JUDGMENT
1. The petitioner No. 1 is a company carrying on business of, inter alia, importing and manufacturing various goods. The petitioner No. 2 is a share holder of petitioner No. 1.
2. By a notification dated April 18, 1980, issued under Section 25(1) of the Customs Act, 1962, the Central Government exempted Aluminium scrap when imported into India from so much of the Customs duty leviable thereon which is specified in the First Schedule of the Customs Tariff Act as in excess of 35% ad valorem of customs duty leviable thereon. By a further notification dated January 1, 1981 the aforesaid exemption from basic Customs duty and additional duty was extended upto and inclusive of the 31st March, 1981.
3. Relying on the aforesaid notification the petitioner No. 1 entered inter alia into two separate contracts for purchase of Aluminium scrap from foreign sellers.
4. The ship carrying two consignments of Aluminium scrap entered into the territorial waters of India and docked at Calcutta on 5th January, 1981.
5. On such arrival of the ship the petitioners filed two separate Bills of Entry for warehousing the said scrap.
6. Thereafter on or about 21st. March, 1981, the petitioners filed Bills of Entry for clearance of the goods for home consumption and paid the import duties thereon as assessed. On 30th March, 1981, the petitioners took delivery of the goods from the Bengal Bonded Warehouse after the same were released by the Customs Authorities.
7. On or about 25th September, 1981, the petitioners were surprised to receive two show cause notices from the respondent No. 4, the Assistant Collector of Customs, seeking to claim Customs duty at the enhanced rate of 86% ad valorem on the basis of a notification dated 30th March, 1981.
8. Upon enquiry the petitioners came to learn that on 30th March, 1981, the Central Government in purported exercise of its powers under Section 25(1) of the Customs Act had made and published two notifications rescinding the earlier notification dated 1st January, 1981, and imposing additional duty at the rate of 24 percent ad valorem on Aluminium scraps.
9. Having tried in vain to obtain any relief from the Customs Authorities the petitioners have come up before this Court for redress under Article 226 of the Constitution.
10. The respondents, though contesting the matter, have not filed any affidavit-in-opposition.
11. Appearing on behalf of the petitioners, Mr. Bhaskar Gupta, the learned Counsel, challenged the impugned notifications dated 30th March, 1981, on divergent grounds.
12. His first contention was that since at the time of the entry of the goods in the Indian territorial waters, the notification dated 1st January, 1981, was in force, customs duty on the goods could be levied only at the rate prescribed therein.
13. It was next contended by Mr. Gupta that in view of the declaration made by the Central Government that the notification dated 1st January, 1981, would remain in force upto and inclusive of 31st March, 1981, and the petitioners having imported the goods relying upon the said declaration, the customs authorities were estopped by the doctrine of promissory estoppel from enhancing the rate of customs duty or introducing fresh duty before the expiry of 31st March, 1981, in contravention of the notifications dated 1st January, 1981.
14. Mr. Gupta's further contention was that the impugned notifications dated 30th March, 1981, became operative only when the official Gazette in which the said notification was published was made available to the public and not on the date of its publication. And his final contention was that under no circumstances the impugned notifications could be given a retrospective effect.
15. All these contentions raised by Mr. Gupta were seriously controverted by Mr. Roy Choudhury, the learned Counsel representing the respondents.
16. Coming now to the rival contentions of the parties, Mr. Gupta, in support of his first contention that since the goods crossed the customs barrier and entered the Indian territorial waters during the time the exemption notification dated 1st January, 1981, was in force, the petitioners become entitled to the benefit of the same notwithstanding the fact that when the goods were actually cleared from the bonded warehouse on 30th March, 1981, no such exemption was available; relied upon the decision of a learned Single Judge of the Bombay High Court in the New India Industries Ltd. v. Union of India reported in 1981 Tax LR 2763.
17. In this connection, it may be recalled here that this Court in its recent decision in the Indian Rayon Corporation Ltd. v. Union of India (Matter No. 1270/1979) and Mahalaxmi Fibres & Industries Ltd. v. The Collector of Customs (Matter No. 1297/1979) has disagreed with the aforesaid view.
