1995 (1) TMI 87 - HC - Customs

Court dismisses challenge to Customs Act provision, lacks jurisdiction for relief. Certificate request denied.

The court dismissed the writ petitions challenging the constitutionality of Section 15(1)(b) of the Customs Act, 1962 and related notifications. The ... Writ Jurisdiction - Territorial jurisdiction Issues:1. Constitutionality of Section 15(1)(b) of the Customs Act, 1962 and related notifications.2. Interpretation of Section 46 and application of Section 15(1)(b) of the Customs Act.3. Lack of territorial jurisdiction and existence of an effective alternative remedy.4. Dispute regarding the liability for payment of auxiliary duty under Section 15 of the Act.5. Jurisdiction to decide the constitutionality of Section 15(1)(b) of the Act.Analysis:Constitutionality of Section 15(1)(b) and related notifications:The petitioners, Public Limited Companies importing scrap materials, challenged the constitutionality of Section 15(1)(b) of the Customs Act, 1962 and notifications dated 15-12-1990. They sought a declaration that these provisions are invalid and demanded the quashing of the increased auxiliary duty demand. The controversy revolved around the interpretation of Section 46 and the application of Section 15(1)(b) concerning the rate of duty for goods cleared from a warehouse. The petitioners argued that the goods were imported for 'home consumption,' invoking Section 15(1)(a) or contended that Section 15(1)(b) was unconstitutional if held applicable.Interpretation of Section 46 and application of Section 15(1)(b):The case involved goods imported by the petitioners for processing and manufacture in their Raipur factories. The dispute centered on whether the goods were intended for 'home consumption' under Section 46 or cleared from a warehouse under Section 68, triggering the application of Section 15(1)(b) for duty determination. The demand for enhanced auxiliary duty arose due to the removal of goods from the warehouse after 15-12-1990, leading to a legal interpretation conflict between the petitioners and the respondents.Lack of territorial jurisdiction and alternative remedy:The respondents raised preliminary objections concerning territorial jurisdiction and the availability of an alternative remedy. Despite the existence of an alternative remedy, the court decided not to dismiss the writ petitions considering the interim orders, bank guarantees, and goods clearance. The issue of territorial jurisdiction under Article 226(2) of the Constitution was crucial in determining the court's authority to issue writs.Dispute regarding liability for auxiliary duty:The dispute primarily focused on the liability for payment of auxiliary duty under Section 15 of the Customs Act. The court analyzed the factors related to the import of goods, the application of duty rates, and the location of the cause of action to ascertain the jurisdictional scope of the case.Jurisdiction to decide constitutionality of Section 15(1)(b):The court addressed the petitioners' argument regarding the court's jurisdiction to decide the constitutionality of Section 15(1)(b) of the Act. It was emphasized that a decision on the disputed provision's applicability was necessary before adjudicating its constitutionality. The court concluded that since the cause of action and the applicability of the provision were outside its territorial jurisdiction, it could not rule on the constitutionality issue.In the final judgment, the court dismissed the writ petitions due to the lack of territorial jurisdiction to grant appropriate relief, emphasizing that the cause of action arose outside its jurisdiction. The court also rejected the request for a certificate under Article 134A and Article 132 of the Constitution, stating that no substantial question of law on the interpretation of the Constitution was involved in the case.