LexM/S. TATA CHEMICALS LTD. versus COMMISSIONER OF CUSTOMS (PREVENTIVE) JAM NAGAR
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B [2015]7S.C.R.132 M/S. TATA CHEMICALS LTD. v. COMMISSIONER OF CUSTOMS (PREVENTIVE) JAM NA GAR (Civil Appeal Nos. 7439- 7440of2004) MAY 14, 2015 [A. K. SIKRI AND R. F. NARIMAN, JJ.] c Customs Act, 1962 - s. 18(b) - Customs duty - Exemption - Notification no. 35190, 36190 and 23191 wherein coking coal having Ash content below 12% exempted from basic customs duty that was in excess of 5% - Assessee engaged in the manufacture of soda ash and coke, imported D consignment of Low Ash Metallurgical Coal -At the time of shipment, inspection agency did detailed sampling following the British Standards equivalent to IS standards and as per the independent agency report moisture content was 7. 2% and Ash content of the coking coal was 9. 8% - On arrival of E samples, the Customs Inspector without objecting to the aforesaid report, drew its own samples in absence of any representative of the assessee and in contravention of IS standards - Reports by Department test agency that Ash content in the samples was more than 12% - Demand of F differential duty by the Department- Denial of exemption of customs duty in tenns of the Notification- Tribunal upholding the demand of duty on the ground that even though the samples were drawn contrary to law, assessee would be G estopped because their representative was present when the samples were drawn and they did not object immediately - On appeal, held: Entire chemical analysis of the imported goods done by the Department was ultra vires s.18(b) - Expressions "deems it necessary" uls. 1 B(b) does not mean H the subjective satisfaction or arbitrary power of the officer 132 TATA CHEMICALS LTD. v. COMMNR. OF CUSTOMS 133 (PREVENTIVE) JAMNAGAR concerned - 1t has to be exercised in accordance with the A restraints imposed by law- If the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner it has no existence in the eye of law at all - Thus, the Customs Authorities not absolve from following the law depending upon the acts of a B particular assessee - Order passed by the tribunal set aside. Allowing the appeals, the Court HELD: 1.1 The expressions "deems it necessary", c "reason to believe" u/s. 18 of the Customs Act have been held not to mean the subjective satisfaction of the officer concerned. Such power given to the concerned officer is not an arbitrary power and has to be exercised in accordance with the restraints imposed by law. The o expression "deems it necessary" obviously means that the proper officer must have good reason to subject imported goods to a chemical or other tests. And, on the facts of the instant case, it is clear that where the importer has furnished all the necessary documents to support E the fact that the ash content in the coking coal imported is less than 12%, the proper officer must, when questioned, state that, at the very least, the documents produced do not inspire confidence for some good prima facie reason. The Revenue never stated that CASCO's F certificate of quality ought to be rejected or is defective in any manner. Thus, the entire chemical analysis of the imported goods done by the Department was ultra vi res Section 18(b) of the Customs Act. Further, the samples G drawn by the Inspector have been drawn contrary to the express provisions of IS 436. On this count also, test reports based on the same cannot be looked at. [Paras 14, 16 and 17] [142-G-H; 143-A-B; 144-8; 145-E-F] 1.2 The tribunal's judgment proceeded on the H 134 SUPREME COURT REPORTS [2015] 7 S.C.R. A basis that even though the samples were drawn contrary to law, the appellants would be estopped because their representative was present when the samples were drawn and they did not object immediately. This is a completely perverse finding both on fact and law. On B fact, it has been more than amply proved that no representative of the appellant was, in fact, present at the time the Customs Inspector took the samples. Employee of the Company who was allegedly present not only stated that he did not represent the Clearing C Agent of the appellants in that he was not their employee but also stated that he was not present when the samples were taken. In fact, therefore, there was no representative of the appellants when the samples were taken. In law 0 equally the tribunal ought to have realized that there can be no estoppel against law. If
Excerpt shown. Read the full judgment & AI analysis in Lexace.