Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 593594 OF 2020
(arising out of SLP (Civil) No(s). 3037130372 of 2017)
M/S. GRANULES INDIA LTD. ...APPELLANT(S)
VERSUS
UNION OF INDIA AND OTHERS ...RESPONDENT(S)
JUDGMENT
NAVIN SINHA, J.
Leave granted.
2. The appellant is aggrieved by orders dated 07.12.2016 and
14.06.2017, rejecting the writ petition as also the review application
arising from the same.
3. The appellant, during the year 1993 imported 96 tons of the
Signature Not Verified
chemical “Acetic Anhydride” under three Bills of Entry bearing nos.
Digitally signed by
MEENAKSHI KOHLI
Date: 2021.03.13
10:30:58 IST
Reason:
290, 291 and 300 dated 01.12.1993, 01.12.1993 and 14.12.1993
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through the Inland Water Container Depot (ICD), Hyderabad under
the Advance Licence Scheme. It claimed clearance of the
consignment free of import duty in terms of Customs Notification
nos. 203/1992, 204/1992, both dated 19.05.1992. The notification
contained a scheme permitting import without payment of customs
duty subject to fulfilment of certain norms and conditions. The
Notification nos. 203/1992 and 204/1992 were amended by a
Notification no. 183/1993 dated 25.11.1993, by which the subject
imports became liable for duty, the exemption having been
withdrawn. The Notification dated 25.11.1993 was further amended
by another clarificatory Notification no. 105/1994 dated 18.03.1994
permitting the import of the chemical without customs duty subject
to certain terms and conditions. The clarificatory notification was
necessitated to obviate the difficulties faced by the importers like
the appellant, who had imported the chemical under the advance
licence issued by the Director General of Foreign Trade prior to the
amendment Notification no. 183/1993 dated 25.11.1993.
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4. The appellant was allowed to clear the consignments under the
aforesaid three Bills of Entry without payment of duty.
Subsequently the respondents issued show cause notice under
Section 28 (1) of the Customs Act, 1962 with regard to the same
consignments as having been imported after 25.11.1993. The
appellant made a representation on 20.11.1997 seeking exemption.
It was considered favourably in respect of three other consignments
under Bill of Entry No.312 dated 12.09.1993, Bill of Entry No.28
dated 10.02.1994 and Bill of Entry No.27 dated 09.02.1994. The
entire consignments were imported under the same advance licence.
In pursuance of the show cause notice the appellant was held liable
to duty by order dated 12.2.1998 with regard to the consignments
under three Bills of Entry bearing nos.290, 291 and 300 dated
01.12.1993, 01.12.1993 and 14.12.1993 respectively though these
were also under the same advance licence. The respondents while
considering the reply to the show cause notice and fixing liability for
payment of customs duty did not make any reference to their
notification dated 18.03.1994. The Commissioner (Appeals) on the
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same reasoning rejected the appeal leading to the institution of the
writ application.
5. Dismissing the writ application, the High Court opined that no
mandamus for exemption could be issued. The consignments were
admittedly imported after 25.11.1993 and before the clarificatory
notification dated 18.03.1994. Thus, there was no arbitrariness on
part of the respondent. The appellant preferred a review application
inter alia relying upon a Division Bench order of the Andhra Pradesh
High Court in
Shri Krishna Pharmaceuticals Limited vs. Union
of India, (2004) 173 ELT 14. Rejecting the plea, the High Court
opined that since the appellant did not produce the clarificatory
notification along with the writ petition and neither were the
respondents aware of the clarificatory notification the appellant was
not entitled to any relief.
6. Shri B. Adinarayana Rao, learned senior counsel appearing on
behalf of the appellant, submitted that denial of exemption to the
consignment actually imported after 25.11.1993 under the advance
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licence obtained prior to 19.05.1992 notwithstanding the
clarificatory notification dated 18.03.1994 holding the appellant
liable for customs duty is completely unsustainable. Special Leave
Petition (Civil) No.14288 of 2004 (CC No.5418/2004) preferred
against the order in Shri Krishna Pharmaceuticals Limited
(supra) was dismissed. The mere failure to enclose a copy of the
notification could not be a ground for denial of relief. Denial of
exemption in the facts and circumstances of the case in view of the
statutory notifications were per se arbitrary.
