Harish Silk Mills Pvt. Ltd. vs Union of India

The petitioners imported three consignments of Nonyl Phenol Ethylene Oxide in October-November 1981 and cleared the same to the bonded warehouse of the Bombay Port Trust. In December 1981 they imported one consignment of Methylene Chloride and cleared the same to the bonded warehouse of the Bombay Port Trust advising them that the goods would be sold if not cleared within 10 days. Accordingly, the petitioners arranged for pay orders for payment of Customs duty upon the said goods. The Customs duty, in the sum of Rs. 6,51,708.43, was paid on 28th February 1983 at about 2.30 P.M. under six bills of entry for home consumption. The six bills of entry were thereupon endorsed, "Passed out of Custom charges". The petitioners also paid on the same day demurrage upon the said goods in the sum of Rs. 1,18,900.90 to the Bombay Port Trust. After making these payments the petitioners, at 4 p.m. on the very day, approached the Superintendent of the bonded warehouse and requested him to allow them to remove the said goods. The Superintendent refused on the ground that he had received instructions from the Assistant Collector of Customs, Bond Department (the 3rd respondent) not to allow withdrawal of goods from the bonded warehouse after 4 P.M. on that day. On 1st March 1983 the petitioners approached the respondents with a request to allow the clearance. The respondents declined to permit clearance except upon payment of the increased Customs duty that had come into effect from that day.

This petition impugns the demand by the respondents of the increased Customs duty. The submission is that the petitioners were entitled in law to remove the said goods on 28th February 1983, but were prevented from doing so by reason of the instructions issued by the respondents. The petitioners cannot, in the circumstances, be made liable to pay the increased Customs duty on the said goods that came into effect on 1st March 1983.

There is no affidavit in reply. The allegations made in the petition are, therefore, uncontroverted.

The petition was heard by me on Friday, 28th July 1989. Mr. Rege, learned counsel for the respondents, then relied upon a cyclostyled circular dated 18th February 1983 and stated that he was told that there was another circular which was relevant but which he did not then have. To enable him to produce that circular I rose early on Friday. Today Mr. Rege states that all he had upon which he can rely is the cyclostyled circular dated 18th February, 1983.

It is unfortunate that the respondents have not intimated to the petitioners, by way of an affidavit in reply or otherwise, what their case is or that they propose to rely upon this circular. The authenticity of the circular has to be taken at face value because even the signature of the Assistant Collector of Customs on what is produced before me is cyclostyled. Again, reference to the circular is valueless unless one knows what the "normal closing hours" are. Mr. Rege states that the normal closing hours are set out in Standing Order No. 6417 dated 11th February, 1970, but he is unable to produce it. The indulgence shown to the respondents has not been put to good use.

There is, in any event, nothing to show that the circular binds the citizen. It would appear to be only an instruction to some functionaries of the respondents whose names and/or designations are not stated. The relevant portion upon which Mr. Rege relies reads thus : "At the Warehouses where P.O.s (Preventive Officers) are posted on permanent basis, ex-bond operations for home consumption should be stopped one hour before the normal closing hours" on 28th February, 1983, being Budget day. What the normal closing hours are I do not know so that the stoppage one hour before then on 28th February 1983 is not understandable. A reference to other portions of that circular, however, suggests that on 28th February 1983 ex-bond warehouse operations were to be stopped at 4 p.m. The circular instructs those to whom it is addressed not to allow ex-bond home consumption withdrawals which are sought to be effected after closing hours on 28th February 1983 "even though the Bill of Entry may have been noted before ..." In the instant case, we have a situation where Customs duty on the said goods was paid at 2.30 p.m. on 28th February 1983 and the six bills of entry were marked "Passed out of Customs charges". Therefore, assuming all else, this circular did not entitle the respondents to refuse clearance of the said goods on 28th February 1983. The respondents can not, therefore, validily lay claim to the enhanced Customs duty on the said goods that came into effect on the next day.

The petition, therefore, succeeds and is made absolute in terms of prayers (c) and (e). The respondents shall pay to the petitioners the costs of the petition.