Case: Ahmedabad Advance Mills Limited, Mihir Textile Limited Vs. Collector of Customs, Bombay

Counsel for the appellant invited our attention to a letter which appellant has addressed to "Ministry of Industry, Udyog Bhawan, Maulana Azad Road, New Delhi" as proof of such application. Learned Additional Solicitor General contended that the said letter could not be treated as the application contemplated in the proviso to Entry 84.66, as the ministry of Industry is not the prescribed authority for granting registration.Even assuming that the said letter should have been treated as the application contemplated in the proviso can the appellant legally claim the relief of concessional duty? Two circumstances have been highlighted against his claim. First is that though the appellant got the import licence on 22-10-1980 he did not make any application for registration for almost six months there after. Second is that even the letter which he claims to be the prescribed application was sent only a month before clearance of the goods from the port and during the remaining period he could not except the Central Government to rush through all the formalities necessary for granting registration. If any hasty steps were adopted on the application the resultant order would have been vulnerable to be assailed as an act done with undue haste. In this context learned Additional Solicitor General referred us to the following observations made by Jeevan Reddy, J i n S.B. International Ltd &Others vs. Assistant Director General of Foreign Trade &Others, "On receipt of the application, the authorities have to satisfy them selves about the correctness of the contents of the application. They also have to satisfy them selves that the application satisfies all the requirements of the scheme and the Other applicable provisions of law, if any. In a country like ours, where abuse of such facilities is rampant, reasonable time has to be afforded to the authorities to process the application. What is a reasonable time, of course, depends on the facts of each case. No hard and fact limit can be prescribed". Learned counsel for the appellant raised an alternative contention that the deficiency in the contract for obtaining the concessions should not have been taken so seriously and the Customs Authorities should have granted the reliefs as the appellants had performed their part complying with the conditions. Non-compliance of the conditions, according to the counsel, was only due to the lapses on the part of the authorities concerned. This contention was expatiated to the extent that the conditions prescribed in the proviso to entry No. 84.66 are merely directory and not mandatory. According to the counsel, the conditions prescribed, if interpreted strictly, would result in the denial of concessional reliefs which statute has conferred on the citizen.In support of that contention, counsel invited our attention to the decision of a Constitution Bench of this Court in State of U.P. vs. Manbodhan Lal Srivastava 1958 SCR 533 , wherein their Lordships were considering the implication of non-compliance with the conditions provided in Article 320(3) of the Constitution on an order imposing punishment to a Government servant without reference to the Public Service Commission. While considering that question learned Judges made a reference to the Privy Council decision in Montreal Street Railway Company vs. Normandin 1917 AIR(PC) 142 and the Federal Court decision in Biswanath Khemka Vs. Rmperor AIR 104 &FC 67. The Constitution Bench held that the provisions of Article 320(3) are not mandatory and non-compliance of those provisions does not afford any cause of action in a court of law. Privy Council in the above quoted decision has observed that the question whether provisions in a statute are directory or imperative depends upon the object of the statute and no general rule can be laid down. "When the provisions of the statute relate to the performance of a public duty and the case is such that to hold null and void sets done in neglect of this duty would work serious general inconvenience or injustice to person who have no control over those entrusted with the duty and at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory." * This is not a case where a certain provision is mandatory or directory. Here the question is whether concessional relief of duty which is made dependent on the satisfaction of certain conditions can be granted without compliance of such conditions. No matter even if the conditions are only directory. In Formica India Division vs. Collector of Central Excise, 1955 (77) ELT 511, non-compliance with Rule 56A of the Central Excise Rule, 1944 was held to be insufficient to deny the benefit of a notification to the assessee. But the said benefit was afforded on the special circumstances of a case as could be seen from the following words.The circumstances in which the appellants did not pay the duty on the intermediary product before putting the same to the captive consumption for producing that stage, the appellants contested the correctness of the classification and had, therefore , not paid the duty on the intermediary product. When it was found that they were liable to pay duty on the intermediary product and had not paid the same, but had paid the duty on the end product, they could not ordinarily have complied with the requirement of Rule 56A. Nor can we find support from the ratio in BOI Finance Ltd. vs. The Custodian &Others, that " infringements of the instructions issued by the Reserve Bank of India under the Banking Regulations Act prohibiting the banks from entering into buy-back arrangements do not invalidate such contracts entered into between the banks and its customer s" as it involved a question of invalidation of the contract. Here neither the contract nor the import is invalid or illegal and the question is only whether the importer is entitled to the concessional duty. The re is no legal foundation for both the appellants to secure the reliefs prescribed in Entry No. 84.66 of the Customs Tariff.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]That fact is not disputed before us and as the appellants were aware of position they choose to pay full Customs duty for making the clearance. Learned counsel contended that the importer is not to be blamed fore with the conditions prescribed in the entry because all what should have been done by the m and what remained to be done was only that part which the authorities had to do in the matter. Obviously the aforesaid contention has no legs to stand at least in one case wherein no application was made at all for registration of the contract before the goods were clearedof the conditions, according to the counsel, was only due to the lapses on the part of the authorities concerned. This contention was expatiated to the extent that the conditions prescribed in the proviso to entry No. 84.66 are merely directory and not mandatoryThis is not a case where a certain provision is mandatory or directory. Here the question is whether concessional relief of duty which is made dependent on the satisfaction of certain conditions can be granted without compliance of such conditions. No matter even if the conditions are only directoryIn Formica India Division vs. Collector of Central Excise, 1955 (77) ELT 511,e with Rule 56A of the Central Excise Rule, 1944 was held to be insufficient to deny the benefit of a notification to the assessee. But the said benefit was afforded on the special circumstances of a case as could be seen from the following words.The circumstances in which the appellants did not pay the duty on the intermediary product before putting the same to the captive consumption for producing that stage, the appellants contested the correctness of the classification and had, therefore , not paid the duty on the intermediary product. When it was found that they were liable to pay duty on the intermediary product and had not paid the same, but had paid the duty on the end product, they could not ordinarily have complied with the requirement of Rule 56ANor can we find support from the ratio in BOI Finance Ltd. vs. The Custodian, that " infringements of the instructions issued by the Reserve Bank of India under the Banking Regulations Act prohibiting the banks from entering intok arrangements do not invalidate such contracts entered into between the banks and its customer s" as it involved a question of invalidation of the contract. Here neither the contract nor the import is invalid or illegal and the question is only whether the importer is entitled to the concessional dutyThe re is no legal foundation for both the appellants to secure the reliefs prescribed in Entry No. 84.66 of the Customs Tariff.