TMI Blog2022 (11) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... made applicable to the bills of entry presented for home consumption before such Notification was uploaded. The Apex Court held in categorical terms that the revised rate of duty apply to bills of entry presented subsequent to uploading of Notification in e-Gazette form. It is quite clear that when Section 25 of the Act empowers the Central Government to exempt either totally or subject to certain conditions from the whole or any part of the customs duty leviable thereon by a Notification in the Official Gazette, it has also the powers to modify and cancel. It is also necessary to refer to the decision of RUCHI SOYA INDUSTRIES LTD THROUGH AUTHORIZED REPRESENTATIVE VERSUS UNION OF INDIA 2 OTHERS [ 2020 (9) TMI 422 - GUJARAT HIGH COURT] where the bills of entry dated 01.03.2018 and 02.03.2018 were filed under the exemption Notification No.50 of 2017-CUS on the ground that though the principal Notification No.50 of 2017 was amended by Notification No.29 of 2018-CUS dated 01.03.2018 but came to be published electronically on 06.03.2018. The customs department enhanced the custom duty and directed the petitioner to pay the differential duty amount. This Court needs to remind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of entry for home consumption and not 54% under Section 17(4) of the Act. Petition allowed. - R/SPECIAL CIVIL APPLICATION NO. 8057 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 8058 of 2019 - - - Dated:- 11-11-2022 - HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE GUPTA LAW ASSOCIATES ( 9818 ) for the Petitioner(s) No. 1 MR JITENDRA MOTWANI WITH MR PARITOSH R GUPTA ( 7583 ) for the Petitioner(s) No. 1 ADVOCATE NOTICE SERVED for the Respondent(s) No. 1 MR NIKUNT K RAVAL ( 5558 ) for the Respondent(s) No. 2,3 JUDGMENT ( PER : HONOURABLE MS. JUSTICE SONIA GOKANI ) 1. Issues involved are identical and therefore, both the petitions are being decided by a common judgment and order where the relevant facts for adjudication are essentially drawn from the Special Civil Application No.8057 of 2020. 2. By way of the present petition, the petitioner seeks following relief: 7 (A) Your Lordships may be pleased to issue a writ of certiorari, or a writ in the nature of certiorari or any other appropriate, writ order or direction quashing order of reassessment of bills of entry No.5407944 and 5407946 Annexu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of various details and then to pass a speaking order following the principles of natural justice. The delay is of 39 days in filing the appeal and as the appellate authority is not empowered to condone the delay, present petition has been preferred by the petitioner. 3.4 In case of PANOLI INTERMEDIATE (INDIA) PRIVATE LIMITED VS. UNION OF INDIA, reported in 2015(326) ELT 532 while interpreting pari materia provision under Central Excise Act, 1944, the Court has held that in exceptional cases where gross injustice is satisfactorily demonstrated, under Article 226 of the Constitution of India, the Court can exercise the power of the writ of certiorari. 3.5 It is specifically the case of the petitioner that adjudication by the authority of the bill of entry is in violation of the principles of natural justice and in contravention of provision of Section 17(5) of the Act. The delay is unintentional, it had continued to correspond with the customs department and therefore, it has not slept over its right and hence, this petition. 4. Affidavit-in-reply has been filed by the respondent Nos.2 and 3 questioning the very maintainability of the petition. In absence of any bre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of any of the fundamental rights guaranteed in Part III of the Constitution of India or any other constitutional provision. There is no third ground. 4.5 Legislative competence of Union of India for enacting any taxing statute is not to be doubted in view of Articles 246 and 248 of the Constitution of India read with Schedule VII List I, Entry No.97. It is,therefore, urged to dismiss the petition. 5. Affidavit-in-rejoinder is filed by the petitioner where all contentions have been denied. It is urged that the constitutional validity of Section 25(4) of the Act is not challenged in the present petition and the averments are completely misconceived. The assertion is that the Notification No.29/2018-CUS dated 01.03.2018 came into effect was on 01.03.2018. However, it has been digitally signed on 06.03.2018 and therefore, it cannot be said to have come into effect prior to the said date. The Gazette Notification of Government of India are being published only in soft copy by Office Memorandum No.O-17022/1/2015-PSP-I dated 30.09.2015. Section 8 of the Information Technology Act, 2000 ( the IT Act hereianfter) provides thus: SECTION 8: Publication of rule, regulation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid at 17.07 hours by a challan No.2021741695. 