Case Law Details

Case Name : Naitik Enterprise Vs Union of India (Gujarat High Court)
Appeal Number : Special Civil Application No. 833 of 2019
Date of Judgement/Order : 02/05/2019
Related Assessment Year :
Courts : All High Courts (6115) Gujarat High Court (610)

Naitik Enterprise Vs Union of India (Gujarat High Court)

In terms of sub-section (25) of section 2 of the Customs Act, once the goods are cleared for home consumption, they no longer retain the identity of the imported goods. Under the circumstances, once the goods have been cleared, such goods no longer remain to be imported goods and hence, there is no question of re-exporting the goods as has been stated in the affidavit-in-reply filed on behalf of the respondents. It is true that prior to the provisional release of the goods and payment of the relevant duties, the petitioner had sought re-export of such goods, which request came to be turned down. However, now, what the petitioner seeks is to export of goods after the same have been cleared for home consumption. On behalf of the respondents, the only contention raised is that in order to deter the petitioner from committing the same irregularities again, the permission to export the goods does not deserve to be granted. In the opinion of this court, unless there is a statutory bar against export of such goods or the petitioner otherwise does not satisfy any statutory requirement for export of such goods, it is not permissible for the respondent authorities to deny the request of the petitioner for granting permission to export the goods.

FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT

1. Mr. Nirzar Desai, learned Senior Standing Counsel, waives service of notice of rule on behalf of the respondents.

2. By this petition under article 226 of the Constitution of India, the petitioner has challenged the communication dated 11.2018 of the third respondent – Assistant Commissioner of Customs, Valvada, informing the petitioner that its request for re-export of goods has been rejected by the Principal Commissioner, Customs, Ahmedabad.

3. The facts stated briefly are that the petitioner is engaged in various businesses, including trading of goods like Aluminium P.S. Plates, printing ink, printing blankets etc. which are used in the printing industry. The petitioner purchased a consignment of 77,000 pieces of Aluminium Plates (PS) from one M/s. Real Ventures General Trading LLC of Dubai, UAE, under a commercial invoice No.RVGT0019541/2018 dated 25.2.2018. The goods have been imported at Inland Container Depot, Valvada, for which a Bill of Entry No.5574760 dated 14.3.2018 has also been filed by the petitioner seeking clearance of the goods for home consumption. In the Bill of Entry, the goods were shown as classifiable under S.H.No.37013000 of the Customs Tariff, and since Anti Dumping Duty @ 0.22 US Dollars per kilogram had been leviable on the goods covered by the above referred classification of S.H.No.37013000 of the Customs Tariff by virtue of Notification No. 25/2014-Cus. (ADD) dated 9.6.2014 the petitioner has shown such Anti Dumping Duty also in the Bill of Entry for payment thereof. It is the case of the petitioner that when the goods were brought at ICD, Valvada and were opened by the Custom Officers, a few stickers were found on some of the boxes in the pallets indicating that the goods were allowed to be re-exported by the Customs authorities of Nhava Sheva Port in Raigad District of Maharashtra; and therefore, the Custom Officers caused inquiries and found that the concerned goods were imported by one M/s.S.K. Enterprises of Surendranagar at Nhava Sheva Port by filing a Bill of Entry No.8948204 dated 13.3.2017, and that the Nhava Sheva Custom officers having felt that the goods were Aluminium CtCP plates (and not Aluminium PS Plates as declared) attracting anti dumping duty at higher rate of 4.87 USD per square metre by virtue of Notification No.51/2012-Cus (ADD) dated 3.12.2012, and in view of such dispute about applicable rate of anti-dumping duty, the goods were re-exported by M/s. S.K. Enterprises from Nhava Sheva Port. It was also found that the proprietor of M/s. S.K. Enterprise was the son-in-law of the petitioner.

3.1 Thereafter, the petitioner requested the respondents No. 2 and 3 herein for provisional release of the above referred goods vide letters dated 24.4.2018, 1.5.2018, 14.5.2018 and 28.5.2018; and in response thereto, the Assistant Commissioner of Customs, by a letter dated 1.6.2018, called upon the petitioner to execute a bond for value of Rs.44,22,023/- and furnish a Bank Guarantee of Rs.16 lakhs, and also make payment of anti-dumping duty under Notification No.51/2012-Cus (ADD).

3.2 Since the goods were lying at ICD, Valvada from March, 2018, and the shelf life of the goods was limited, the petitioner found that it may not be possible to sell the imported goods in the local market because the demand for such goods is limited in the printing industry in India. On the other hand, the foreign supplier agreed to take back the goods and, therefore, on the basis of a written confirmation of the UAE based supplier for returning the goods back to them, the petitioner, by a letter dated 4.6.2018, requested the second respondent herein for permission to return the goods by way of re-export.

3.3 By a letter dated 8.6.2018, the petitioner was informed that its request was rejected and that as the goods had been ordered to be provisionally released vide order dated 1.6.2018, the same could not be allowed to be re-exported.