7. Learned counsel appearing for the State supported the order of
the High Court and urged that the consignments having been
imported after withdrawal of the exemption and before issuance of
the clarificatory notification was justified.
8. We have considered the submissions on behalf of the parties
and are of the considered opinion that the order of the High Court is
completely unsustainable. The entire consignment was imported
under one advance licence issued to the petitioner prior to
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19.05.1992. The fortuitous circumstance that part of the
consignment was actually imported prior to 25.11.1993 and the rest
subsequent thereto is hardly relevant in view of the clarificatory
notification dated 18.03.1994 that the exemption would continue to
apply subject to fulfilment of the specified terms and conditions. It
is not the case of the respondents that the consignments imported
subsequently did not meet the terms and conditions of the
exemption. In (supra), the
Shri Krishna Pharmaceuticals Limited
High Court observed as follows:
“7. …Obviously, the petitioner had the facility
of exemption from payment of the customs
duty under the scheme known as Advance
License Scheme, but the same was banned
through notification dated 25.11.1993 and
later through another clarificatory notification
the same was extended by Notification dated
18.3.1994. Thus, since the Government itself
has clarified by its second notification
providing exemption, we are inclined to hold
that the petitioner shall be entitled to be
exemption for all the three consignments as
long as the three consignments are imported
under the Advance License scheme. Moreover,
it is not the case of the respondents that these
three consignments are not covered under the
Advance License scheme.”
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9. It is unfortunate that the High Court failed to follow its own
orders in a similar matter. The High Court further gravely erred in
holding that the authorities of the State were also unaware of the
clarificatory notification and neither did the appellant bring it on
record. The State is the largest litigant as often noted. It stands in a
category apart having a solemn and constitutional duty to assist the
court in dispensation of justice. The State cannot behave like a
private litigant and rely on abstract theories of the burden of proof.
The State acts through its officer who are given powers in trust. If
the trust so reposed is betrayed, whether by casualness or
negligence, will the State still be liable for such misdemeanor by its
officers betraying the trust so reposed in them or will the officers be
individually answerable. In our considered opinion it is absolutely
no defence of the State authorities to contend that they were not
aware of their own notification dated 18.03.1994. The onus heavily
rests on them and a casual statement generating litigation by State
apathy cannot be approved.
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10. We can do no better than quote the following extract from
National Insurance Co. Ltd. vs. Jugal Kishore, (1988) 1 SCC
,
626 observing as follows:
“10. Before parting with the case, we consider it
necessary to refer to the attitude often adopted
by the Insurance Companies, as was adopted
even in this case, of not filing a copy of the policy
before the Tribunal and even before the High
Court in appeal. In this connection what is of
significance is that the claimants for
compensation under the Act are invariably not
possessed of either the policy or a copy thereof.
This Court has consistently emphasised that it is
the duty of the party which is in possession of a
document which would be helpful in doing
justice in the cause to produce the said
document and such party should not be
permitted to take shelter behind the abstract
doctrine of burden of proof. This duty is greater
in the case of instrumentalities of the State such
as the appellant who are under an obligation to
act fairly. In many cases even the owner of the
vehicle for reasons known to him does not
choose to produce the policy or a copy thereof.
We accordingly wish to emphasise that in all
such cases where the Insurance Company
concerned wishes to take a defence in a claim
petition that its liability is not in excess of the
statutory liability it should file a copy of the
insurance policy along with its defence. Even in
the instant case had it been done so at the
appropriate stage necessity of approaching this
Court in civil appeal would in all probability have
been avoided. Filing a copy of the policy,
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therefore, not only cuts short avoidable litigation
but also helps the court in doing justice between
the parties. The obligation on the part of the
State or its instrumentalities to act fairly can
never be overemphasised.”
11. The impugned orders are therefore held to be unsustainable
and are set aside. The appeals are allowed.
.……………………….J.
(Navin Sinha)
………………………..J.
(Krishna Murari)
New Delhi,
January 23, 2020
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