1983 (5) TMI 35 - HC - Customs

Imported goods Rate of duty prevalent at the time of importation to apply Effect of withdrawal of exemption Fixation of rate of customs duty Writ jurisdiction Taxation Legal Aid Society

Summary

Issues Involved:
1. Plea of promissory estoppel.
2. Public interest in the notification of 16-10-1980.
3. Date applicable for the rate of duty for imported goods.

Issue-wise Detailed Analysis:

1. Plea of Promissory Estoppel:
The petitioners argued that the respondents were estopped from superseding the notification of 15-3-1979, which provided total exemption from customs duty, by the notification of 16-10-1980, which imposed a 40% duty. The court rejected this plea, referencing previous judgments (M/s. Super Traders v. U.O.I. and Khandelwal Metal & Engg. v. Union of India), which held that no party can claim a vested right to compel the government to refrain from making changes in import and export policies. The court reiterated that the power to issue notifications under Section 25(1) of the Customs Act is a legislative power, and no estoppel can be pleaded against a statute.

2. Public Interest in the Notification of 16-10-1980:
The petitioners contended that the notification of 16-10-1980 was not issued in the public interest. The court dismissed this argument, stating that it is not within the court's purview to scrutinize the motives behind legislative actions if the legislature is competent to pass the law. The court cited the Bombay Conductors' case, emphasizing that the government can grant or withdraw exemptions in public interest as it deems necessary. The court also noted that the notification was issued to protect indigenous industries from anti-dumping practices and to balance the difference between imported and domestic PVC resin prices, which justified the partial exemption in public interest.

3. Date Applicable for the Rate of Duty for Imported Goods:
The petitioners argued that the rate of duty should be determined based on the date when the ship carrying the goods entered the territorial waters of India (7-10-1980), which would make the applicable duty nil due to the notification of 15-3-1979. The court rejected this argument, stating that the date for determining the rate of duty is specified under Section 15 of the Customs Act. According to Section 15, the rate of duty is determined based on the date of the Bill of Entry, the date of removal from the warehouse, or the date of payment of duty. Since the goods were cleared after 16-10-1980, the applicable rate was 40% as per the notification of 16-10-1980. The court cited the Supreme Court's decision in Prakash Cotton Mills v. B. Sen, which confirmed that the rate of duty is determined by the date specified in Section 15, not by the date the ship enters territorial waters.

Conclusion:
The court dismissed the petitions, holding that:
- The plea of promissory estoppel is not maintainable against legislative actions.
- The notification of 16-10-1980 was issued in public interest and is not subject to judicial review regarding its motives.
- The rate of duty is determined based on the dates specified in Section 15 of the Customs Act, not by the date the ship enters territorial waters.

The court also vacated the interim orders allowing the petitioners to import goods without paying the demanded duty and directed the respondents to take appropriate steps to recover the duty. Additionally, part of the costs awarded to the Union of India was directed to be given to a legal aid society.