CHANDRACHUO, C.J. - (1.) THE Judgment of the court was delivered by -
(2.) THIS is a group of Civil and special leave petitions arising out of a judgment dated 19/10/1982 delivered by a division bench of the High court of Delhi in a batch of Writ Petition filed under Article 226 of the Constitution. Those Writ Petition having been dismissed by the High court, the writ petitioners have filed these appeals and special leave petitions. The facts of the various Writ Petition naturally vary from case to case but, such variation has no bearing on the points which arise for our decision. We will mention the facts of Civil 27-33 of 1983 as a representative batch of cases. The two appellants therein are respectively Messrs Eastern Engineers, a partnership firm carrying on business at Goregaon. Bombay, and a partner of that firm. For the sake of convenience, we will proceed on the basis that the real appellant is the firm. The appellant carries on the business, inter 626 alia, of importing brass scrap from other countries. Its contention is that the 'additional duty' of customs, which is in the nature of counter- vailing duty, cannot be levied on brass scrap because, such scrap which consists of damaged brass articles like taps and pipes, is not 'manufactured' in India (or elsewhere), as indeed it cannot be. The second contention of the appellant is that it is liable to pay duty of customs on the brass scrap at the rate of 40% only and not at the rate of 80% because, brass scrap is a 'master alloy'. The rate of customs duty payable depends upon which of the two Notifications, granting exemption from payment of customs duty, is applicable. These contentions are based on the following provisions of law. S. 2(15) of the Customs Act, 1962 defines 'duty' to mean a duty of customs leviable under the Act. Ch. V of the Act contains provisions for the levy of, and exemption from, customs duties. By S. 12(1) of the Act, "Except as otherwise provided in the Act or in any other law for the time being in force", duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or under any other law for the time being in force, on goods imported into or exported from India. S. 25 of the Customs Act, which deals with the power of the central government to grant exemption from the payment of customs duty, provides by sub-section (1) that, if the central government is satisfied that it is necessary in the public interest so to do, it may. by a notification in the Official Gazette, exempt generally, either absolutely or subject to such conditions as may be specified, goods of any specified description from the whole or any part of the duty of customs leviable thereon.
(3.) S. 2 of the Customs Tariff Act, 1975 says that the rates at which duties of customs shall be levied under the Customs Act, 1962 are specified in the First and Second Schedules of the Tariff Act. Section 3 of the Tariff Act deals with the levy of "additional duty equal to excise duty". Ss. (1) of S. 3 and the Explanation to that section, which are relevant for our purpose, read thus: 3. Levy of additional duty equal to excise duty.-(1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this S. referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation.-In this section, the expression "the excise duty for the time being leviable on a like article if produced or manufactured in India" means the excise duty for the time being in force 627 which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured which would be leviable on the class or description of article to which the imported article belongs, and where such duty is leviable at different rates, the highest duty. The question which we must first examine is as to what is the true nature of the duty mentioned in S. 3(1) of the Tariff Act. It has to be appreciated at the threshold that the charging S. is Section 12 of the Customs Act and not S. 3 of the Tariff Act. Section 12, Customs Act, incorporates the different ingredients embodied in the concept of a fiscal imposition. It levies a charge, it indicates the taxable event (the import or export of goods) and it indicates the rate of the levy. The rates are such "as may be specified under the Customs Tariff Act, 1975". The last ingredient takes us to S. 2, Tariff Act, which lays down that "the rates at which the duties of customs shall be levied under the Customs Act are specified in the First or Second Schedules". Nothing more would be ordinarily required to complete the scope of S. 12, Customs Act. The scheme incorporated in that S. read with S. 2 of the Tariff Act is analogous to the scheme embodied in S. 4, Income Tax Act read with the relevant provisions of the Finance Act. The levy specified in S. 3(1) of the Tariff Act is a supplementary levy, in enhancement of the levy charged by S. 12 of the Customs Act and with a different base constituting the measure of the impost. In other words, the scheme embodied in S. 12 is amplified by what is provided in S. 3(1). The customs duty charged under S. 12 is extended by an additional duty confined to imported articles in the measure set forth in Section 3 ( I ). Thus. the additional duty which is mentioned in Section 3(1) of the Tariff Act is not in the nature of countervailing duty. In Ashok Service Centre v. State of Orissa, which considered the nature of levy of additional sales-tax under an orissa Act, this Court observed : This construction receives support from the use of the word 'additional' in S. 3(1) which involves the idea of joining or uniting one thing to another so as thereby to form one aggregate (see Black's Law Dictionary). The gross turnover referred to therein should, therefore, be understood as that part of the gross turnover which is taxable under the principal Act. (page 380) ;