By TIOL News Service

NEW DELHI, JUNE 17, 2015: THE respondents are engaged in the export and import of various edible oils. They have been importing edible oils in bulks through various ports throughout the country. The respondent had imported RBD Palmolein which had arrived at the port of destination and the same were cleared after payment of import duty of 85 per cent of its value. This import duty was paid pursuant to the notification which was in existence as on that date. The respondent had even removed major quantity of the goods under the aforesaid consignment from the warehouse after payment of the duty in the manner aforesaid. However, when it wanted to remove the balance quantity, the same was denied. Thereafter, a notice was received by the respondent which was issued by the appellant stating that with effect from 03.08.2001 (incidentally this is the date on which the bill of entry was filed and goods were cleared by the respondent as aforesaid), the tariff value in respect of RBD Palmolein had been raised to USD 372 per metric ton and therefore, the respondent was liable to pay the difference in the tariff value which was paid on the basis of earlier notification. The respondent contested the aforesaid demand raised in the show cause notice by filing reply and contending that the notification which was issued under Section 14(2) of the Customs Act, raising the import duty had not come into effect from 03.08.2001.

The respondent filed the writ petitions challenging the action of the Department in determining the duty.

The High Court has concluded that notification issued under Section 14(2) of the Customs Act cannot be held to have come into force with effect from 03.08.2001. There was some dispute as to whether the notification was published on 03.08.2001 itself or it was published on a later date. However, from the record, it gets revealed that the notification was sent for publication after the normal office hours, i.e., much after 5 p.m. on 03.08.2001. It was almost at the midnight, may be few minutes before 12 in the night. Even if it is to be treated as notification having been published on 03.08.2001 itself, i.e., just before the midnight, an issue has arisen as to whether it could be made effective qua the goods which were already cleared during the day time on the basis of earlier notification.

However, the Supreme Court found it is not necessary to go into this issue at all.

The Supreme Court found that the High Court has stated that for bringing the notification into force and make it effective, two conditions are mandatory, viz., (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. In the present case, admittedly, second condition was not satisfied inasmuch as it was offered for sale only on 06.08.2001, as it was published on 03.08.2001 in late evening hours and 04/05.08.2001 were holidays.

Supreme Court is in agreement with the aforesaid view taken by the High Court which is in conformity with the law laid down by the court in ' Harla v. The State of Rajasthan'

These appeals therefore, are liable to fail only on the aforesaid ground and are dismissed accordingly.

The Supreme Court also allowed several appeals by the assessees on this issue, observing, "though the notification may have been published on the date when the goods were cleared, it was not offered for sale by the concerned Board, which event took place much thereafter. Therefore, it was not justified and lawful on the part of the Department to claim the differential amount of duty on the basis of said notification."

(See 2015-TIOL-140-SC-CUS)