2017 (12) TMI 564 - HC - Customs

Effective date of notification - petitioner has prayed for a declaration that the Notification No. 43 of 2010 dated 09.04.2010 granting the exempt from payment of customs duty came to withdrawn become effective only from 20.04.2010 and not earlier and therefore, cannot be applied to the shipping bills of the petitioner for which let orders were issued by the authorities before such date. Held that - it is an admitted position that the shipping bills of the petitioner filed with the authorities on 08.04.2010 were processed and let orders were passed by the concerned authority on 09.04.2010. It is not in dispute that the question of charging duty on such exports would have to be decided on the basis of the law prevailing on such dates. In several judgements, the Supreme Court has held that both the conditions contained in sub-section (4) of section 25 as it stood at the relevant time must be satisfied for the notification to become effective in the present case. The date of publication of the notification in the official gazette which admittedly happens to be on 20.04.2010. The notification would be effective only from such date and not earlier. The withdrawal of the exemption from export duty would therefore take effect from 20.04.2010 and onwards alone. For the petitioner s exports made before such date, customs duty cannot be levied. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to demand of export duty on raw cotton exports; Interpretation of notification withdrawal date.

Analysis:
The petitioner challenged the respondents' demand for export duty on raw cotton exports, seeking a declaration that Notification No. 43 of 2010, withdrawing customs duty exemption, was effective only from 20.04.2010. The petitioner exported raw cotton under shipping bills processed before this date, arguing that the notification's publication date determined its applicability. The petitioner relied on Customs Act provisions stating notifications come into force upon publication. The department disagreed, holding up exports until duty payment. The petitioner paid duty under protest and sought a refund, contending the exemption withdrawal did not apply to their exports.

The court examined whether the notification was effective immediately upon issue on 09.04.2010, as argued by the department, or from its publication date on 20.04.2010, favoring the petitioner. Citing Supreme Court precedents, the court emphasized the mandatory conditions for a notification's effectiveness: publication in the official gazette and offering for sale on the date of issue. Referring to specific case judgments, the court highlighted that both conditions must be met for a notification to be enforceable. The court concluded that since the notification was published on 20.04.2010, it would only be effective from that date onwards, not earlier. Therefore, duty could not be levied on exports made before this date, leading to the petitioner's successful claim for duty refund.

In the final judgment, the court ruled in favor of the petitioner, ordering the respondent to refund the duty paid under protest with interest. The court directed the refund to be processed promptly and preferably before a specified date. The petition was disposed of, affirming the petitioner's entitlement to the refund based on the notification's effective date and the legal interpretation of notification publication requirements.