7.3 On 06.03.2018 Notification No.29 of 2018-CUS dated 01.03.2018 enhancing the rate of duty from 40% to 54% was digitally signed. On 07.03.2018 bill of entry No.5404574 was unilaterally reassessed to a higher rate of duty at 54% under Section 17(4) of the Act and the petitioner paid enhanced rate of duty of Rs.1,37,46,173/- under protest vide its letter dated 06.03.2018. 7.4 The petitioner also addressed a letter to the custom department for deciding its protest and for passing of speaking orders on 21.05.2018. Since order passed was not a speaking one, on 19.06.2018, the petitioner challenged the reassessment of the bill of entry before Commissioner of Appeal. On 21.01.2019, Commissioner of Appeal passed the order in appeal without going into the merit on the ground that he did not have power to condone the delay caused in filing the appeal under Section 128 of the Act as the same was filed after 90 days from the date of communication of order. 8. We have heard extensively the learned advocates on both the sides, who have extensively argued and relied on the following decisions in support of their respective submissions: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In compliance with the provisions of Section 8 of the Information Technology Act, 2000, it has been decided in consultation with Department of Legal Affairs to switch over to exclusive e-publishing of the Government of India Gazette Notification on its official website with effect from 1-10-2015 and to do away with the physical printing of Gazette Notification. The date of publishing shall be the date of e-publication on official website by way of electronic gazette in respect of Gazette notification. (emphasis supplied) 53. Thus far, this Court has not had to confront the question as to whether the shift from the analog to the digital for Gazette notifications has any bearing for ascertaining when they come into force. The judgments which dealt with the starting point for the enforceability of notifications were all concerned with circumstances in which such publication took place in the physical gazette. We are now required to determine if the shift to electronic gazettes has brought about a change in this position. 54. The High Courts have begun offering guidance on this score. The Delhi High Court in M.D. Overseas Industries v. Union of India [W.P. (C) 7838/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctronic gazette was considered by the Andhra Pradesh High Court in Ruchi Soya Industries vs. Union of India. (W.P.No.4533 and 4534 of 2019 decided on 28 September, 2019 (Andhra Pradesh High Court). The petitioner entered into a contract with its foreign suplier on 18 January, 2008 for the import of 9,500 Metric Tons of crude oil. The first consignment of 4000 metric tons was shipped by the supplier on 6 February, 2018 from Dubai. The petitioner filed two bills of entry for 2000 metric tons of crude oil on 1 March, 2018. They were assessed that day and levied with 30% customs duty and 10% social welfare surcharge. On the same date, a notification raised the basic customs duty from 30 to 44%. The petitioner filed four bills of entry for the remaining 2000 tons on 2 March, 2018 and argued that the revised rate was not applicable to it because the notification was published in the electronic gazette only on 6 March, 2018. The High Court agreed with the petitioner and held that the revised notification would come into force only after it was digitally signed by the competent official and uploaded and published in the official gazette. The relevant excerpts from page 41 of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. The import duty was paid pursuant to a notification which was in existence as on that date. A major quantity of the goods had been removed from the warehouse after the payment of duty. The importer was, however, informed that by a notification dated 3 August, 2001 (incidentally this was also the date the bill of entry was filed and goods were cleared) the tariff value had been raised to USD 372 per metric tonne and that the importer was liable to pay the difference in the tariff which was paid on the basis of the earlier notification. The respondent contested the demand on the ground that the notification raising the import duty had not come into effect on 3 August, 2001. The Division Bench of the High Court held that the notification was not published on 3 August, 2001 and must have been Gazetted only after the following weekend namely on 6 August, 2001 or thereafter; the Gazette issued containing notification was offered for sale only starting from 6 August, 2001; and that the mere publication of the notification on the website and the issuance of a letter to the Assistant Controller, Government of India (Press) was not sufficient for the notification to be operational and