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PETITIONER: NORTHERN CORPORATION

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT06/08/1990

BENCH: MUKHARJI, SABYASACHI (CJ) BENCH: MUKHARJI, SABYASACHI (CJ) SAIKIA, K.N. (J)

CITATION:  1990 AIR  764            1990 SCR  (3) 621  1990 SCC  (4) 239        JT 1990 (3)   699  1990 SCALE  (2)279

ACT:     Customs    Act,    1962:    Section    15(1)(b)--Customs duty--Determination  of  rate--Goods imported could  not  be cleared due to ban imposed by income tax authorities--Wheth- er importer liable to may at the enhanced rate prevailing at the time of clearance.     Constitution   of   India,   1950:   Article   32--Scope of--Excise duty-Liability to pay particular  duty--Dependent on  interpretation of law ,and determination  of  facts--En- forcement  of  provisions  of the Act-Whether  a  breach  of fundamental  right--Whether  permissible to move  the  Court without  seeking relief within the procedure  prescribed  by the Act.

HEADNOTE:     The  petitioner-Corporation imported certain goods.  The goods were bounded. and could not be got released due to the ban  imposed  by the Income Tax authorities,  under  Section 132(1)  of the Income Tax Act. 1961. Subsequently after  the ban  was lifted, the petitioner approached  the  authorities for  clearance  of the goods, but  the  customs  authorities demanded payment of customs duty at the enhanced rate  which was prevailing at the time of clearance. Hence the petition- er  filed a Writ Petition before this Court challenging  the demand as arbitrary. illegal and unconstitutional.     It was contended that though the petitioner was  willing to clear the goods on payment of the then prevailing  custom duty,  the goods could not be cleared due  to  circumstances beyond its control, by the order of the Income Tax  authori- ties  and,  therefore, the authorities could not  claim  en- hanced duty.     On  behalf of the respondents it was contended  that  in view of Section 15(1)(b) of the Customs Act, especially  the expression "actually removed" used therein, the liability of the  petitioner to pay the duty was the duty at the time  of clearance of the goods. Disposing of the Writ Petition, this Court, 622     HELD:  1.  Section  15(1)(b) of the  Customs  Act,  1962 clearly requires that the rate of duty, rate of exchange and tariff  applicable to any imported goods shall be  the  rate

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and valuation in force on the date on which goods are  actu- ally  removed from the warehouse. Therefore, in view of  the language  used in Section 15(1)(b) of the Act, specially  in the light of the expression ’actually removed’ the petition- er was liable to pay excise duty at enhanced rate prevailing on the date the goods were cleared. The prohibitory  orders, arbitrary or not, would postpone the date of clearance,  and as such would postpone the determination of the duty. [626F; 627C]     Prakash Cotton Mills (P) Ltd. v. B. Sen & Ors., [1979] 2 SCR 1142, relied on.     2.1  Recourse to Art. 32 of the Constitution can be  had if there is a breach of the fundamental rights, provided the other  conditions are satisfied. BUt in a matter  where  li- ability  of  a citizen to pay a particular duty  depends  on interpretation  of  law and determination of facts  and  the provision  of  a  particular statute,  for  which  elaborate procedure  is prescribed, enforcing of those  provisions  of the  Act  would not breach fundamental  right  and,  without taking  any resort to the provisions of the Act, it  is  not permissible to move this Court on the theoretical basis that there  is  breach of fundamental right.  Whenever  a  person complains  and claims that there is a violation of  law,  it does  not  involve breach of fundamental right for  the  en- forcement  of  which alone Art. 32 of  the  Constitution  is attracted. [627E; 628A-D]     Smt.  Ujjam Bai v. State of Uttar Pradesh, [1963] 1  SCR 778, relied on.     2.2  In a particular situation whether customs  duty  is payable  at the rate prevalent on a particular date  or  not has  to be determined under the four corners of the  Customs Act, 1962. [627F]     In  the instant case, the petitioner has no  fundamental right as such to clear any goods imported without payment of duties  in accordance with the law. There is procedure  pro- vided  by  law for determination of the payment  of  customs duty. The revenue has proceeded on that basis. The petition- er  cannot seek to remove the goods without payment at  that rate  or without having the matter determined by the  proce- dure  envisaged and enjoined by the law for that  determina- tion.  The  petitioner, without seeking to take  any  relief within the procedure envisaged under the Act, had moved this Court for breach of funda- 623 mental  right. This is not permissible and should  never  be entertained. [627F-H]     Relief  under Article 32 of the Constitution  is  there- fore, wholly inappropriate in the facts and circumstances of the instant case. [628B]

