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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.4676-4677 OF 2013

AMIN MERCHANT ….  APPELLANT

VERSUS

CHAIRMAN, CENTRAL BOARD OF EXCISE & REVENUE & ORS. …. RESONDENTS

JUDGMENT  

N.V. RAMANA, J.

1. These appeals, by special leave, have been filed against the

impugned  judgment  and  order  dated  02.09.2011  in  Writ  Petition

No.1761  of  2009  and  order  dated  24.11.2011 in  Review  Petition

No.24 of 2011 in Writ Petition No.1761 of 2009 respectively, of the

High Court of Judicature at Bombay, by which the High Court has

dismissed the  Writ  Petition  filed  by  the  appellant  herein  and  also

dismissed the Review Petition by holding that no error apparent on

record has been made out.

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2. The  facts  leading  to  these  appeals,  in  brief,  are  that  the

appellant imported eight consignments of goods falling under Tariff

Sub-Heading  2208.10  of  the  Customs  Tariff,  namely,  “Compound

alcoholic  preparations  of  a  kind  used  for  the  manufacture  of

beverages”  during the financial  years  1993-94 and 1994-95.   The

customs authorities assessed the goods imported provisionally and

subjected them to a prescribed rate of duty of Rs.300/- per liter or

400%  whichever  is  higher  specified  in  respect  of  Sub-Heading

2208.10  of  the  Customs  Tariff  for  1993-94  and  1994-95.   The

appellant claims to have deposited the amount of duty provisionally

assessed on the assessable value declared in the eight bills of entry.

According  to  the  appellant,  he  cleared  the  goods  for  home

consumption during financial years 1993-94 and 1994-95.  Between

the  years  1994  and  2001  the  appellant  addressed  several

communications,  inter  alia,  to  the  Central  Board  of  Excise  and

Customs and to the Tariff Research Unit (TRU) of the Union Ministry

of Finance.  The grievance of the appellant is that the rate which has

been prescribed for goods falling under Tariff Sub-Heading 2208.10 is

higher  than  that  was  authorized  in  the  Budget  Proposals  during

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financial years 1993-94 and 1994-95.   The appellant took recourse to

the  provisions  of  the  Right  to  Information  Act  in  order  to  procure

relevant information from the concerned authorities.  According to the

appellant, the authorities have not furnished the relevant information.  

3. Not satisfied with the attitude of the authorities, the appellant

preferred a Writ Petition before the High Court seeking the following

reliefs:   (a)  a  writ  of  Mandamus  directing  the  first  and  second

respondents herein to issue a notification u/s.25(1) of the Customs

Act, 1962 (for short ‘the Act’) in order to exempt goods falling under

Tariff  Sub-Heading  2208.10  so  as  to  give  effect  to  the  Budget

proposal announced by the Finance Minister (FM) in Parliament for

financial years l993-94 and 1994-95;  (b)   a direction to the Chief

Commissioner of Customs to finalize assessment of the eight bills of

entry after a notification is issued by the first and second respondents

u/s.25(1) of the Act;   (c) a writ  of  Mandamus directing the second

respondent  to  issue a notification u/s.25(2)  of  the Act  for  granting

exemption  from  customs  duty  for  goods  falling  under  Tariff

Sub-Heading 2208.10 for financial years 1993-94 and 1994-95; (d) an

order for refund after assessments are finalized and (e) an order for

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the payment of interest at the rate of 12% p.a. on the refund that is

ordered.

4. The  High  Court  has  dismissed  the  Writ  Petition  by  the

impugned judgment  and  order  dated  2.9.2011.   Being  dissatisfied

with the dismissal of his writ petition, the appellant preferred a Review

Petition,  which  was  also  dismissed  by  the  High  Court  by  the

impugned judgment and order dated 24.11.2011.   

5. Heard the appellant, appearing in person, and learned Senior

Counsel for the respondents.