en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the elements of operativeness and enforceability. (emphasis supplied) The principles recognized in Pankaj Jain were re-iterated and affirmed by a three judge Bench of this Court in Union of India v. Ganesh Das Bhojraj [(2000) 9 SCC 461 = 2000 (116) E.L.T. 431 (S.C.).] which dealt with the enforceability of a notification under Section 25, prior to its Amendment by Act 21 of 1998 which inserted Section 25(4) and the requirement of 'offering for sale'. The Court separately noted that the newly introduced requirement of 'offering of sale' had prospective application. However, in the factual scenario concerning a notification governed by the pre-amended act, it upheld the principle that any additional requirement of publication can only be introduced by statute and the Court is bound by the applicable statutory scheme for determining enforceability. It noted: 11. In our view, as noted above, in Pankaj Jain Agencies case [(1994) 5 SCC 198] the Court directly dealt with a similar contention and after relying upon the decision in the case of Mayer Hans George (AIR 1965 SC 722: (1965) 1 Cri LJ 641 (1965) 1 SCR 123] rejected the same. That decision is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c form. As we have previously noted, Notification No. 5/2019 was uploaded in the e-gazette at a specific time and date and cannot apply to bills of entry which were presented on the customs automated EDI system prior to it, attracting the legal fiction set out in Regulation 4(2) of the 2018 Regulations. Therefore, Param Industries does not have any bearing on the case at hand. M. Retrospectivity 62. Section 8A of the Customs Tariff Act confers an emergency power upon the Central Government to increase import duties in respect of any article included in the first schedule . By the notification dated 16 February, 2019, the Union Ministry of Finance in the Department of Revenue introduced a distinct tariff item- 9806 00 00 encompassing all goods originating in or exported from the Islamic Republic of Pakistan for which a rate of duty of 200 per cent has been prescribed. The exercise of the power under Section 8A is contingent on the satisfaction of the Central Government that (i) the duty on any article in the first schedule should be increased; and (ii) that circumstances exist which render it necessary to take immediate action. The Central Government in the exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when they are issued in pursuance of an enabling statutory framework, are subject to the statute. Delegated legislation does not lose its character even when it has the same force and effect as if it is contained in the statute. This is a settled position of law. In a decision which was rendered in 1961 by a Constitution Bench of this Court in Chief Inspector of Mines v. Lala Karam Chand Thapar [AIR 1961 SC 838], the principle of law was formulated in the following terms: 20. The true position appears to be that the rules and regulations do not lose their character as rules and regulations, even though they are to be of the same effect as if contained in the Act. They continue to be rules subordinate to the Act, and though for certain purposes, including the purpose of construction, they are to be treated as if contained in the Act, their true nature as subordinate rule is not lost.... In K.I. Shepard v. Union of India [(1987) 4 SCC 431), a two judge Bench of this Court held that the power to frame a scheme under Section 45 of the Banking Regulation Act, 1949 was not legislative in character but an administrative function. This Court observed : 9...But is the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a notification once issued will have force and effect anterior in time. The provisions of sub-sections (3) and (4) of Section 7 of the Customs Tariff Act bring to bear legislative oversight and supervision over the power which is entrusted to the Central Government under Section 8A. That however does not lead to the inference that a notification under Section 8A has retrospective effect. Plainly, a notification enhancing the rate of duty under Section 8A has prospective effect. A rule framed by the delegate of the legislature does not have retrospective effect unless the statutory provision under which it is framed allows retrospectivity either by the use of specific words to that effect or by necessary implication. In Hukum Chand v. Union of India [(1972) 2 SCC 601], a three judge Bench of this Court held that: 8... The extent and amplitude of the rule-making power would depend upon and be governed by the language of the section. If a particular rule were not to fall within the ambit and purview of the section, the Central Government in such an event would have no power to make that rule. Likewise, if there was nothing in the language of Section 40 to empower the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to