18. It has been held in the said decision that though it is true that in view of the definition of ‘India’ as given in section 2(27) of the Customs Act, importation takes place as soon as the goods enter the Indian Territorial waters, the goods retain their character as imported goods till the date of their clearance for home consumption in view of the definition as given in Section 2(25). Section 12 of the Customs Act provides that goods imported into India shall be leviable to customs duty. But as it is true that the goods acquire the character of imported goods no sooner they enter the Indian territorial waters, it is equally true that they do not cease to be imported goods immediately thereafter and continue to be so till they are cleared. Thus, though the goods become leviable to duty as soon as they are imported and chargeability does not remain suspended till they are cleared, section 12 does not limit its operation only to the point of time when the goods acquired the character of imported goods. It remains operative so long the goods retain their character as imported goods. Since the section refers to levy of duty on goods imported, without any reservation and without in any way trying to restrict or limit the scope of the definition of ‘imported goods’ as given in Section 2(25) of the Customs Act. It was further held that it would be too narrow a view to accept that chargeability once fixed cannot be altered thereafter even in public interest while the goods still retain the character of imported goods. Since the charging section, viz. section 12, is always subject to the Central Government's power to issue notifications under Section 25(1) exempting any specified goods from levy of customs duty either wholly or in part in public interests, the Central Government in view of section 21 of the General Clauses Act can always withdraw, rescind, add to or modify an exemption notification which may be in force on the date of the entry of the specified goods in the Indian territorial waters, till the goods retain their character as imported goods. To say that an exemption notification in force at the time of the entry of the goods into the Indian territorial waters cannot be subsequently withdrawn, rescinded, added to or modified; would be putting unwarranted restrictions to the Central Government's power under Section 25 of the Customs Act, in public interest.
19. The view as expressed above, finds support from the Bench decision of the Delhi High Court in Jain Shudh Vanaspati…Petitioner v. Union Of India…S reported in 1983 ELT 1688 and the decision of a learned Single Judge of the Kerala High Court in Aluminium Industries Ltd. v. Union of India, (1984) 16 ELT 183.
20. That being so Mr. Gupta's contention based on the decision of the Bombay High Court in New India Industries Ltd. v. Union of India (supra) cannot be accepted and the impugned notification dated 30th March, 1981 under Section 25(1) of the Customs Act cannot be said to be bad in law simply because it has rescinded and/or modified the earlier notification dated 1st January, 1981 raising thereby the rate of the basic customs duty and imposing fresh additional duty.
21. In the instant case, the goods as already seen, entered the Indian territorial waters on 5th January, 1981 when the exemption notification dated 1st January, 1981 was in force but on the date the goods were cleared for home consumption from the Bonded Warehouse, i.e on 30th March, 1981, the impugned notification had come into force, making the petitioners liable to pay customs duty at the rates prescribed therein in view of section 15(1)(b) of the Customs Act, which provides that the rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, in the case of goods cleared from a warehouse, on the date on which the goods are actually removed from the warehouse.
22. However, Mr. Gupta's contention in this connection was that the impugned notification could not be said to have come into force on 30th march, 1981 since the official gazette publishing the notification could not be made public on the very same date.
23. In this connection Mr. Gupta referred me to two decisions of the Allahabad High Court in U.S Awasthi v. Income Tax Appellate Commissioner, (1977) 107 ITR 796 and Kishen Lal v. I.A.C, (1983) 142 ITR 312 where it has been held that the publication of notice in the official gazette under Section 269D of the Income Tax Act, becomes complete only when the Gazette containing the notification becomes available to the public and not on the date of the Gazette.
24. But a contrary view appears to have been taken by the Gujarat High Court in Commissioner of Income Tax v. Shilaben Kanchan Lal Rana, (1980) 124 ITR 420, to the effect that the requirement under Section 269D(1) is that proceedings can be initiated by the competent authority only by a notice published in the official gazette. There is no further requirement that the gazette in which the notice is published is made available to the concerned persons within the stipulated period. Thus, where the competent authority initiated acquisition proceedings by a notice on 18-5-1974 which was published in the official gazette on 31-8-74, it was held that the acquisition order eventually passed could not be treated as invalid on the grounds that the gazette was not available to the interested parties within time.
25. In my judgment the Gujarat view seems to be more reasonable at least so far the publication of a notification under Section 25 of the Customs Act is concerned. The official gazette is printed and published from Delhi and it may become available to the public at different times in different places. To accept the Allahabad view as referred to earlier that the publication is not complete unless the official gazette publishing the notification becomes available to the public, the purpose of issuing such notification in public interest may very often be frustrated due to the long delay that normally intervenes between the actual publication of the notification in the official gazette and its becoming avilable to the public. Public interest may sometime demand issuance of notifications under Section 25 of the Customs Act within the shortest possible time. But the Allahabad view of publication is very likely to make the matter difficult. As a matter of fact the Allahabad view, if accepted, may sometime frustrate the very purpose and object of Section 25 of the Customs Act.
