1989 (3) TMI 245 - AT - Customs

Tribunal overturns fines and penalties, citing exception in Public Notice, effective date of notification

The Tribunal set aside the redemption fines and personal penalties imposed on the appellants regarding the validity of a Public Notice dated 6.10.1986. ... Letter of credit Issues Involved:1. Validity of the Public Notice dated 6.10.1986.2. Effective date of the Public Notice.3. Applicability of earlier judgments to the present case.4. Imposition of redemption fines and personal penalties.Detailed Analysis:1. Validity of the Public Notice dated 6.10.1986:The appellants imported Cinnamonum Zolyanicum (crude drug) and filed two bills of entry. They claimed clearance under OGL 6 item 37(4) of the Import-Export Policy 1985-88. The import of Darchini (Bark) was admissible under O.G.L. but was deleted by ITC Public Notice No. 121-ITC (PN)/85-88 dated 6th October 1986. The appellants contended that the application for LCs was made on 4th October 1986, but the LCs were issued on 6th October 1986. The Collector of Customs imposed redemption fines and personal penalties on the appellants.2. Effective date of the Public Notice:The primary issue was whether the Public Notice dated 6.10.1986, appearing in the Gazette of the same date, can be said to have been published on 6.10.1986 itself in the eye of law. The appellants argued that they came to know about the Public Notice on 9.10.1986 through the 'Financial Express'. The Tribunal referred to the judgment of the Madras High Court in Asia Tobacco Company Ltd. v. Union of India, which held that the effective date is the date of knowledge, not the date of the official gazette. Similar views were expressed by the Bombay High Court in GTC Industries Ltd. v. Union of India and the Tribunal in Gokaldas Harbhagwan Das v. Collector.3. Applicability of earlier judgments to the present case:The appellants argued that the matter is covered by an earlier judgment of the Tribunal in Gulab Impex Enterprises Ltd. v. Collector of Customs, New Delhi. The Tribunal noted that both sides agreed that the facts were similar to the Gulab Impex case. The Tribunal followed the earlier judgments, including those of the High Courts and the Supreme Court, which emphasized that the effective date of a notification is when it is made known to the public.4. Imposition of redemption fines and personal penalties:The Tribunal set aside the redemption fines and personal penalties imposed on the appellants. It held that the appellants could not be deprived of the benefit of the exception carved out in Para-3 of the Public Notice dated 6.10.1986, as they had entered into commitments with foreign suppliers by means of irrevocable Letters of Credit before the date of the Public Notice. The Tribunal directed the revenue authorities to give consequential effect to this order.Separate Judgments Delivered:[Order per: Harish Chander, Member (J)]: The appeals were allowed, and the impugned orders were set aside. The Tribunal directed the revenue authorities to give consequential effect to this order.[Per: P.C. Jain, Member (T)]: Following the judgment of the Tribunal in the case of Gulab Impex Enterprises, the appeals were allowed. No new points arose for consideration in these appeals.