1993 (9) TMI 132 - HC - Customs

Summary

Issues:
- Dispute over Customs duty rate on imported goods
- Impact of a government notification on Customs duty rate
- Interpretation of duty payment obligation based on the date of entry of goods into territorial waters
- Application of legal principles of equity and fair play in revenue matters

Analysis:
1. The petitioners sought permission to clear goods by paying Customs duty at 60% plus 20% Auxiliary Duty, citing a consignment of 1000 MT of Crude Palm Stearin purchased from a specific company.
2. A Division Bench order allowed the petitioners to clear the goods at 60% duty plus auxiliary duty instead of the increased rate of 125% duty plus auxiliary duty, as per a subsequent government notification issued on 24th September 1981.
3. The petitioners argued that since the notification did not specify the goods, they were not obligated to pay the increased duty rate, while the Union of India contended the duty increase was in the public interest and applicable post-notification.
4. The timing of duty payment obligation was debated, with the petitioners asserting duty should align with the date goods entered territorial waters, and the Union emphasizing duty payment post-notification issuance.
5. Reference was made to a prior Division Bench judgment establishing that duty calculation occurs at the time of goods clearance, not entry into territorial waters, supporting the Union's stance on duty payment timing.
6. The Court rejected the petitioners' arguments, affirming their duty to pay the increased rate post-notification issuance, specifically 125% ad valorem on palm stearin as per the notification.
7. Considering the interim relief granted to the petitioners adversely affected public revenue, the Court invoked principles of equity and fair play, directing the petitioners to restore any undue advantage gained during the interim period, citing a relevant judgment on bank rate application.
8. Ultimately, the Court dismissed the writ petition, deeming it meritless, and imposed costs on the petitioners amounting to Rs. 2,000, emphasizing adherence to legal obligations and revenue integrity.