6. The appellant,  appearing in  person,  vehemently  submits that

the budget proposals for 1993-94 stipulated, inter alia, a reduction in

effective rate of import duty on items which had then attracted a rate

of duty higher than 85%, to 85% advalorem, except on dried grapes,

almonds, alcoholic beverages, ball and roller bearings and passenger

baggage; the Budget proposals for 1994-95 similarly contemplated a

reduction in effective rates of customs duty on items which until then

attracted  a  duty  higher  than  65%,  to  65%  except,  inter  alia,  on

alcoholic  beverages.   ‘CAP of  a  kind  used  in  the  manufacture  of

beverages’  falling  under  sub-heading  2208.10  of  the  Act  are  not

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covered  by  the  said  exceptions  ‘dried  grapes,  almonds,  alcoholic

beverages,  ball  and  roller  bearings  and  passenger  baggage’  as

mentioned in the Budge proposal appearing at Sl.No.B 1.  Hence the

import duty on ‘CAP of a kind used in the manufacture of beverages’

falling under sub-heading 2208.10 should have been read as “85%”

for the financial year 1993-1994 in keeping with the Budget Proposal

at  Sl.No.B1  duly  passed  by  the  Parliament  for  the  financial  year

1993-94 so also for the financial year 1994-95, it should have been

“65%”.  

7. The  appellant  would  further  submit  that  all  the  notifications

contained  in  the  Explanatory  Memorandum 1993-94  and  1994-95

were  to  give  effect  to  the  Budget  Proposals  duly  passed  and

legislated  by  the  Parliament  and  rectify  the  erroneous  tariff  rates

prescribed by the TRU department in the Customs Tariff Act, Finance

Bill  and  Finance  Act  for  1993-94  and  1994-95;  Budget  proposals

announced  by  the  FM  in  the  Parliament  are  duly  passed  and/or

approved by the Parliament, no person, executive, bureaucrat or any

authority or Court of Law has the authority and/or power to alter or

amend the same.  If the executives are allowed to prescribe any tariff

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rates  contrary  to  the  Budget  Proposals  duly  authorized  by  the

Parliament, then the Budget Proposals duly passed by the Parliament

will have no meaning and will be rendered nugatory and thus opening

the flood gates for ‘corrupt practice’.   

8. He  also  submits  that  the  goods  falling  under  sub-heading

2208.10 of the Customs Tariff Act are not ‘alcoholic beverages’ but

‘Compound alcoholic preparations of a kind used for the manufacture

of beverages’ falling under sub-heading 2208.10 in the Customs Tariff

Act  1993-94 and 1994-95, not  being ‘alcoholic beverages’ and not

being covered by the exceptions mentioned in the said proposal at

Sl.No.  B1,  the  rate  of  duty  duly  passed  and  legislated  by  the

Parliament should have been prescribed as 85% for the year 1993-94

and as 65% for the year 1994-95.  The statutory term ‘Compound

alcoholic  preparations  of  a  kind  used  for  the  manufacture  of

beverages’  clearly  explains  that  it  covers  compound  alcoholic

preparations for the manufacture of beverages and that it is a product

that  precedes  the  consumable  ‘alcoholic  beverage’  and  hence  it

cannot, by any stretch of imagination, be equated to and or termed as

‘alcoholic beverages’ in itself.  If “Compound alcoholic preparations of

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a  kind  used  for  the  manufacture  of  beverages’  are  sought  to  be

included in the term ‘spirits, liquors and other spirituous beverages’

and  or  sought  to  be  treated  as  ‘Alcoholic  Beverages’  then  the

statutory term ‘Compound alcoholic preparations of a kind used for

the  manufacture  of  beverages’  distinctly  falling  under  sub-heading

2208.10 will be redundant and such a perverse interpretation is not

permissible  as  it  will  alter  the  statutory  heading  22.08  and

sub-heading 2208.10 in  the Customs Tariff  Act,  1975.    He would

further submit that Harmonized System of Nomenclature (HSN), an

International  Regulation    evolved  in  1986  by  the  Customs

Co-operation  Council,  Brussels,  which  is  adopted  by  the  Govt.  of

India, clearly recognizes that ‘CAP of a kind used in the manufacture

of  beverages’  are  distinct  and  different  products  from  ‘alcoholic

beverage’ which are intended for immediate consumption and in the

said  HSN  Explanatory  Notes  dealing  with  sub-heading  2208  it  is

expressly  stated  that  “these  preparations  are  not  intended  for

immediate  consumption  and  thus  can  be  distinguished  from  the

liquors and other spirituous beverages of this heading”.  

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9. In  this  connection,  he places reliance on a  Judgment  of  the

Bombay High Court in Bussa Overseas and Properties (Pvt.) Ltd.

