Bombay High Court
Swati Chemicals vs Collector Of Customs on 19 February, 1990
Equivalent citations: 1990(50)ELT342(BOM)
JUDGMENT
1. The Petitioners, Swati Chemicals, have in this Writ Petition prayed for a writ of certiorari for scrutinising the records of their case before the Assistant Collector of Customs and the Collector of Customs (Appeals) and to quash the impugned order of the Assistant Collector dated 20-2-1985 and the impugned order dated 1-1-1987 passed by the Collector of Customs (Appeals).
2. Briefly stated, the facts concerning the present Writ Petition are that the Petitioners imported Active Erythromycin Thicyonate (TIOC) weighing 200 kgs. The consignment arrived at the Sahar Airport on 6-8-1984. The Petitioners filed a Bill of Entry for home consumption in respect of the same consignment on 10-8-1984. The Petitioners claimed partial exemption from customs duty in respect of the said consignment under Notification No. 64/79-Cus., dated 6-3-1979 as amended by the Notification No. 41/83-Cus., dated 1-3-1983 showing that TIOC was exempt from payment of customs duty in excess of 25 per cent ad valorem.
3. The said consignment was accordingly assessed to customs duty at 25 per cent ad valorem and the amount of customs duty was paid by the Petitioners on 14-8-1984. The consignment was cleared on the same day.
4. The Government of India, by Notification by earning No. 218/84 dated 10-8-1984, withdrew the exemption granted in respect of TIOC under Notification No. 64/79-Cus. It is the contention of the Petitioners that even though the Notification No. 218/84-Cus., was dated 10-8-1984, the same was included in the Extraordinary Gazette of India, Part II, Section 3, sub-section (i) dated 10-8-1984. A copy of the said Gazette of India was given for publication only on 13-9-1984 and was available to members of the public prior to that date. In support of their contention, the Petitioners relied on a letter dated 20-12-1984 issued by the Department of Publication, Ministry of Works and Housing, addressed to the Petitioners, to which I shall refer hereafter. On 23-8-1984, a less charge notice was issued to the Petitioners by the Assistant Collector of Customs, Air Cargo, Bombay, requiring the Petitioners to pay customs duty amounting to Rs. 2,12,866.82 Ps. on the ground that by virtue of the said Notification No. 218/84-Cus., dated 10-8-1984, the exemption granted in respect of TIOC under the Notification No. 64/79-Cus. had been withdrawn and, therefore, the Petitioners were liable to pay the customs duty stated heretofore. The Petitioners replied to this less charge notice by heir letter dated 20-9-1984 wherein they stated that they were not liable to pay the amount of the customs duty as demanded by the Assistant Collector of Customs. The Assistant Collector of Customs, by his order dated 20-2-1985, negatived the contention of the Petitioners that the Notification withdrawing the exemption had not come to their knowledge on or before 10-8-1984 and hence the said Notification was not applicable to them. The Assistant Collector of Customs was, therefore, pleased to confirm the less charge demand notice.
5. The Petitioners, being aggrieved by the said order, filed an Appeal before the Collector of Customs (Appeals). In the memorandum of appeal, the Petitioners raised substantially the same contentions which they had raised before the Assistant Collector of Customs.
6. On 14-2-1986, the Petitioners filed an application for stay and dispensation of deposit before the Collector of Customs (Appeals) praying that the demand of Rs. 2,12,866.82 Ps. be stayed pending the hearing and final disposal of the appeal and that the condition for pre-deposit of the demand as a condition precedent to the hearing of the appeal be dispensed with.
7. The Collector of Customs (Appeals), Bombay, by his order dated 1-1-1987, concluded that no undue hardship would be caused to the Petitioners if they were called upon to deposit the amount of penalty pending the hearing of the appeal. The Collector of Customs (Appeals), Bombay called upon the petitioners to deposit the said amount of penalty with 15 days of the receipt of his order, failing which the appeal was liable to be dismissed under the provisions of Section 129E of the Customs Act, 1962. The Petitioners have impugned the order dated 20-2-1985 passed by the Assistant Collector of Customs as also the order dated 1-1-1987 passed by the Collector of Customs (Appeals), Bombay.
8. Shri Seervai, learned Counsel appearing on behalf of the Petitioners, has canvassed two submissions before me. Firstly, that the Notification bearing No. 218/84 dated 10-8-1984, withdrawing the exemption in respect of TIOC, was not applicable in the case of the Petitioners inasmuch as the Gazette of India, containing the said Notification, was placed on sale for public on 13-9-1984. According to Shri Seervai, this fact has been confirmed by the Assistant Controller (Periodicals) by his letter dated 20-12-1984 addressed to the Petitioners. The second submission made by Shri Seervai is that although an application for stay praying that the deposit of the penalty be dispensed with had been filed with the Collector of Customs on 14-2-1986, the Collector had not granted any hearing to the Petitioners or their representative and hence the Collector had flouted the principles of audi alteram partem. On this ground also, argued Shri Seervai, the order of the Collector of Customs (Appeals) should be set aside.
