Goods Exempted From Customs Duty, May Still Be Subject To Levy Of Additional Duty Under Respective Enactments: Madras High Court

The Madras High Court stated that goods imported exempted from basic customs duty, may still be subject to levy of additional duty under respective enactments. “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” stated the bench comprising of Chief Justice K.R. Shriram and Justice Mohammed Shaffiq. The bench further stated that 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. The petitioner/assessee had imported and warehoused one consignment of Hemato Analyser with standard accessories and filed bills of entry. Commissioner of Customs (Respondent No.2) assessed the bills of entry and demanded additional duty at 4% in terms of Notification No.19/2005-Cus dated 01.03.2005. 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 assessee 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. According to assessee 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. The assessee 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%. The bench opined that “Notification No.19/2005 has been issued in exercise of the powers conferred by Subsection (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 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.” The bench referred to a similar case i.e Century Floor Mills Ltd. v. Union of India [W.P.No.20358 of 1999] where it was 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, 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. In view of the above, the bench dismissed the petition. Case Title: Transasia Bio-Medicals Ltd. v. Union of IndiaCitation: 2025 LiveLaw (Mad) 137 Case Number: W.P.Nos.28380 & 28388 of 2018 Counsel for Petitioner/ Assessee: Hari Radhakrishnan Counsel for Respondent/ Department: A.P. Srinivas Click here to download Order/Judgement

Goods Exempted From Customs Duty, May Still Be Subject To Levy Of Additional Duty Under Respective Enactments: Madras High Court

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