M/S. BOMBAY OIL INDUSTRIES PVT. LTD. versus UNION OF INDIA AND ORS.

Citation: [1994] SUPP. 6 S.C.R. 301 · Decided: 06-12-1994 · Supreme Court of India · Bench: R.M. SAHAI · Disposal: Dismissed

Judgment (excerpt)

.. 
MIS. BOMBAY OIL INDUSTRIES PVT. LTD. 
A 
v. 
UNION OF INDIA AND ORS. 
DECEMBER 6, I 994 
[R. M. SAHAI AND S. B. MAJMUDAR, JJ.] 
B 
Customs Act, 1962/Customs. Tariff Act 1975: 
Sections 25, 131 (3) Heading No. 15-01106 of the First Schedule-
Notification No. 141-CUS/76 dated 2.8.1976 granting partial exemption 
from Customs duty in respect of imported tallow subject to certain C 
specifications-Subsequent Notification No.1681 F. No.370124178/Cus I 
dated 2.9.1978 deleting one of the specifications regarding colour-During 
the interregnum between the dates of the two notifications, duty attracted if 
the specification regarding colour did not conform to the requirements-
Tests to be conducted-Indian Standard method as laid down by Indian D 
Standard lnstitutfon since the tallow is utilised in India-American method 
not to be followed-Subsequent Notification-Not merely classificatory nor 
with retrospective effect-It is $imply a fresh Notification deleting the 
condition about the colour specification. 
The appellant imported bleachable- mutton tallow, while the . E 
appellants in the connected appeals imported bleachable fancy tallow, 
which according to them was not mutton tallow. The imported tallow 
was liable to customs duty under the sub-heading No.15-01/06 at the 
rate of 35 o/o ad valorem. A partial exemption in excess of 15 % ad 
valorem from payment of custo~s duty was given as per Notification p 
No. 141-CUS/ 76 dated 2nd August, 1976. The Notification further laid 
down the specifications of the exe~pted tallow. It was provided that the 
imported tallow meeting the specifications was entitle to partial 
customs duty. 
Subsequently by another No•ification dated 2nd September, 1978, G 
one of the specifications mentioned under the earlier Notification viz. 
item (ii) and entries relating thereto were omitted. Thus the 
requirement that the imported tallow to stand the test of having colour 
not deeper than 20 in one inch cell on the lovibond scale as Y+5R was 
omitted. 
H 
301 
A 
B 
c 
D 
E 
F 
302 
SUPREME COURT REPORTS 
(1994) SUPP. 6 S.C.R 
Before the Customs Authorities the appellants contended that they 
were entitled to get refund ofcustoms duty paid by them in excess of 
1So/o as their imported tallow satisfied the Notification dated 2.8.1976. 
The samples of imported tallow were examined by the Custom House 
and were found not meeting the colour test Specification as laid down 
in the Nodfication dated 2.8.1976. Therefore, their request was rejected 
by the Assistant Collector of Customs. 
On appe&I, the Collector took the view that the appellant in the 
main appeal imported tallow on 4.4.1978 when the Notification 141-
CUS/76 was operative; but since the sample did not satisfy the colour 
specification, the appeal was dismissed. As regards the appeals of other 
appellants, the Collector allowed them and remanded to the Assistant 
Collector directing that the tallow being foreign tallow, the test should 
be done only after refining and bleaching the sample as prescribed in 
the American Oils Chemists' Society Official method Cc 8d-SS ; and 
that if it passed the colour test, the benefit of Notification 141/ CUS/76 
should be extended ; otherwise not. 
The main appellant filed appeals before the Tribunal against the 
said order of the Appellate Collector. As regards the other appellants, 
the Central Government issued notices under Section 131 (3) of the 
Customs Act, 1962 calling upon them to show cause why the orders 
passed by the Appellate Collector should not be recalled. After the 
establishment of the Tribunal, these matters were transferred to the 
Tribunal as appeals taken out by the Collector of Customs. 
The Tribunal dismissed the appeal of the main appellant and 
allowed the appeals of the other appellants on the ground that the test 
under the American method was not called for. Hence these appeals. 
Dismissing the appeals, this Court 
HELD : 1. It is obvious that whatever exemption is granted under 
Notification may be either absolute or subject to such conditions which 
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have got to be fulfilled by the importers before earning such exemption. 
The Notification 141-CUS/76 does not grant such 30 per cent 
exemption in absolute terms but such exemption is based on fulfilment 
of condition mentioned therein about the specification of imported 
tallow and if the imported tallow does not meet the specification 
required it cannot earn the exemption. It is trite to say that in order to 
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