Goods Exempted from Customs Duty | 15 Apr 2025

Transasia Bio-Medicals Ltd. v. Union of India

“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.”

Chief Justice K.R. Shriram and Justice Mohammed Shaffiq

Source: Madras High Court

Why in News?

Recently, the bench of Chief Justice K.R. Shriram and Justice Mohammed Shaffiq held that exemption from basic
customs duty does not automatically extend to additional duties unless specifically exempted under the respective
enactments.

The Madras High Court held this in the matter of Transasia Bio-Medicals Ltd. v. Union of India (2025).

What was the Background of Transasia Bio-Medicals Ltd. v. Union of India (2025) Case?

Transasia Bio-Medicals Ltd., represented by Ashok Suthar (General Manager-Taxations & Legal), imported a
consignment of Hemato Analyser with standard accessories and filed bills of entry.
The Deputy Commissioner of Customs (Group-5B) assessed the bills of entry and demanded additional duty at 4% in
terms of Notification No.19/2005-Cus dated 01.03.2005.
The additional duty was demanded on the grounds that as per Notification No.19/2005-Cus, the goods covered under
exemption Notification No.24/2005-Cus are liable to pay additional duty at the rate of 4%.
The goods imported fell under Customs Tariff heading 9027 80, which is listed in the Customs Exemption Notification
No.24/2005-Cus, and the tariff rate for this product was designated as "free" under the Customs Tariff Act, 1975.
Notification No.19/2005 was issued under Sub-section (5) of Section 3 of the Customs Tariff Act, 1975, while
Notification No.24/2005 was issued under Sub-section (1) of Section 25 of the Customs Act, 1962.
The petitioner challenged the validity of Notification No.24/2005-Cus, contending that when the Customs Tariff
designates imported goods as "free" of duty, there is no need for exemption under Section 25 of the Customs Act.
The petitioner further argued that if Notification No.24/2005 is invalid, then the reference to that notification in
Notification No.19/2005 would also be ineffective, meaning the imported goods would not be liable for the 4%
additional duty.
The petitioner filed writ petitions under Article 226 of the Constitution of India, 1950 (COI) seeking a declaration that
Notification No.24/2005-Cus is ultra vires the provisions of Section 25 of the Customs Act, 1962.
The petitioner also sought a writ of Certiorari to quash the assessments made in the bills of entry Nos.896356 dated
21.10.2005 and 940189 dated 05.01.2006 that levied 4% additional duty under Notification No.19/2005-Cus.

What were the Court’s Observations?

The Madras High Court observed that both the Customs Act and the Customs Tariff Act are independent of each
other, and one duty can be levied without the other, as supported by the decision in Colgate Palmolive (India) Limited
v. Commissioner of Customs, Patna.
The Court noted that Section 3(1) of the Customs Tariff Act provides for levy of additional duty, which is in addition to
the customs duty leviable under Section 12 of the Customs Act and Section 2 of the Customs Tariff Act.
The Court held that even if the duty leviable under the Customs Act is stated to be "free," additional duty can still be
levied under the Customs Tariff Act because the charging section for additional duty is Section 3 of the Customs Tariff
Act and not Section 12 of the Customs Act.
The Court emphasized that the notification does not say 4% of the customs duty leviable on the goods imported (in
which case 4% of "free" would have been "nil") but rather states that the identified goods when imported shall be
liable to an additional duty at 4% ad valorem.
The Court observed that goods imported, even though exempted from basic customs duty, may still be subject to levy
of additional duty under respective enactments unless specifically exempted by the competent authority exercising
powers under those enactments.
The Court referenced the Century Floor Mills Ltd. v. Union of India case, noting that under Section 25 of the Customs
Act, the Government has authority to grant exemption from duty conditionally or in absolute terms, making imports
either free of liability or subject to conditions as deemed appropriate.
What are the Legal Provisions Refereed to?

Section 12 of the Customs Act, 1962:

Section 12 deals with Dutiable goods.

Section 25 of the Customs Act, 1962:

This Section empowers the Central Government to exempt goods from customs duty when satisfied it is necessary in
the public interest.

Kailash v. Nanhku (2005) | 15 Apr 2025

This is a landmark judgment where the Court held that the timeline for filing a written statement under Order VIII
Rule 1 of Civil Procedure Code, 1908 is directory and not mandatory.
The Court held that the power of the Court to extend the time for filing a written statement beyond the time provided
in Order VIII Rule 1 of CPC has not been taken away.
The Judgment was delivered by a 3- judge Bench of Supreme Court consisting of Justice RC Lahoti, Justice DM
Dharmadhikari and Justice PK Balasubramanyam.

