Gujarat High Court
M/S M D Overseas Ltd vs Union Of India & on 10 April, 2017
Bench: Harsha Devani, A.S. Supehia
C/SCA/20859/2015 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO.20859 of 2015
FOR APPROVAL AND SIGNATURE
:
HONOURABLE MS.JUSTICE HARSHA DEVANI Sd/
and
HONOURABLE MR.JUSTICE A.S. SUPEHIA Sd/
===================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ?
YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation NO of the Constitution of India or any order made thereunder ?
=================================================== M/S M D OVERSEAS LTD....Petitioner(s) Versus UNION OF INDIA & 1....Respondent(s) =================================================== Appearance:
MR ANAND NAINAWATI, ADVOCATE for Petitioner(s) No.1 NOTICE SERVED BY DS for the Respondent(s) No. 1 MR DHAVAL D VYAS, ADVOCATE for Respondent(s) No. 2 =================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MR.JUSTICE A.S. SUPEHIA Date : 10/04/2017 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE A.S. SUPEHIA) (1) The present writ petition assails the communication issued under File No.VIII/48 226/ACC/ Misc. Corres./ Gr. 3 & 4/2014/801/ Ahmedabad, dated 16.10.2015 by Respondent Page 1 of 19 HC-NIC Page 1 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT No.2Deputy Commissioner of Customs, Air Cargo Complex, Ahmedabad, whereby the petitioner is directed to deposit differential customs duty of Rs.1,23,37,546/ along with interest, on account of change in rate of customs duty from 4% to 6% in terms of Notification No.1/2013Custom dated 21.01.2013, which came into effect on 21.01.2013 by amending Notification No.12/2012Cus dated 17.03.2012.
(2) The petitioner had imported 200 Kilograms of gold worth Rs.59,89,10,000/ under Airway Bill No.176 3778 8424 dated 18.01.2013, which arrived by flight EK 0538 on 21.01.2013 at 0308 hrs. The petitioner filed Bill of Entry No.9080170 in the morning of 21.01.2013. The duty of Rs.2,46,75,092/ @ 4.12% on the goods, which was the prevailing rate (under Notification No.12/2012Cus dated 17.03.2012), was paid vide Challan No.2005364364 dated 21.01.2013 and the assessment of Bill of Entry was, thereafter, made final on the same day.
(3) The Assistant Commissioner of Customs, Air Cargo Complex, Ahmedabad, issued a letter under VIII/48261/ ACC/ MISCCorp/ 2012/ 523 Page 2 of 19 HC-NIC Page 2 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT dated 30.01.2013 asking the petitioner to deposit differential duty along with interest as per amended Notification No.01/2013 which speaks about 6% i.e 2% increase. The petitioner vide letter dated 09.02.2013, responded to the same and submitted that the customs duty at the prevailing rate of 4.12% in terms of Notification No.12/2012Cus dated 17.03.2012 was already deposited, and the Notification No.1/2013Customs dated 21.01.2013 cannot be applied retrospectively to the goods already cleared.
(4) The Assistant Commissioner of Customs, Air Cargo Complex, Ahmedabad, issued another letter under File No.VII/48226/ACC/Misc. Corres./ Gr.3&4/21014/639, Ahmedabad dated 25.08.2015 asking the petitioner to deposit differential duty as per the Notification no.1/2013Customs dated 21.01.2013 pursuant to which the rate of duty was enhanced from 4% to 6%.
(5) Thereafter, the petitioner made an application under the Right to Information Act, 2005 on 10.09.2015 before the Assistant Commission, CPIO, Director of Publicity and Public Relations, New Delhi seeking specific Page 3 of 19 HC-NIC Page 3 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT information about the Notification dated 21.01.2013.
(6) The CPIO, Government of India Press, New Delhi vide A43013/116/RTI/EI/2012/966 dated 28.02.2013 gave its response wherein at Point No.(ii) of the response, it is informed that the notification was received in the press on 21.01.2013 at 9:45 p.m. Also, at Point No.(vi) it is informed that the notification was printed in the Gazette of India on 01.02.2013. Further, from Point No.(vii), it is evident that the notification was dispatched to Kitab Mahal on 04.02.2013 vide Press Gate No.C35647 dated 04.02.2013 and Kitab Mahal acknowledges receipt at 01:35 p.m. on 04.02.2013.
(7) Thereafter, vide impugned communication dated 16.10.2015, the Respondent no.2 directed the petitioners to pay differential Custom duty of Rs.1,23,37,546/ along with interest.