Vs. Union of India, reported in  1991 (53) ELT 65 (Bom.),  wherein

the Bombay High Court, while dealing with classification has held that

goods falling  under  sub-heading 2208.10,  namely, ‘CAP of  a  kind

used in the manufacture of beverages’ are not consumable as such,

have to be sold to the distilleries where they undergo a process and

cannot be treated as Whisky, Gin or Brandy as known in the trade.

Against  the  said  decision,  Union  of  India  has  preferred  S.L.P.(C)

Nos.13194-210/1991 in this Court  wherein this Court has dismissed

the aforesaid SLPs upholding the decision of the Bombay High Court.

10. He also places reliance on a judgment  of  the High Court  of

Delhi  in  Seagram  Manufacturing  Ltd.  Vs.  Commissioner  of

Customs,  New Delhi,  reported  in  2003 (154)  ELT 610 (Tri.Del.),

which is affirmed by this Court reported in 2004 (163) ELT A 205 (SC)

wherein  this  Court,  confirming the views of  the Tribunal  regarding

classification, held that ‘goods’ falling under sub-heading 2208.10 are

not  intended  for  immediate  consumption  and  are  not  ‘alcoholic

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beverages  and  are  classifiable  under  sub-heading  2208.10  of

Customs Tariff’.  

11. He would further submit that the TRU department has issued

notifications for all other erroneous tariff rates prescribed by them in

the Customs Tariff  Act,  Finance Bill  and Finance Act  1993-94 and

1994-95  to  give  effect  to  the  Budget  proposals  duly  passed  and

legislated by the Parliament and the respondents cannot discriminate

in the case of the appellant and refuse to issue notifications.   

12. He further  submits  that  he  is  seeking  a  suitable  notification

prescribing Customs Tariff of 85% and 65% on goods falling under

sub-heading 2208.10 to give effect to the budget proposals at Sl.No.B

1 duly passed and legislated by the Parliament for the years 1993-94

and  1994-95  since  collection  of  tax  without  authority  of  law  is  in

violation  of  Article  265  of  the  Constitution  and  violation  of  the

appellant’s right to property under Article 300 A of the Constitution

and return of the excess amount of Rs.5,62,46,722/- (Rupees Five

core sixty two lakhs forty six thousand seven hundred and twenty two

only)  collected from him at  the time of  provisional  assessment for

imports  made during  the  years  1993-94  and 1994-95  with  simple

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interest @ 12% p.a.  On the point of interest, he would submit that

the  respondents  are  liable  to  pay  interest  on  the  excess  duty

unlawfully collected from him since 1993-94 and 1994-95 and having

retained the same since the last 20 years.   In this connection,  he

places reliance on Sandvik Asia Ltd. Vs. Commissioner of Income

Tax, Pune, reported in [(2006) 150 TAXMAN, 591 (SC)].  

13. He would  further  submit  that  the  Courts  can,  in  exceptional

circumstances like the present one, compel officers of Respondent

No.2 to issue appropriate notification u/s.25(2) of the Customs Act,

1962, in order to give effect to the Budget Proposals so as to levy

duty on the appellant’s imports only at 85% for the F.Y. 199-94 and

65% for the F.Y. 1994-95.  In this connection, he places reliance on a

judgment  of  this  Court  in  Choksi  Tube  Co.  Vs.  Union  of  India

reported in 1998(97) ELT 404 SC.   

14. He would further contend that the respondents/revenue have

illegally collected import tax/import duty without any authority of law

and  deprived  the  appellant  of  profits  of  the  said  amount  of

Rs.5,62,46,726/-  since  1993-94  and  1994-95  and  thereby  put  an

unreasonable  restriction  on  the  appellant’s  fundamental  right  as

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guaranteed by  Article  19(1)(g)  of  the  Constitution,  to  carry  on  his

trade and business since 1993-94 and 1994-95.  In support of this

contention,  he  places  reliance  on  a  Judgment  of  this  Court  in

Mohammed Yasin Vs.  Town Area Committee,  Jabalpur  & Anr.

reported in AIR 1952 SC 115.  

15. Per  contra,  learned  Senior  Counsel  for  respondents  would

submit that the speech of the Finance Minister while presenting the

Budgetary Proposals only highlights the more important proposals of

the  Budget;  Budgetary  changes  are,  in  fact,  enacted  by  the

Parliament as contained in the Finance Bill or ratified by Parliament

or implemented through notifications.  The legal force for charging a

particular rate of customs duty on import of goods, is derived from the

First Schedule of the Customs Tariff Act, 1975 read with notifications

issued u/s.25(1) of the Act.  If any changes in the rates were intended

by Parliament it would have been reflected in the respective Finance

Bills.   

