INTER CONTINENTAL Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners have challenged by way of this writ petition circular No.40/01-CUS dated 13/7/2001 (Exh."A") as being unconstitutional , illegal, ultravires (i) Articles 14, 19(1)(g) and (ii) the provisions of Section 151A of the Customs Act,1962 (hereinafter referred to as 'the Act'), and (iii) Notification No.17/01-CUS dated 1/3/2001 : interalia praying that the the impugned circular (Exh."A") and consequential order dated 20/7/2001 (Exh."R") be quashed and set aside. Further prayer has been made that the petitioners be assessed in relation to the goods covered by bill of entry dated 28/3/2000 (Exh."C") and in relation to consignment listed in Exh."H" at the concessional rate of 35% duty in terms of entry at Sr.No.29 of Table annexed to the Notification No.17/01 dated 1/3/2001 and furthermore, cancel the bonds executed by the petitioners and release the bank guarantees furnished at the time of provisional release of the goods in question.

(2.) Petitioner No.1 is a partnership firm while petitioner No.2 is a partner of petitioner No.1-Firm. The petitioners are engaged in business of trading in various commodities including Crude Palm Oil and Crude Palm Olein of Non-Edible Grade which is imported in accordance with law. Respondent No.1 is Union of India while Respondent No.2 is The Central Board of Excise and Customs, a statutory authority constituted under the Central Board of Revenue Act,1963. Respondent No.3 is the proper Officer having jurisdiction to assess the duty under the provisions of the Act.

(3.) On 1/3/2001 the Central Government issued an exemption Notification bearing No.17/01-CUS dated 1/3/2001 (hereinafter referred to as 'Notification No.17`) in exercise of powers available under Section 25(1) of the Act.On 28/3/2001 the petitioners imported consignments of Crude Palm Oil (Non-edible Grade) and Crude Palmolein and filed Bills of Entry for home consumption wherein the said goods were classified under Chapter 15 of the First Schedule to the Customs Tariff Act,1975 (hereinafter referred to as the 'Tariff Act') as falling under sub-heading No.1511.10 and accordingly claimed exemption/benefit of being assessed at concessional rate of duty at 35% as provided under Entry at Sr.No.29 of Notification No.17. On 16/4/2001, petitioner - firm informed respondent No.3 in writing that as the petitioner was only a trader and the Crude Palm Oil having been imported for trading purposes only, the petitioner was not concerned in any manner whatsoever with the end use of the said goods and even otherwise it was difficult for the petitioner-firm to establish the end use.However, on 28/3/2001, Respondent No.3 provisionally assessed the aforesaid imported goods under Entry No.34 of Notification No.17 at rate of 75% pending verification of the end-use on the ground that the petitioners were not able to establish the exact end-use of the produce and the benefit under Entry No.29 of Notification No.17 would be admissible only if the Oil was used as other than Edible Oil. Incidentally, though the order bears date of 28.3.2001 it appears to have been made after 16.4.2001, because petitioner's letter of 16.4.2001 has been considered before framing the order finally. Accordingly, by the said order provisional clearance was permitted on execution of Bond for differential duty and Bank Guarantee equivalent to 10% of the differential duty. It is pertinent to note that, in the meantime, the Boarding Officer collected samples of the goods in question and forwarded the same for the chemical examination. The Chemical Examiner, Kandla opined on 31/3/2001 that the said goods did not conform specification for Crude Palm Oil (Edible grade) as per IS-8323E-1977. Respondent No.3 had also forwarded one sample to the Superintendent, Referal Hospital and Community Health Center, Mundra, who in turn had forwarded the said samples for analysis to Food and Drug Laboratory, Vadodara and vide letter dated 11/5/2001 an opinion given by Public Analyst, Food and Drugs Laboratory, Vadodara was reproduced by Chief Medical Officer, wherein it was stated that except for acid value, the sample conforms to the standards and provisions laid down under the Prevention of the Food Adulteration Rules,1955 for Palm Oil and cannot be used as such for human consumption.