2014 (2) TMI 829 - HC - Customs

Constitutional Validity of Notification providing tariff value of edible oil - Effective date of notification - proof of date of publication of notification in the official gazette - Violation of Article 14 - Held that - in the affidavit dated 20-8-2012 filed by Shri Manish Kumar Chavda Assistant Commissioner of Customs Jamnagar he stated that It is therefore submitted that the documents and facts clearly show that the notification was issued by the C.B.E. & C. on 2-9-2002 was sent for publication in the Official Gazette on 2-9-2002 itself and the same was received by the Government Press for publication in the Official Gazette on 2-9-2002. The allegation of the petitioner that the Notification No. 60/2002-Cus (N.T.) dated 2-9-2002 was published in the Official Gazette on or after 3-9-2002 is far from truth - Thus we have clear and unequivocal assertion and denial on the part of the respondents on affidavit that such notification was not only issued on 2-9-2002 but was also published in the Official Gazette on the same date. We have no reason to disbelieve such clear statement made on oath. In fact the respondents have also produced a copy of the Government Gazette publishing such notification on 2-9-2002. Section 14(2) of the Act does not insist on any further requirement than publication of the notification in the Official Gazette. In view of the decision of the Apex Court in the case of B.K. Srinivasan (1987 (1) TMI 483 - SUPREME COURT) thus the statute prescribes the mode of publication which has been complied with. In absence of any additional requirement that such notification must also be published in the Government Press we wonder whether non-compliance with such additional requirement even if found desirable would invalidate the notification itself. - We are satisfied that the respondents have discharged their burden to show that the notification in question was also published in the Government of India Press on the same day in addition to publishing the same in the Official Gazette on 2-9-2002. - Decided against the assessee. Whether the was not placed before both the Houses of Parliament as required under Section 159 - Held that - the case of the petitioners is that neither of the two notifications of 2001 or 2002 were placed before the Parliament as required under Section 159 of the Act. Since there was no specific answer from the respondents on this issue we had called upon the Central Government counsel to supply files pertaining to such notifications. She had under the condition of confidentiality of such documents as desired by the Government produced in a sealed cover authenticated copies of the files. We find that there are documents to suggest that both notifications were placed before the Parliament as required under Section 159 of the Act. - Decided against the assessee. Power to provide tariff value of edible oil - challenge to a piece of legislation albeit a delegated legislation - Held that - both the notifications were issued by the Board in valid exercise of the power under Section 14(2) of the Act. The decision of the Board would be based on subjective satisfaction of the requirement that it was necessary to fix such tariff value. - Decided against the assessee. Constitutional validity - whethter notifications being ultra vires Article 14 of the Constitution - Held that - We do not see how the entire Chapter Heading 15 can be stated to be forming a homogeneous class of goods with respect to which further sub-classification is not permissible. The Chapter itself contains several sub-headings and classifications. As we already noted the rule making authority found it necessary to fix tariff value in case of some of these goods since the price rigging was found prevalent. Simply because certain items which fall under Chapter 15 were not included for such exercise in our view cannot be stated to be violative of Article 14 of the Constitution. Essentially we do not think that edible oils as a class form one homogeneous category of goods in which further sub-classification was not permissible. - Decided against the assessee.

Summary

Issues Involved:
1. Publication of the Notification.
2. Availability to the Public and Trade.
3. Requirement of Parliamentary Approval.
4. Compliance with Section 14(2) of the Customs Act.
5. Alleged Discrimination under Article 14 of the Constitution.

Detailed Analysis:

1. Publication of the Notification:
The petitioners contended that the notification of 2002 was not published in the Official Gazette on 2-9-2002, and therefore, it cannot be applied to their imports. The court, however, found clear and unequivocal assertions from the respondents, supported by affidavits and documentary evidence, that the notification was indeed issued and published on 2-9-2002. The court concluded that the notification was validly published on the said date.

2. Availability to the Public and Trade:
The petitioners argued that the notification was not made available to the public and trade until 3-9-2002, and thus it should not be applicable. The court examined the statutory requirement under Section 25(4) of the Customs Act and found that the notification was published in the Official Gazette, which is the primary requirement. The court also noted that the respondents provided sufficient evidence to show that the notification was sent for publication on the same day, and thus, the petitioners' contention was dismissed.

3. Requirement of Parliamentary Approval:
The petitioners claimed that the notifications were ineffective as they were not placed before the Parliament as required under Section 159 of the Customs Act. The court reviewed the documents produced by the Government, which showed that both notifications were indeed placed before the Parliament. The court highlighted that the statutory language of Section 159 does not require the Government to seek approval from the Parliament but only to lay the notifications before it. Therefore, the court found that the requirement was fulfilled, and the notifications were valid.

4. Compliance with Section 14(2) of the Customs Act:
The petitioners challenged the notifications on the grounds that the requirements of Section 14(2) were not fulfilled. The court examined the documents and found that a detailed exercise was conducted before issuing the notifications. The Board considered various factors, including international price trends and recommendations from the Director of Valuation. The court concluded that the notifications were issued after due deliberation and full consideration of relevant factors, fulfilling the requirements of Section 14(2).

5. Alleged Discrimination under Article 14 of the Constitution:
The petitioners argued that the notifications were discriminatory as they fixed tariff values for only certain categories of edible oils, violating Article 14 of the Constitution. The court disagreed, noting that Article 14 prohibits class legislation but allows reasonable classification. The court found that the classification of edible oils into different sub-categories was rational and based on intelligible differentia. The court also observed that the Karnataka High Court in a subsequent decision upheld a similar notification, distinguishing it from the earlier decision in Param Industries. The court concluded that the notifications did not violate Article 14.

Conclusion:
The court dismissed the petitions, finding no substance in the challenges raised by the petitioners. The notifications were held to be validly issued, published, and in compliance with the statutory requirements, including those under Section 14(2) and Section 159 of the Customs Act. The court also found that the notifications did not violate Article 14 of the Constitution. The interim relief was vacated, and the rule was discharged.