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TMI Blog2000 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... be supplied to the O.N.G.C. or G.A.I.L. from so much of that portion of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 as is in excess of the amount calculated at the rate of 25% ad valorem and whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975 subject to certain conditions. By another Notification No. 516/86 of the same date the Central Government exempted goods imported in connection with off-shore oil exploration or exploitation from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975 subject to certain conditions. By another Notification No. 517/86, dated December 30, 1986 it was notified that Notification No. 210/82, dated September 10, 1982 stood amended by omitting the words "or Oil and Natural Gas Commission or Oil India Limited or Gas Authority of India Limited". As a result thereof the appellant who is manufacturer and supplier of certain goods to O.N.G.C. in connection with oil exploration viz. Flow Improver under the trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to public interest drain on foreign exchange. 5.The High Court took the view that this Court had laid down in Kasinka Trading & Anr. v. Union of India & Anr. - 1994 (74) E.L.T. 782 (S.C.) = 1995 (1) SCC 274, that the power to exempt flows from Section 25 of the Customs Act; that just as the notification issued granting exemption is in public interest, by another notification it can also be modified or withdrawn in public interest, irrespective of whether exemption is project based or specific goods related. The High Court having held that Notification No. 210/82 had been issued in public interest and modified again in public interest, dismissed the petition. Hence this appeal. 6.Inasmuch as the contention raised on behalf of the appellant had not been specifically dealt with by the respondents in the writ petition in the High Court, this Court permitted the respondents to file counter affidavit. Accordingly, a counter affidavit was filed on February 9, 2000. In that affidavit what is stated is as follows:- "It is further submitted that the oil section in general had been enjoying various fiscal concessions since 1982. During December, 1986, a review was undertaken in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and reiterated in Shrijee Sales Corporation & Anr. v. Union of India - 1997 (89) E.L.T. 452 (S.C.) = 1997 (3) SCC 398. In both these cases this Court is concerned with notifications issued under Section 25 of the Customs Act. In Kasinka Trading & Anr. (supra) case it is stated that the exemptions granted under Section 25(i) of the Customs Act in public interest is designed to off-set the excess price which the local entrepreneurs were required to pay for importing PVC resin at a time when the difference between the indigenous product and the imported product was substantial and at a time when the notification was withdrawn by the Government there was no scope for any lose to be suffered by the importers and, therefore, the change of policy was permissible. The decision is the same in Shrijee Sales Corporation & Anr. (supra) wherein it was noticed that once public interest is accepted as the superior equity which can override individual equity, the principle would be applicable even in cases where a period has been indicated for which period the notification would remain in force and Government is competent to resile from a promise. It was further noticed therein that the Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st yield to plenary legislation; (iii) that it is unreasonable in the sense that it is manifestly arbitrary. The embargo of arbitrariness is embodied in Article 14 of the Constitution. An enquiry into the vires of delegated legislation must be confined to the ground on which the plenary legislation may be questioned, except that sub-ordinate legislation cannot be questioned on the ground of violation of the principle of natural justice on which administrative action may be questioned. In cases where power vested in the Government is a power which has got to be exercised in public interest, as is the case in the present case, the Court may require the Government to exercise that power in a reasonable way in accordance with the spirit of the Constitution. The mere fact that a notification issued under Section 25 of the Customs Act is required to be laid before Parliament under Section 159 of the Customs Act does not make any substantial difference as regards the jurisdiction of the court to pronounce on its validity. Section 25 of the Customs Act under which notifications are issued confers a power on the Central Government coupled with a duty to examine the whole issue in the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stages and limiting only to the extent of 75% for the period from December 30, 1986 to September 20, 1987 and for the reasons stated earlier in the manner set out in the counter affidavit clearly indicate that the Government has not taken into account all the relevant factors while issuing the impugned notifications reducing the exemption to 25% for the aforesaid period. We may state that the Government has failed to discharge its statutory obligation while issuing the impugned notification. Justifications offered, to say the least, is for too naive to be accepted. The reason set out does not carry the case of the State Government further at all. 13.However, Ms. Nisha Bagchi sought to distinguish the different notifications by stating that different notifications issued subsequently are in respect of different commodities and it is always open to the Government to change its policy. Undoubtedly it is so, but those factors per se would not discharge the burden of the Government in establishing as to what public interest governed the Government in reducing the extent of exemption. 14.We have already held that the Government has failed to discharge that burden. In the result, we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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