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Judgment
This petition under Article 226 of the Constitution of India was filed by M/s. W. G. Forge & Allied Industries Limited, a public Company, on February 21, 1979 to challenge 21 show cause notices issued by respondent No. 2 on September 28, 1978. The Company was ordered to be wound up by order dated June 21, 1985 and thereafter the Official Liquidator has come on record.
The Company had imported alloy steel bars, billets and die steel blocks between the period commencing from December 1975 and June 1977. The Company had a licence to store the imported goods in bonded warehouse and under that facility the consignment on import were stored in the bounded warehouse. The duty payable on the import i.e. at the time of the goods was 75% ad valorem, that is 60% basic and 15% auxiliary. On June 18, 1977 a notification was published by Government of India reducing the duty to 40% ad valorem, that is 35% basic and 5% auxiliary. The goods were cleared by the Company from the bonded warehouse between the period June 1977 and December 1978 and this clearance was on payment of duty at 40% ad valorem.
On September 28, 1978 the respondent No. 2 served 21 show cause notices upon the Company to explain why the difference in duty, that is 75% ad valorem and 40% ad valorem as prescribed by the notification should not be recovered. The Company gave reply on December 22, 1978 denying the liability and thereafter filed the present petition even before the show cause notice proceedings were disposed of.
Shri Subramanium, learned counsel appearing on behalf of the Official Assignee, submitted that the show cause notices were without jurisdiction as the same proceeds on the basis that the rate of duty, which could be levied is that on the date of actual import of the goods and not the date on which the goods were cleared form the bonded warehouse. The submission of the learned counsel is correct. The relevant date for ascertaining the rate of duty is the date on which the goods are cleared from the bonded warehouse. Section 15(1)(b) provides that the rate of duty applicable to imported goods shall be rate and valuation in force, in the case of goods cleared from the warehouse u/s 68, in the date on which the goods are actually removed from the warehouse. It is now well settled by catena of decisions that the rate of duty which can be levied in respect of important goods is the date on which the said goods are cleared from the warehouse. Reference to decision of the Supreme Court Prakash Cotton Mills (P) Ltd. Vs. B. Sen and Others, is suffice. Shri Shah, learned counsel for the respondent, did not dispute the legal position, but urged that it is not clear as to when the goods were cleared from the bounded warehouse. The submission cannot be accepted for more than one reason. In the first instance the goods must have been cleared after the date of notification otherwise the respondent No. 2 would not have charged the duty at 40% ad valorem. Secondly, the mere perusal of Exhibit ''D'' annexed to the petition leaves no manner of doubt that the goods were cleared by payment of cash after April 4, 1978 onwards. In may judgment, the show cause notices clearly proceeds on misconception and are without jurisdiction and are therefore required to be struck down.
Accordingly, rule is made absolute and the 21 show cause notices dated September 28, 1978 issued by respondent No. 2 are quashed. There will be no order as to costs.