Union of India v. M/S G S Chatha Rice Mills
Civil Appeal No 3249 of 2020 (Arising out of SLP(C) No 3860 of 2020 decided on September 23, 2020.
BENCH– Dr Dhananjaya Y Chandrachud, Indu Malhotra, K. M. Joseph JJ.
The respondent is a partnership firm based in Amritsar which is engaged in the import of cement. It imported a consignment of cement from Pakistan under an invoice dated 1 February 2019. A truck crossed the ‘zero line’ on Saturday, 16 February 2019 under entry number 47195 with a Pakistan Custom’s Cargo Manifest bearing the time of 4:31 pm. The goods arrived at Amritsar on the same day and IGM number filed in respect of the goods. The truck unloaded its cargo at the warehouse. The arrival of the goods and the filing of the IGM was before 18:00 hours on 16 February 2019. The respondent filed bill of entry number dated 16 February 2019 seeking clearance of the goods for home consumption. The bill of entry was self-assessed at 18:08 hours under the provisions of Section 17(1) of the Customs Act. The duty payable was assessed at Rs 73,342/- prescribed a preferential rate of duty on specified goods originating in the Islamic Republic of Pakistan. On 16 February 2019 at 20:46:58 hours, notification 5/2019 was uploaded by the Ministry of Finance in the Department of Revenue, on the e-Gazette in exercise of powers conferred by sub-section (1) of Section 8A of the Customs Tariff Act 1975 enhancing the rate of duty to 200 per cent.
[See: Section 17 provides for the assessment of duty including self-assessment. Self assessment scheme of import clearance was introduced by customs authorities to simplify import procedures and expedite import clearance. Under self assessment scheme, importer himself declares the details of goods with rate of duty applicable based on previously cleared bill of entry.
Section 8A- Emergency Power of Central Government to increase import duties]
Whether the goods which entered Indian territory through the Pakistan border at Amritsar before 18:00 hours on 16 February 2019 are liable to increased rate of duty of 200 percent as per notification?
Was the Notification in force on 16.02.2019 so that it would cover all the transactions countenanced by the Bills of Entry which were duly presented during the office hours on 16.02.2019?
The Court held that the said notification cannot operate retrospectively, unless authorized by statute and the revised rate of import duty under the said notification applies to bills of entry presented for home consumption after the notification was uploaded in the e-Gazette at 20:46:58 hours on 16 February 2019.
Court’s View on Customs Act
The Customs Act is a consolidating Act. It is intended, inter alia, to deal with the menace of smuggling. It contains various sanctions. It also provides for the levy of Customs duty on import and export. It is a law which provides revenue to the State. It is also an important tool in the hands of the nation to arrange its economic affairs to make it best suited to the welfare of the people otherwise. Indisputably, the charging Section is Section 12. The taxable event is import into or export of goods from India. Ordinarily, the Tariff Act provides the rates at which duty is imposed on imports and exports.