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2012 Supreme(Kar) 50
High Court of Karnataka
THE HONOURABLE CHIEF JUSTICE MR. VIKRAMAJIT SEN & THE HONOURABLE MRS. JUSTICE B.V. NAGARATHNA
M/s Ruchi Soya Industries
Versus
Union of India & Others
Writ Petition No. 25290 of 2002 (TAR) c/w Writ Petition No. 25291 of 2002 (TAR)
Decided On : 20-01-2012
For the Petitioner:K. Shashikiran Shetty, Advocate.
For the Respondentss:R1 to R3 - Jeevan J. Neeralagi, Central Government Standing Counsel, R1 - Kalyan Basavaraj Additional Solicitor General, Jeevan J. Neeralagi, Advocate.
Headnote:CUSTOMS ACT, 1962 - Section 14(2): [Vikramajit Sen, C.J. & B.V. Nagarathna, JJ] Valuation of goods - Prescribing different tariffs - Validity - Held, Each of the subject heads defined in Chapter-15 i.e., 15.01 to 15.22 deals with distinct ’class of goods’, and the sub-divisions of commodities/products entitled as ’Cleavage products’. The tariff on goods is imposed to regulate the importation of different commodities so as to bring about a balance in prices in domestic markets. The demand of items such as Lard and animal fats is not similar to that of natural oils. Lard or pig fat will not be consumed by certain sections of the society and they may also not be palatable to persons belonging to different communities of our society. The reality is that there are also fluctuating preference even of natural oils as cooking mediums, the consumption is susceptible to dietary research as well as the publicity and advertising blitz, and accordingly demand would increase or decrease. It is for this reason, that each of the subject headings contained in Chapter-15 of Section-III comprises a different class of goods in themselves. This being so, it is open to the legislature to prescribe and modify from time to time different tariff rates in respect of each of them and such action of the instrumentalities or functionaries could not be termed as violative of Article-14 of the Constitution of India. Section 14(2) which was amended by the Finance Act, 2007, specifically contemplates the actual price of the commodities at any given point of time. Therefore, Chapter-15 of the Customs Tariff Act, 1975 cannot be dealt with as one composite subject, and each of the entries mentioning a class of goods and their cleavages or fragments or divisions can be dealt with separately and distinctly.
Thus, prescribing different tariffs only for Palmolein or Palm oil covered by Heading No. 15.11 would not be violative of Article 14 of the Constitution of India.
CUSTOMS ACT, 1962 - Section 15(1), Proviso: [Vikramajit Sen, C.J. & B.V. Nagarathna, JJ] Determination of rate of import duty - Relevant date - Import for home consumption - Bill of entry presented before date of entry of vessel - However, bill of entry would be deemed to have been presented only at time of arrival of vessel and at no point anterior thereto - Notification levying rate of duty was gazetted on date when shipment had arrived - Held, Subject shipment would be liable to levies prescribed therein and not in accordance with fiscal regime attaining on previous day.
VIKRAMAJIT SEN, C.J.
1. These writ petitions have been filed under Article 226 and 227 of the Constitution of India, and have been pending for one decade. It contains several prayers, but the ones relevant for our purposes seek the issuance of a mandamus directing that the Notification No. 38/2002-Cus (N.T.) dated 13.06.2002 is not applicable to the imported goods consisting of 1647.414 metric tonnes of crude palmolein covered under Bill of Entry for Home Consumption dated 12.06.2002 (hereafter ‘subject shipment’); for an order declaring that the petitioner is not liable to pay any additional/differential duty in respect to the said shipment of crude palmolein; and that the subject Notification is effective only from 14.06.2002. On 04.07.2002, by way of interim relief, the Respondents had been directed to release the subject shipment on the basis of the duty already paid by the petitioner and in addition thereto on its furnishing “25% bank guarantee towards differential duty”.
2. Learned counsel for the parties have been heard in full detail.
3. The facts, so far as relevant for the purpose of deciding these petitions, are that the ‘subject shipment’ left Malaysia in June 2002. On 12.06.2002 the petitioners filed a Bill of Entry for Home Consumption in respect thereof and in conformity with Notification No.29/2002-Cus (N.T.) dated 16.5.2002 paid a sum of Rs.2,16,31,258/-. However, it is not in dispute that the ‘subject shipment’ actually arrived in India only on the following day on 13.6.2002 at 5.50 a.m. The Respondents contended that by that date enhanced tariff became payable by virtue of Notification No.38/2002-Cus dated 13.6.2002. In paragraph-10 of the petitions it has been averred that the said Notification “was issued/published only some time after 12.00 noon on 13.6.2002. It is categorically submitted that its issue and its printing in the Government Press takes time, the said Notification could have been issued and published in the official gazette only after 12.00 noon on 13.6.2002 and not before that. Further, the said Notification as published in the official gazette was offered for sell and made available to the public and others including the petitioner company on 14.6.2002 and not before that. The said Notification, therefore, has no applicability at all to the aforesaid consignment of crude palmolein imported by the petitioner company.”
4. Learned counsel for the petitioners has firstly contended that the relevant date for calculation of the duty is the date of the Bill of Entry, which according to him is 12.6.2002. It was on the following day 13.6.2002 that the tariff/duty stood increased from $ 372 to $ 411 per metric tonne. We think that it would not be sanguine to believe that the Petitioner had got wind of the tariff increase and for this reason, petitioner hastened to file the Bill of Entry in anticipation of the arrival of the ‘subject shipment’ into India. It is also not clear whether the ship entered Indian territorial water at 5.50 a.m or berthed in the dock at 5.50 a.m on 13.06.2002, but that would not make any difference for liability to pay the new tariff.
5. Reliance has been placed by learned counsel for the petitioners on the Division Bench Judgment reported as Param Industries Limited – Vs-Union of India, ILR 2002 KAR 4523. In that case, the tariff value in respect of RBD Palmolein had been raised to $ 372 with effect from 03.08.2001. The allegation was that the Notification had not been published in the Official Gazette on 03.08.2001, but on 06.08.2001. The Court noted that 4th and 5th August were Saturday and Sunday; that the publication could only been carried on 06.08.2001 and a copy thereof could have been received by the Customs Authorities in Cochin only on 07.08.2001. It was in those circumstances that the Division Bench concluded that the new Notification would not be attracted. While so concluding to fortify their conclusion, a reference was made to the decision of the
