AGARWAL INDUSTRIES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) W.P. No.19303 of 2001 is filed seeking a writ of mandamus to declare that Notification No.36/2001 -Cus(NT) dated 03.08.2001 is valid and enforceable only on and from 07.08.2001 when the gazette was made available to the public; and that the subsequent Circular No.46/2001 dated 10.08.2001, issued by the first respondent clarifying that the notification dated 03.08.2001 came into effect on and from 03.08.2001 when it was issued for publication in the gazette, is ultra vires Section 14(2) of the Customs Act. W.P. No.20536 of 2001 is filed seeking a writ of certiorari to quash Notification No.36/2001 dated 03.08.2001 and to declare the order of assessment, passed on the strength of the tariff value fixed by the said notification, as arbitrary and illegal.

(2.) It would suffice, for the disposal of both the Writ Petitions, if the facts in W.P. No.20536 of 2001 are noted. The petitioner in W.P. No.20536 of 2001 carries on business in the import of edible oils including RBD Palmolein oil. They imported 1009.234 metric tonnes of RBD Palmolein oil of edible grade in bulk at 248 U.S. dollars per metric tonne. A bill of entry for home consumption was filed on

(3.) 08.2001 for the import of these goods. By Notification No.36/2001 dated 03.08.2001, the Central Board of Excise and Customs, Ministry of Finance, Government of India, and in the exercise of the powers conferred on them under Section 14(2) of the Customs Act, fixed the tariff value of RBD Palmolein oil at 372 U.S. dollars per metric tonne. On their being called upon to pay the differential customs duty (difference between 372 U.S. dollars per metric tonne prescribed under Notification No.36/2001 dated 03.08.2001 and the invoice value of 248 U.S. dollars per metric tonne), the petitioner invoked the jurisdiction of this Court contending, among others, that Notification No.36/2001 dated 03.08.2001 came into force only from 07.08.2001; as the bill of entry for home consumption was filed earlier on 03.08.2001, they were not liable to pay customs duty at the tariff value, fixed under Notification No.36/2001, of 372 U.S. dollars per metric tonne; and they had rightly paid customs duty on the invoice value of 248 U.S. dollars per metric tonne. 3. Sri G.L. Rawal, Learned Senior Counsel appearing on behalf of the petitioner, would submit, placing reliance on the judgment of the Supreme Court in Union of India v. Param Industries Ltd , that Notification No.36 of 2001 came into force only with effect from 07.08.2001 and, consequently, the tariff value prescribed under the said notification cannot be applied retrospectively on the goods imported earlier on 03.08.2001; as the very same notification has been held by the Supreme Court to have come into force on or after 06.08.2001, the respondents cannot apply the tariff value prescribed under Notification No.36 of 2001 to goods imported on 03.08.2001; reliance placed on behalf of the respondents, on the Division Bench judgment of this Court in M/s. K.G.F. Cotton Pvt. Ltd v. Union of India , is misplaced; the judgment of the Karnataka High Court in Param Industries Ltd v. Union of India was affirmed by the Supreme Court in Param Industries Ltd1 it is evident, from the facts noted in Param Industries Ltd3, that Notification No.36/2001 could only have been published in the Gazette of India on or after 06.08.2001; and, since the bill of entry for home consumption is dated 03.08.2001, the tariff value of RBD Palmolein oil, as prescribed in Notification No.36/2001, should not have been applied to this earlier import of RBD Palmolein oil. On the other hand Sri P.S.P. Suresh Kumar, Learned Standing Counsel for Central Excise, would submit that the Gazette of India notification bears 03.08.2001 as the date on which it was published in the Official Gazette; the said notification must, therefore, be held to have come into force on 03.08.2001 itself; Section 25 of the Customs Act, on which reliance has been erroneously placed both by the Karnataka High Court and the Supreme Court in Param Industries Ltd1, relates to exemptions; the power conferred on the Central Board of Excise and Customs (CBEC for short) to prescribe the tariff value of imported goods is under Section 14(2) of the Customs Act; unlike Section 25, which makes a notification issued thereunder effective from the date on which it is made available for sale to the public, Section 14(2) merely stipulates that the notification issued by the CBEC must be published in the Gazette; the date referred to in the Gazette notification must be presumed to be the date of publication; as the tariff notification was published in the Gazette on 03.08.2001, the tariff value mentioned therein is the value on which customs duty is required to be paid, and not the invoice value; reliance cannot be placed on internal correspondence of the department in this regard; the law declared by the Supreme Court in Param Industries Ltd1 is per incuriam as it is contrary to the law declared in the earlier judgments of the Supreme Court in M/s. Pankaj Jain Agencies v. Union of India and Union of India v. Ganesh Das Bhojraj ; and, in view of the law declared by the Supreme Court in Sundeep Kumar Bafna v. State of Maharashtra and M.S. Sandhu v. State of Punjab , this Court is bound to follow the aforesaid earlier judgments of the Supreme Court and not the judgment in Param Industries Ltd1. Learned Standing Counsel would also submit that the Division bench of this Court, in M/s. K.G.F. Cotton Pvt. Ltd2, considered the Division bench judgment of the Karnataka High Court in Param Industries Ltd3, and differed therefrom to hold that Notification No.36 of 2001 came into force from 03.08.2001 and not on or after 06.08.2001; and the judgment of the co -ordinate bench, in M/s. K.G.F. Cotton Pvt. Ltd2, is binding on this Court.