16. He  further  submits  that  there  was  no  error  or  discrepancy

between the budget proposals announced by the Finance Minister

and the Finance Bill.   According to him, the High Court has rightly

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held  that  the  appellant  did  not  dispute  the  fact  that  the  goods

imported by him fell  within Tariff  Heading 2208.10 and the position

under the Finance Act of 1993 was that the rate of duty prescribed for

Tariff sub-heading 2208.10 was Rs.300/- per liter or 400% whichever

is higher and the High Court thus rightly held that budget proposals

and the speech of the Finance Minister in Parliament may or may not

accept the proposal as held in  B.K. Industries V. Union of India

reported in  (1993) 65 ELT 465 (SC) and once Parliament has duly

legislated, and a rate of duty is prescribed in relation to a particular

tariff  heading  that  constitutes  the  authorities’  expression  of  the

legislative will of Parliament; the speech of the Finance Minister and

the  financial/budget  proposals  duly  passed by  Parliament  are  two

separate  and  distinct  documents;  the  law  as  enacted  is  what  is

contained  in  the  Finance  Act  after  it  is  legislated  upon  by  the

Parliament.   Budgetary  proposals  constitute  legislative  material

antecedent to the enactment of law.  The rates of tax are those which

are prescribed by legislation, once it is enacted by Parliament.  It is

the law as enacted, which gives expression to legislative will and it is

the law as enacted which prescribes the rate of tax which Parliament

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has duly  imposed.   Consequently, as  a  matter  of  first  principle,  it

would be impermissible for  the Court  to undertake the exercise of

entering  upon  a  scrutiny  of  the  correctness  of  the  collective

expression of legislative will which finds expression in the legislation

as adopted by the Parliament.   

17. In  his  submission,  the  Court  cannot  undertake  a  scrutiny  of

whether there was an error on the part of the Parliament in legislating

to provide a particular rate of duty.  The power to issue a notification

u/s.  25(1)  of  the  Act  has  been  conferred  upon  the  Central

Government  where it  is  satisfied that  it  is  necessary  in  the public

interest so to do.  Under sub-section (2) of Section 25, the Central

Government may, where it is satisfied that it is necessary in the public

interest  so to do,  by special  order in each case, exempt from the

payment of duty, under circumstances of an exceptional nature to be

stated in such order, any goods on which duty is leviable and this

Court has observed in the case of Union of India Vs. Jalyan Udyog

reported  in [1993(68)  ELT  9  (SC)] that  “the  Parliament  cannot

constantly  monitor  the  needs  of  and  the  emerging  trends  in  the

economy  and  is  in  no  position  to  engage  itself  in  day-to-day

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regulation and adjustment of  import-export  trade.   Accordingly, the

power  is  conferred  upon  the  Central  Government  to  provide  for

exemption from duty  of  goods,  either  wholly  or  partly  and with  or

without conditions, as may be called for in public interest.  We see no

warrant for reading any limitation into this power.”

18. According to him, the Government of India i.e. the TRU is fully

empowered to decide the quantum of  levy of  duty on a particular

commodity and to define it.  Therefore, no wrong was committed by

the TRU when it held that the commodity imported by the appellant

did  not  enjoy  the  peak  duty  structure  of  70%  but  fell  under  the

exceptions  and  replied  to  the  appellant  accordingly.   The  Court,

therefore, would not be justified in directing the Central Government

to issue a notification in this case.  

19. He  would  further  contend  that  the  goods  imported  by  the

appellant were cleared provisionally on payment of duty prescribed in

the  Customs  Tariff  Act,  1975;  the  imported  compound  alcoholic

preparation  was  known  as  “concentrated  extracts”.   Compound

Alcoholic  Preparations  are  used  in  the  manufacture  of  various

beverages and are not for immediate consumption.  The claim of the

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appellant-importer that duty should have been imposed at the rate of

85% for 1993-94 and 65% in 1994-95 and the claim that he had paid

excess duty of Rs.5,62,46,726/- cannot be sustained since all these

consignments  were  assessed  provisionally  and  the  goods  were

classified  under  Chapter  Tariff  Heading  No.2208.10  of  the  First

Schedule to the then Custom Tariff and accordingly, the goods were

assessed provisionally and cleared on payment of appropriate duties.

