Madras High Court
Transasia Bio-Medicals Ltd vs Union Of India on 1 April, 2025
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P.Nos.28380 & 28388 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.04.2025
CORAM :
THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE MOHAMMED SHAFFIQ
W.P.Nos.28380 & 28388 of 2018
&
W.M.P.Nos.33089, 33091 & 33100 of 2018
Transasia Bio-Medicals Ltd.
Rep. by Ashok Suthar
(General Manager-Taxations & Legal)
Transasia House
No.8, Chandivali Studio Road Petitioner in
Mumbai 400 072. .. both W.Ps.
Vs.
1. Union of India
Rep. by its Secretary
Ministry of Finance
Department of Revenue
North Block, New Delhi 110 001.
2. Deputy Commissioner of Customs (Group-5B)
Custom House
No.60, Rajaji Salai Respondents in
Chennai 600 001. .. both W.Ps.
____________
Page 1 of 12
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
Prayer : Petitions filed under Article 226 of the Constitution of India seeking
(i) a writ of Declaration holding that Notification No.24/2005-Cus dated
01.03.2005 is ultra vires the provisions of Section 25 of the Customs Act,
1962, to the extent it seeks to exempt goods falling under tariff heading
9027 80 of the First Schedule of the Customs Tariff Act, 1975; and
(ii) a writ of Certiorari calling for the records pertaining to the assessments
made in the bills of entry Nos.896356 dated 21.10.2005 and 940189 dated
05.01.2006 seeking to levy 4% additional duty in terms of Notification
No.19/2005-Cus dated 01.03.2005 and quash the same.
For Petitioner : Mr.Hari Radhakrishnan
For Respondents : Mr.A.P.Srinivas
Senior Standing Counsel
ORDER
(Order of the Court was made
by the Hon'ble Chief Justice)
Petitioner has come up with an ingenious petition to avoid payment
of duties payable to the State.
2. Petitioner is a public limited company engaged in the business of
import and manufacture of medical equipments and sale of such
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
equipments in India. Petitioner had imported and warehoused one
consignment of Hemato Analyser with standard accessories and filed bills of
entry. Respondent No.2, i.e. Commissioner of Customs assessed the bills of
entry and demanded additional duty at 4% in terms of Notification
No.19/2005-Cus dated 01.03.2005 issued by respondent No.1, i.e. Union of
India.
3. Respondent No.2 demanded additional duty on the ground that as
per the Notification No.19/2005-Cus dated 01.03.2005, the goods covered
under the exemption Notification No.24/2005-Cus dated 01.03.2005 are
liable to pay additional duty at the rate of 4%. The goods imported by
petitioner fell under the Customs Tariff (9027 80), which is found in the
Customs Exemption Notification No.24/2005-Cus. The tariff rate of the said
product is free as per the Customs Tariff Act, 1975.
4. Notification No.19/2005 has been issued under Sub-section (5) of
Section 3 of the Customs Tariff Act, 1975, as amended by Clause 72 of the
Finance Bill, 2005, whereas Notification No.24/2005 has been issued under
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
Sub-section (1) of Section 25 of the Customs Act, 1962.
5. According to petitioner and that is the only case that when the
Customs Tariff and imported goods says rate of duty to be free, the question
of exempting it under Section 25 of the Customs Act does not arise.
Therefore, the Notification No.24/2005 is bad in law.
6. Shri Hari Radhakrishnan submitted that consequently, the
reference to that notification in the Notification No.19/2005 would also go.
Therefore, the goods imported will not be liable to pay additional duty at
4%.
7. Before we proceed further, the Customs Tariff Act, in Section XVIII,
while dealing with Tariff item 9027 80, provides that the rate of duty would
be free. The Notification No.24/2005 reads as under:
“In exercise of the powers conferred by sub-section (1) of section
25 of the Customs Act, 1962 (52 of 1962), the Central
Government, on being satisfied that it is necessary in the public
interest so to do, hereby exempts the following goods, falling
under the heading, sub-heading or tarrif-item of the First Schedule
to the Customs Tariff Act, 1975 (51 of 1975) and specified in
column (2) of the Table below, when imported into India, from
the whole of the duty of customs leviable thereon under the said
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
First Schedule, namely:-
Table
S.No. Goods falling under the Heading, Sub-heading of Tariff
item
(1) (2)
...
4 ... 9027 80 ...
...
The Notification No.19/2005 reads as under:
“In exercise of the powers conferred by sub-section (5) of
section 3 of the Customs Tariff Act, 1975 (51 of 1975), as
amended by clause 72 of the Finance Bill, 2005, the clause which
has, by virtue of the declaration made in the said Finance Bill
under the Provisional Collection of Taxes Act, 1931 (16 of 1931),
the force of law, the Central Government, on being satisfied that it
is necessary in the public interest so to do and having regard to
sales tax, value added tax, local tax and other taxes or charges
leviable on sale or purchase or transportation of such or like goos
in India, hereby directs that the goods specified in column (2) of
the Table below, when imported into India, shall be liable to an
additional duty at the rate of four per cent ad valorem.
Table
S.No. Description of goods
(1) (2)
...
5 Goods specified in notifiation No.24/205-Customs, dated
the 1 st March, 2005
...
