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Judgment
Bharucha, J.—The petitioners imported Polyvinyl Alcohol GR 17 from Japan. The goods arrived in Bombay on 22nd February 1983 and 4 bills of entry were filed for home consumption. This petition was filed and the goods were cleared on the basis of the interim order dated 25th February 1983.
The contention that was originally taken in the petition was that customs duty could not be levied on the c.i.f. value of the goods while determining the assessable value for the purposes of countervailing duly. This contention can no longer be urged. It has been rejected by a Division Bench of this Court by the judgment in Ashok Traders Vs. Union of India and another, .
What is urged after an amendment of the petition is an ingenious argument based upon the construction of the applicable exemption notification dated 28th February, 1982.
The goods are covered by Item No. 39.01/06 of the First Schedule to the Customs Tariff Act. They are liable under that item to customs duty at the rate of 100% ad valorem.
The aforementioned notification exempts goods specified in Column 2 of the Table annexed thereto, when imported into India, from so much of the auxiliary customs duty leviable thereon as is in excess of the rates specified in the corresponding entry in Column 3. Item 1 of the Table applies to goods in respect of which the rate of customs duty specified in the said First Schedule, read with the relevant notification for the time being in force is "60% ad valorem or more but less than 100% ad valorem". The rate of auxiliary duty applicable to such goods is 25% ad valorem. Item 2 of the Table refers to goods where the rate of customs duty is "nil or less than 60% ad valorem" and the rate of auxiliary duty applicable thereto is 15% ad valorem. Item 3 in the Table applies to goods where the customs duty is (i) "at a specified rate" or (ii) "at a specific rate or at ad valorem rate whichever is less or higher as the case may be" or (iii) ''at a specific rate and ad valorem rate in all of which cases the rate of auxiliary duty is 15% ad valorem.
Now, the rate of customs duty upon the goods in question is 100% so that the goods do not fall within Items 1 and 2 of the above Table. It is not either at a specific rate or at a specific rate and ad valorem rate so that sub-items (i) and (iii) of Item 3 are not attracted. It is argued that the goods fall within sub-item (ii) of Item 3 because the customs duly thereon is at an ad valorem rate.
Item 3 of the Table applies to goods in respect of which the said First Schedule fixes a specific rate of duty [sub-item (i)] or a specific rate coupled with an ad valorem rate sub-item (iii) or a specific rate and an ad valorem rate and states that out of these that rate will be applicable which is higher or lower as the case may be [sub-item (ii)]. The words ''at ad valorem rate'' in sub-item (ii) of Item 3 cannot be read disjunctively. The sub-item must be read as a whole. It can have, therefore, no application to goods, such as the goods in question, in respect of which only an ad valorem rate of duty has been prescribed.
In the result, the petition is dismissed.
The respondents shall be entitled to encash the bank guarantee furnished by the petitioners pursuant to the interim order.
No order as to the costs.