JUDGMENT: ORIGINAL JURISDICTION: Civil Writ Petition No. 443 of 1988. (Under Article 32 of the Constitution of India). Rajiv K. Garg and N.D. Garg for the Petitioner.     Soli  J. Sorabjee, Attorney General, M.  Chandrasekharan and P. Parmeswaran for the Respondents. The Judgment of the Court was delivered by     SABYASACHI  MUKHARJI, CJ. This is an  application  under Article 32 of the Constitution. Northern Corporation is  the petitioner  in  the  instant application and  the  Union  of India, the Collector of Customs and the Assistant  Collector of Customs (Bond Department) are the respondents.     On 11th May, 1983, the licensing authority issued import

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licence  No.  2959845  for Rs.20, 12,729 in  favour  of  M/s Industrial  Cable  India Ltd., Rajpura. The  licence  holder transferred  the same in favour of M/s Metalic metal  Indus- tries.  The  transferee-licence holder issued  a  letter  of authority in favour of the petitioner for the import of MSCR defective  sheets  or  coils. The letter  of  authority  was issued on 21st May, 1984.     The petitioner herein placed order on M/s Sayani  Enter- prises Pvt. Ltd., Singapore for the supply of MSCR defective sheets  or  coils on 30th May, 1984.  The  foreign  supplier shipped  the  material in three consignments and  the  goods arrived at the Bombay Port on 12th June, 1984. The  clearing agent  of the petitioner filed bills of entry on 30th  July, 1984  for warehousing under section 59 of the  Customs  Act. 1962  (hereinafter referred to as ’the Act’), and  the  same was allowed. The goods were bounded on 7th August, 1984.  It may be mentioned that the rate of duty on the day was 60%  + 40%  + Rs.650 per M.T. and 10% C.V.D. The total duty on  the consignment was assessed as Rs.26,20,109.55. 624     On  21th August, 1984, the petitioner’s  clearing  agent filed six bills of entry for ex bond clearance. However, the bills  of entry were returned with the remark  that  "please obtain no objection from the income tax". This was  endorsed on 24th August, 1984. The petitioner states that  thereafter he came to know that the income tax authorities had  imposed ban  under section 132(1) of the Income Tax Act,  1961.  The petitioner  asserted  that he was ever  ready  and  willing, rather  was anxious, to get the material on payment  of  the then prevailing customs duty. However, due to  circumstances beyond the control of the petitioner, that it to say, by the order  of the Income Tax Authorities the goods could not  be released.  This factor was not of the  petitioner’s  making, according to the petitioner.                       ’     On  30th March, 1988, the Income Tax  Department  issued the  necessary  no objection certificate, thus  lifting  the ban.  On 4th April, 1988, the petitioner’s  agent  contacted the  customs authority for clearance of the goods. The  duty as  is prevalent now is Rs.5,000 per M.T. + addl.  duty  45% and C.V.D. at Rs.325 per M.T. The total duty came to a  very large sum of money. The demand, according to the petitioner, was arbitrary, illegal and unconstitutional.     The  instant  writ  was filed under Article  32  of  the Constitution  on 16th April, 1988 and on 22nd  April,  1988, this Court passed the following order: "Pending  notice, there will be limited stay to  the  extent that  the  goods name, "MSCR defective  sheets/coils"  which have arrived at Bombay Port per S.S. "SEA PRIMROSE" will  be released forthwith on petitioner’s paying customs and  other duties  as  leviable on 21.8.84. In addition  to  the  above payment  the petitioner will deposit Rs.5 lakhs and for  the balance  amount  petitioner will furnish surety  (which  may consist    of    ITC   bond    but    excluding    cash/bank guarantee/NSC/FDR)  to the satisfaction of the Collector  of Customs." We  directed that the notice should be given to the  revenue authority to appear before us. Learned Attorney General  had appeared  pursuant to the notice on behalf of  the  respond- ents. It is contended on behalf of the respondents that  for the payment of duty, the liability of the petitioner to  pay the duty is the duty at the time of clearance of the  goods. Our attention was drawn to section 15(1)(b) of the Act which postulates  that the rate of duty and tariff  valuation,  if any, applicable 625

