M.B. Shah JUDGMENT
B.N. Kirpal, J.
1. Levy of additional duty of customs under Section 3(1) of the Customs Act, 1975 on import of asbestos fibre is challenged by the appellants in these appeals by special leave.
2. The appellants, who use asbestos fibre as a raw material, imported the same into India. We are in these cases concerned with the imports made prior to the year 1986. On the import so made the department sought to raise a demand of additional duty of customs under Section 3(1) of the said Act. The appellants represented that on a correct interpretation no duty was payable inasmuch as asbestos fibre which was imported had not been manufactured or produced but was a natural mineral and thus no duty was leviable. The Collector, Central Excise, Hyderabad, however, issued a trade notice on 3rd August, 1997 taking the view that asbestos fibre as processed and graded had a distinct character differing from asbestos rock and the said item was covered within Tariff Item 22 (F) of the Excise Act and on the same there was a liability to pay the duty of excise. The Government of India and the Ministry of Finance also informed the appellants, namely, Hyderabad Asbestos Cement Products vide Ministry of Finance's letter dated 17th August, 1997 that the process by which the asbestos fibre was obtained was a process of manufacture and the said item correctly fell within Tariff Item 22 (F) of the 1st Schedule to the Excise Act. The consequence of this was that the demand under Section 3(1) of the said Act was raised because the imported item namely, asbestos fibre was regarded as an article which was liable to duty excise under the Excise Act.
3. The appellants then filed various writ petitions before the High Court of Delhi. The main contention of the appellants was that the asbestos fibre which was imported had not been manufactured or produced and, under Section 3(1) of the Customs Tariff Act, additional duty of customs could be levied only if the article which is imported is one which is produced and manufactured in India and is liable to payment of excise duty. The submission was that asbestos fibre had not undergone any manufacturing or other process and, therefore, no additional duty could be charged.
4. The High Court dismissed the writ petitions by accepting the contention of the respondents that extracting or removing the asbestos fibre from the rock amounted to manufacturing process being undertaken and, therefore, excise duty was leviable and, as a result thereof, additional duty under Section 3(1) of the Tariff Act could be imposed o........