Rathi Alloys and Steel Ltd. and another vs Union of India and others

By this petition filed under Article 226 of the Constitution of India, the petitioners are complaining about the levy of custom duty and additional duty in respect of import of stainless/steel ingots/billets and the complaint is based upon the advantage conferred by notification dated July 15, 1977 exempting the import from payment of custom duty. It is not necessary to set out the facts in detail as by mentioning only a few dates, it would be clear that the claim of the petitioners is entirely unsustainable.

On July 15, 1977, in exercise of powers conferred by sub-section (1) of Section 25 of the Customs Act, the Central Government directed that melting scrap of iron and steel when imported would not be liable to payment of Customs duty. By another notification of the same date, the import of melting scrap of iron and steel was exempted from payment of additional duty. These two notifications were to remain in force upto and inclusive of March 31, 1982. On February 28, 1982, the Central Government issued two notifications withdrawing the exemption given by the earlier two notifications.

On October 14, 1981, the Metal Scrap Trade Corporation which is a canalising agency entered into an agreement with M/s. Northern Steel and General Mills who were quota-holders for import of stainless steel ingots/billets. The price was determined by the contract. The quota-holder entered into an agreement with the petitioners and the petitioners opened letter of credit on December 30, 1981. The goods were shipped on February 7, 1982 by the foreign vendors and the goods arrived in Bombay on April, 13, 1982. The petitioners were directed to pay custom duty as well as additional duty and the petitioners complained against that levy.

Dr. Kantawala, learned counsel appearing on behalf of the petitioners, very strenuously submitted that the duty could not have been levied and in support of the submission tried to draw support from the doctrine of promissory estoppel which is enunciated by the Supreme Court in the case of Union of India and others V/s. Codfrey Philips India Ltd. and other reported in 1985 (22) Excise Law Times 306. It is not necessary to examine the claim of the petitioners because the question would require consideration if the ship had arrived in Bombay prior to March 31, 1982 and subsequent to February 28, 1982 when the exemption was withdrawn. If the ship had admittedly arrived at Bombay Port on April 13, 1982 i.e. long after March 31, 1982 the question of withdrawal of exemption need not detain me for a moment. Whether the Central Government could have withdrawn the notification or not need not be examined at all in the present case in view of the fact that on the date when the ship reached the Bombay Port, exemption was not available and the goods were liable to duty. In these circumstances, the claim of the petitioners is without any merit and the petitioners are not entitled to any relief.

Accordingly, petition fails and rule is discharged. In the circumstances of the case, there will be no order as to costs.