1999 JTR(SC) 1270
2000 115 ELT 42 ; 2001 9 SCC 198 ; 2001 KHC 3932
SUPREME COURT OF INDIA
S.P.Bharucha : V.N.Khare
Steel Authority Of India Limited
Versus
Collector Of Customs, Bombay
Case No. : 6600 of 1995, 6893 of 1996
Date of Decision : 10/28/99
Customs authorities are bound by the trade notices they issue and cannot argue against them. Such notices are binding across all customs houses to ensure uniformity and must be formally withdrawn or amended if they are erroneous.
Act
Referred
:CENTRAL EXCISE ACT
: S.37(b)
CUSTOMS ACT: S.11(n), S.25, S.151(a)
(A) Customs Law - Exemption Notification - Trade Notice - Import of refractory blocks of special shape - Whether trade notices issued by customs authorities for guidance are binding on the authorities themselves - Authorities are bound by the trade notices they issue and cannot argue to the contrary (Para 2).
(B) Customs Law - Uniformity of Administration - Trade notice issued by one customs house must bind all customs authorities across different states - If a trade notice is erroneous, it must be withdrawn or amended to cease being binding (Para 3).
Facts of the case:
The appellants imported refractory blocks of special shape and claimed an exemption based on a notification for refractory bricks. A trade notice had been issued by the customs house for the information and guidance of importers and agents, stating that refractory blocks of special shape were covered by the expression "bricks of special shape" appearing in the said notification. The Tribunal declined to take the trade notice into account on the ground that it could not enlarge the scope of the notification.
Findings of Court:
The court found that the authorities are bound by the trade notices they issue. It held that customs authorities cannot take one stand in one state and another stand in another state. A trade notice issued by one customs house must bind all customs authorities, and if it is erroneous, it should be withdrawn or amended, which had not occurred in this case.
Issues: Whether the customs authorities are bound by the trade notices issued by them and whether such notices are binding across different customs houses to ensure uniformity in administration.
Ratio Decidendi: Authorities are bound by the trade notices they issue and cannot argue to the contrary. To maintain administrative consistency, a trade notice issued by one customs house binds all customs authorities; any error in such a notice must be rectified through formal withdrawal or amendment.
Result: Civil appeal allowed.
(B) Customs Law - Uniformity of Administration - Trade notice issued by one customs house must bind all customs authorities across different states - If a trade notice is erroneous, it must be withdrawn or amended to cease being binding (Para 3).
Facts of the case:
The appellants imported refractory blocks of special shape and claimed an exemption based on a notification for refractory bricks. A trade notice had been issued by the customs house for the information and guidance of importers and agents, stating that refractory blocks of special shape were covered by the expression "bricks of special shape" appearing in the said notification. The Tribunal declined to take the trade notice into account on the ground that it could not enlarge the scope of the notification.
Findings of Court:
The court found that the authorities are bound by the trade notices they issue. It held that customs authorities cannot take one stand in one state and another stand in another state. A trade notice issued by one customs house must bind all customs authorities, and if it is erroneous, it should be withdrawn or amended, which had not occurred in this case.
Issues: Whether the customs authorities are bound by the trade notices issued by them and whether such notices are binding across different customs houses to ensure uniformity in administration.
Ratio Decidendi: Authorities are bound by the trade notices they issue and cannot argue to the contrary. To maintain administrative consistency, a trade notice issued by one customs house binds all customs authorities; any error in such a notice must be rectified through formal withdrawal or amendment.
Result: Civil appeal allowed.
Trade-Notice - The court cited this case to establish that authorities are bound by the trade notices they issue and cannot argue to the contrary.
(1) THE appellants claimed the benefit of an exemption notification in respect of refractory blocks of special shape imported by them. The said notification gave such exemption to refractory bricks and there was a trade notice issued by the Bombay Customs House for the information and guidance of importers, clearance agents and all others concerned that refractory blocks of special shape were covered by the expression "bricks of special shape" appearing in the said notification. The Tribunal, however, declined to take the trade notice into account on the ground that it could not enlarge the scope of the said notification.
(2) THIS Court has consistently held that the authorities are bound by the trade notices that they issue and cannot argue to the contrary. (See Ranadey Micronutrients v. CCE.) It was, therefore, not open to the Revenue to contend that the said notification did not exempt refractory blocks.
(3) LEARNED counsel for the Revenue submitted that this trade notice had been issued only by the Bombay Customs House. It is hardly to be supposed that the Customs Authorities can take one stand in one State and another stand in another State. The trade notice issued by one Customs House must bind all Customs Authorities and, if it is erroneous, it should be withdrawn or amended, which in the instant case, admittedly, has not been done.
(4) THE civil appeal is allowed. The order under appeal is set aside.
(5) PAYMENT having been made by the appellants in pursuance of the order under challenge, they shall now be entitled to a refund thereof within twelve weeks.
(6) NO order as to costs.
(7) THE civil appeal is covered by the order we have just delivered in Steel Authority of India v. Collector of Customs, Bombay (Civil Appeal No. 6600 of 1985).
(8) THE civil appeal is allowed.
(9) SUCH payment as has been made by the appellant in pursuance of the order of the Tribunal shall now be refunded to it within twelve weeks.
(10) NO order as to costs.