1990 (2) TMI 63 - HC - Customs

Summary

Issues:
1. Validity of the withdrawal of exemption granted in respect of TIOC.
2. Compliance with principles of natural justice in the proceedings before the Collector of Customs (Appeals).

Detailed Analysis:

Issue 1: Validity of the withdrawal of exemption granted in respect of TIOC
The Petitioners imported Active Erythromycin Thicyonate (TIOC) and claimed partial exemption from customs duty under Notification No. 64/79-Cus. The consignment was assessed to customs duty at 25% ad valorem, and the duty was paid. Subsequently, the Government withdrew the exemption through Notification No. 218/84 dated 10-8-1984, but the Gazette containing the notification was made public only on 13-9-1984. The Petitioners argued that since the notification was not public knowledge until 13-9-1984, they were not liable to pay the additional duty and penalty demanded by the Assistant Collector of Customs. The court cited precedents emphasizing that publication in the Gazette alone does not suffice; the information must be made available to the public for enforcement. Considering this, the court held that the demand made by the Customs Authorities was premature and not legally sustainable. Therefore, the Petitioners succeeded in their Writ Petition challenging the imposition of additional duty and penalty.

Issue 2: Compliance with principles of natural justice in the proceedings before the Collector of Customs (Appeals)
The Petitioners had filed an application for stay and dispensation of deposit before the Collector of Customs (Appeals), requesting the waiver of the penalty amount pending the appeal hearing. However, the Collector of Customs (Appeals) ordered the Petitioners to deposit the penalty within 15 days, failing which the appeal would be dismissed. The Petitioners argued that they were not granted a hearing before the order was passed, alleging a violation of the principles of natural justice. The court found merit in this contention, stating that the Collector of Customs (Appeals) failed to follow the principles of natural justice by not providing a hearing to the Petitioners before passing the order. Consequently, the court held that the order of the Collector of Customs (Appeals) must fail on this ground as well.

In conclusion, the court ruled in favor of the Petitioners, setting aside the orders of the Assistant Collector of Customs and the Collector of Customs (Appeals). Each party was directed to bear its own costs.