20. According  to  him,  the  further  contention  of  the

appellant-importer  that  exclusion  in  peak  rate  covers  alcohol

beverages  but  his  imported  goods  are  “compound  alcoholic

preparation of a kind used for manufacturing of beverages” which is

not alcohol beverage and, therefore, not hit by the exclusion clause,

cannot also be sustained.   

21. According to him, the contention of the importer that during the

impugned period, the peak rate of duty was 150% as announced by

the FM in his Budget Speech also cannot be sustained because the

proposed rate of maximum 150% was applicable to goods other than

alcoholic beverages and passenger baggage.  The speech of the FM

in this regard was very clear and there is no ambiguity in the speech.

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Alcohol beverages and passenger baggage have been taken out of

the cover of maximum 150% rate duty.  Hence the contention of the

appellant-importer that the impugned imported goods were covered

by  FM speech  for  150% rate  duty  is  incorrect  and  in  fact  this  is

contrary to what was contemplated in the Customs Tariff Act, 1975

and the HSN Explanatory Notes.   

22. We have considered the extensive arguments submitted by the

appellant/party-in-person  and  gone  through  the  voluminous  record

placed  before  us  and  the  respective  submissions  of  the  learned

senior counsel for respondents.   

23. Before adverting to the various arguments advanced by both

sides  and  the  findings  recorded  by  the  Court  below,  we  deem it

appropriate  to  extract  the  relevant  Tariff  Entry  2208.10  under  the

Customs Tariff 1993-94 and 1994-95, which reads:

Heading No.

Sub- heading No.

Description of article Rate of duty Stand- Preferential ard       areas

22.08 2208.10 Compound  alcoholic preparations  of  a  kind used  for  the manufacture  of beverages.

Rs.300 per litre or 400%  whichever is higher….

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24. Though it was already discussed in the preceding paragraphs

about the reliefs sought by the appellant before the High Court, we

deem it appropriate to extract the same hereunder:

“(1)  a writ of Mandamus directing the first and second respondents to

issue a notification under Section 25(1) of the Customs Act, 1962, in

order to exempt goods falling under Tariff Heading 2208.10 so as to

give effect to the budget proposal announced by the Finance Minister

in Parliament for financial years l993-94 and 1994-95;  (2)  a direction

to the Chief Commissioner of Customs to finalize assessment of the

eight bills of entry after a notification is issued by the first and second

respondents under Section 25(1) of the Customs Act, 1962;  (3) a writ

of Mandamus directing the second respondent to issue a notification

under Section 25(2) of the Customs Act, 1962, for granting exemption

from customs duty for goods falling under Tariff Heading 2208.10 for

financial  years  1993-94 and 1994-95;  (4)  an order  to  refund after

assessments are finalized and (5) an order for the payment of interest

at the rate of 12% p.a. on the refund that is ordered.”  

25. The  High  Court  of  Bombay,  after  giving  a  thorough

consideration, dismissed the writ petition on the ground that once a

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particular  Tariff  Heading  is  prescribed,  that  constitutes  the

authoritative expression of the legislative will of Parliament and the

High Court cannot exercise its power of judicial review and go beyond

the law enacted by the Parliament and it is not permissible for the

Court to undertake a scrutiny of whether there was an error on the

part of the Parliament in legislating a particular rate of duty.   Further,

the High Court observed that there is no discriminatory conduct which

would compel the interference of the court. The appellant, unsatisfied

with the order, has preferred a revision before the High Court which

ended up in dismissal as no error apparent on record has been made

out.  

26. In those circumstances, the appellant is before us by way of

these appeals; one arising out of the original order and one against

the order passed in review. Before  this  Court,  the  appellant  has

amended the reliefs and sought for the following reliefs:  (1)  direct

the respondents to perform their duty to issue suitable notification to

rectify the erroneous rate of duty prescribed on sub-heading 2208.10

and to implement and execute the tariff rate already legislated;  (2)

direct  the  respondents  to  return  the  excess  amount  of

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Rs.5,62,46,722/- collected without any authority of law;   (3) direct the

respondents  to  pay  12%  simple  interest  for  having  willfully  and

deliberately refused to rectify the error.   

27. The appellant has come up before this Court with a voluminous

record and made submissions at length.   The gist of the first and

foremost  grievance  of  the  appellant  appears  to  be  that  he  was

charged  with  the  duty  @  Rs.300/-  per  litre  or  400%  which  was

already paid by him for the goods he imported as per the provisional

assessment.   

