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2020 (7) TMI 429 - HC - CustomsEffective date of notification - Validity of Notification issued by the respondent Customs Department dated 1.3.2018 under Section 25 of the Customs Act, 1962 - Import of Crude Vegetable Oils in bulk by the petitioner company for manufacture of Soya Food products - It is the contention of the petitioner that the said notification dated 1.3.2018 was updated on 2.3.2018 and came to be published in the Official Gazette on 6.3.2018 - HELD THAT - On the issue of the date of publication, the Delhi High Court in M.D. OVERSEAS LTD., KUNDAN CARE PRODUCTS LTD., MINK TRADECOM PVT. LTD., VERSUS UNION OF INDIA ORS. 2019 (11) TMI 130 - DELHI HIGH COURT while dealing with a similar notification held that the notification would come into effect from the date and time when it was electronically printed in the gazette and mere uploading on the website would have no significance - The reasoning given by the Division Bench of the Delhi High Court in M.D.Overseas Ltd. (supra) does not appear to be suffering from any legal infirmity, nor any material or argument has been placed before us to take a different view in the matter. We, therefore, accept the contention of the learned counsel for the petitioner on this count. The respondents are directed to refund the entire excess amount paid by the petitioner as enhanced duty under protest, including the IGST amount, within a period of two months from today - petition allowed.
Issues Involved:
1. Validity of the Notification issued under Section 25 of the Customs Act, 1962. 2. Date of enforcement of the notification. 3. Payment of customs duty and Integrated Goods and Service Tax (IGST). 4. Applicability of the notification to transactions prior to its publication. 5. Constitutionality of Section 25(4) of the Customs Act, 1962. 6. Refund of excess customs duty and IGST paid under protest. Detailed Analysis: 1. Validity of the Notification issued under Section 25 of the Customs Act, 1962: The petitioner, a public limited company, challenged the Notification issued by the respondent Customs Department dated 1.3.2018 under Section 25 of the Customs Act, 1962. The petitioner argued that the notification was updated on 2.3.2018 and published in the Official Gazette on 6.3.2018. Therefore, the enhanced customs duty and IGST collected based on this notification were unlawful as the petitioner had already paid the applicable duty and IGST on 1.3.2018 and 5.3.2018, respectively. 2. Date of enforcement of the notification: The petitioner contended that since the notification was published on 6.3.2018, it could not be applied to transactions carried out before this date. The respondents reassessed the customs duty and raised an additional demand, which the petitioner deposited under protest. The petitioner sought a declaration that the notification dated 1.3.2018 could not be applied retrospectively to their transactions. 3. Payment of customs duty and Integrated Goods and Service Tax (IGST): The dispute centered on the payment of customs duty and IGST for the clearance of imported Crude Vegetable Oils. The petitioner argued that the enhanced duty of 54% as against the earlier 40% could not be imposed on them for transactions conducted before the publication of the notification. 4. Applicability of the notification to transactions prior to its publication: The petitioner relied on the Division Bench judgment of the Delhi High Court in M.D. Overseas Ltd. v. Union of India, which held that a notification would come into effect from the date and time when it was electronically printed in the gazette, not merely from the date of its issuance. The Andhra Pradesh High Court in Ruchi Soya Industries Ltd. v. Union of India also supported this view, stating that the notification's enforceability is dependent on its publication in the Official Gazette. 5. Constitutionality of Section 25(4) of the Customs Act, 1962: The petitioner challenged the vires of Sub-Section (4) of Section 25 of the Customs Act, 1962, arguing that it was inconsistent with Section 25(1) and arbitrary. Section 25(1) requires the issuance of a notification in the Official Gazette for granting or withdrawing exemptions in public interest. However, Section 25(4) states that the notification shall come into force on the date of its issue by the Central Government for publication in the Official Gazette. The petitioner argued that this provision allows the Central Government to enforce a notification without publishing it, violating Article 14 and Article 19(1)(g) of the Constitution of India. 6. Refund of excess customs duty and IGST paid under protest: The Court considered the judgments of the Delhi High Court and the Andhra Pradesh High Court, which had already settled the issue in favor of the petitioner. The Court directed the respondents to refund the excess amount paid by the petitioner as enhanced duty under protest, including the IGST amount, within two months. Conclusion: The Court found no reason to differ from the reasoning given by the Delhi and Andhra Pradesh High Courts. It held that the notification dated 1.3.2018 could not be applied retrospectively to transactions conducted before its publication on 6.3.2018. The Court declared Section 25(4) of the Customs Act, 1962, as arbitrary and inconsistent with Section 25(1) and (2-A). The writ petition was allowed, and the respondents were directed to refund the excess amount collected from the petitioner.
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