26. Thus, at least for the purpose of Section 25 of the Customs Act, publication of a notification in the official gazette should be deemed to be sufficient to make it operative and its availability to the public cannot be made a condition precedent for the same.
27. In the instant case it is not Mr. Gupta's contention that the impugned notification dated 30th March, 1981 did not become operative at the time of the clearance of the goods on account of its not having been actually published in the official gazette on that very date and that being so, it is immaterial whether it was made available to the public simultaneously or not.
28. Coming to the question of applicability of the doctrine of promissory estoppel to a notification issued under Section 25 of the Customs Act, Mr. Gupta was fair enough to concede that such a notification is a piece of delegated legislation but at the same time he contended that if any time limit is specified in such notification indicating that it should remain in force upto the said period, the portion of the notification fixing such time limit should be deemed to have been issued by the Central Government in exercise of its executive power since Section 25 of the Customs Act does not vest any such power on the Government. And in that event the Government would be barred by the doctrine of promissory estoppel from withdrawing, altering or rescinding such notification before the time limit so fixed expires, since promissory estoppel applies to a valid executive order of the Government.
29. I am, however, unable to accept Mr. Gupta's contention for the simple reason that Section 25 of the Customs Act does not restrict the Central Government's power to issue an exemption notification for a fixed period. Since notifications under the said section are issued in public interest, the Central Government, if public interest so demands, may issue time-bound notifications and then withdraw, modify or rescind the same in view of section 21 of the General Clauses Act, before the expiry of the prescribed period if again, the public interest justifies it. Section 25 of the Customs Act confers wide legislative powers upon the executive government as a delegate of the legislature and to argue that the section does not confer powers upon the Government to issue time-bound notifications, would be putting unnecessary restrictions to the Government's power to act in public interest.
30. A Full Bench of the Delhi High Court in Bombay Conductors and Electricals v. K. Chandramouli, (1984) 1 ECC 1 : 1986 (23) ELT 87 has also taken the view that the power to issue notifications under Section 25 also includes power to issue time bound notifications. According to the said decision, if the Central Government in public interest decides to grant exemption at one moment and decides to withdraw it at another, the Court cannot compel it to continue the exemption beyond the time the Government thinks it necessary in public interest to do. This applies to issue of notifications whether they are time-bound or not.
31. Thus the power to issue notifications under Section 25 being a legislative power including the power to issue time-bound notifications, there can be no promissory estoppel against such power.
32. Similar view has been taken by the Delhi High Court in Bombay Conductor's case (supra) while holding that the statutory notifications issued under Section 25(1) of the Customs Act are from first to last legislative in character and the doctrine of promissory estoppel has no application to such notifications.
33. This Court in Indian Rayon Corporation v. Collector of Customs (Matter No. 1270 of 1979) and Mahalaxmi Fibre Industries Ltd. v. Collector of Customs (Matter No. 1297 of 1979) (supra) has also taken the identical view.
34. In this connection it was contended by Mr. Gupta, the learned Counsel for the petitioners, that in the matter of withdrawing or modifying a time-bound notification it was the duty of the Government to satisfy the Court the exact nature of the public interest which prompted it to take such actions. But this argument again does not seem to be acceptable because in the absence of anything to the contrary the normal presumption would be that while acting under Section 25(1), the Government acted in accordance with the said Section. There can be no presumption that while exercising statutory powers the Government acted against the statutory provisions. Thus issuance of a statutory notification under Section 25(1) presupposes that it was issued in the public interest which is a sine qua non for the purpose.
35. Accordingly, in my judgment, it is not necessary that whenever a notification is issued under Section 25(1) of the Customs Act the Government is duty bound to disclose the exact nature of the public interest to make it operative.
36. Mr. Gupta's last contention was that the impugned notification was bad in law since it was issued with retrospective effect. But this contention does not appear to have much substance in it since the notification was made operative only from the date of its issue and not retrospectively from an earlier date. The fact that it was issued with effect from a date earlier than the expiry of the previous notification does not make it bad in law since, as already stated earlier, the Central Government is empowered to do so in public interest.
37. Thus all the contentions raised by Mr. Gupta, failing, the writ application fails too.
38. The Rule issued upon the respondents be, accordingly, discharged and the interim order do stand vacated. The respondents may now realise the balance of customs duty from the petitioners at the rates prescribed in the impugned notification by encashment of the Bank guarantee and/or by any other legal method including enforcement of the bond, if any.
39. No order is made for costs.