Case Law Details
Shree Renuka Sugars Ltd. Vs Union of India (Gujarat High Court)
Summary: The Gujarat High Court heard a petition concerning the petitioner’s entitlement to benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme for exports of white refined sugar. The petitioner sought protection against coercive recovery of RoDTEP benefits already granted for exports made between 1 June 2022 and November 2022, a declaration of entitlement to the scheme benefits from 1 June 2022, permission to lodge shipping bills claiming RoDTEP benefits, and directions to process pending and future claims. Interim reliefs were also sought to restrain recovery proceedings and permit filing of shipping bills with RoDTEP claims.
The Court noted that the RoDTEP Scheme provides duty credit at prescribed rates for specified exported goods, with refined sugar eligible for a benefit of 0.5% of the export value. It was undisputed that the petitioner had received RoDTEP benefits from January 2021 to June 2022. Following a notification dated 24 May 2022 restricting sugar exports under the export policy, customs authorities issued communications stating that exports of sugar from 1 June 2022 would be treated as restricted exports and that RoDTEP benefits would not be admissible. According to the petitioner, customs authorities at different ports subsequently refused to permit RoDTEP claims through shipping bills, compelling exporters to file shipping bills without claiming the benefit. The petitioner stated that it had filed 127 shipping bills, involving approximately Rs. 2.10 crore in duty credit, without claiming RoDTEP benefits, and further alleged that authorities had threatened recovery of benefits already sanctioned under Section 142 of the Customs Act, 1962.
The petitioner argued that coercive recovery could not be initiated without issuing a show-cause notice or granting an opportunity of hearing, as contemplated under Section 28 of the Customs Act. It also contended that preventing claims through shipping bills could later result in the authorities treating the claims as waived or time-barred. The respondents submitted that the petitioner was not denied the right to claim the benefit but that, as a matter of policy, such claims could not be made in shipping bills and could instead be submitted separately for each export consignment.
Without deciding the wider issues relating to export policy or entitlement, the High Court issued directions to protect the petitioner’s ability to pursue RoDTEP claims. The Court held that the petitioner would be entitled to apply for RoDTEP benefits for exports of white refined sugar even if the benefit had not been claimed in the shipping bills. It directed that the passage of time resulting from the absence of such claims in shipping bills would not render the applications time-barred, and the omission to mention the claim in the shipping bills would not be treated as a waiver. The authorities were directed to process the petitioner’s claims irrespective of whether they were mentioned in the shipping bills. The Court further directed that, if adjudicatory proceedings were required, the Commissioner of Customs and the Assistant Commissioner of Customs, Kandla, should provide the petitioner an opportunity of hearing and act in accordance with Section 28 of the Customs Act. The Court clarified that it had not examined any other issues, including the extent of exports permissible under the export policy, and disposed of the petition along with the connected civil application.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
Heard learned advocate Mr.Paresh Dave for the petitioner, learned advocate Mr.Utkarsh Sharma and learned advocate Mr.Priyank Lodha for the respective respondents.
2. The prayers advanced in the present petition are as under,
“(i) To prohibit the Respondents, their servants and agents from taking any coercive actions of recovery against the Petitioner for export benefits allowed during 1st June 2022 to November, 2022 under RoDTEP Scheme.
(ii) To hold and declare that the Petitioner is entitled to export benefit of RoDTEP Scheme for exports of While Refined Sugar even for the period commencing from 1st June, 2022.
iii. To permit the Petitioner to lodge claim for export benefits under RoDTEP in shipping bills for exports of White Refined Sugar and further directing the Respondents, their servants and agents to accept and process such shipping bills on Customs EDI System thereby allowing the Petitioner to clear consignments of white refined sugar for exportation under Section 51 of the Customs Act, 1962.
iv. To sanction and pay export benefit under RoDTEP Scheme for exports of white refined sugar that may be made in future and also directing the Respondents, their servants and agents to sanction all pending claims under RoDTEP Scheme for the exports made from 27.11.2022 onwards.”
2.1 By way of interim prayers, it is prayed to restrain the custom officers under jurisdiction of respondent Nos.3 and 5 from taking any coercive measures for recovery from the petitioner of the amount sanctioned and paid under the said Remission of Duties and Taxes on Exported Products Scheme for exports of sugar made from 1.6.2022 to 30.11.2022. The other interim prayer is to direct the custom officers concerned to permit the petitioner to lodge shipping bills for export of white refined sugar with claim of export benefit under Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme and further to clear the consignments of the white refined sugar covered under such shipping bills for export.
3. The Government of India, Ministry of Commercial Industries has extended the export incentive under the scheme called Remission of Duties and Taxes on Exported Products (RoDTEP) under the foreign trade policy whereby the duty credit at the fixed rate in respect of the specified goods exported is allowed. For the goods- refined sugar the said benefit is allowed at the rate of 0.5% of the value of the exported goods. For the petitioner who is one of the manufacturers and exporters of the refined white sugar seeks entitlement to the said RoDTEP benefit.