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to  any imported goods, shall be the rate and  valuation  in force, in case the goods are cleared from a warehouse  under section  68,  on the date on which the  goods  are  actually removed  from the warehouse. Section 15 of the Act reads  as under: "S.  15. Date for determination of rate of duty  and  tariff valuation of imported goods. (1) The rate of duty and tariff valuation, if any,  applica- ble  to any imported goods, shall be the rate and  valuation in force--           (a)  in the case of goods entered for  home   con- sumption  under section 46, on the date on which a  bill  of entry  in  respect  of such goods is  presented  under  that section;           (b) in the case of goods cleared from a  warehouse under section 68, on the date on which the goods are actual- ly removed from the warehouse;           (c) in the case of any other goods, on the date of payment of duty:           Provided that if a bill of entry has been present- ed  before the date of entry inwards of the vessel by  which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards. (2)  The provisions of this section shall not apply to  bag- gage and goods imported by post."     Learned Attorney General laid emphasis on the expression "actually  removed"  in clause (b) of section 15(1)  of  the Act.  Our attention was also drawn to section 16 of the  Act which reads as under: "S.  16. Date for determination of rate of duty  and  tariff valuation of export goods. (1) The rate of duty and tariff valuation, if any,  applica- ble to any export goods, shall be the rate and valuation  in force-- (a) in the case of goods entered for export under 626 section 50, on the date"on which the proper officer makes an order  permitting  clearance and loading of  the  goods  for exportation under section 51;           (b) in the case of any other goods, on the date of payment of duty. (2)  The  provisions  of this section shall  not  apply,  to baggage and goods exported by post."     It  was contended on behalf of the revenue that in  view of the aforesaid, it would not be possible for the petition- er  to clear the goods on payment of duty on the  date  when the  petitioner  was  actualling  expressed  willingness  to remove the goods. Our attention was drawn to the decision of this  Court  in Prakash Cotton Mills (P) Ltd. v.  B.  Sen  & Ors.,  [1979] 2 SCR 1142. In that case,the appellant  stored on December 22, 1965 in the Customs warehouse, goods import- ed by him under a licence, and cleared them on various dates between  September  1,  1966 and February  20,  1967.  Under protest,  they  paid customs duty at the enhanced  rates  in accordance with the amended provisions. Later, they  claimed rebate  alleging  that since the consignments had  been  re- ceived, stored and assessed to duty much before the  promul- gation of the Ordinance, they were liable to pay duty at the rate  prevailing on the date of warehousing.  Their  appeals and  revision were unsuccessful. In appeal to this Court  it was  contended that the material change in s. 15 being  only the substitution of the words "the rate of duty" the customs authorities  were not entitled to take into account the  new rate  of  exchange at the appreciated value of  currency  in respect of the consignments stored in the warehouse prior to

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the  coming  into  force of the  Ordinance.  Dismissing  the appeal,  this Court held that the customs  authorities  were right intaking the view that the rate of duty applicable  to the imported goods should be determined according to the law prevalent  on the date they were actually removed  from  the warehouse.  Section 15(1)(b) clearly requires that the  rate of  duty,  rate  of exchange and tariff  applicable  to  any imported  goods shall be the rate and valuation in force  on the date on which goods are actually removed from the  ware- house.  Under s. 49 and importer may apply to the  Assistant Collector  of Customs for permission to store  the  imported goods  in a warehouse pending their clearance and he may  be permitted  to do so; and s. 68 provides that an importer  of any  warehoused  goods  may clear them if  the  import  duty leviable  on them has been paid. In that case, it was  found that as the goods were removed from the warehouse after  the amending Ordinance had come 627 into force, the customs authorities and the Central  Govern- ment  were  right in taking the view that the rate  of  duty applicable  to the imported goods should be  determined  ac- cording  the law prevalent on the date these  were  actually removed from the warehouse.     Mr.  Garg,  appearing for the petitioner, on  the  other hand contended before us that his client was willing  indeed to  pay the duty when the goods crossed the customs  barrier and  were in the process of being cleared, but could not  be cleared because of the prohibitory orders of the Income  Tax Department  under  section 102 of the Customs Act.  In  that light,  it  was not possible, Mr. Garg  contended,  for  the Income  Tax Department to claim enhanced duty due  to  facts which  were not for the fault of the petitioner. In view  of the  language  used in section 15(1)(b) of the  Act,  it  is difficult  to accept this contention specially in the  light of  the expression used ’actually removed’. It must  be  ac- cepted that the prohibitory orders, arbitrary or not,  would postpone  the date of clearance and as such  would  postpone the determination of the duty. Therefore, it is difficult to accept Mr. Garg’s contention.     However, there is a far more serious objection in enter- taining  this application under Article 32 of the  Constitu- tion. Article 32 of the Constitution guarantees the right to move  the  Supreme  Court  for  enforcement  of  fundamental rights.  If there is breach of the fundamental  rights,  the petitioner can certainly have recourse to Article 32 of  the Constitution provided other conditions are satisfied. But we must,  in  all such cases, be circumventive of what  is  the right  claimed. In this case, the petitioner as such has  no fundamental fight to clear the goods imported except in  due process  of law. Now in the facts of this case, such  clear- ance can only be made on payment of duty as enjoined by  the Customs Act. In a particular situation whether customs  duty is payable at the rate prevalent on a particular date or not has  to be determined under the four corners of the  Customs Act,  1962. The petitioner has no fundamental right as  such to  clear  any goods imported without payment of  duties  in accordance with the law. There is procedure provided by  law for determination of the payment of customs duty. The  reve- nue  has  proceeded on that basis. The  petitioner  contends that  duty  at a particular rate prevalent at  a  particular date  was not payable. The petitioner cannot seek to  remove the goods without payment at that rate or without having the matter determined by the procedure envisaged and enjoined by the  law  for  that determination.  The  petitioner  without seeking  to take any relief within the  procedure  envisaged