Section 12 of the Customs Act, 1962 reads as under:
“12. Dutiable goods.-
(1) Except as otherwise provided in this Act, or 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
(51 of 1975), or any other law for the time being in force, on
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
goods imported into, or exported from, India.
(2) The provisions of sub-section (1) shall apply in respect
of all goods belonging to Government as they apply in respect of
goods not belonging to Government.”
8. Under the Customs Act, duties of custom shall be levied at such
rates as may be specified under the Customs Tariff Act, 1975 on goods
imported into or exported from India. Therefore, the Customs Tariff Act
specifies the rate at which duties of customs shall be levied. For the goods
imported by petitioner in 2004 and 2005, the duty was 5%. In 2005-06, the
goods were made free of customs duty. Therefore, what the Customs Tariff
Act only signifies is what is the rate of duty that will be levied on goods
imported into India. Section 2 of the Customs Tariff Act, 1975 provides the
rates at which duties of customs shall be levied under the Customs Act,
1962 and are specified in the First and Second Schedules. Notification
No.19/2005 has been issued in exercise of the powers conferred by Sub-
section (5) of Section 3 of the Customs Tariff Act, 1975 and in the table it
only indicates the description of goods that shall be liable to additional duty
at 4% ad valorem. That has nothing to do with Section 25 of the Customs
Act. It does not mean that where goods are allowed to be imported free of
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
customs duty, Government of India is not empowered under Section 25 of
the Customs Act, 1962 to exempt the goods from the whole of the customs
duty leviable thereon under the First Schedule.
9. Both the Acts, i.e., the Customs Act as well as the Customs Tariff
Act, are independent to each other and one duty can be levied without the
other. We find support for this view in Colgate Palmolive (India) Limited
v. Commissioner of Customs, Patna1 .
10. We would also add that Section 3(1) of the Customs Tariff Act
provides for levy of additional duty. The duty is, in other words, in addition
to the customs duty leviable under Section 12 of the Customs Act and
Section 2 of the Customs Tariff Act. Therefore, even if under the Customs
Act the duty leviable is stated to be “free”, still this additional duty can be
levied under the Customs Tariff Act and that has been levied in exercise of
powers conferred by Sub-section 5 of Section 3 of the Customs Tariff Act.
This is because the charging section for the additional duty is Section 3 of
the Customs Tariff Act and not Section 12 of the Customs Act, because Sub-
1 (2016) 15 SCC 144
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
section 5 of Section 3 of the Customs Tariff Act clearly states that duty
chargeable under Section 3 shall be in addition to any other duty imposed
under this Act or any other law for the time being in force [Vide Hyderabad
Industries Ltd v. Union of India2].
11. Further, here is not a case where the notification says 4% of the
customs duty leviable on the goods imported, in which case 4% of “free”
would have been “nil”. It only says the identified goods when imported into
India shall be liable to an additional duty at 4% ad valorem.
12. In our view, the goods imported, even though exempted from
basic customs duty, may still be subject to levy of additional duty under the
respective enactments and they would be so subject unless and until they
are specifically exempted by the competent authority in exercise of the
powers vested under those respective enactments from such additional duty.
13. Shri Hari Radhakrishnan relied upon a judgment of the Apex
Court in the case of Associated Cement Companies Ltd. v. Commissioner
2 (1999) 5 SCC 15
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
of Customs3. In our view, this judgment is of no help because it does not
apply to the facts of this case. In that case, the Court held that goods are
allowed to be imported free those goods cannot be added to dutiable
articles and customs duty will be levied thereon.
14. There is a judgment of the Co-ordinate Bench of this Court in
Century Floor Mills Ltd. v. Union of India4, in which, similar situation
arose. There also, counsel for petitioner submitted that unless a duty is
either levied or leviable, then alone the question of increase or decreasing
the rate of duty will arise and the entry “free” denotes that “no duty” is
leviable and therefore, the impugned notification which provided for
imposition of 50% of the customs duty on imported wheat is ultra vires of
Section 12 of the Customs Act and Section 8A of the Customs Tariff Act. The
Division Bench held that under Section 25 of the Customs Act, the
Government has authority to grant exemption from duty only conditionally
or in absolute terms and in which event, the power under Section 25 of the
Customs Act will only go for exempting generally and in absolute terms,
3 2001 (128 ELT 21 (SC)
4 2013 SCC OnLine Mad 3049
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
thus making import free of any liability under the Act or permit import
subject to other conditions as it may deem fit in the given circumstances.
The Court held that there could not be much of difference in an item being
notified under the Customs Tariff Act as nil or free, which matters very
little.
In the circumstances, we find no merit. Petitions are dismissed. There
shall be no order as to costs. Consequently, all the interim applications also
stand dismissed.
(K.R.SHRIRAM, CJ) (MOHAMMED SHAFFIQ,J.)
01.04.2025
Index : Yes
Neutral Citation : Yes
kpl
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
To
1. The Secretary
Ministry of Finance
Department of Revenue
North Block, New Delhi 110 001.
2. Deputy Commissioner of Customs (Group-5B)
Custom House
No.60, Rajaji Salai
Chennai 600 001.
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
W.P.Nos.28380 & 28388 of 2018
THE HON'BLE CHIEF JUSTICE
AND
MOHAMMED SHAFFIQ,J.
(kpl)
W.P.Nos.28380 & 28388 of 2018
01.04.2025
____________
https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/04/2025 08:30:29 pm )
