LIVING MEDIA INDIA LTD. AND ANR. ETC. versus UNION OF INDIA AND ORS.

Citation: [1998] SUPP. 2 S.C.R. 436 · Decided: 28-10-1998 · Supreme Court of India · Bench: K. VENKATASWAMI · Disposal: Disposed off

Judgment (excerpt)

A 
LIVING MEDIA INDIA LTD. AND ANR. ETC. 
v. 
UNION OF INDIA AND ORS. 
OCTOBER 28, 1998 
B 
[K. VENKATASWAMI ANDS. RAJENDRA BABU, JJ.] 
Customs Act, 1962: 
S. 25(1)-Customs duty-Refund of-Interest on amount refundable-
C 'Glazed newsprint '-Used in news magazines-Notification No. 49189 Customs 
dated I. 3. I 989-Levying customs duty on 'glazed newsprint' imported/cleared 
at 30% ad valorem-Settlement between parties to bring down the levy to 
I 5r-Held, in view of the admitted position that cost of news magazines 
exceeds sale price and loss is compensated by earning from advertisements, 
which has no bearing o~ refund of duty, petitioners entitled to refund of excess 
D duty recovered-However, petitioners not entitled to interest on the refund-
Principle of 'unjust enrichment'. 
Prior to 1.3.1989, customs duty on imported 'glazed newsprint', which 
was used in publication of news magazines, was being charged at Rs. 550 
per metric tonne. The respondent-Union of India, in exercise of power 
E under s. 25(1) of the Customs Act, 1962, issued notification No. 49/89 
Customs dated 1.3.1989 levying customs duty on the said item at 30% ad 
valorem. The notification was challenged in the present writ petitions. 
Meanwhile the respondents restored the customs duty at Rs. 550/- per metric 
tonne with effect from 25.1.1990. Thus the dispute between the parties 
F Temained with regard to the imposition of customs duty at 30% from 
1.3.1989 till 25.1.1990. When the petition came to be heard by the Court, it 
was suggested that the Union Government should itself re-consider the 
matter; and the case was adjourned. 
An affidavit was filed on behalf of the respondents giving a proposal 
G that basic customs duty on the glazed newsprint imported/cleared by the 
petitioners during the period 1.3.1989 to 24.1.1990 would be charged at 15% 
ad valorem instead of 30% and any claim for refund of the duty already 
paid would be subject to the provisions of the Act. The petitioners in Writ 
Petition No. 1103/89 filed an affidavit stating that the entire basis of 
reduction of customs duty was to reduce the economic burden on the 
H 
436 
LIVING MEDIA INDIA LTD. v. U.0.1. 
437 
newspaper industry; that the imported glazed newsprint was consumed in A 
printing and publishing the news magazines and the cost of news print 
comprised raw material used for printing of the news magazines, but the 
burden of duty thereon was never recoveri:d from the subscribers/ 
customers, inasmuch as the cost of production of news magazines exceeded 
its retail price and economic survival of news magazines depended upon B 
the income generated by way of advertisements; and therefore, refund of 
duty cannot be denied to the petitioners. The court directed the respondents 
to file a counter affidavit with regard to the stand taken by the petitioners. 
But no counter-affidavit was filed and it was contended that the question 
of refund of 50% of customs duty would be decided in view of Mafat/a/ 
Industries Ltd.* 
C 
It was contended for the petitioners that the averment contained in 
the affidavit filed by the petitioners in Writ Petition No. 1103/89 remained 
uncontroverted as the respondents did not file any counter affidavit thereto; 
therefore, question ofinvoking the law laid down in Mafatla/ Industries Ltd* 
would not arise, and as such the petitioners were entitled to unconditional D 
refund. For the petitioners in Writ Petition No. 931/89, it was further 
contended that they were entitled to interest also. 
Disposing of the writ petitions, this Court 
HELD: I.I. The respondents are entitlecl to levy and recover customs 
duty to the extent of 15%. ad valorem on the glazed newsprint imported/ E 
cleared by the petitioners during the period 1.3.89 to 24.1.90. [443-E) 
l.2 It is clear from the affidavit of the petitioners in Writ Petition No. 
1103/89 that the cost of the raw material for bringing out the news magazines 
exceeds its retail sale price. It is only by way of advertisement, which has 
no bearing on the refund of duty, the loss was compensated and profit F 
earned. Further, in spite of the opportunity given, this statement of fact 
remains uncontroverted and thereby accepted by the respondents. 
Therefore, on the facts of these cases the petitioners are entitled to the refund 
in cases where they have paid customs duty more than 15% ad valorem, 
and the payment of such refund would not be subject to the provisions of 
the Act. The respondents are di

Excerpt shown. Read the full judgment & AI analysis in Lexace.