Bhasker Pradhan, Manik Karanjawala, Ms. Vidula, R. Ashok S.Rajappa P. Narasimhan, Sarva Mitter, Pardeep Kumar for Mitter & G Mitter Co., for the appearing parties. The Judgment of the Court was delivered by BHARUCHA, J. The appellants Original writ petitioners import asbestos fibre and pay Customs duty thereon under entry 25.01.32, which H reads: HYDERABAD INDS. LID. v. U.0.1. [BHARUCHA, J.] 289 "Mineral substances not elsewhere specified ........... .. . . ......... .. : A (1) xxxxx xxxxx xxxxx xxxxx (2) Asbestos raw including fibre 40% B xxxxx xxxxx xxxxx xxxxx There is no dispute in regard to the levy of Cust
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