2006 (9) TMI 106 - HC - Customs

Challenge to Not..19 dated 4/7/06 whereby retrospective effect is given to Not. dated 27/6/06 & dated 3/7/06 so as to be operative w.e.f. 22/6/06 Ban of export of pulses - - Not. dated 27/6/06 would be applicable from the date of the issue, i.e. 27.6.06 & any consignments cleared by the Customs prior thereto cannot be hit by any modification by way of subsequent Not.19 so as to work to the disadvantage of the exporter - HC Delhi having already quashed Not. 19 so not permitted to operate

Summary

Issues Involved:
1. Retrospective effect of Notification No.19 (RE-2006)/2004-2009 dated 4/7/2006.
2. Application of Section 51 of the Customs Act, 1962.
3. Interpretation of Paragraph No. 9.12 of the Handbook of Procedures Volume I.
4. Validity of the impugned Notification in light of the Delhi High Court judgment.

Detailed Analysis:

1. Retrospective Effect of Notification No.19 (RE-2006)/2004-2009 dated 4/7/2006:
The petitioner challenged the retrospective application of Notification No.19 (RE-2006)/2004-2009 dated 4/7/2006, which amended earlier notifications dated 27/6/2006 and 3/7/2006 to be effective from 22/6/2006. The petitioner argued that such retrospective application is illegal, unjust, and against the settled principles of law, including the provisions of the General Clauses Act, 1897. The petitioner contended that the principal Act does not provide for retrospective effect and cited a Supreme Court judgment to support this claim.

2. Application of Section 51 of the Customs Act, 1962:
The petitioner argued that the goods were already handed over to the Customs Authorities and cleared for export under Section 51 of the Customs Act, 1962, before the issuance of the impugned notification. The petitioner emphasized that once the "let export" order is issued, the goods should be allowed to be exported irrespective of subsequent notifications. The court noted that the Customs Authorities had indeed undertaken the procedure laid down in Sections 50 and 51 of the Customs Act, with "let export" orders issued on 23/6/2006 and 24/6/2006 for the consignments.

3. Interpretation of Paragraph No. 9.12 of the Handbook of Procedures Volume I:
The petitioner relied on Paragraph No. 9.12 of the Handbook of Procedures, which states that any modification to the disadvantage of the exporters shall not apply to consignments already handed over to the Customs for examination and subsequent export up to the date of the public notice. The court interpreted the term "disadvantage" broadly, rejecting the respondents' argument that it should be limited to the advantages specified in Chapters 4 and 5 of the Foreign Trade Policy. The court concluded that preventing the export of goods already cleared by Customs constitutes a disadvantage to the exporter.

4. Validity of the Impugned Notification in Light of the Delhi High Court Judgment:
The petitioner cited a Delhi High Court judgment which quashed the impugned notification as being ultra vires Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. The court agreed with this precedent, stating that once the notification is quashed by a competent court, it cannot operate throughout India. Consequently, the court held that Notification dated 27/6/2006 cannot be applied retrospectively from 22/6/2006.

Conclusion:
The court allowed the petition, quashing the impugned Notification dated 4/7/2006. It directed the respondent authorities to permit the petitioner to load and export the consignments that had already been cleared by the Customs Authorities on 23/6/2006 and 24/6/2006. The court emphasized that the retrospective application of the notification was invalid and that the petitioner was entitled to export the goods under the provisions of the Customs Act and the Handbook of Procedures. Rule was made absolute with no order as to costs.