What is the binding nature of public notices issued by Custom Houses
Way back in 1996 in Ranadey Micronutrients followed by several decisions, the Supreme Court had held that the department cannot take a plea against its own circulars.
In Steel Authority of India Vs. Commissioner of Customs, Bombay – - this very issue had been in agitation before the Supreme Court. The Apex Court then ruled that 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 The trade notice issued by one Customs House must bind all Customs authorities and, if it is erroneous, it should be withdrawn or amended.
This decision of the Supreme Court was delivered on October 28, 1999. By a strange coincidence, exactly six years later to the date by a decision dated October 28, 2005, the Supreme Court has taken a different view. Please see our latest case which we have carried today.
In this case the counsel for the importer relied on a public notice issued by the Madras Custom House with regard to interpretation of an exemption notification. But the counsel for revenue took a plea that the public notice issued by a particular Custom House cannot be equated with the circular issued by the Board in exercise of its statutory power under Section 151A of the Customs Act. The exemption notification being a statutory one cannot be clarified by one Custom House as the same must emanate from the same authority.
The Supreme Court did not agree with the assessee’s counsel and held that in terms of Section 151A it was only the Board which may issue instructions and even the Board had limited power as held in the Pahwa Chemicals Case.
Of course the SAIL case was apparently not brought to the notice of the Apex Court.
Now what happens to the trade notices and public notices issued by the Commissioners. They may not have relevance even within the same Commissionerate. The Supreme Court in this very case had observed that the legislature always intend to avoid hard ship. The same cannot be said off the executive. What is the purpose of issuing clarifications by trade notices and public notices if they are not binding on any one including the ones who issued them? It is high time they stopped issuing clarifications as they only result in more confusion and litigation. Yet another example of this kind of confusion is analysed in our Guest Column today. Finally is the present decision of the Apex Court per incuriam or does it over rule the SAIL decision?