JUDGMENT

SABYASACHI MUKHARJI, C.J.I. —This is an application under Art. 32 of the Constitution. Northern Corporation is the petitioner in the instant application and the, Union of India, the Collector of Customs and the Assistant Collector of Customs (Bond Department) are the respondents.

2. On 11th May, 1983, the licensing authority issued import licence No. 2959845 for Rs. 20,12,729 / - in favour of M/ s. Industrial Cable India Ltd., Rajpura. The licence holder transferred the same in favour of M/ s. Metalic Metal Industries. The transferee-licence holder issued a letter of authority in favour of the petitioner for the import of MSCR defective sheets of coils. The letter of authority was issued on 21st May, 1984.

3. The petitioner herein placed order on M/ s. Sayani Enterprises Pvt. Ltd., Singapore for the supply of MSCR defective sheets or coils on 30th May, 1984. The foreign supplier shipped the material in three consignments and the goods arrived at the Bombay Port on 12th June, 1984. The clearing agent of the petitioner filed bills of entry on 30th July, 1984 for warehousing under S. 59 of. the Customs Act, 1962 (hereinafter referred to as the Act), and the same was allowed. The goods were bonded on 7th August, 1984. It may be mentioned that the rate of duty on that day was 60% + 40% + Rs. 650 per M.T. and 10% C.V.D. The total duty on the consignment was assessed at Rupees 26,20,109.55.

4. On 21 st August, 1984, the petitioners clearing agent filed six bills of entry for ex bond clearance. However, the bills of entry were returned with the remark that "please obtain no objection from the income tax". This was endorsed on 24th August, 1984. The petitioner states that thereafter he came to know that the income tax authorities had imposed ban u/ S. 132(1) of the Income-tax Act, 1961. The petitioner asserted that he was ever ready and willing, rather was anxious, to get the material on payment of the then prevailing customs duty. However, due to circumstances beyond the control of the petitioner, that is to say, by the order of the Income-tax Authorities the goods could not be released. This factor was not of the petitioners making, according to the petitioner.

5. On 30th March, 1988, the Income-tax Department issued the necessary no objection certificate, thus lifting the ban. On 4th April, 1988, the petitioners agent contacted the customs authority for clearance of the goods. The duty as is prevalent now is Rs. 5,000/- per M.T. + addl. duty 45% and C.V.D. at Rs. 825/- per M.T. The total duty came to a very large sum of money. The demand, according to the petitioner, was arbitrary, illegal and unconstitutional.

6. The instant writ was filed under Art. 32 of the Constitution on 16th April, 1988 and on 22nd April, 1988, this Court passed the following order:

"Pending notice, there will be limited stay to the extent that the goods name, "MSCR defective sheets/ coils" which have arrived at Bombay Port per Ss. "Sea Primrose" will be released forthwith on petitioners paying customs and other duties as leviable on 21-884. In addition to the above payment the petitioner will deposit Rs. 5 lakhs and for the balance amount petitioner will furnish surety (which may consist of ITC bond but excluding cash/ bank guarantee/NSC/FDR) to the satisfaction of the Collector of Customs."

7. We directed that the notice should be given to the revenue authority to appear before us. Learned Attorney General had appeared pursuant to the notice on behalf of the respondents. It is contended on behalf of the respondents that for the payment of duty, the liability of the petitioner to pay the duty is the duty at the time of clearance of the goods. Our attention was drawn to S. 15(1)(b)of the Act which postulates that the rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, in case the goods are cleared from a warehouse u/ S. 68, on the date on which the goods are actually removed from the warehou