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under the Act had moved this Court for breach of fundamental right. This is not permissible and should never be 628 entertained. In a matter of this nature where liability of a citizen  to pay a particular duty depends on  interpretation of  law  and determination of facts and the provision  of  a particular  statute  for which elaborate procedure  is  pre- scribed,  it cannot conceivably be contended that  enforcing of  those  provisions of the Act  would  breach  fundamental right which entitle a citizen to seek recourse to Article 32 of  the  Constitution.  We are, therefore,  clearly  of  the opinion that relief under Article 32 of the Constitution  is wholly  inappropriate in the facts and the circumstances  of this case. It has further to be reiterated that for enforce- ment of fundamental right which is dependent upon  adjudica- tion  or determination of questions of law as well as  ques- tion of fact without taking any resort to the provisions  of the  Act,  it is not permissible to move this Court  on  the theoretical  basis that there is breach of  the  fundamental right. Whenever a person complains and claims that there  is a violation of law, it does not automatically involve breach of  fundamental  right for the enforcement  of  which  alone Article 32 of the Constitution is attracted. It appears that the facts of this nature require elaborate procedural inves- tigation  and this Court should not be moved and should  not entertain  on these averments of the Article 32 of the  Con- stitution. This position is clearly well settled, but  some- times  we  are  persuaded to accept that  an  allegation  of breach  of law is an action in breach of fundamental  right. In this connection, reference may be made to the decision of this  Court  in Smt. Ujjam Bai v. State  of  Uttar  Pradesh, [1963] 1 SCR 778, where this Court observed at p. 842 of the report as under: "In  my  opinion, the correct answer to  the  two  questions which have been referred to this larger Bench must be in the negative. An order of assessment made by an authority  under a  taxing statute which is intra vires and in the  undoubted exercise  of  its jurisdiction cannot be challenged  on  the sole  ground that it is ,passed ,on a misconstruction  of  a provision of the Act or of a notification issued thereunder. Nor  can  the validity of such an order be questioned  in  a petition  under  Art.  32 of the  Constitution.  The  proper remedy  for correcting an error in such an order is to  pro- ceed by way of appeal, or if the error is an error  apparent on the face of the record, they by an application under Art. 226  of  the Constitution. It is necessary to  observe  here that Art. 32 of the Constitution does not give this Court an appellate  jurisdiction  Such. as is given by Arts.  132  to 136.  Article  32 guarantees the right to  a  constitutional remedy  and  relates only to the enforcement of  the  rights conferred 629 by  Part 111 of the Constitution. Unless a question  of  the enforcement of a fundamental right arises, Art. 32 does  not apply.  There  can be no question of the  enforcement  of  a fundamental  fight  if the order challenged is a  valid  and legal  order, in spite of the allegation that it is  errone- ous.  I  have,  therefore, come to the  conclusion  that  no question of the enforcement of a fundamental fight arises in this case and the writ petition is not maintainable."     In  the aforesaid view of the matter, we are clearly  of the  opinion that Article 32 of the Constitution should  not have  been  resorted to and this application  does  not  lie under Article 32 of the Constitution.     However, it appears that this Court has passed an  order

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on 22nd April, as indicated hereinbefore. It is stated  that the  goods  have been cleared pursuant to  that  order.  The revenue  would be at liberty to take appropriate  action  in accordance with law for the recovery of the dues. This writ petition is accordingly disposed of. N.P.V.                                     Petition disposed of. 630