M/S. MOTIRAM TOLARAM AND ANR. ETC. ETC. versus THE UNION OF INDIA AND ANR.

Citation: [1999] SUPP. 1 S.C.R. 82 · Decided: 05-08-1999 · Supreme Court of India · Bench: B.N. KIRPAL, AJAY PRAKASH MISRA, R.P. SETHI · Disposal: Dismissed

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Judgment (excerpt)

A 
MIS. MOTIRAM TOLARAM AND ANR. ETC. ETC. 
v. 
THE UNION OF INDIA AND ANR. 
AUGUST 5, 1999 
B 
[B.N. KIRPAL, A.P. MISRA AND R.P. SETHI, JJ.] 
Customs Tariff Act, 1975: 
S.3-Additional duty on polyvinyl alcohol-Notification No. 185 of 
C 1983-Assessees claiming benefit of the Notification and contending to pay 
excise duty of l 0% ad valorem, instead of normal duty of 40fJ/rr-Held, under 
s.3, rate of duty would be only that which an Indian manufacturer would pay 
under the Excise Act on a like article-When under the provisions of Excise 
Act an assessee wants to claim benefit of an exemption/notification, then 
/ D onus is on him to prove· and show that the conditions, if any, which are 
imposed by the exemption/notification have been satisfied-On imported 
polyvinyl alcohol, vinyl acetate monomer has not been subjected to the , 
appropriate amount of duty payable under Indian law-It is only if this 
payment had been made that Notification No. 185 of 1983 would have been 
applicable-Because this condition has not been satisfied, assessees can not 
E get the benefit of the Notification-Appropriate amount of duty would mean 
the duty payable under the Central Excise and Salt Act or under Customs 
Tariff Act. 
Hyderabad Industries Ltd. v. Union of India, (1999)108 ELT 321 SC 
F at page 326, relied on. 
The Union of India v. The Commercial Tax Officer West Bengal and 
Ors., (1955) 2 SCR 1076 and Collector of Central Excise, Patna v. Usha 
Martin Industries, (1997) 7 SCC 47, cited. 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3977 of 1988 
Etc. Etc. 
H 
From the Judgment and Order dated 6.1.88 of the Bombay High Court 
in A. No. 1472of1987. 
Dipankar P. Gupta, Prashant Bhushan, Ramesh Singh Jaitley, S. Goswami, 
82 
MOTIRAM TOLARAM v. U.0.1. 
83 
Ms. Bina Gupta, and Ms. Vanita Bhargawa for the Appellants. 
C.S. Vaidyanathan, Additional Solictor General, N.K. Bajpai and K.C. 
Kaushik for P. Parmeswaran for the Respondents. 
l 
The following Order of the Court was delivered : 
Normally it is the assessee who does tax planning but this is a case 
where one finds that it is the Revenue which has done tax collection planning. 
A 
B 
The appellants imported consignments of polyvinyl alcohol on which 
additional duty under Section 3 of the Customs Tariff Act was sought to be 
imposed. The contention of the appellants before the authorities was that C 
polyvinyl alcohol when manufactured in India from vinyl acetate monomer, on 
which appropriate amount of duty has been paid, is subjected to a concessional 
rate of excise duty of I 0% ad valorem, instead of the normal duty of 40%, 
and, therefore, the appellants should also be required to pay the additional 
duty at this reduced rate. 
D 
When the case came up for hearing before the C.E.G.A.T., it came to the 
conclusion that the appellants were not entitled to the benefit of the notification 
whereby reduced rate of duty could be paid. It was held by the Tribunal that 
Excise Notification of Exemption could not apply while determining the duty 
payable under Section 3 of the Customs Tariff Act. One other reason given E 
by one of the Members of the Tribunal in deciding against the appellants was 
that the rate which is leviable under Section 3 of the Customs Tariff Act is 
the one which is provided in the Schedule of the Excise Act and, therefore, 
if there is any exemption which is granted the same would not be applicable. 
Before dealing with ~he contentions raised by the learned counsel F 
before us, we wish to make it clear that on the correct interpretation of Section 
3 of the Customs Tariff Act it is now settled that the rate of duty would be 
only that which an Indian manufacturer would pay under the Excise Act on 
a like article See Hyderabad Industries Ltd. v. Union of India, (1999) 108 ELT 
321 SC at page 326. The aforesaid conclusion ofC.E.G.A.T does not appear G 
to be correct. 
The Excise Notification on which reliance is placed by the appellants is 
Notification No. 185 of 1983 which reads as follows: 
"In exercise of the powers conferred by sub-rule (I) of Rule 8 of H 
84 
A 
B 
c 
SUPREME COURT REPORTS [1~99) SUPP. 1 S.C.R. 
the Central Excise Rules, 1944, the Central Government hereby exempts 
Polyvinly Alcohol, falling under item No. l 5A of the First Schedule 
to the Central Excises and Salt Act, 1944 (I of 1944) and manufactured 
from Vinyl Acetate Monomer, from so much of the duty of excise 
leviable thereon under the said Act at the rate specified i

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