Hindustan Transmission Products ... vs Union Of India And Ors.
1992 Latest Caselaw 197 Del

JUDGMENT

Y.K. Sabharwal, J.

(1) Petitioner No. 1 is a Public Limited Company carrying on business of Super Enameled Copper Wires and allied materials and goods. Petitioner No. 2 is the Vice-President and Secretary of theCompany. The petitioner company entered into contracts for importing electrolytic copper rods (in coils). The short question for determination in this petition is when the taxable event in the matter of levy of customs duty on the import of goods takes place under the Customs Act, 1962 (for short'the Act')-Is it on the date specified in Section 15 of the Act or any otherdate.

(2) The rate of basic customs duty on the goods in question which would fail within Chapter 74 of the First Schedule to the Customs Tariff Act,1975 had been laid down at 100%. The Central Government has, however,power to exempt any goods from levy of customs duty. Section 25 of the Act,empowers the Central Government, if it is satisfied that it is necessary in the public interest .so to do, to exempt generally either absolutely or subject to such conditions as may be specified in the Notification goods of any specified description from the whole or any part of the duty of customs leviable under the Act. In exercise of powers under Section 25 the" Government of India issued Notification No. 109 dated 1/07/1977, and thereby reduced the incidence of custom duty on import of electrolytic copper rods (coils) to 40%ad valorem.

(3) The petitioner company clam is that relying of the Notification No.109 dated 1.7.1977, during the period from April 1980 to 22/11/1980, it placed firm orders and opened letters of credit for the import of thegoods. The Government of India, however, by another Notification No. 228dated 26/11/1980, again issued in exercise of power under Section 25 of the Act, rescinded earlier Notification No. 109 dated 1/07/1977. On 8/12/1980 the petitioner company wrote, to the Assistant Collector ofCustums, Bombay, stating that it expected arrival of about 600 Mt of Electrolytic copper rods and coils on or around 20/12/1980, in terms of the firm and irrevocable orders and letters of credit established by the petitioners during August, September and October 1980 and in terms of Notification No. 109 dated 1/07/1977 the said import was liable to duty at the rates specified in 1977 Notification notwithstanding its rescission on 2 6/11/1980. According to the petitioner company the rescission could not impose an extra burden on the imports under irrevocable import commitments entered anterior to rescission. In response to the aforesaid communication, the Assistant Collector of Customs informed the petitioner by his communication dated 9/12/1980 that the rate of duty on the imported goods is chargeable as per provisions of Section 15 of the. Act and, accordingly, duty rate will be applicable as prevailing on the date on which bill of entry in respect of such goods is presented. The plea of the petitioner company that rate of duty as prevailing on the date when the firm commitments were entered into with the foreign suppliers should be charged was not accepted.

(4) Admittedly, the bill of entry in respect of the goods in question was filed after the issue of the Notification rescinding the exemption Notification No. 109 dated 1/07/1977. The case of the petitioners, however, is that custom duty is payable at the rate prevalent on the date when firm contract with the foreign supplier was entered into and irrevocable letter of credit opened. On the other hand, the case of the respondents, is that custom duty is payable at the rate prevalent on the date when bill of entry is presented in terms of Section 15 of the Act. As the respondents have not filed any counter affidavit, for deciding the rival contentions, we will assume as correct that the petitioner company entered into firm contracts for import of goods and opened irrevocable letters of credit before 26/11/1980.

