2016 (6) TMI 432 - HC - Customs

Legality of proceedings - Import of deep sea fishing trawlers on 26.02.1998 but finding the same to be not seaworthy, sent it for breaking up - Non-compliance of provisions contained in notification No. 133/87 - Appellant stated that by that time, notification No. 133/87 was rescinded by notification No. 47/96 dated 23.07.1996, so the liability under notification No. 133/87 was not in existence from 23.07.1996. Held that - Clause (c) of Section 159A is attracted only in a case where a right, privilege, obligation or the liability is acquired, accrued or incurred under any notification superseded or rescinded. Insofar as this case is concerned, the acquisition of liability could have arisen only on the transfer of the vessels for breaking up, which event took place either on 26.02.1998 or thereafter. As on that date, notification No. 133/1987 was no longer in force. This means that as on 26.02.1998 or thereafter, in the absence of notification No. 133/1987 being inexistence, the liability thereunder could not have been acquired or incurred, to attract clause (c) of Section 159A. This, therefore, means that Section 159A would not save the proceedings initiated against the appellant under notification No. 133/1987. If that be so, the whole proceedings initiated against the appellant are without jurisdiction. - Decided in favour of appellant

Summary

Issues:
1. Legality of proceedings initiated against the appellant under Customs Act.
2. Interpretation of notification No. 133/87 and its rescission by notification No. 47/96.
3. Application of Section 159A of the Customs Act 1962.

Analysis:

Issue 1: Legality of proceedings initiated against the appellant under Customs Act
The appeal was filed against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai, where the penalty and fine were reduced but the appeal was rejected. The appellant, who purchased two deep sea fishing trawlers, was issued a show cause notice under Section 124 of the Customs Act for confiscation and penalty due to non-compliance with notification No. 133/87. The appellant contended that the proceedings were illegal due to the rescission of the notification.

Issue 2: Interpretation of notification No. 133/87 and its rescission by notification No. 47/96
The appellant argued that the liability under notification No. 133/87 was not applicable as it was rescinded by notification No. 47/96 before the appellant acquired the trawlers. The respondent, however, relied on Section 159A of the Customs Act, stating that the liability under the rescinded notification still existed. The Court examined the provisions of notification No. 133/87 and concluded that the liability could not have been acquired after the rescission of the notification.

Issue 3: Application of Section 159A of the Customs Act 1962
The Court analyzed Section 159A, which deals with the effect of amendments, repeal, or rescission of notifications. It was observed that the liability under a rescinded notification could only be acquired if the event triggering the liability occurred before the rescission. As the liability could only arise after the rescission of notification No. 133/87, Section 159A did not save the proceedings initiated against the appellant. Consequently, the Court allowed the appeal, setting aside the impugned order.

In conclusion, the Court found that the proceedings initiated against the appellant were without jurisdiction due to the rescission of notification No. 133/87 before the liability could be acquired. The appeal was allowed based on this finding, and other contentions raised by the appellant were not addressed in light of the decision on the legality of the proceedings.