28. According  to  him,  the  Finance  Minister  has  presented  the

budget proposals before the Parliament which were duly approved by

the Parliament.  As per  the approved budget  proposals,  the goods

imported by him attracts reduction in duty higher than 85% to 85%

advalorem for 1993-94 and higher than 65% to 65% ad valorem for

the  year  1994-95  and  he  does  not  fall  under  the  exception  of

alcoholic beverages. The tariff he was charged and the tariff rates in

the finance bill are contrary to the approved budget proposals.  

29. The second grievance appears to be that whenever the tariff

rates  are  erroneously  prescribed,  the  2nd respondent  is  issuing

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notification  and  in  fact  they  have  issued  85 notifications  for  the

financial  year  1993-94  and  94 notifications  for  the  financial  year

1994-95.  The  2nd respondent  is  discriminating  the  appellant  by

refusing to  issue a circular  in  respect  of  his  goods;  as  such their

action is discriminatory and violative of Article 14 of the Constitution

of India.  

30. In view of the aforesaid rival submissions, the issues that fall for

consideration are:

1) Whether  the  budget  proposals,  as  alleged  by  the

appellant,  are  duly  passed and approved by the Parliament

and whether the tariff rates fixed by the TRU are contrary to

the legislative mandate?

2) Whether this Court can direct the Central Government

to issue a notification under Section 25(1) of the Customs Act?

3) Whether  the  compound  alcoholic  preparations  of  a

kind used for  the manufacturing of  beverages fall  under the

category of alcoholic beverage?

4) Whether there is any discrimination on the part of the

Central  Government  in  issuing  a  notification  under  Section

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25(1)  of  the  Customs  Act  in  respect  of  other  goods  and

contrary to Article 14 of the Constitution of India?

31. In Re Issue No.1:

The whole thrust of the appellant is that the proposals of the Finance

Minister  were  duly  approved  by  the  Parliament.   No  doubt,  the

appellant has placed before this Court the proposals of the Finance

Minister which discloses the intention of the Government but there is

no  material  placed  before  us  to  demonstrate  that  the  budget

proposals are duly accepted by the Parliament.  It is an admitted fact

that pursuant to the proposals, the Finance Act was passed by the

Parliament wherein for the goods specified under Tariff Sub-Heading

2208.10, particular tariff was specified.  We are unable to agree with

the argument advanced by the appellant  for  the reason that  he is

unable to make note of  the difference between a proposal  moved

before  the  Parliament  and  a  statutory  provision  enacted  by  the

Parliament,  because  the  process  of  Taxation  involves  various

considerations and criteria.    

Every legislation is done with the object of public good as said by

Jeremy Bentham.  Taxation is an unilateral decision of the Parliament

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and it is the exercise of the sovereign power.  The financial proposals

put forth by the Finance Minister reflects the governmental view for

raising revenue to meet the expenditure for the financial year and it is

the  financial  policy  of  the  Central  Government.   The  Finance

Minster’s speech only highlights the more important proposals of the

budget.  Those are not the enactments by the Parliament.  The law

as  enacted  is  what  is  contained  in  the  Finance  Act.  After  it  is

legislated upon by the Parliament and a rate of duty that is prescribed

in relation to a particular Tariff Head that constitutes the authoritative

expression of the legislative will of Parliament.   Now in the present

facts of the case, as per the finance bill,  the legislative will  of  the

Parliament  is  that  for  the  commodities  falling  under  Tariff  Head

2208.10, the tariff is Rs.300/- per litre or 400% whichever is higher.

Even assuming that the amount of tax is excessive, in the matters of

taxation laws, the Court permits greater latitude to the discretion of

the legislature and it is not amenable to judicial review.  

In view of the foregoing discussion, we are unable to concur with the

submission  of  the  appellant  that  the  budget  proposals  are  duly

passed  and  approved  by  the  Parliament  and  moreover,  if  the

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appellant  is  aggrieved by the particular  tariff  prescribed under  the

Finance  Act  and  the  same  is  contrary  to  the  approved  budget

proposals,  he  ought  to  have  questioned  the  same  if  permissible.

Hence, this issue is answered against the appellant.  

32. In Re :  Issue No.2:

It is the case of the appellant that in respect of other categories of the

budgetary  proposals,  several  notifications  were  issued  by  the  2nd

respondent altering the Tariff rates, but whereas in his case, the 2nd

respondent refused to issue such a notification and it is nothing but

mala  fide  and  corrupt  practice  on  the  part  of  the  respondents.

