- (1.) Petitioner carries on business of manufacturing "Engineers, Steel Files" at its factory situated at 29, New Tangra Road, Calcutta. The said Steel Files are manufactured from alloy steel which has to be imported by the petitioner. Since 1954, the petitioner started manufacturing of the said Steel Files and is still importing alloy steel from foreign countries. On or about March 1, 1968, a notification was issued by the Government of India bearing No. 30 Customs, whereby the alloy steel when imported for the manufacture of Small Tools was exempted from the Customs duty leviable thereon which was in excess of 5% advalorem when of British manufacturer and 15% advalorem when not of British manufacturer. It was further provided in the said notification that the benefit of the exemption would be granted provided the importer by executing a bond in such form and for such sum as may be specified by the Asstt. Collector of Customs binds himself to pay on demand of such quantity of alloy steel which is not proved to the satisfaction of the Asstt. Collector of Customs to have been used for the aforesaid purpose an amount equal to the difference between the duty leviable on such quantity but for the exemption and that already -paid at the time of importation. Petitioner came to know of the said notification for the first time in December 9, 1969. Prior to December 9, 1969 the petitioner paid the Customs duty in respect of the import of the alloy.steel in full without claiming the exemption granted under the said notification. From December, 1969 to 4th December, 1971 the petitioner had been claiming and has been granted exemption of duty in terms of the said notification in respect of the import of alloy steel made by it during the said period for the manufacture of the said steel files. During the said period, viz. December, 1969 to October, 1971 the petitioner from time to time executed 50 bonds as required by the said notification in respect of the different consignments of alloy steel for the purpose of claiming the exemption of duty. In respect of consignment of alloy steel imported by the petitioner which arrived in November, 1971, the Customs Authorities refused to grant the benefit of concessional rate of duty in terms of the said notification. It is contended by the Customs that the petitioner was not entitled to claim exemption from duty in terms of the said notification as the steel files manufactured by the petitioner out of the imported alloy steel were not "small tools" within the meaning of the said notification. In order to avoid detention of the aforesaid consignment and to obtain early clearance of the materials which were urgently needed by it, the petitioner paid the entire customs duty as assessed by the Respondent No. 1 under protest. In the meantime the petitioner made various representations to the Respondent No. 3 and made applications before the Respondent No. 1 for granting refund of duty paid in excess of what could be levied in terms of the said notification. The Respondent No. 1 passed three orders rejecting in part one of the said applications for the refund of the Customs duty in respect of the consignments imported during the period December 1971 to February 1972. Against the said orders of the Respondent No 1 the petitioner preferred appeals to the Appellate. Collector of Customs and the same are pending. The petitioner's application for refund of duty in respect of the other consignments imported during the period of December, 1971 to February, 1972 have not been disposed of by the Respondent No. 1 and are still pending. On September 2, 1972 the petitioner received a letter from the Respondent No. 1, the Asstt. Collector of Customs in reply to its representation dated December 2, 1971 and the subsequent correspondence relating thereto. By the said letter the petitioner was informed that the respondent No. 3 had carefully examined in consultation with D.C.T.D. the question as to whether the alloy steel imported for the manufacture of steel files would be entitled to the benefit of concessional rate of duty laid down in the said notification dated March 1, 1968 which refers to 'Alloy Steel' for the manufacture of small tools. It was further stated that the Board was advised that the term 'small tools' referred to those tools which were used with the machine tools and that the steel files could not be treated as small tools and the petitioner's request for concessional rate of duty could not be acceded to. Thereafter, the petitioner, received a letter dated September 12, 1972 from the respondent No. 1 whereby the petitioner was required to pay a sum of Rs. 2,80,055/-in respect of various bonds mentioned in the enclosure to the said letter. The said letter was sent as a result of the decision of the Respondent No. 3 contained in the said letter dated August 29, 1972. It is stated by the petitioner that the steel files manufactured by it are known in the trade as small tools. Steel files are utilised for the purpose of removing and/or cutting metals. The tools utilised for the purpose of removing and cutting metals are technically as well as in the trade are known as small tools. The said steel files are also affixed to the machine for removing and cutting metals. The petitioner being aggrieved by the said decision as well as the demand made by the Respondent No. 1 moved this Court in an application under Article 226 of the Constitution and obtained the present Rule.
(2.) An affidavit-in-opposition has been filed on behalf of the respondents and affirmed by Barendra Nath Mitra, the Asstt. Collector of Customs, the Respondent No. 1. In that affidavit it is stated that the petitioner is manufacturing steel files which are "hand tools" and not 'small tools'. It is slated that the concessional rate of duty hitherto enjoyed by the said petitioner was not arbitrarily withdrawn but the same was legally withdrawn in terms of the Gazette Notification, wherein the criterion is 'satisfaction of the Asstt. Collector'. As the Asstt. Collector concerned was satisfied in the instant case that the steel files which are produced were not small tools but hand tools, extension of the benefit under concessional rate was rightly denied. In paragraph 29 of the said affidavit it is stated that the small tools' are tools like twist drills and reamers, dis and taps, gear cutters an4 hacksaw blades as mentioned under item 72(3) of the first schedule of the Indian Customs and Central Excise Tariff. Tools are classified under item 71(a) of ICT and such definition is quite clear and specific. In view of the specified mention in the relevant statute any extraneous meaning as given in any other statutory order or trade usage as sought to be suggested by the petitioner should not be looked into and in any event they can not be admitted. It has, however, been admitted in the affidavit that due to wrong notion a number of bonds were accepted by the Customs House and goods were allowed to clear at lower rates of duty in terms of notification in question.
(3.) Mr. Chatterjee, appearing on behalf of the petitioner in support of the Rule contended that the steel files manufactured by the petitioner were small tools within the meaning of the said notification dated March 1, 1968. The said steel files are commonly known in the trade as small tools. The Ministry of Foreign Trade, Government of India, in the various import trade policy published from lime to time have also treated the said steel files as small tools and has allowed the import on the said basis. In the Monopoly and Restrictive Trade Practices (Classification of Goods) Rules, 1971 the said steel files have also been described under the group small tools. There is no definition of the small tools in the statute. Reference to item 72(3) where certain small tools have been referred are not exhaustive. According to Mr. Chatterjee any artificial definition can not be imported for the purpose of disallowing the exemption of lower rate of import duty which the petitioner is entitled to under the said notification.;