2002 (9) TMI 115 - HC - Customs

Customs 'trend values' hike for select vegetable oils: notification held inoperative and discriminatory; additional duty demand quashed.

The dominant issues were whether the impugned customs notification enhancing assessable 'trend values' became operative on 3-8-2001 for levy of additional ... Import and export of various edible oils - Date of effect - Rate of duty - Notification - change in the rate of tariff was not brought to the notice of the petitioners and even the customs authorities were not aware of the said change - Whether the Notification No. 36/2001-Cus. (N.T.), dated 3-8-2001 was published in the Official Gazette on 3-8-2001 itself, as contended by the Revenue authorities or was it notified on 6-8-2001 or thereafter, as stated by the petitioners and further whether the notification has been issued within the terms and after meeting the requirements of Sec. 14 (2) of the Customs Act. - HELD THAT:- It is true that Gazette notification is admissible being the official record evidencing public affairs and the Court is required to presume its contents as genuine under Sections 35 and 38 read with Section 81 of the Evidence Act unless contrary is proved. Despite directions the respondents have not chosen to produce the records to show that averment made in the writ petitions is false and that notification was published on 3-8-2001 itself. It is clear from the averments made in the affidavit dated 30-8-2002 and Annexure R1 produced along with the affidavit that Annexure R1 is not the Gazette notification, it is only a letter addressed to the Manager, Government of India Press, Mayapuri, New Delhi to publish the notification dated 3-8-2001 and no records have been produced to show the exact date on which notification was published in the Gazette. Annexure R1 would only reveal that the notification was forwarded to the Manager, Government of India Press to publish the same in the Official Gazette and there is no record further to show that pursuant to the said letter Gazette notification was published on 3-8-2001 itself. But on a perusal, it is clear from Annexure R1 that the date 6-8-2001 has been overwritten as 3-8-2001 and that apart in the letter sent to the Government of India Press on 3-8-2001 the said overwriting has not been attested or explained in the affidavit. Be that as it may. What is produced is the xerox copy of the letter and therefore the said letter is not helpful to show that it was published in the Gazette on 3-8-2001 itself in the Gazette on the same day and on the other hand it would help the petitioners' contention. Merely on the basis of notifying in Website and showing a letter addressed to the Manager, Government of India Press on 3-8-2001, without actual publication of the Notification in the Gazette, it cannot be presumed that there was proper publication as stated. So far as the Order of the Madras High Court in Writ Misc. Petition Nos. 22829 to 22831/2001 and connected matters is concerned, it is not helpful as it is an interim order. Further, in that case the learned single Judge prima facie came to the conclusion that 'the relevant date for the assessment of the duty was only 5-8-2001, when admittedly the date on which the entry inwards of the vessel was 5-8-2001'. However, in other cases interim order was granted with some conditions. So the notification is liable to be set aside. We are constrained to hold that contrary is proved and presumption of publication on 3-8-2001 is not available to the respondents in this case and notification dated 3-8-2001 did not acquire the elements of operativeness and enforceability on 3-8-2001 and hence additional duty imposed by notification could not be levied on 3-8-2001 and hence petitioners are entitled to succeed on this ground. Under the impugned Notification No. 36/2001-Cus. (N.T.), dated 3-8-2001, the trend values 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 discriminatory 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. Writ Petitions are allowed. The petitioners would be entitled to cancellation of security and bank guarantee furnished as per the conditions of the interim order and for the reasons stated above. The impugned notification is set aside and the demand in consequence of the said notification is also set aside. Issues: (i) Whether Notification No. 36/2001-Cus. (N.T.), dated 3-8-2001, was published in the Official Gazette on 3-8-2001 and therefore operative from that date or was published on or after 6-8-2001; (ii) Whether the Notification dated 3-8-2001 fixing tariff values only for certain vegetable oils (part of a class) is permissible under Section 14(2) of the Customs Act, 1962 or is discriminatory and therefore invalid.Issue (i): Whether the impugned notification acquired operativeness on 3-8-2001 by publication in the Official Gazette or only on or after 6-8-2001.Analysis: Records and available material were examined to determine date of publication and availability for sale; official presumption of Gazette contents applies unless contrary is proved; documents produced by petitioners and publication-sale records indicate availability for public sale from 6-8-2001 and no adequate record was produced by revenue to prove publication on 3-8-2001; statutory amendments to Section 25 indicate notification is effective from date of issue for publication and when offered for sale by the designated authority.Conclusion: The notification was not published or offered for sale on 3-8-2001 and did not acquire operativeness until on or after 6-8-2001; conclusion is in favour of the assessee.Issue (ii): Whether fixing tariff values only for certain items within the class of vegetable oils without fixing values for other items of the same class is authorised by Section 14(2) of the Customs Act, 1962.Analysis: Section 14(2) permits fixation of tariff values for any class of imported goods having regard to trend of value of such or like goods; the impugned notification fixed trend values only for certain items (Crude Palm Oil, RBD Palmolein) which constitute part of the broader class of vegetable oils; no sufficient materials or reasons were placed on record to justify selective fixation for part of the class and no objective satisfaction was demonstrated to support discrimination; absent reasoned justification, selective fixation is not authorised by the statute.Conclusion: The notification is invalid as it effects discriminatory fixation of tariff values for part of a class of goods; conclusion is in favour of the assessee.Final Conclusion: The impugned notification is set aside, the consequential demand for differential duty is quashed, securities/bank guarantees furnished pursuant to interim orders are liable to be cancelled, and the writ petitions are allowed.Ratio Decidendi: A notification under the Customs Act becomes operative only when it is published and offered for sale by the designated authority on the date of issue for publication; statutory power to fix tariff values under Section 14(2) must be exercised for a class of goods as a whole and selective fixation for part of a class without adequate reasons is unauthorised and invalid.