(8) Learned advocate Mr.Anand Nainawati appearing on behalf of the petitioner Company has contended that as per the information received by him under the Right Page 4 of 19 HC-NIC Page 4 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT to Information Act, 2005, qua publication of Notification No.1/2013Customs dated 21.01.2013 vide letter dated 28.02.2013, written by the CPIO, Government of India Press, New Delhi, the same was received in the press on 21.01.2013 at 9:45 p.m., and it was printed in the Gazette of India on 01.02.2013. He has stated that it is evident from the said letter that the notification was dispatched to Kitab Mahal on 04.02.2013 vide Press Gate Pass No.C35647. Placing reliance on section 25(4)(a)(b) of the Customs Act, 1962 ("the Act" for short) he has stated that the Notification No.1/2013 Customs dated 21.01.2013 will not apply in his case as the goods were cleared during morning hours on 21.01.2013 whereas the notification was issued and received in the Press on 21.01.2013 at 9:45 p.m. Further, the said notification was not printed in the Official Gazette on that day and the same was printed in the Gazette of India on 01.02.2013 and dispatched to Kitab Mahal on 04.02.2013 in compliance of the Rule 25(4)
(b) of the Act.
(9) In support of the aforesaid contention, the learned advocate for the petitioner has placed reliance on the judgement rendered in Page 5 of 19 HC-NIC Page 5 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT the case of Param Industries Limited v. Union of India, reported in 2002 (150) E.L.T. 3 (Kar.) rendered by the Division Bench of High Court of Karnataka at Bangalore which was subsequently confirmed by the Supreme Court vide judgement reported in the case of Union of India V. Param Industries Ltd., 2015 (321) E.L.T. 192 (S.C.). He has urged that the Supreme Court has observed that for bringing the notification into force two conditions are mandatory i.e. (i) the same should be duly published in the Official Gazette; and
(ii) it should be offered for sale on the date of issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. He has stated that the Supreme Court agreed with the view taken by the High Court as the second condition was not satisfied. In view of the aforesaid judgement, the learned advocate for the petitioner has submitted that the department was not justified in claiming the differential amount of duty on the basis of notification No.1/2013Customs dated 21.01.2013. Mr.Nainavati has also placed reliance on the larger Bench judgement of the Apex Court in the case of Union of India v. Ganesh Das Bhojraj, 2000 (116) E.L.T. 431 (S.C.), more particularly, paragraph 12, which states that the Page 6 of 19 HC-NIC Page 6 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT Notification under section 25 of the Customs Act would come into operation as soon as it is published in the Gazette of India i.e., the date of publication of the Gazette.
(10) Mr.Dhaval Vyas, learned Senior Standing Counsel for respondent No.2 refuting the arguments advanced by the learned advocate for the petitioner, has urged that the action of respondent No.2 is justified and does not require any interference. He has authoritatively stated that the fact that the Notification No.1/2013Customs dated 21.01.2013 was printed in the Gazette of India on 01.02.2013 is irrelevant for the purpose of giving its effect for charging Basic Customs duty. He has asserted that subsection (4)(a) of section 25 of the Act speaks of the date of effect of notification by providing that the same comes into force on the date of its issue by the Central Government for publication in the Official Gazette. Subsection (4)(b) of section 25 of the Act is a directive provision mandating the Directorate of Publicity and Public Relations of the Board, New Delhi, to publish and make available for sale a copy of the notification from the date of its issue. This arrangement is to ensure that Page 7 of 19 HC-NIC Page 7 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT text of notification is available to the public. He has submitted that the golden rule of interpretation of a statute is in its literary meaning. Hence, both the clauses are complete sentences and independent of each other and each sub section should be read separately with the principal clause of the sentence. Hence, subsection (4)(b) of section 25 of the Act is a directive law, the compliance of which is not made an indispensable factor for giving effect to notification.
(11) Distinguishing the judgement relied upon by the learned advocate for the petitioner in the case of Param Industries Limited (supra) it was submitted that the facts of the present case and those in the said case are different. In the case of Param Industries Limited (supra) the petitioners therein averred that the disputed Notification No.36/2001Cus (notification dated) dated 03.08.2001 was not gazetted on the same day, 4th and 5th were public holidays and hence, notification must have been published in the Gazette only after 06.08.2001. The High Court of Karnataka had observed that despite directions, the respondents have not chosen to produce the records to show that the Page 8 of 19 HC-NIC Page 8 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT averment made in the writ petition is false and that notification was published on 03.08.2001. However, in the present case, the notification was sent for publication on the very day it was issued, which is also not disputed by the petitioners. Further, the point that subsection (4)(a) and (4)(b) of section 25 of the Act are independent of each other was not put forth before the court in the case of Param Industries Limited (supra), hence, the said judgement will not apply in the present case. Moreover, the case of Param Industries Limited (supra) pertained to fixation of tariff value in terms of section 14(2) of the Act where the statutory requirements were different as compared to Section 25(4) of the Act. Mr.Vyas has vehemently submitted that section 14(2) of the Act does not prescribe provision akin to subsection (4)(b) of section 25 of the Act, therefore, the Notification No.1/2013Customs dated 21.01.2013 can be said to have come into force on the date of issuance. He has also placed reliance on the judgement reported in the case of Agarwal Industries Limited v. Union of India, 2016 (340) E.L.T. 145 (A.P.) for reinforcing the aforesaid submission.
