S.MURALIDHAR,J. - (1.) The Petitioner, Oswal Chemicals and Fertilizers Ltd., has filed the present petition under Article 226 of the Constitution seeking a declaration that the impugned Notification No. 3/2002-Cus., dated 1st March, 2002 issued by the Department of Revenue, Ministry of Finance, Government of India to the extent that it removed 'sulphur' and 'rock phosphate' from the ambit of goods entitled to nil rate of Special Additional Duty ('SAD') on their import and subjecting them to SAD @ 4%, is illegal. Background facts :
(2.) The brief facts are that the petitioner is a domestic manufacturer of phosphoric acid which in turn, is mixed with ammonia to produce phosphatic fertilizers. Two of the raw materials used in the manufacture of phosphoric acid are sulphur and rock phosphate and both of them are imported. They are classified under Tariff Headings 25.03 (sulphur of all kinds) and 25.10 (natural calcium phosphates etc.) of the Customs Tariff. The customs duty on both the products at the relevant time was 5% ad valorem. Phosphoric acid is also imported by other manufacturers of fertilisers.
(3.) SAD was introduced, on articles imported into India, by insertion of Section 3A to the Customs Tariff Act, 1975 ('CTA'), by Section 104 of the Finance Act, 1998. The relevant portion of Section 3A reads as under : 3A. Special Additional Duty. - (1) Any article which is imported into India shall in addition be liable to a duty (hereinafter referred to in this section as the special additional duty), which shall be levied at a rate to be specified by the Central Government, by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India : Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight per cent of the value of the article imported into India. Explanation. - In this sub-section, the expression "maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India" means the maximum sales tax, local tax, other charges for the time being in force, which shall be leviable on a like article, if sold or purchased in India, or if a like article is not so sold or purchased which shall be leviable on the class or description of articles to which the imported article belongs. (2) For the purpose of calculating under this section the special additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962 or Section 3 of this Act, be the aggregate of - (i) the value of the imported article determined under sub-section (1) of Section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the special additional duty referred to in sub-section (1); and (iii) the additional duty of customs chargeable on that article under Section 3 of this Act. (3) The duty chargeable under this Section shall be in addition to any other duty imposed, under this Act or under any other law for the time being in force. (4) The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties shall, so far as they may be, apply to the duty chargeable under this Section as they apply in relation to the duties leviable under that Act. (5) Nothing contained in this section shall apply to any article, which is chargeable to additional duties levied under sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957)." ;