2008 (10) TMI 373 - HC - Customs

Exemption from payment of customs duty - import of marble amongst other commodities from Sri Lanka under the treaty Denial of exemption - object which specified in the affidavit defeats both the notification issued under the Customs Tariff Act, as also the provisions of the India-Sri Lanka Treaty and, therefore, it cannot be said that the purpose of issuing the notification is legitimate and, therefore, it cannot be said that the notification impugned in the present petition has been issued in public interest, because what is opposed to law cannot be said to be in public interest - petition succeed

Summary

Issues:
Challenge to notification under Foreign Trade Act
Validity of notification restricting import to Kolkata Port
Legitimacy of the object of the notification

Analysis:
1. Challenge to notification under Foreign Trade Act:
The petitioner challenged a notification issued by the Director General of Foreign Trade under the Foreign Trade (Development & Regulation) Act, 1992, amending the import schedule for raw and polished marble from Sri Lanka. The petitioner contended that the notification exceeded the powers of the respondent and was issued with the intention to deny duty-free import benefits. The court examined the authority of the Director General to issue such a notification and the legality of the exercise of powers. The respondents did not file an affidavit in this writ petition, but the court considered the affidavit filed in a previous petition by the petitioner.

2. Validity of notification restricting import to Kolkata Port:
The petitioner challenged the validity of the notification on the grounds that it restricted the import of marble from Sri Lanka to only the Port of Kolkata under the India-Sri Lanka Free Trade Treaty Agreement. The court analyzed whether such a restriction was justified and in public interest. The respondents argued that the restriction was imposed to prevent misuse of concessions and protect the domestic marble industry. However, the court found that restricting imports to only Kolkata Port did not serve the intended purposes as checking the origin of marble could be done at any port. The court concluded that the restriction lacked a valid nexus and was not in public interest.

3. Legitimacy of the object of the notification:
The court further examined the object of the notification, which aimed to neutralize duty benefits under the Customs Tariff Act and discourage marble imports to protect the domestic industry. The court scrutinized the legitimacy of this object and found that it aimed to defeat statutory concessions without proper legal basis. The court held that the object of the notification was not legitimate as it conflicted with existing laws and treaties. Consequently, the court ruled in favor of the petitioner, making the rule in the petition absolute without costs.

This detailed analysis of the judgment from the Bombay High Court highlights the legal issues involved, the arguments presented by the parties, and the court's reasoning leading to the final decision in the case.