make retrospective rules. The whole purpose of laying on the table of the legislature the rules framed by the State Government is different and the effect of any one of the three alternative modes of so placing the rules has been explained by this Court in Hukam Chand v. Union of India ((1972) 2 SCC 601, 606: (1973) 1 SCR 896, 902]. This precisely is the principle which applies in construing whether the power which is conferred by Section 8A of the Customs Tariff Act is retrospective. The provisions of sub-sections (3) and (4) of Section 7, which are made applicable by sub-section (2) of Section 8A, are to ensure Parliamentary oversight. But that does not enable the Central Government to exercise the power under section 8A with retrospective effect. In Federation of Indian Minerals Industries v. Union of India [(2017) 16 SCC 186], a three judge Bench of this Court formulated the principles on the subject. Justice Madan B. Lokur observed that the power to frame subordinate legislation is not retrospective unless it is authorized expressly or by necessary implication by the parent statute. The Court observed: 26...The relevant principles are: (i) The Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT, Bihar [(1947) FCR 116 at 126] and of this Court in A.V. Fernandez v. State of Kerala [1957 SCR 837 at para 39] and Deputy CTO v. Sha Sukraj Peerajee ((1967) 3 SCR 661 at para 5]. 67. In the present case the twin conditions of Section 15 stood determined prior to the issuance of Notification No. 5/2019 on 16 February, 2019 at 20:46:58 hours. The rate of duty was determined by the presentation of the bills of entry for home consumption in the electronic form under Section 46. Self-assessment was on the basis of rate of duty which was in force on the date and at the time of presentation of the bills of entry for home consumption. This could not have been altered in the purported exercise of the power of re-assessment under Section 17 or at the time of the clearance of the goods for home consumption under Section 47. The rate of duty which was applicable was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 read with Regulation 4(2) of the Regulations of 2018. The power of re-assessment under Section 17(4) could not have been exercised since this is not a case where there was an incorrect self-assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial duty amount. 10.1 Similar questions arose for consideration before the High Court of Andhra Pradesh in the case of M/s. Ruchi Soya Industries Ltd.(supra) and the Court after considering at length all provisions held that the Notification was not signed by the competent authority on the date of presentation of ex-bond bill of entry before the competent authority for release of imported goods for human consumption and therefore, the collection of enhance customs duty on the imported goods belonging to the petitioners prior to the publication of Notification in electronic mode, is an illegality. The petitioners were thus, held entitled to claim refund of the amount paid in excess of 30% of the original rate of customs duty as on the date of presentation of ex bond bills of entry for clearance of import goods of human consumption. 10.2 This Court in case of Ruchi Soya Industries Ltd (supra) had questioned as to whether the Notification No.29 of 2018 dated 01.03.2018 would be effective from the date of issue or from the date of publication in e-Gazette, where the Court held that the Notification is deemed to have come into force on the date of signing of the Notification by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once the Gazette is admissible being the official record evidencing public affairs. 13. This Court needs to remind itself of the extensive way of consideration of the issue of Notification in e-Gazette with the advent of IT Act and particularly, Section 8 of the IT Act. The Ministry of Urban Development discontinued the practice of physical printing and replaced it with electronic Gazette on 30.09.2015 in compliance with the provision of Section 8 of the IT Act. Thus, it switched over to exclusive e-publishing of the Government of India Gazette Notification on its official website with effect from 01.10.2015 and has done away with the physical printing of Gazette Notification. The date of publishing shall be the date of epublication on official website by way of electronic Gazette in respect of Gazette Notification. Thus the Apex Court has already dealt with the issue as to whether the shift from the analog to the digital for Gazette notifications has any bearing for ascertaining as to when the same has come into force and whether this switching over to the digital manner of publication has brought about a change in this position has resulted into the Court concluding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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