3.1 It is not in dispute that from January 2021 to June 2022, the duty under the RoDTEP Scheme came to be allowed to the petitioner in respect of the consignments which were containing the refined sugar. It appears that Notification dated 24.5.2022 came to be issued by the Director General of Foreign Trade limiting quota of export of sugar as part of the policy. The petitioner has been claiming the said RoDTEP benefit by seeking and mentioning such benefit specifying the amount in the shipping bills themselves when the refined white sugar is exported from different countries from Kandla Port, Mundra Port or Nhava Sheva Port, as the case may be.
3.2 It is to be noted that the petitioner does not want larger quantity of goods to be exported, beyond permissible limits. As per the policy norms, the petitioner would effect export and in that desire to avail RoDTEP benefits. The RoDTEP benefits so claimed was used to be assessed by the officers and the benefit was used to be extended to the petitioner in respect of the exports made.
3.3 It is an undisputed fact that the petitioner has earned RoDTEP benefit from the period June, 2022 to November, 2022 by claiming such benefit in the shipping bills themselves.
However, it appears that certain letters came to be issued by the officers of Kandla customs and Mundra customs providing that the export of sugar made from 1.6.2022 would be treated as restricted export and that the RoDTEP benefit would not be admissible to the goods where the export was restricted under the foreign trade policy.
3.4 It is the grievance of the petitioner that the custom authorities at the different station of Mundra, Kandla or Nhava Sheva Port, as the case may be, have been taking a changed stand that the exporter would not be entitle to submit its claim for benefit of RoDTEP Scheme through shipping bills for export. It has been given out that the exporter will not be submitting the claim of benefit in the shipping bills without claiming the actual benefit.
3.5 In other words, the exporters were stopped from advancing their prior claim for getting their benefit but were compelled to get their claim adjudicated. The petitioner has stated that in view of such insistence, it had no option but to lodge the shipping bills on the system without claiming the benefit of RoDTEP Scheme thereunder. It is stated that as many as 127 shipping bills and even further, involving duty credit aggregating to Rs.2.10 crores approximated, have been submitted, however without claiming the benefit under RoDTEP Scheme, though as per the case of the petitioner, the petitioner is entitled to claim such benefit.
3.6 It is further grievance of the petitioner that the petitioner is not only permitted to claim the benefit in question in the shipping bills but even in respect of the benefit already accrued and earned by the petitioner, the authorities have threatened with the recovery proceedings under Section 142 of the Customs Act, 1962, if the petitioner fails to pay back the benefit under the Scheme. This recovery is sought to be effected only on the ground that from June, 2022 onwards the petitioner claim such benefit by mentioning it in the shipping bills.
3.7 It is in the above premise of operating facts that the petitioner has approached this court by filing this petition seeking protection against the coercive recovery and further seeking the entitlement to the export benefit under the RoDTEP Scheme.
4. Learned advocate for the petitioner submitted that the officers could not be permitted to resort to the coercive recovery even without issuing any show-cause notice and without affording opportunity to the petitioner. It was submitted that Section 28 of the Customs Act contemplates the opportunity of being heard and that since the denial of the export benefit is an adverse consequence on the petitioner, before taking such step or decision the petitioner has right to be heard to put forth its case. It was submitted that it is not permissible for the respondent authorities to take stand that the petitioner cannot claim benefit of the scheme by submitting such claim in the shipping bills itself.
4.1 It was submitted that when the petitioner is prevented from lodging the claim for benefit of RoDTEP Scheme, at the juncture of forwarding the shipping bills itself, subsequently the authorities may treat the claim of the petitioner for the benefit either to have been waived or as time barred.
4.2 On the other hand, learned advocate for the respondent submitted that the petitioner is not totally denied its right to claim the benefit, however as a matter of policy, in the shipping bills the benefit is not permitted to be claimed. It is submitted that the petitioner may claim the benefit in respect of each consignment of export of the refined white sugar independently of the shipping bills.
5. As the controversy unfolds as above, the court is of the view that the following directions would serve the ends of justice. Accordingly it is provided that,
i. The petitioner shall be entitled to claim the RoDTEP Scheme benefit in respect of the exports of white refined sugar at the rate permissible. Even if such benefit is not claimed or mentioned in the shipping bills, the petitioner is permitted to make necessary application seeking such benefit in respect of the consignments concerned.
ii. The passage of time in making such applications which would occur as amount would not be mentioned in the shipping bills, would not render the claim of the petitioner time barred.
iii. The non-mentioning of the claim of the benefit in the shipping bill by the petitioner shall also not be treated as waiver on part of the petitioner by the authorities.
iv. The authority shall process the claim of the petitioner for RoDTEP Scheme benefit irrespective of the fact that the same was not mentioned or lodged along with the shipping bill concerned.
v. If any adjudicatory proceedings are require to be undertaken by the authorities in respect of the claim of the petitioner for the benefit, the respondent Nos.3- The Commissioner of Customs, Kandla and respondent No.4- The Assistant Commissioner of Customs, (DBK), Kandla, shall while deciding the claim, extend opportunity of hearing to the petitioner and shall act in accordance with Section 28 of the Customs Act.
6. Except giving the above directions, the court has not gone into any other aspect in the subject matter including the extent of exports which may be allowed by customs authorities under the export policy.
7. In view of disposal of the petition, the Civil Application will not survive. It is disposed of accordingly.
The Registry shall accept the Vakalatnama of learned advocate Mr.Priyank Lodha, which shall be filed within one week.
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