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TMI Blog2014 (2) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... goods was USD 370 per metric tonne. 3. Part of the goods arrived at Jamnagar on 2-9-2002. The company thereupon filed three bills of entries No. 371, 372 and 373 all of 2-9-2002 before the customs authorities at Jamnagar for a total quantity of 1250 metric tonnes for home consumption. The company declared the CIF value of the goods on the basis of the contracted price. As per the company, assessment of customs duty and additional duty would be based on the value so declared in the bills of entries. The respondent authorities, however, insisted on collection of duty on the basis of the tariff value fixed by the respondents under a notification dated 2-9-2002 (hereinafter to be referred to as 'the notification of 2002') issued in exercise of powers under Section 14(2) of the Customs Act, 1962 ('the Act', for short). 4. Such dispute was not peculiar to the present petitioners and the Department. Several importers across the country had similar disputes. Various petitions were filed before different High Courts. Since the petitioners were not willing to pay the duties on the basis of the tariff value fixed under notification dated 2-9-2002 and since the Department was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was observed that when it appears to a Single Judge or a Division Bench that there are conflicting decisions of the same court or there are some decisions of other High Courts which are strongly persuasive, and take a different view from the view which prevails in his or their High Courts, or that a question of law of importance arises in the trial of a case, the Judge or the Bench passes an order that papers be placed before the Chief Justice of the High Court with request to form a Special or Full Bench. (ii) In the case of Damodar J. Malpani v. Collector of Central Excise reported in 2002 (146) E.L.T. 483 (S.C.). (iii) In the case of Unipatch Rubber Ltd. v. Commissioner of Central Excise, Bhopal reported in 2011 (272) E.L.T. 340 (S.C.). 5.1 With respect to the substantive challenge to the two notifications raised in the petitions, the counsel raised the following contentions :- (1) that the notification of 2002 was never published in the Official Gazette on 2-9-2002. The petitioners filed bills of entries on 2-9-2002. Since on such date, the notification of 2002 was not gazetted, the same cannot be made applicable to these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and Others reported in AIR 2001 SC 2512 wherein finding that the requirement of placing the notification under Parliament was not satisfied, the Apex Court held that such notification was invalid. (4) (a) The counsel also contended that sub-section (2) of Section 14 of the Act authorises the Central Board of Excise and Customs ('the Board', for short) if it is satisfied that it is necessary or expedient to do so to fix tariff value by issuance of a notification having regard to the trend of the value of such or like goods. According to the counsel, the requirement for issuance of such a notification would be the satisfaction of the Board that it was necessary or expedient to fix the tariff value and that the same should be done having regard to the trend of the value of such or like goods. According to the counsel, in the present case, both these requirements are not satisfied. He submitted that from the record, it nowhere emerges that the Board having regard to the trend of the value of such or like goods was satisfied that the tariff value of the goods in question was required to be fixed. (b) On the same ground the counsel also questioned the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners of such goods was USD 370 per metric tonne which was much lower than the tariff value fixed by the Central Government. 6.1 The counsel also relied on the affidavit dated 20-8-2012 filed by one Shri Manish Kumar Chavda, Assistant Commissioner of Customs, Jamnagar in which the details of publication of the notification of 2002 in Official Gazette and its publication for general public consumption on the very same day has been highlighted. 6.2 Counsel relied on a decision of Karnataka High Court dated 20-1-2012 [2012 (281) E.L.T. 406 (Kar.)] in case of Ruchi Soya Industries i.e. the present petitioner No. 1 company in which a notification issued by the Central Government dated 13-6-2002 revising the tariff value of these very goods to USD 411 per metric tonne came up for consideration. In such decision, the High Court noticed the earlier decision in the case of Param Industries (supra) but proceeded to dismiss the petitions upholding the validity of the notification dated 13-6-2002. 6.3 Counsel relied on the decision of Apex Court in the case of Union of India v. Ganesh Das Bhojraj reported in 2000 (116) E.L.T. 431 (S.C.) in which the Apex Court held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench. In this context, it was observed that a Single Judge does not by himself refer the matter to the Full Bench. He only refers it to the Chief Justice to constitute a Full Bench for hearing the matter. We fail to see how the said decision would support the contention of the petitioners. Likewise, the decision in case of Damodar J. Malpani (supra) pertains to requirement of uniformity in judicial approach. In case of Unipatch Rubber Ltd. (supra), the decision in case of Damodar Malpani was referred to and relied upon in the context of requirement of uniformity in classification of goods. 10. We may now examine the challenge of the petitioners to the validity of the two notifications. With respect to the publication of the notification of 2002 in the Official Gazette, we notice that in the affidavit dated 20-8-2012 filed by Shri Manish Kumar Chavda, Assistant Commissioner of Customs, Jamnagar, he stated that "It is, therefore, submitted that the documents and facts clearly show that the notification was issued by the C.B.E. & C. on 2-9-2002, was sent for publication in the Official Gazette on 2-9-2002 itself and the same was received by the Government Press for publication i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emsp;We may firstly notice that the requirement of publication of the notification by the Directorate of Publicity and Public Relations of the Board as required in clause (b) of sub-section (4) is in relation to the notifications issued by the Government under sub-section (1). We are doubtful whether such statutory requirement can be rigidly insisted upon with respect to the Board's notification under Section 14(2) of the Act. We also find that the Apex Court in case of B.K. Srinivasan (supra) observed in context of requirement of publication of delegated legislation that the same must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It was observed that it will then take effect from the date of such publication or promulgation. Where the parent statute prescribes the mode of publication or promulgation that mode must be followed. Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable. If the subordinate legislation does not prescribe the mode of publication or if the subordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been received by the Manager, Government of India Press, New Delhi on the very day, i.e. on 2-9-2002 as evident on the letter itself, a copy of which is produced by the petitioner at page 80. It was also specifically stated in the letter that "MOST IMMEDIATE" and "BY SPL MESSENGER". It is, therefore, submitted that the documents and facts clearly show that the notification was issued by the C.B.E. & C. on 2-9-2002, was sent for publication in the Official Gazette on 2-9-2002 itself and the same was received by the Government Press for publication in the Official Gazette on 2-9-2002. The allegation of the petitioner that the Notification No. 60/2002-Cus. (N.T.), dated 2-9-2002 was published in the Official Gazette on or after 3-9-2002 is far from truth." 16. We are satisfied that the respondents have discharged their burden to show that the notification in question was also published in the Government of India Press on the same day in addition to publishing the same in the Official Gazette on 2-9-2002. 17. We may now examine the challenge to the notification on the ground that the same was not placed before both the Houses of Parliament as required under Section 159 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (1) shall be laid before each House of Parliament, if it is sitting and if it is not sitting, within seven days of its re-assembly and the Central Government shall seek the approval of the Parliament to the notification by a resolution within a period of 15 days beginning with the day on which the notification is so laid before the House of the People. It can thus be seen that the requirement in such case was substantially different and more stringent. It required the notification to be placed before both the Houses of Parliament and further required the Central Government to seek approval of the Parliament to such notification by resolution moved within 15 days from the date of laying such notification before the House of the People. It was in this context the Apex Court noticed that nothing was produced on record to show that such a resolution was moved by the Government. The notification was, therefore, declared invalid for not fulfilling such a requirement. 20. In the present case, the statutory language is substantially different. Section 159 of the Act requires the laying of the notification before each House of the Parliament and further provides that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sabha. On file we also have a statement of Notification to be laid on the table of both Houses of Parliament and the proforma to be attached to the OM forwarding papers to be laid on the table of Lok Sabha/Rajya Sabha. We have no reason to believe that such Notification was not laid before both Houses of Parliament as required under Section 159 of the Act. We are satisfied that such requirement was fulfilled. 22. We now come to the challenge of the petitioners on substantive grounds to these notifications. Essentially, there are two limbs to such challenge. Firstly that the requirements of Section 14(2) of the Act have not been fulfilled and secondly that providing tariff value in case of some of the edible oils would be opposed to Article 14 of the Constitution. 23. Before dealing with such challenge, we may briefly take note of certain decisions touching the question of vires of delegated legislation. It would be necessary because undoubtedly the impugned notifications which are issued under Section 14(2) of the Act form a class of delegated legislation. While examining vires of a statutory provision, the court starts with the presumption of constitutionality. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer, to say the least, not unjust on the face of it and the onus therefore cannot shift from where it originally lay." 24. Such presumption of constitutionality is available also in case of a delegated legislation. In case of St. Johns Teachers Training Institute v. Regional Director, National Council for Teacher Education and Another reported in (2003) 3 SCC 321, the Apex Court observed that "it is well-settled that in considering the vires of subordinate legislation, one should start with the presumption that it is intra vires and if it is open to two constructions, one of which would make it valid and the other invalid, the courts must adopt that construction which makes it valid and the legislation can also be read down to avoid its being declared ultra vires." Such principle of presumption of constitutionality in case of delegated legislation is consistently followed in several decisions. It is not necessary to refer to all such decisions on this issue. 25. It is equally well-settled that the delegated legislation does not carry same level of immunity as that of the Act of the Parliament or the State Legislatures. In Indian Express Newspapers (Bombay) Private Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which traces its source to the parent Act must, therefore, conform to the limitations of exercise of such powers provided in the Act itself. 27. In the above context, therefore, it would certainly be necessary that the impugned notifications fulfil the requirements of discharge of the power by the Board as provided under Section 14(2) of the Act. We have noticed that Section 14(2) of the Act empowers the Board, by issuance of notification, to provide tariff value when it is satisfied that having regard to the trend of the value of such or like goods, it is necessary so to do. Since such aspects were not elaborately met with by the respondents in their affidavit, we had perused the documents produced before us pertaining to issuance of both the notifications. We find that before issuance of such notifications particularly the notification of 2001, a detailed exercise was carried out. From the documents it appears that the issue arose out of the investigation by the Revenue Intelligence of large scale price rigging of certain kind of edible oils for evasion of duty. The Director of Revenue Intelligence had carried out country-wide search operations covering various importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent price fluctuations. Information received from various Commissionerates was analysed and compared to international prices given by Oil World Weekly, comparisons were carried out and only thereupon the decision to amend the tariff value came to be taken which ultimately culminated into issuance of notification dated 2-9-2002. 