1986 (4) TMI 54 - HC - Customs

Summary

Issues Involved:
1. Definition and applicability of 'finished leather' under the exemption notification dated August 2, 1976.
2. Reliance on Central Leather Research Institute (C.L.R.I.) norms for determining 'finished leather'.
3. Jurisdiction of the writ court in interfering with the Customs authorities' decisions.
4. Applicability of the subsequent notification dated October 1, 1977, during pending adjudication proceedings.

Issue-Wise Detailed Analysis:

1. Definition and Applicability of 'Finished Leather':
The primary issue revolves around the interpretation of 'finished leather' as per the exemption notification dated August 2, 1976. The petitioners claimed that their exported goods qualified as 'finished leather' and were thus exempt from customs duty. However, the notification did not define 'finished leather', leading to reliance on external norms.

2. Reliance on C.L.R.I. Norms:
Since the 1976 notification did not explain 'finished leather', the Customs authorities relied on the norms set by the C.L.R.I. in 1973. The petitioners argued that these norms lacked legal foundation. Despite this, the Customs authorities, based on C.L.R.I.'s opinion, determined that the exported goods did not meet the 'finished leather' criteria and levied a 25% duty. The court noted that the petitioners had admitted to following C.L.R.I. norms during the relevant period, reinforcing the legitimacy of the Customs authorities' reliance on these norms.

3. Jurisdiction of the Writ Court:
The respondents contended that the writ court should not interfere as the departmental actions were lawful and non-perverse. The court agreed, emphasizing that the Customs authorities' reliance on C.L.R.I.'s expert opinion was justified and not perverse. The court highlighted that even if an alternative view favoring the petitioners was possible, the existing view based on expert opinion could not be deemed perverse, thus limiting the court's intervention.

4. Applicability of the Subsequent Notification:
The petitioners argued that the amended notification dated October 1, 1977, which defined 'finished leather' per Indian Standards Institution (I.S.I.) standards, should apply retroactively as the adjudication was pending. The court examined the principles of retrospective application of laws, concluding that there was no clear legislative intent or language in the 1977 notification to apply it retrospectively. Consequently, the Customs authorities' decision to apply the 1976 notification standards was upheld.

Conclusion:
The court dismissed the writ applications, affirming that the Customs authorities acted within their legal bounds by relying on C.L.R.I. norms to determine the status of 'finished leather' for the consignments exported before October 1, 1977. The subsequent notification did not retrospectively affect pending proceedings. The petitioners were directed to comply with the customs duty demands within 45 days, and no costs were awarded.