Facts

Elections for the Uttar Pradesh Legislative Council were held following a Presidential notification dated 7th
November, 2003.
The appellant was declared the winner of the election.
Respondent No. 1 filed an election petition under Section 80 of the Representation of the People Act, 1951, challenging
the appellant's election.
The appellant was served with summons and a copy of the election petition, requiring him to appear before the Court
on 6th April 2004.
On the appointed day, the appellant appeared through his counsel and requested one month's time to file a written
statement.
The Court granted time until 13th May 2004, for filing the written statement.
On 13th May 2004, the appellant filed another application seeking additional time for filing the written statement,
citing the need to obtain copies of several documents.
The Court adjourned the hearing to 3rd July, 2004, as the High Court was closed for summer vacation from 13th May
to 2nd July, 2004.
On 22nd June 2004, the appellant's advocate's nephew passed away, though the written statement was drafted and
kept ready for filing.
The advocate's registered clerk was sent to file the written statement at the High Court in Allahabad from Gazipur,
where the appellant and his advocate resided.
On 1st July 2004, two days before the hearing, the appellant's affidavit annexed with the written statement was sworn
in at Allahabad.
Due to the clerk's lack of understanding, the written statement was not filed on 3rd July 2004, but was instead filed on
8th July 2004.
The written statement was accompanied by an application for condonation of delay, briefly explaining the reasons for
the late filing.
On 23rd August 2004, the High Court rejected the appellant's application and refused to accept the written statement
because it was filed beyond the 90-day limitation period from the date of service of summons, as mandated by the
 proviso to Rule 1 of Order VIII of the Code of Civil Procedure, 1908 (CPC).
Aggrieved by this order, the winning candidate (defendant-respondent before the High Court) filed an appeal by
special leave.

Issues Involved

Whether Order VIII Rule 1 of the CPC is applicable to the trial of an election petition under Chapter II of the Act?
Whether the rules framed by the High Court governing the trial of election petitions would override the provisions of
CPC and permit a written statement being filed beyond the period prescribed by Order VIII Rule 1 of the CPC?
Is the time limit of 90 days as prescribed by the Proviso appended to Rule 1 of Order VIII of the CPC mandatory or
directory in nature?

Observations

Trial Includes Filing of Written Statement: The term ‘trial’ in the context of an election petition includes the stage of
filing a written statement. Hence, the High Court can adjourn the trial to allow time for filing it.
Court Has Discretion to Extend Time: Under Section 86(6) of the Representation of the People Act and Rules 5 and 12
framed under Article 225 of the Constitution, the High Court has the discretion to extend time for filing a written
statement for valid reasons recorded in writing.
Order VIII Rule 1 is Procedural: Order VIII Rule 1 of the Civil Procedure Code (CPC), which sets a timeline for filing
written statements, is a procedural provision and not part of substantive law.
Provision is Directory, Not Mandatory: Despite the negative language used in Order VIII Rule 1, the Court held that
the provision is directory in nature. It aims to ensure speedy disposal but does not create an absolute bar.
Court Not Rendered Powerless: Even after the 90-day limit prescribed by Order VIII Rule 1, the Court is not
powerless to accept a written statement if it deems fit and necessary in the interest of justice.
No Penal Consequences Specified: The rule does not lay down specific penal consequences for failure to file the
written statement within 90 days.
Rule Meant to Expedite, Not Deny Justice: The purpose of the rule is to expedite the trial and not to defeat the ends
of justice or to penalize the defendant unfairly.
Exceptional Circumstances Allow Extension: The Court can permit filing beyond the 90-day limit in exceptional
cases where delay is due to reasons beyond the defendant’s control and where denial would cause grave injustice.
Routine Extensions Not Allowed: Extension of time should not be granted routinely or merely on request. Reasons
must be recorded and justified.
Flexibility in Election Petitions: In election petitions, procedural rules from CPC apply flexibly and are not to be
rigidly followed, as per Section 87(1) of the Representation of the People Act.
Court Can Permit Late Filing with Costs: In the present case, the High Court wrongly believed it had no power to
allow late filing. The Supreme Court held the written statement should be accepted upon payment of Rs. 5000 as costs
to the respondent.
Written Statement Accepted: The written statement filed by the appellant was directed to be taken on record,
subject to payment of costs within 4 weeks.

Conclusion

The Supreme Court held that the 90-day timeline under Order VIII Rule 1 of the CPC is directory, not mandatory, and
courts have discretion to permit delays in exceptional cases.
The ruling balances the need for expeditious trials with the broader interests of justice.

Earlier Application under Section 42 of the Arbitration Act | 15 Apr 2025

“It is apposite to state that a writ petition cannot be construed as an "earlier application" under Section 42 of the
Arbitration Act to decide jurisdiction as the very nature of a writ petition is to challenge an administrative action or a legal
decision, not to initiate arbitration proceedings.”
 Justice Manoj Kumar Ohri

Source: Delhi High Court

Why in News?