According to him, the budget proposals passed and approved by the

Parliament are paramount and the Executive or Central Government

cannot prescribe Tariff rates contrary to the budget proposals and he

finds fault with the way the 2nd respondent officials are functioning.   

A thorough look at the relevant provisions reveals that the source of

power  to  issue  notification  by  the  Central  Government  relates  to

Section 25 of the Customs Act, 1962, which reads as under:   

“Power to grant exemption from duty.

(1) If  the  Central  Government  is  satisfied  that  it  is necessary  in  the  public  interest  so  to  do,  it  may,  by notification in the Official Gazette, exempt generally either

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absolutely  or  subject  to  such  conditions  (to  be  fulfilled before  or  after  clearance)  as  may  be  specified  in  the notification  goods of  any specified  description  from the whole or any part of duty of customs leviable thereon.  

(2) If  the  Central  Government  is  satisfied  that  it  is necessary in the public interest so to do, it may, by special order  in  each  case  exempt  from the  payment  of  duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.”

Section 25 of the Act delegates power to the Central Government i.e.

the  executive  branch  to  grant  exemption  generally  from  duty

whenever it  finds that  it  is necessary to do so in the larger public

interest  either  absolutely  or  subject  to  such conditions as may be

specified in the notification or by a special order in each case under

exceptional circumstances.  

As per Section 159 of the Act, any notification issued under Section

25 shall  be placed before the Parliament and the Parliament  may

amend  or  reject  the  same.   This  clearly  demonstrates  that  the

ultimate law making power is vested with the Legislature. Hence, the

allegation of the appellant that the notifications are issued basing on

the  whims  and  fancies  of  the  2nd respondent  is  misconceived.

Whereas,  notifications  are  issued  generally  in  the  larger  public

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interest, the Legislature has given the power to exempt duty to the 2nd

respondent subject to the amending power.

In these circumstances, it is not appropriate on our part to issue any

orders directing them to issue a notification under Section 25 (2) of

the Act  except  on the grounds of  discrimination.   In  the matter  of

taxation, the Court gives a greater latitude to the legislative discretion.

Accordingly, the issue is answered.

33.  In Re : Issue No.3:

In regard to this issue ‘Whether the compound alcoholic preparations

of a kind used for manufacturing of beverages fall under the category

of alcoholic beverages’, the appellant has relied upon a judgment of

the Bombay High Court which was confirmed by this Court and the

learned  senior  counsel  for  respondents  made  several  contra

submissions relying on some judgments.   According to us, it is not for

us to do this exercise.  It is always open to the parties to settle the

dispute before the appropriate forum if  they choose to do so.  The

issue is accordingly answered.

34. In Re : Issue No.4:

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According  to  the  appellant,  the  Central  Government  has  issued

notifications under Section 25(1) and he is also entitled to such a

notification in respect of the commodities falling under the category

2208.10.   When the appellant  alleges discriminatory action on the

part of the respondents, he has to establish that there is no rational

basis for making classification between the goods which are notified

and the goods of the appellant which are not notified.  It is also a

firmly  established  principle  that  the  legislature  understands  and

appreciates the needs of its people.  A Taxing Statute can be held to

contravene  Article  14  of  the  Constitution  if  it  purports  to  impose

certain  duty  on  the  same class  of  people  differently  and leads to

obvious inequality.  Such a material is not placed before us to come

to  a  just  conclusion  that  the  action  of  the  respondents  is

discriminative.  Hence, the same is held against the appellant.

35. As far as the interest aspect is concerned, when the appellant

is not entitled for the relief, there is no need for us to express any

opinion on the interest aspect.  

36. Before we conclude, we would like to record our appreciation

for the strenuous efforts put forth by the appellant and the kind of

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efforts he put in to collect the data.  We feel that it is not out of place

to mention that the appellant has presented the case like a seasoned

professional with utmost skill and knowledge.  

37. In view of the aforesaid elaborate discussion, we reach to an

irresistible conclusion that  the appeals,  being devoid of  any merit,

deserve to be dismissed and are dismissed accordingly.  No costs.  

……………………………….J.         (MADAN B. LOKUR)

………………………………..J.        (N.V. RAMANA)

NEW DELHI, JULY 22, 2016

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