On the date of filing Bill of Entry, customs duty was increased by a notification but not published in official gazette.
Whether
the importers are liable to pay increased rate of duty as per the Notification
issued under Section 25(1) of the Customs Act on the same day on which the
bills of entry were field ?
The
notification was made available in official gazette in electronic form
subsequently, in view of the provisions of Section 25(4) of the Customs Act as
amended by the Finance Act, 2016.
Whether
the provisions of Section 25(4) of the Customs Act, 1962 as amended by the
Finance Act, 2016 is arbitrary, illegal, ultra vires and unconstitutional or not?
The above
questions came for the consideration before the Andhra Pradesh High Court in
M/S RUCHI SOYA INDUSTRIES LTD. VERSUS UNION OF INDIA and has declared by
Hon’ble High Court that Section 25(4) of the Customs Act is contrary to Section
25(1)(2A) and to be strike off.
As held by the
Supreme Court in case of KUSUM INGOTS & ALLOYS LTD. VERSUS UNION OF INDIA the
parliamentary legislation without receiving the consent of the President of
India and published in a official gazette unless specifically excluded will
apply to entire territory of India. If passing of the legislation gives rise to
cause of action, the writ petition
questioning the constitutionality thereof can be filed in any High Court of the
country having requisite territorial jurisdiction and an order passed
on writ petition questioning the constitutionality of Parliamentary Act, where
interim or final keeping in view the provisions contained in clause (2) of
Article 226 of the Constitution of India will effect throughout the territory
of India, subject to applicability of the Act.
Relevant part of
the Customs Act given below ;
Customs Act - Power to grant
exemption from duty Section 25
(1)
If the Central Government is satisfied
that it is necessary in the public interest so to do, it may, by notification in
the Official Gazette, exempt generally either absolutely or subject to such
conditions (to be fulfilled before or after clearance) as may be specified in
the notification goods of any specified description from the whole or any part
of duty of customs leviable thereon.
(2A) The Central Government may, if it
considers it necessary or expedient so to do for the purpose of clarifying the
scope or applicability of any notification issued under sub-section (1) or
order issued under sub-section (2), insert an explanation in such notification
or order, as the case may be, by notification in the Official Gazette, at any
time within one year of issue of the notification under sub-section (1) or
order under sub-section (2), and every such explanation shall have effect as if
it had always been the part of the first such notification or order, as the
case may be.
(4) Every notification
issued under sub-section (1) or sub-section (2A) shall, unless otherwise
provided, come into force on the date of its issue by the Central Government for
publication in the Official Gazette.
Readers can see the underlined words which are contradictory to each
other. One says “Notification in the official gazette” and another one says “on
the date of issue ” which leads to this litigation.
The provisions of Section 25(4) of the Customs Act,
1962 is declared as arbitrary and contrary to Section 25(1) & (2)(A) of the
Customs Act, 1962.
Customs Department was directed to refund the
excess amount of custom duty and differential amount of IGST collected from the
Importer with simple interest @ 6% p.a. from the date of deposit till the date
of payment.
RUCHI SOYA INDUSTRIES LTD THROUGH
AUTHORIZED REPRESENTATIVE VERSUS UNION OF INDIA & 2 OTHERS, GUJARAT HIGH
COURT, decided on 12 March 2020
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