2012 (10) TMI 234 - HC - Customs

Notification Date Determines Duty: Court Upholds Tariff Classification

RUCHI SOYA INDUSTRIES LTD. Versus UNION OF INDIA

RUCHI SOYA INDUSTRIES LTD. Versus UNION OF INDIA - 2012 (281) E.L.T. 406 (Kar.) Issues Involved:1. Applicability of Notification No. 38/2002-Cus. (N.T.), dated 13-6-2002 to the imported goods.2. Determination of the relevant date for calculation of duty.3. Validity and applicability of the Notification's publication date.4. Classification of goods under Chapter 15 of the Customs Tariff Act, 1975.5. Discrimination in the fixation of tariff values for certain goods.6. Legislative power to prescribe and modify tariffs.7. Liability for differential duty and interest.Issue-wise Detailed Analysis:1. Applicability of Notification No. 38/2002-Cus. (N.T.), dated 13-6-2002:The petitioners sought a mandamus declaring that the Notification No. 38/2002-Cus. (N.T.), dated 13-6-2002, was not applicable to their shipment of crude palmolein. The court found that the notification was effective from the date of its publication, i.e., 13-6-2002, and thus applicable to the shipment that arrived on the same date.2. Determination of the Relevant Date for Calculation of Duty:The petitioners contended that the relevant date for duty calculation should be the date of the Bill of Entry, which was 12-6-2002. However, the court concluded that, according to Section 15 of the Customs Act, 1962, the Bill of Entry is deemed to have been presented on the date of the arrival of the goods, i.e., 13-6-2002, making the new tariff applicable.3. Validity and Applicability of the Notification's Publication Date:The petitioners argued that the notification was published after 12.00 noon on 13-6-2002 and only made available to the public on 14-6-2002. The court referred to the precedent set in Union of India v. Ganesh Das Bhojraj, which established that publication in the Official Gazette is sufficient for a notification to be effective. Therefore, the notification was considered effective from 13-6-2002.4. Classification of Goods under Chapter 15 of the Customs Tariff Act, 1975:The petitioners relied on the Param Industries Limited case, arguing that the entire Chapter 15 should be treated as a single class of goods. The court disagreed, stating that each heading under Chapter 15 deals with distinct classes of goods. Consequently, different tariffs can be prescribed for different headings within the chapter.5. Discrimination in the Fixation of Tariff Values for Certain Goods:The petitioners claimed that the fixation of tariff values only for some goods under Chapter 15 was discriminatory. The court noted that the Customs Valuation Rules, 1988 (and the 2007 Rules) allow for different tariff values for different classes of goods. Therefore, the fixation of different tariffs for Palmolein or Palm oil was not discriminatory or violative of Article 14 of the Constitution of India.6. Legislative Power to Prescribe and Modify Tariffs:The court affirmed that the Parliament and the appropriate authorities have the power to prescribe and modify tariffs for different classes of goods under the Customs Tariff Act, 1975. This power includes the ability to set and adjust tariffs to regulate the importation of commodities and balance domestic market prices.7. Liability for Differential Duty and Interest:The court dismissed the petitions, holding that the petitioners were liable to pay the differential duty as per the Notification dated 13-6-2002. The court also imposed costs of Rs. 25,000 on each petition and directed the petitioners to deposit the shortfall of the duty along with interest at the rate of 12% per annum within sixty days from the judgment date.Conclusion:The court concluded that the Bill of Entry is deemed to have been presented on 13-6-2002, making the Notification dated 13-6-2002 applicable to the subject shipment. The classification of goods under Chapter 15 allows for different tariffs for different headings, and the legislative power to prescribe and modify tariffs was upheld. The writ petitions were dismissed with costs, and the petitioners were directed to pay the differential duty and interest.