(12) Learned advocate appearing on behalf of Page 9 of 19 HC-NIC Page 9 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT respondent No.2 has also placed reliance on the judgement in the case of Ruchi Soya Industries Limited v. Union of India, reported in, 2016 (336) E.L.T. 463 (Cal.) more particularly Paragraphs No.24 to 26 thereof, which are reproduced hereinbelow:
"24. The Karnataka judgement in Param Industries Limited imported the provision of Section 25(4) of the Act into Section 14(2) thereof when there may not have been any warrant to do so since the interpretation of Section 14(2) would be governed by the dictum in Ganesh Das Bhojraj on the pari materia wording of Section 25(1) of the Act. The Supreme Court judgement in Param Industries Limited did not have any occasion to deal with Section 25 of the Act. Even though the dictum in the Supreme Court judgement may be seen to be applicable in a situation covered by Section 14(2) of the Act, it cannot govern Section 25 thereof in view of the special feature of subsection (4) that qualifies the more general provision of subsection (1) of Section 25 of the Act.
25. Clause (b) of Section 25(4) of the Act does not admit of construction that the notification as published in the Official Page 10 of 19 HC-NIC Page 10 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT Gazette must be offered for sale. If copies of the notification which has been published in the Official Gazette or has been required to be published in the Official Gazette at the first available opportunity, are put on sale, the statutory command is complied with. At any rate, the civil liability that arises upon a notification coming into force upon it being issued for publication in the Official Gazette cannot be diluted by the failure to adhere to the mandate in clause
(b).
26. The most cardinal rule in interpreting a statutory provision is that the language of the statute should be read as it is. If the language of Section 25(4) of the Act is not distorted and the intention thereof gathered from the language used therein, the plain meaning of the words used to do not admit of a construction that unless a notification is published in the Official Gazette and unless such notification or the Official Gazette containing the same is put on sale, the notification is not deemed to come into force. The construction of the provision as the petitioners suggest would require the addition or substitution of words not found in the provision of the rejection of certain Page 11 of 19 HC-NIC Page 11 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT words as meaningless. It is elementary that if a provision in a statute can be read without adding words thereto or subtracting words therefrom, that would be the ideal constructions, unless it throws up an absurd result. The literal construction in this case does not result in any absurdity."
By placing reliance on the foregoing paragraphs, Mr.Vyas has submitted that the proposition of law envisaged in the aforesaid judgement will squarely apply in the present case, hence the impugned communication requires to be sustained.
(13) Learned advocate Mr.Vyas has also laid emphasis on the provision contained in sub section(5) of section 25 of the Act. He has submitted that in the present case it can be said that the Notification came into force on a later date than the date of its issue, the same came to be published and offered for sale by the Directorate of Publicity and Public Relations on the same day, hence, the same will be applicable in the case of the petitioner.
Page 12 of 19HC-NIC Page 12 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT (14) After hearing the respective submissions made by the learned Advocate for the petitioner and the learned Senior Standing Counsel for the Respondent no.2, we shall now endeavour to consider the various legal and factual parameters on the basis whereof, they have premised such submissions.
(15) The facts which are not in dispute are that the petitioner filed Bill of Entry No.9080170 in the morning of 21.01.2013 for the imported 200 Kgs. of Gold. He paid the Customs Duty of Rs.2,46,75,092/ @ 4.12%, which was the prevailing rate under Notification dated No.12/2012Customs dated 17.03.2012 vide Challan No.2005364364 dated 21.01.2013. The aforesaid notification was amended vide Notification dated No.1/2013Customs dated 21.01.2013 in exercise of the powers conferred by subsection (1) of section 25 of the Act. From the contents of the letter dated 28.02.2013 it is apparent that the Notification No.1/2013Customs dated 21.01.2013 was received in the Press on 21.01.2013 at 9:45 p.m. The same was printed in the Gazette of India on 01.02.2013 and was dispatched to Kitab Mahal on 04.02.2013 vide Press Gate Pass No.C35647.
Page 13 of 19HC-NIC Page 13 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT (16) Section 25(4)(a) & (b) of the Act governs the issuance of Notification to grant exemption from duty. The same reads thus:
"Section 25: Power to grant exemption from duty(1) (2) ...
2A) ...
(3) ...