29. We may remind ourselves that we are examining challenge to a piece of legislation albeit a delegated legislation. Such legislation is in the field of taxation. Though it is open for the court to examine vires thereof on the well recognised principles on which a delegated legislation can be called in question, undoubtedly, neither the sufficiency of the reasons which prompted the competent authority to issue such a notification nor the wisdom of the policy would be open for this court to examine. In case of Maharashtra State Board of Secondary and Higher Secondary Education and Another v. Paritosh Bhupeshkumar Sheth and Others reported in 1984 (4) SCC 27, the Apex Court in the context of the challenge to the Maharashtra Secondary and Higher Secondary Education Board's regulations observed that the question whether a particular piece of delegated leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been fixed only in respect of some of the goods viz., Crude Palm Oil, RBD Palmolein classified under chapter sub-heading 15.11 constituting only a part of the class of goods being vegetable oils under chapter Heading 15 of the Tariff Act. Clearly a large number of other vegetable oils such as Sunflower, Safflower, Cotton Seed, Soyabean, all of which form part of the same class of goods as the goods notified vide the impugned Notification No. 36/2001-Cus. (N.T.), dated 3-8-2001, have been left out. Such a discretionary fixation of trend value for only part of class of goods is not authorised by statute and in the absence of any reasonable explanation and materials placed on record to satisfy the Court justifying that the same has been issued after due application of mind and objective satisfaction, the notification is not sustainable." 32. With respect, we are unable to persuade ourselves to adopt such a line. We say so because of the following reasons :- 32.1 Article 14, as is well-settled, prohibits class legislation but not reasonable classification. In other words, Article 14 would strike at a law which will apply only to a particular class of persons or thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other vegetable oils such as Sunflower, Saffola, Cottonseed, Soyabean etc. have been left out. 32.3 We do not see how the entire Chapter Heading 15 can be stated to be forming a homogeneous class of goods with respect to which further sub-classification is not permissible. The Chapter itself contains several sub-headings and classifications. As we already noted, the rule making authority found it necessary to fix tariff value in case of some of these goods since the price rigging was found prevalent. Simply because certain items which fall under Chapter 15 were not included for such exercise, in our view, cannot be stated to be violative of Article 14 of the Constitution. Essentially, we do not think that edible oils as a class form one homogeneous category of goods in which further sub-classification was not permissible. 33. Additionally, we also note that Karnataka High Court itself in subsequent decision in the case of Ruchi Soya Industries (supra) examined validity of notification dated 13-6-2002 by which also the tariff value specified in the notification of 2001 came to be amended. The petitioners therein had placed reliance on the decision of the High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve of Article-14 of the Constitution of India. Section 14(2) which was amended by the Finance Act, 2007, specifically contemplates the actual price of the commodities at any given point of time. Therefore, Chapter-15 of the Customs Tariff Act, 1975 cannot be dealt with as one composite subject, and each of the entries mentioning a class of goods and their cleavages or fragments or divisions can be dealt with separately and distinctly. We think it proper to reiterate that the definition contained in the Customs Valuation Rules, 1988 was not brought to the notice of the Division Bench which decided Param Industries, as is manifestly evident from a perusal thereof. 10. In view of this analysis, we find no merit in the second argument advanced by learned counsel for the petitioner that the trend value of the goods cannot be prescribed separately for each of the several subject headings contained in Section-III, Chapter-15 of the Customs Tariff Act, 1975. Accordingly, we hold that prescribing different tariffs only for Palmolein or Palm oil covered by Heading No. 15.11 is not violative of Article-14 of the Constitution of India. The position stands amply clarified by the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment would take diverse factors for formulating the policy in the overall large interest of the economy of the country. When the Government is satisfied that change in the policy was necessary in the public interest it would be entitled to revise the policy and lay down a new policy." 35. Before closing, we may record that Shri Dipen Desai for the petitioners had requested that the Government documents be shared with the petitioners. If the documents were being summoned at the request of the petitioners, we would have surely granted such a request. However, these documents were summoned at our request. The Government counsel conveyed to us the earnest request of the authorities to maintain confidentiality of such documents. We had called for such documents to verify certain factual aspects for our consideration and to examine satisfaction of certain requirements particularly when the reply of the Government of India was not elaborate on such aspects. We also record that the petitioners had, at a fairly advanced stage, also widened the scope of the petitions by placing additional material to contend that the notification of 2002 was not sent for publication in Government Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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