(5) The first contention of Mr. Pareekh, learned Counsel for the petitioners is that 1977 exemption notification created a vested right in favor of the petitioners to pay the customs duty at 40% on the import of goods specified in the Notification and it cannot be said that the vested right so created was taken away by Notification of 1980 as 1980 notification does not show that it intended to take away any vested or accrued rights. The contention is that vested and accrued rights could have been taken away by an enactment either expressly or by necessary implication but that was not so in so far as 1980notification is concerned. In support of the contention reliance is placed upon Section 6(c) of the General Clauses Act, 1897 and on the decision of Supreme Court in Commissioner of Income Tax, Up v. M/s. Shah Sadiq and Sons, . Section 6(c) of the General Clauses Act, inter aila, provides that unless a different intention appears the repeal shall not affect any right,privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. In the cited decision the Supreme Court held that the right given to the assessed for the assessment years 1961-62 under Section 24(2)of 1922 Act was accrued and a vested right and it could have been taken away expressly or by necessary implication but that was not so done as neither Section 292(2)(b) nor any other sub-clauses of Sub-section 2 of Section 297 of-1961 Act indicates contrary intention of the Legislature taking away any vested right of the assessed under 1922 Act. In our opinion, Section 6(c)General Clauses Act has no applicability to the present case. Section 15 of the Customs Act is a complete answer to the contention of the petitioners. No person has a vested right to import goods without payment of customs duty prescribed by the Act. Section 15, inter-aila, states that the rate of duty applicable to any imported goods shall be the rate in force, in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that Section. In view of specific provisions of Section 15 of the Act reliance on Section 6(c) of the General Clauses Act is misconceived. For the same reasons the aforesaid decision of the Supreme Court has also no applicability to the present case.When specific provisions fixing date for rate of duty is given by the Statute(Section 15) it is not permissible to indulge in any alternative exercise to fix other dates (See : Jain Shudh Vanaspati Ltd. and Another v. Union of India &Others, 1983 E.L.T. 1688 (Delhi). It is well settled that customs duty is payable at the rate prevalent on the date of the presentation of bill of entry as provided in Section 15 of the Act and not the rate prevalent on any other date.(See : The Collector of Customs, Calcutta and Another v. G. Dass and Co. andOthers, : Indian Rayon Corporation and Others v. Collector of Customs, .

(6) Next, learned Counsel for the petitioners relying upon the doctrine of promissory estoppel contended that the petitioners had placed firm orders and opened letters of credit for the import of goods in question while acting upon the exemption notification and thus the government is estopped from giving effect to 1980 notification to such transactions. In our opinion, the doctrine of promissory estoppel has no applicability to the present case. No promise or representation was made to the petitioners by issue of the exemption notification. I he exemption notification of 1977 was not intended to induce the petitioners to import the goods in question nor was it intended to encourage the import of the goods. The notification was issued in publicinterest. It cannot be said that the exemption notification was meant to be or can be treated as a representation or promise made to the petitioners. In Feno Plast Pvt. Ltd. & Another v. Union of India & Another, 1914 (17) E.L.T.97, the Andhra Pradesh High Court while rejecting the plea of promissory estoppels said:- "THE exemption notification cannot be made a basis for founding a promissory or equitable, estoppel, and the Government should not be bound by its notifications once issued, and that it should be left free to modify or rescind them as and when public interest sodemands. This power of exemption is granted to the Government with a view to enable it to regulate, control and promote the industries and industrial production in the country."

(7) We are in complete agreement with the opinion of Andhra Pradesh High Court and the opinions expressed to the similar effect in the decision of this Court in Jain Shudh Vanaspati's case (supra) and by Calcutta High Court in case of Indian Rayon Corporation (supra).

(8) Lastly, learned Counsel for the petitioners made a feeble attempt to contend that it was not in public interest to rescind the exemption notification of 1977. The petitioners have not laid any foundation in the writ petition on this question. Even otherwise in such matters it is not open to this Court to examine the question of public interest Jain Shudh Vanaspati's case,(supra).

(9) For this reasons aforesaid, no case has been made out for issue of writ of mandamus to the respondents directing that on the goods in question the duty shall be levied in accordance with and at the rates specified in Notification No. 109 dated 1/07/1977 or declaring that NotificationNo. 228 dated 26/11/1980 is inapplicable to the transactions inquestion.

(10) Consequently, the writ petition is dismissed with costs. Counsel's fee Rs. 3.000.00.