Delhi High Court
Naraindas Brothers vs Union Of India (Uoi) And Anr. on 1 March, 2002
Equivalent citations: 2002 (82) ECC 37, 2002 (143) ELT 52 Del
Author: A Sikri
Bench: S Sinha, A Sikri
JUDGMENT
A.K. Sikri, J.
1. Under the Customs Tariff Act, 1975 the
petitioner was required to pay the customs duty on the
importation of PBSY cotton seed oil at the rate of 60
per cent ad valorem and the additional duty. Under
Section 25 of the Customs Tariff Act, the Central
Government has been given power to grant exemption from
payment of duty if it is satisfied that it is necessary
in the public interest so to do. In exercise of this
power, the Central Government issued two notifications
dated 1st April, 1980 and 24th October, 1980 granting
total exemption from payment of custom duty and
additional duty on edible oils imported into India by
the National Dairy Development Board (for short
'NDDB)'. The petitioner has sought to challenge the
aforesaid orders on the ground that granting of
exemption to NDDB and not to the petitioner would be
discriminatory and also violative of Article 19(1)(g)
of the Constitution of India inasmuch as the commodity
importer by the petitioner would be at a higher price
than that of the NDDB which is not leviable to pay any
such duty.
2. The issue involved in this case has already
been decided by the Division Bench of this court in
case of M. Jehangir Bhatusha v. Union of India being
CWP No. 1517/79 decided on 14th November, 1979.
3. The court in this case did not find favor
with the contentions of the petitioners on both counts
and held that neither grant of exemption in favor of
public undertaking(STC) in that case was discriminatory
nor was there any violation of Article 19(1)(g) of the
Constitution of India. Relying upon the decision of
the Supreme Court in the case of Shree Meenakshi Mills
Ltd. v. Union of India ,
the court held that a price control measure adopted by
the Government cannot be deemed to be an unreasonable
restriction on the rights of the petitioners guaranteed
by Article 19(1)(g) of the Constitution only because it
either reduces the profit margin of the petitioners or
even results in some loss to the petitioners. The
arguments of discrimination was repelled in the
following words:
"That the classification between the
Government or a Government Corporation
like the STC, on the one hand, and the
petitioners and other private persons, on
the other hand, is reasonable is settled
by a series of decisions ending in the
seven-Judge Bench decision in Maganlal
Changanlal (P) Ltd. v. Municipal
Corporation of Greater Bombay and Ors.,
(1974) 2 SCC 402 . The object of the
classification has also a rational
connection with the distinction made
between the STC and the petitioners.
While the STC is under the control of the
Government the petitioners are not. This
is why the benefit of the reduction of
duty is given to the STC alone and not to
the petitioners. Moreover, while the
cost of the import by the STC is known to
the Government, the cost of the imports
by the petitioners it is not so known to
it. Lastly, the impact of the price of
vanaspati through lowering of the import
duty on the imports by the STC is secured
in accordance with the guidelines laid
down by Sub-section (2) of Section 25 of
the Act. For these reasons the impugned
orders are valid and they have not been
shown to be contrary to Article 14 of the
Constitution."
4. In the result this writ petition is dismissed.
The petitioner is liable to pay the balance custom duty
on the goods imported by it.
5. There shall be no order as to costs.