9. Now, it is true that the Notification No. 218/84 withdrawing the exemption in respect of TIOC was dated 10-8-1984. However, the Notification appeared in the Extraordinary Gazette of India, Part II, dated 10-8-1984 No. 315, and was placed on sale for public only on 13-9-1984, as is evident from the letter of the Assistant Controller (Periodicals) dated 20-12-1984 addressed to the Petitioners and annexed as Exhibit 'C' to the Petition. If the Notification was made public only on 13-9-1984, then the Petitioners were not liable to pay the additional duty plus the penalty as called upon by the Assistant Collector of Customs under his less charge notice dated 23-8-1984. The fact that the Gazette was printed on 10-8-1984 cannot mean that the Notification had become public knowledge on that very day.
10. Shri Seervai has relied on two rulings, one of a learned Single Judge of this Court and another of a learned Single Judge of the Madras High Court. In the case of Asia Tobacco Company v. Union of India - 1984(18) ELT 152 (Mad.), the learned Single Judge of the Madras High Court was pleased to observe :-
"The mere printing of the Official Gazette containing the relevant notification and without making the same available for circulation and putting it on sale to the Public will not amount to the 'notification' within the meaning of Rule 8(1) of the Rules. The intendment of the notification in the Official Gazette is that in the case of either grant of withdrawal of exemption the public must come to know of the same. 'Notify' even according to ordinary dictionary meaning would be" to take note of, observe; to make known, publish, proclaim to announce; to give notice to; to inform". It would be a mockery of the rule to state that it would suffice the purpose of the notification if the notification is merely printed in the Official Gazette, without making the same available for circulation to the public or putting it on sale to the public. The communication from the Department of Publication, Government of India, dated 23-4-1983, as per extract made above, leaves no room for doubt that the Official Gazette containing the Withdrawal Notification was placed on sale for public only on 8-12-1982. Without a proper notification in the sense, without putting the public on notice of the same, it is not possible to enforce the withdrawal of the exemption earlier accorded. It is not a case of printing, (may be anterior to the publishing) and releasing to the public, the notification, on the same date which the Official Gazette bears. Neither the date of the notification nor the date of printing, nor the date of the Gazette counts for 'notification' within the meaning of the rule, but only the date when the public gets notified in the sense, the concerned Gazette is made available to the public".
11. In the case of GTC Industries Ltd. v. U.O.I., 1988(33) ELT 83 (Bom.), the learned Single Judge of this Court held :-
"The publication in the Gazette is a requirement of the rule and the section. That publication cannot be equated with the mere printing. It is the availability of the printed material to the general public that constitutes the publication required by the statute and the rules of natural justice. In the absence of the knowledge of the withdrawal of the notification, even the department permitted the petitioners to avail of the concession granted by the notification dated 1st March, 1979. This went of till as late as 14th December, 1982. However, the petitioners cannot contend that they should be permitted to avail of the concession right till December 14, 1982, when the withdrawal of the concession was brought to their notice by a letter from the Excise department. The withdrawal notification had been published in the Gazette and the Gazette was on sale as from 8th December 1982."
Now, on this issue whether the Withdrawal Notification would be applicable in the present case, I may cite the observations of the Supreme Court in the case of B. K. Srinivasan and Others v. State of Karnataka and Others, , wherein Chinnappa Reddy, J. speaking for the Bench observed.
"There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes. Whether law is viewed from the standpoint of the 'conscientious good man' seeking to abide by the law or from the standpoint of Justice Holmes's 'Unconscientious bad man' seeking to avoid the law, law must be known, that is to say, it must be so made that it an be known."
12. Now, in the instant case, the Withdrawal Notification bearing No. 218/84 is dated 10-8-1984. However, the same was brought to the knowledge of the public on 13-9-1984 as per the letter of the Assistant Controller (Periodicals) dated 20-12-1984 referred heretofore. Therefore, on the principle that the Withdrawal Notification would be applicable only after it was brought to the notice of the public on 13-9-1984, the demand made by the Assistant Collector of Customs and confirmed by the Collector of Customs (Appeals) would appear to be wrong. That being the case, the Petitioners must succeed in this Writ Petition.
13. Shri Seervai has also contended that, although an application for stay had been filed before the Collector of Customs (Appeals) and a hearing had been asked for, no hearing had been granted to the Petitioners by the Collector of Customs (Appeal) before he passed his order dated 1-1-1987. Hence the Collector of Customs (Appeals) had failed to follow the principles of natural justice in the instant case. There appears to be considerable justification in this grievance made by Shri Seervai. On this ground also, the order of the Collector of Customs (Appeals) must fail.
14. Shri Shah, the learned Government Pleader appearing for the Respondents, contended that I should protect the Customs Authorities by calling upon the Petitioners to deposit in Court the amount of the levy and the penalty to the tune of Rs. 2,12,866.82 Ps. Shri Shah relied on an order passed by a Division Bench of this Court in a Notice of Motion in Appeal No. 364 of 1988 in Writ Petition No. 143 of 1987 where a prayer for refund of the duty by the Customs Authorities had been stayed. It is pertinent to point out that this order was made by the Appeal Court at the time of admission of the appeal. Inasmuch as I have held that the demand for this amount by way of customs duty and penalty cannot be sustained in law, I do not see how I can call upon the Petitioners to deposit the said amount at this stage in these proceedings.
15. In the result, rule is made absolute in terms of prayer (a). Each party will bear its own costs.