Supreme Court

Granules India Ltd. Vs. Union of India (UOI) and Ors.

MANU/SC/0075/2020

23.01.2020

Customs

Mere failure to enclose a copy of Notification could not be a ground for denial of relief

The Appellant, during the year 1993 imported 96 tons of the chemical "Acetic Anhydride" under three Bills of Entry through the Inland Water Container Depot (ICD), Hyderabad under the Advance Licence Scheme. It claimed clearance of the consignment free of import duty in terms of Customs Notification Nos. 203/1992, 204/1992, both dated 19th May, 1992. The Notification contained a scheme permitting import without payment of customs duty subject to fulfilment of certain norms and conditions. The Notifications were amended by a Notification No. 183/1993 dated 25th November, 1993, by which the subject imports became liable for duty, the exemption having been withdrawn. The Notification dated 25th November, 1993 was further amended by another clarificatory Notification No. 105/1994 dated 18th March, 1994 permitting the import of the chemical without customs duty subject to certain terms and conditions.

The Appellant was allowed to clear the consignments under the aforesaid three Bills of Entry without payment of duty. Subsequently, the Respondents issued show cause notice under Section 28(1) of the Customs Act, 1962 with regard to the same consignments as having been imported after 25th November, 1993.

In pursuance of the show cause notice the Appellant was held liable to duty by order with regard to the consignments under three Bills of Entry. The Respondents while considering the reply to the show cause notice and fixing liability for payment of customs duty did not make any reference to their notification dated 18th March, 1994. The Commissioner (Appeals) on the same reasoning rejected the appeal leading to the institution of the writ application.

Dismissing the writ application, the High Court opined that no mandamus for exemption could be issued. The consignments were admittedly imported after 25th November, 1993 and before the clarificatory Notification dated 18th March, 1994. Thus, there was no arbitrariness on part of the Respondent. The Appellant preferred a review application. Rejecting the plea, the High Court opined that since the Appellant did not produce the clarificatory notification along with the writ petition and the Respondents were not aware of clarificatory notification, the Appellant was not entitled to any relief.

The Appellant, submitted that denial of exemption to the consignment actually imported after 25th November, 1993 under the advance licence obtained prior to 19th May, 1992 notwithstanding the clarificatory Notification dated 18th March, 1994 holding the Appellant liable for customs duty is completely unsustainable.

The entire consignment was imported under one advance licence issued to the Petitioner prior to 19t May, 1992. The fortuitous circumstance that part of the consignment was actually imported prior to 25th November, 1993 and the rest subsequent thereto is hardly relevant in view of the clarificatory notification dated 18th March, 1994 that the exemption would continue to apply subject to fulfilment of the specified terms and conditions. It is not the case of the Respondents that the consignments imported subsequently did not meet the terms and conditions of the exemption.

It is unfortunate that the High Court failed to follow its own orders in a similar matter. The High Court further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither did the Appellant bring it on record. The State is the largest litigant as often noted. It stands in a category apart having a solemn and constitutional duty to assist the court in dispensation of justice. The State cannot behave like a private litigant and rely on abstract theories of the burden of proof..

It is absolutely no defence of the State authorities to contend that, they were not aware of their own Notification dated 18th March, 1994. The onus heavily rests on them and a casual statement generating litigation by State apathy cannot be approved. The impugned orders are therefore held to be unsustainable and are set aside. The appeals are allowed.

Relevant

Shri Krishna Pharmaceuticals Limited v. Union of India (UOI) MANU/AP/1135/2003

Tags : Import Demand Legality

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