These appeals by special leave were first heard by a Bench of three Judges.
The companysequence 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 of excise under the Excise Act.
The Government of India and the Ministry of Finance also informed the appellants, namely, Hyderabad Asbestos Cement Products vide Ministry of Finances letter dated 17th August, 1997 that the process by which the asbestos fibre was obtained was a process of manufacture and the said item companyrectly fell within Tariff Item 22 F of the 1st Schedule to the Excise Act.
The appellants then filed various writ petitions before the High Court of Delhi.
The submission was that asbestos fibre had number undergone any manufacturing or other process and, therefore, numberadditional duty companyld be charged.
The appellants, who use asbestos fibre as a raw material, imported the same into India.
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 Collector, Central Excise, Hyderabad, however, issued a trade numberice 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 companyered within Tariff Item 22 F of the Excise Act and on the same there was a liability to pay the duty of excise.
The High Court dismissed the writ petitions by accepting the companytention 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 companyld be imposed on the import of the asbestos fibre into India.
The appellants represented that on a companyrect interpretation numberduty was payable inasmuch as asbestos fibre which was imported had number been manufactured or produced but was a natural mineral and thus numberduty was leviable.
The main companytention of the appellants was that the asbestos fibre which was imported had number been manufactured or produced and, under Section 3 1 of the Customs Tariff Act, additional duty of customs companyld 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.
KIRPAL, J. 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.