A bench of Justice Manoj Kumar Ohri held that writ petition filed cannot be construed as earlier application under Section
42 of the Arbitration and Conciliation Act, 1996.

The Delhi High Court held this in the case of Hariram & Ors v. National Highway Authority of India (2025).

What was the Background of Hariram & Ors v. National Highway Authority of India (2025) Case?

The petitioners filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act),
challenging an award dated 16th October 2020, passed by the District Collector, Division Meerut, District Baghpat,
Uttar Pradesh.
The Central Government had issued a notification on July 28, 2006, to acquire land from Baghpat Division to Baghpat
District, Uttar Pradesh under Section 3A (1) of the National Highways Act.
Some portions of land were compulsorily acquired, while for other portions, possession was taken without
acquisition via a notification dated 8th February 2007.
The petitioners initially approached the Delhi High Court through a Writ Petition, seeking compensation for their
acquired land.
The Delhi High Court disposed of the writ petition on 27th November 2018, directing the competent authority to
disburse compensation to the petitioners within six months.
The petitioners received the original land compensation as per the market value of 2006 through an order dated 27th
May 2019, passed by the District Collector, Bhagpat, U.P.
Unsatisfied with the compensation amount, the petitioners filed suit before the District Collector-Division Meerut
under Sections 3G (5) and 3G (7) of the National Highway Act, seeking enhanced compensation.
The suit was dismissed via the impugned judgment dated 16th October 2020.
The respondents raised a preliminary objection regarding the Delhi High Court's territorial jurisdiction to entertain
the petition under Section 34 of the Arbitration Act.
The Delhi High Court dismissed the petition for lack of territorial jurisdiction, ruling that the competent court
under whose jurisdiction Baghpat falls would have jurisdiction to entertain the petition.

What were the Court’s Observations?

The Court defined what constitutes a "Court" under the Arbitration and Conciliation Act, 1996, as the principal Civil
Court having jurisdiction to decide the subject matter of arbitration if it had been the subject matter of a suit.
The Court determined that territorial jurisdiction in arbitration matters lies with the court within whose jurisdiction
the subject matter of the suit is situated, as well as the courts within whose jurisdiction the arbitration is
conducted.
The Court established that the designation of an arbitration seat is equivalent to an exclusive jurisdiction clause,
following the precedents set in BALCO v. Kaiser Aluminium Technical Services Inc. and other cases.
The Court ruled that a writ petition cannot be construed as an "earlier application" under Section 42 of the
Arbitration Act for the purpose of determining jurisdiction.
The Court clarified that Section 42 of the Arbitration Act applies only to applications made under Part I of the Act if
they are made to a court as defined in the Act.
The Court confirmed that the subject matter of arbitration should not be equated with the subject matter of a suit,
as the former relates to proceedings under Part I of the Arbitration Act.
The Court held that the purpose of Section 2(1)(e) is to identify courts with supervisory control over arbitration
proceedings, which refers to the court of the seat of arbitration.
The Court found that the legislature intentionally gave jurisdiction to two courts: the court where the cause of action
arose and the court where arbitration takes place.
The Court ruled that since Baghpat was the agreed seat of arbitration, the land in question was located outside Delhi,
and the impugned award was passed in Baghpat, UP, the Delhi High Court lacked territorial jurisdiction in this case.
The Court concluded that the competent court under whose jurisdiction Baghpat falls has the jurisdiction to entertain
a petition under Section 34 of the Arbitration and Conciliation Act, 1996.

What is Section 42 of the A & C Act?

About:

The Section envisions a situation where, if an application under Part I of the A&C Act has already been made to a
Court, that same Court is entrusted with the jurisdiction to deal with all subsequent applications arising out of
that agreement and arbitral proceedings and other Courts are barred from entertaining such applications.
 Section 42 is meant to avoid conflicts in the jurisdiction of courts by placing the supervisory jurisdiction over all
arbitral proceedings in connection with the arbitration in one court exclusively.

Constituents:

Section 42 of the Arbitration and Conciliation Act, 1996 commences with a non obstante clause ("Notwithstanding
anything contained elsewhere in this Part or in any other law for the time being in force"), which renders it
overriding in effect and gives it primacy over any other conflicting provisions.
The provision establishes exclusive jurisdictional competence in the court where the first application under Part I
of the Act has been filed with respect to an arbitration agreement.
Such court of first instance shall retain exclusive jurisdiction over all subsequent applications arising out of the same
arbitration agreement and the proceedings thereto.
The provision operates as a complete ouster of jurisdiction of all other courts, once jurisdiction has been properly
invoked in accordance with the section.
For the application of Section 42, the initial application must qualify as one made "under this Part" (Part I of the Act)
and must be presented before a "Court" as defined under Section 2(1)(e) of the Act.