CUSTOMS CIRCULAR No.18/2000-CUS.VI Date 13th March, 2000

Sub: Wheat Import- Writ Petitions challenging duty
I am directed to inform that a number of writ petitions has been filed in the High Court of Chennai and in the High Court of Kerala(Ernakulam Bench) challenging the power of the Central Government vide Section 8A ofCTA,75 to impose duty on imported wheat vide Notification No.127/99-Custom dated 1.12.1999 the customs duty on imported wheat was raised from 'Free' to 50%.

2. In this connection this is to convey that in the counter affidavits that may be filed by the Commissioners including on behalf of Union of India the following may be mentioned:-

a) The notification 127/99-Customs dated 1.12.1999 was issued under Section 8A of CTA that gives emergency power to the Central Government to enhance the duty rate. Further in terms of Section 7(3) the Notification 127/99 was duly approved by the Parliament. (The Lok Sabha passed the resolution at the sitting held on 21st December, 1999.)

b) The comments of JS (TRU) to Commissioner of Customs Cochin may also be used while preparing a suitable counter affidavit. (Annexure "A").

The total number of similar cases pending in various courts, indicating revenue involved may also be intimated to the Board.

(Dr. Vinayak Prasad)
Under Secretary to the Government of India

ANNEXURE "A"

TO: SHRI T.K. JAYARAMAN COMMISSIONER OF CUSTOMS COCHIN
FROM: T.R. RUSTAGI JOINT SECRETARY (TRU) FIN REV NEW DELHI.

F.NO.354/56/99-TRU(.) KINDLY REFER TO YOUR LETTER F.NO.S32/180/99AP(1) DATED 28.12.99 REGARDING WRIT PETITION NO.32741/99 FILED BEFORE THE HON'BLE HIGH COURT OF KERALA CHALLENGING THE AUTHORITY OF THE CENTRAL GOVERNMENT TO IMPOSE DUTY ON WHEATTHROUGH A NOTIFICATION ISSUED UNDER SECTION 8A OF THE CUSTOMS TARIFF ACT, 1975 (.) THE MAIN ISSUE RAISED BY THE PETITIONER IS THAT SINCE THE RATE OF DUTY PRESCRIBED IN RESPECT OF WHEAT IN THE TARIFF WAS "FREE" PRIOR TO 1. 12.99, IT WAS NOT "LEVIABLE TO DUTY (.) ACCORDING TO HIM THE CENTRAL GOVERNMENT COULD HAVE INVOKED THE POWERS TO INCREASE DUTY UNDER SECTION 8A ONLY IF WHEAT WAS LEVIABLE TO DUTY IN THE FIRST PLACE(.) IN THIS REGARD, HE SEEKS TO MAKE A DISTINCTION BETWEEN "FREE" RATE AND "NIL" RATE AND ARGUES THAT WHILE NIL RATE CONSTITUTES A LEVY FREE DOES NOT(.) THERE DOES NOT APPEAR TO BE ANY BASIS FOR MAKING THIS DISTINCTION (.) ACCORDING TO SECTION 12 OF THE CUSTOMS ACT, 1962 "DUTIES OF CUSTOMS SHALL BE LEVIED AT SUCH RATES AS MAY BE SPECIFIED UNDER THE CUSTOMS TARIFF ACT, 1975 (.)IN RESPECT OF GOODS FALLING UNDER SUB-HEADING NOS.1001.10 AND 1001.90 OF THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT THE RATE OF DUTY PRESCRIBED PRIOR TO 1.12.99 WAS "FREE" (.) WHEN READ IN THE LIGHT OF SECTION 12, IT IS EVIDENT THAT GOODS FALLING UNDER THESE SUB-HEADINGS WERE LEVIABLE TO DUTY AT "FREE" RATE (.) FURTHER, NOTIFICATION NO.127/99 DATED 1. 12.99 WHEREBY DUTY ON WHEAT WAS INCREASED TO 50% HAS ALREADY RECEIVED THE APPROVAL OF THE PARLIAMENT (.) ADMISSION OF THE WRIT MAY BE OPPOSED ACCORDINGLY (.) IN VIEW OF THE SIGNIFICANCE OF THE ISSUE RAISED IN THE WRIT YOU MAY REQUEST ADDITIONAL SOLICITOR GENERAL, CHENNAI TO APPEAR ON BEHALF OF THE CENTRAL GOVERNMENT (.).

(T.R. RUSTAGI)
JOINT SECRETARY 30.12.1999

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