MIS. JAIN EXPORTS PVT. LTD. AND ANR. versus UNION OF INDIA AND ORS.

Citation: [1996] SUPP. 4 S.C.R. 673 · Decided: 14-08-1996 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed

Judgment (excerpt)

MIS. JAIN EXPORTS PVT. LTD. AND ANR. 
v. 
UNION OF INDIA AND ORS. 
AUGUST 14, 1996 
[S.P. BHARUCHA AND S.B. MAJMUDAR, JJ.] 
Customs Act, 1962-Section 25(2}-Claim of exemption u11dei-Mai11-
tai11ability-lmport of liquid caustic soda-Levy of duty-Exemption granted 
in favour of State Chemicals and Phannaceuticals Coporation by reducing 
rate of custom duty levied 011 them-Legality of 
Practice and Procedure-U11de1taki11g given to Court-Not an obliga-
tion imposed by court-Acting upon its own undertaking to Court-No equity 
in favour of the party giving iHt is not a special or peculiar circumstance. 
A 
B 
c 
The appellant imported liquid caustic soda in bulk, on which Cos- D 
toms, auxiliary and countervailing duty was payable at the aggregate rate 
of 92.5 percent. The respondents, State Chemicals and Pharmaceuticals 
Corporation of India Ltd. were required to pay duty on import of caustic 
soda only at the rate of 10 percent because of an exemption granted to 
them in public interest u/s. 25(2) of Customs Act. The appellants filed a E 
writ petition challenging it as discriminatory while claiming grant of such 
exemption. The High Court dismissed the writ petition. Hence this appeal. 
The appellants submitted that special circumstances favoured them 
in that interim order passed on the appellants by this Court on the 
appellant's application for the stay of recovery of the difference in duty, F 
obliged them to sell the caustic soda at the price that did not take duty at 
the rate of 92.5 percent into account as appellants were permitted to clear 
the quantity of caustic soda on the condition that they furnished security 
to the satisfaction of the Collector of Customs for the difference in duty 
between 10 percent and 92.S percent, and, in the event that the Collector 
was not satisfied with such security, the appellants furnished a bank G 
guarantee for that difference. The appellant undertook 'not to sell canstic 
soda imported nuder the licence at the rate higher than Rs. 5132 only per 
M.T. Ex-godown which is represented by the State Chemicals and Phar-
maceuticals Corporation of India Ltd. as the price at which they had sold 
the quantity of caustic soda imported by them'. Appellants alleged that an H 
673 
674 
SUPREME COURT REPORTS [1996) SUPP. 4S.C.R. 
A 
obligation had been imposed by this Court upon the appellant not to sell 
the caustic soda at more than Rs. 5132 per metric tonne and they had been 
unable to cover the balance 82.S percent of duty and therefore, an equity 
arose in favour of the appellant by reason of the interim order and they 
should be permitted to pay as duty only 10 percent as provided under its 
B terms. 
Dismissing the appeal with costs, this Court 
HELD : 1.1. The interim order was passed upon the application for 
stay of recovery of the difference in duty made by the appellants. If the 
C appellants found the condition imposed by the order unacceptable, they 
could have sold the caustic soda at a price higher than Rs. 5132 per metric 
tonne and paid duty thereon at the rate of 92.5 percent after applying to 
this Court to relieve them of their undertaking. The appellants acted upon 
the interim order knowing full well that if the appeal was decided against 
them they would be required to pay duty at the rate of 92.5 percent. Acting 
D upon the interim order created no equity in favour of the appellants, nor 
were these any special or peculiar circumstances. [678-B-C] 
E 
F 
1.2. An undertaking given to" Court is not an obligation imposed by 
the Court. It is a promise voluntarily made to the Court. Actin11 upon its 
own undertaking to court creates no equity in favour of the party giving 
it, nor is it a special or peculiar circumstance. [678-D] 
1.3. Should a court come to the conclusion that an exemption is · 
arbitrary or discriminatory or violative of Article 14, it may strike the 
exemption down but it cannot widen its scope so as to cover those it finds 
have been discriminated against. [678-E] 
M. Jha11gir Bhatusha & Ors. v. U11io11 of llldia & Ors., [1989] Supp. 2 
SCC 201 and State of M.P. v. Moha11 Si11gh, [1995] 6 SCC 321, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 884 of 
G 1980. 
From the Judgment and Order dated 18.4.80 of the Delhi High Court 
in C.W. No. 351 of 1980. 
G.K. Raman, D.K. Garg, N.D.B. Raju and P. Parmcswaran for the 
H Appellants. 
JAIN EXPORTS PVf. LTD. v. U.0.1. [BHARUCHA,J.) 
675 
AK. Ganguli, AS. Rao, Sushi! Kr. Jain for the Respon

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