Khandwala Finstock Private Limited Vs Union of India & Ors. (Delhi High Court)
Delhi High Court directed to decide afresh whether imported article i.e. gold coins are classifiable under CTH 7114 1910 or 7118 9000 bearing in mind the findings on the scope of those two entries.
Facts- By way of the present writ petition, the petitioner questions the validity of the impugned orders dated 04 September 2020 and 07 September 2020 passed by the Principal Commissioner of Customs, the second respondent herein. By the impugned order the second respondent has rejected the classification of gold coins imported vide 27 Bills of Entry under CTH 7114 1910 as claimed by the petitioner and held that these goods are correctly classifiable under CTH 7118 9000 of the Customs Tariff Act,1975.
The grievance of the petitioner essentially is that the second respondent appears to have construed the judgment rendered in Khandwala Enterprise as having finally determined the question of whether the articles imported by the petitioner were liable to be classified under CTH 7114 1910 or 7118 9000.
Conclusion- We are thus of the firm opinion that the Principal Commissioner has clearly committed a manifest error while viewing the judgment rendered in Khandwala Enterprise and proceeding on the assumption that the contentions raised by the petitioner already stood conclusively answered by the Court. The aforesaid premise is clearly based on an incorrect reading of that decision. The Principal Commissioner has also clearly erred in failing to appreciate the import of the explanatory notes which stand placed along with CTH 7118 9000 and ignoring the binding character of those notes.
In our considered opinion, the Principal Commissioner would thus be obliged to decide the SCN proceedings afresh bearing in mind the observations rendered hereinabove. We consequently leave it open to the said authority to duly examine whether the imported articles would fall within the ambit of CTH 7114 1910 or 7118 9000 bearing in mind our findings on the scope of those two entries as recorded hereinabove.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. By way of the present writ petition, the petitioner questions the validity of the impugned orders dated 04 September 2020 and 07 September 2020 passed by the Principal Commissioner of Customs, the second respondent herein. By the impugned order the second respondent has rejected the classification of gold coins imported vide 27 Bills of Entry under CTH 7114 1910 as claimed by the petitioner and held that these goods are correctly classifiable under CTH 7118 9000 of the Customs Tariff Act,1975.
2. The petitioner seeks to invoke the jurisdiction of this Court to assail the validity of the Order-in-Original notwithstanding the existence of a statutory remedy of appeal, primarily on the ground that the same is based on a wholly erroneous understanding and appreciation of the judgement dated 14 November 2019 which was rendered inter partes in W.P.(C) 9225/2019 titled as Khandwala Enterprise Private Limited vs. Union of India and Ors1.
3. The grievance of the petitioner essentially is that the second respondent appears to have construed the judgment rendered in Khandwala Enterprise as having finally determined the question of whether the articles imported by the petitioner were liable to be classified under CTH 7114 1910 or 7118 9000. According to Mr. Gulati, learned senior counsel appearing in support of the petition, the second respondent incorrectly proceeds on the assumption that this Court had conclusively held that the articles imported by the petitioner were liable to be classified under CTH 7118 9000. It was in the aforesaid backdrop that Mr. Gulati had submitted that since it was ex facie evident that the impugned orders had completely misconstrued the judgment rendered inter partes, the ends of justice would warrant an appropriate clarification being rendered by the Court in this regard whereafter the petitioner may be accorded the liberty to pursue the appellate remedy.
4. We had in this context and consequently accorded liberty to Mr. Gurnani, learned counsel appearing for the respondents, to obtain instructions. When the petition was called finally on 05 October 2023, Mr. Gurnani submitted that the respondents would take the position that no clarification was warranted and that the writ petition is liable to be dismissed outrightly on the ground of alternative remedy.
5. It was in the aforesaid backdrop that we had proceeded to hear submissions addressed by respective sides on merits. Before proceeding ahead and for the purposes of appreciating the context in which the present writ petition has reached this Court, we deem it appropriate to notice the following salient facts.
6. The petitioner is stated to be engaged in the business of import and trade in gold, gold articles and assorted gold jewellery. On 07 August 2009, the Republics of India and Korea entered into a Comprehensive Economic Partnership Agreement2 which shall hereinafter and for the sake of brevity be referred to as the “Indo-Korean CEPA”. The petitioner claimed exemption from payment of customs duties based on the exemption provisions as contained in the Indo-Korean CEPA. In extension of the aforesaid Agreement between the Republics of India and Korea, the Department of Revenue issued a Notification No. 152/2009-Customs dated 31 December 2009 as amended by Notification No. 66/2016-Customs dated 31 December 2016, extending the benefit of Nil Basic Customs Duty3 to all goods falling under CTH 711021 to 711890 subject to the production of a certificate pertaining to the country of origin. The relevant parts of the aforesaid Notification are extracted herein below: –
―Notification No. 152/2009-Customs dated 31.12.2009
Exemption of Customs duty on certain goods when imported
into India from the Republic of Korea
G.S.R.(E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description as specified in column (3) of the Table appended hereto and falling under the Chapter, Heading, Sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the corresponding entry in column (2) of the said Table, when imported into India from the Republic of Korea, from so much of the duty of customs leviable thereon as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the aforesaid Table:
Provided that the importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of Republic of Korea, in accordance with the provisions of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 187/2009-Customs (N.T.), dated the 31st December, 2009.
2. This notification shall come into force with effect from 1st January, 2010.
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