2000 (2) TMI 89 - SC - Customs

High Court overturns judgment, imposes 25% customs duty under Notification No. 40/87-Cus.

Union of India And Others Versus Ganesh Das Bhojraj

The appeal was allowed, and the High Court's judgment was set aside. The respondent was held liable to pay customs duty at 25% under Notification No. ... Whether it is necessary that the publication of notification should be proved to have been brought to the knowledge of the accused? Whether or not mens rea? Held that:- The case at hand is one where through the writ petition filed by the respondent before the High Court the liability to pay customs duty at the rate of 25 per cent. of the value of the goods was sought to be avoided and the goods were sought to be released from detention of the customs authorities. In such a case the publication of notification in the Government Gazette in the manner contemplated by section 25(1) of the Customs Act would be enough to import the liability to pay customs duty without regard to the enquiry into the fact whether the notification had actually come to the knowledge of the importer or not. It is not the respondent's case that the relevant Gazette has been published ante-dated. What will be the impact of publication in the Government Gazette though the Gazette in spite of having been published was not available to be seen by the persons affected when criminal consequences are sought to be inflicted---is a question which should in my opinion be left open to be gone into in an appropriate case. Non-availability of the Gazette carrying the notification may provide foundation for a defence plea of innocence where mens rea is an ingredient of offence committed by breach of notification. Where mens rea is not an ingredient, want of circulation of the Gazette may still be a reason for leniency in punishment. These are the questions which need to be left open. Issues Involved:1. Conflict in the ratio of decisions in previous cases.2. Validity of customs duty levy based on the publication of notification.3. Interpretation of Section 25 of the Customs Act, 1962.4. Impact of the publication of notification in the Official Gazette.5. Applicability of the law to civil and criminal liabilities.Detailed Analysis:1. Conflict in the Ratio of Decisions in Previous Cases:The court observed a conflict in the ratio of decisions in the cases of Pankaj Jain Agencies v. Union of India [1994] 5 SCC 198, Collector of Central Excise v. New Tobacco Co. [1998] 109 STC 376, and I. T. C. Limited v. Collector of Central Excise, Bombay [1996] 5 SCC 538. It was deemed appropriate for a larger Bench to hear the appeal to resolve this conflict.2. Validity of Customs Duty Levy Based on the Publication of Notification:The respondent imported green beans and filed for clearance free of duty based on an exemption notification. However, an amendment levying a 25% duty was issued just before the filing. The High Court of Bombay initially ruled in favor of the respondent, but the Supreme Court set aside this judgment, holding that the notification was validly published and enforceable.3. Interpretation of Section 25 of the Customs Act, 1962:Section 25(1) empowers the Central Government to exempt goods from customs duty via notification in the Official Gazette. The court held that the notification under Section 25 becomes operative upon its publication in the Official Gazette, without requiring further publication or availability to the public.4. Impact of the Publication of Notification in the Official Gazette:The court emphasized that publication in the Official Gazette is the established and sufficient method to bring a rule or subordinate legislation to the notice of the public. This was supported by precedents such as Mayer Hans George [1965] 1 SCR 123 and B. K. Srinivasan v. State of Karnataka [1987] 1 SCC 658. The court rejected the argument that the notification must be made available to the public beyond its publication in the Gazette.5. Applicability of the Law to Civil and Criminal Liabilities:The judgment clarified that the principles laid down apply primarily to civil liabilities. For criminal liabilities, especially where mens rea (intent) is an essential ingredient, the knowledge of the notification may be relevant. The court distinguished between cases imposing civil liabilities and those involving criminal liabilities, where the lack of knowledge of a notification might influence the outcome.Conclusion:The appeal was allowed, and the High Court's judgment was set aside. The respondent was held liable to pay customs duty at 25% under Notification No. 40/87-Cus., dated February 4, 1987. The court affirmed that the notification became effective upon its publication in the Official Gazette and did not require further dissemination to be enforceable. The judgment also highlighted the distinction between civil and criminal liabilities concerning the publication and knowledge of notifications.