(4) Every Notification issued under sub section(1)(or subsection 2A) shall,
(a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette;
(b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi."
(5) Notwithstanding anything contained in subsection (4), where a notification comes into force on a date later than the date of its issue, the same shall be published and offered for sale by the said Directorate of Publicity and Public Relations on a date on or before the date on which the said notific ation comes into force."
Page 14 of 19HC-NIC Page 14 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT (17) What follows from the bare reading of the provisions of subsections (4)(a) and 4(b) is that the same are intrinsically connected to each other and cannot be read in isolation. On plain reading of subsection (4)(a), it can be inferred that the notification comes into force from the date it is issued by the Central Government for publication in the Official Gazette; but it is equally obligatory that the same shall also be published and offered for sale on the date of issue by the Directorate of Publicity and Public Relations of the Board. Thus, the legislature had envisaged a common date of coming into force of the notification and date of publication and sale, and hence, the expression "the date of issue" is required to be construed accordingly, viz. when the notification is issued and is published and offered for sale. Moreover, the Supreme Court in the case of Union of India v. Param Industries (supra) has agreed with the view adopted by the Karnataka High Court whereby it has been held that "for bringing the notification into force and make it effective, two conditions are mandatory, viz. (1) Notification should be duly published in the official gazette, (2) it should be offered Page 15 of 19 HC-NIC Page 15 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi." In the light of the view taken by the Supreme Court, the respondents cannot be heard to contend that subsection (4)(b) of section 25 of the Act is only directory and not mandatory. The facts emphasized in the present case, reveal that the Notification no.1/2013Customs dated 21.01.2013 was received by the government press on 21.01.2013 at 9.45 p.m., printed on 01.02.2013 and sent to Kitab Mahal on 04.02.2013. Clearly, therefore, the Notification No.1/2013Customs, though issued on 21.01.2013, was neither published in the official gazette nor was offered for sale on the said date, and therefore, would not come into force and be operative from 21.01.2013. Under the circumstances, the said notification cannot be made applicable to the goods imported by the petitioner which were cleared on 21.01.2013.
(18) In our considered opinion, the proposition of law enunciated in the case of Param Industries Limited (supra) will govern the controversy raised in the present petition. The Division Bench of Karnataka High Court Page 16 of 19 HC-NIC Page 16 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT and the Apex Court in case of Param Industries Limited (supra) while dealing with issuance of notification issued under section 14(2) of the Act has considered the provisions of subsections (4) and (5) of section 25 of the Act has observed that for bringing the notification into force and making it effective, two conditions are mandatory, viz., (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. Thus, in wake of the aforesaid observations, the contention raised by the learned counsel for the Respondents that the said decision having been rendered in the context of the only provisions of section 14(2) of the Act will not apply in the present case, is ill founded. The judgment in case of Ruchi Soya Industries Limited (supra) relied upon by the learned Counsel for the Respondent no.2 cannot come to his rescue as the facts reveal that in the said case the Notification was published and offered for sale on the same date i.e. 17th September, 2015. Further in appeal, the Division Bench of Calcutta High Court vide judgement dated Page 17 of 19 HC-NIC Page 17 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT 23.02.2016 passed in M.A.T No.260 of 2016, though dismissing the same has observed that issuance of a notification by the Central Government for publication in the official gazette is enough for the notification to come into force but the follow up action is equally necessary which is to be done by Directorate of Publicity and Public Relations. Reliance placed on the judgment rendered by the Andhra Pradesh High Court in the case of Agarwal Industries Limited (supra) is also misconceived since we perceive that the view taken in Param Industries Limited (supra) will govern the present lis.
(19) We are not impressed by the last contention advanced by Mr.Dhaval Vyas that the issuance of Notification no.1/2013Customs dated 21.01.2013 will be governed by the provisions of section 25(5) of the Act. A bare reading of the said section 25(5) of the Act signifies that it is meant for those notifications which are intended to operate from a later date than the date of its issue. Indubitably, the Notification dated 21.03.2013 does not convey such an intention.
Page 18 of 19HC-NIC Page 18 of 19 Created On Tue Apr 11 02:55:54 IST 2017 C/SCA/20859/2015 CAV JUDGMENT (20) The foregoing observations culminate into the sole eventuality of allowing the petition. The impugned communication dated 16.10.2015 issued by Respondent no.2 asking the petitioner to deposit the differential customs duty of Rs.1,23,37,546/ with interest is hereby quashed and set aside. RULE is made absolute to the aforesaid extent.
Sd/ [HARSHA DEVANI, J] Sd/ [A. S. SUPEHIA, J] *** Bhavesh[pps]* Page 19 of 19 HC-NIC Page 19 of 19 Created On Tue Apr 11 02:55:54 IST 2017