3.4 It appears that thereafter, a writ petition was filed before this court being Special Civil Application No.9126 of 2018 for a direction to allow re-export of the goods, which came to be withdrawn on 20.6.2018 for pursuing the matter with the custom authorities.

3.5 Thereafter, the petitioner submitted a bond for a sum of Rs.44,22,024/-, and also furnished a bank guarantee for a sum of Rs.16,00,000/-. The petitioner also paid/deposited all the duties leviable on the goods including anti-dumping duty in accordance with the higher rate laid down vide Notification No.51/2012-Cus (ADD). The petitioner submitted a letter dated 12.7.2018 informing the third respondent that all the conditions of provisional release of the goods were complied with; and a request was made to assess the above referred Bill of Entry No.5574760 dated 14.3.2018 provisionally and also for allowing provisional release of the goods. It is the case of the petitioner that it has complied with all the conditions laid down by the custom authorities for release of the goods, and no liability remains to be discharged by the petitioner and that the goods are therefore liable to be cleared from customs area.

3.6 However, since the goods lying at ICD, Valvada from March, 2018 are Offset Printing Plates, which are coated and covered by chemicals, and such chemicals evaporate over a period of time, thereby rendering the goods, namely, Positive Offset plates, unusable for printing purpose and the market for such printing plates in India is limited, the petitioner is not in a position to locate buyers for selling the entire cargo of Offset Printing Plates imported vide the above referred Bill of Entry.

3.7 On the other hand, the UAE based supplier has a large clientele all over the world, and it is easy for this supplier to sell these goods to any other buyer before the goods become useless in view of possible evaporation of chemicals used for coating and covering the plates. The petitioner, therefore, desires to export these goods so that the petitioner’s losses could be minimized in the process.

3.8 Therefore, for export of these goods in accordance with section 50 of the Customs Act, 1962 (hereinafter referred to as “the Act”), the petitioner filed a Shipping Bill bearing No.8962904 dated 17.11.2018 with the third respondent, who is the proper Customs Officer in charge of Valvada ICD. The third respondent did not assess the above referred shipping bill, and therefore, the petitioner was not in a position to export the goods in question. However, the third respondent issued a letter dated 29.11.2018 informing the petitioner that the request for re-export of goods had been rejected by the Principal Commissioner of Customs, Ahmedabad, which was communicated to the petitioner vide letter dated 8.6.2018. Being aggrieved, the petitioner has filed the present petition.

4. Mr. Paresh Dave, learned advocate for the petitioner submitted that the goods in question are freely exportable and, therefore, the petitioner’s application for export of goods ought not to have been rejected by the customs authorities. It was submitted that earlier, the petitioner wanted to re-export the goods without complying with the conditions laid down by the customs authorities for releasing the goods; but this situation no longer continues, inasmuch as the petitioner has paid all the duties including anti-dumping duty at the higher rate, and has also furnished bond as well as bank guarantee as directed by the Customs authorities. It was submitted that the goods imported by the petitioner have been released for being cleared for home consumption and, therefore, such goods could be used in India or they could be exported also in accordance with the normal procedure for export of any goods. Under the circumstances, the action of the customs authorities in not allowing the petitioner to export the goods is illegal, and not in accordance with the provisions of the Customs Act.

4.1 Reference was made to sub-section (25) of section 2 of the Customs Act which defines “imported goods” to mean any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. It was submitted that in this case, the goods having been already cleared for home consumption are no longer imported goods and hence, the respondents are not justified in not permitting the export of such goods which are otherwise freely exportable.

5. On the other hand, Mr. Nirzar Desai, learned Senior Standing Counsel for the respondents, reiterated the averments made in the affidavit-in-reply filed on behalf of the second and third respondents. It was submitted that the petitioner imported the same cargo at a different port before importing at ICD Valvada and again mis-declared in respect of Computer to Conventional Plates (CtCP) with an intent to evade payment of levy of anti-dumping duty at the rate of 87 USD per square metre as per the provisions of Notification No.51/2012-ADD dated 3.12.2012. It was submitted that therefore, in such matters where any importer has mis-declared the goods with an intent to evade payment of appropriate anti-dumping duty, and thereby committed offences as per the relevant provisions of the Customs Act, 1962, read with the provisions of the Customs Tariff Act, 1975, such importer should not be allowed to re-export the goods, because such an instance would set a wrong precedent. It was submitted that the petitioner has twice mis-declared the goods with a clear intention to evade payment of anti-dumping duty and that, in order to deter such importer for regularly repeating such offences, the request of the petitioner for re­export of the goods cannot be acceded to.

6. The facts are not in dispute. In respect of the goods imported by the petitioner, upon objection being raised by the Customs authorities with regard to classification of the goods and the corresponding rate of anti-dumping duty to be paid thereon, the petitioner had sought provisional release of the goods and such permission had been granted by the respondent authorities as is evident from the averments in the affidavit-in-reply filed on behalf of the respondents. In fact it has been categorically stated in the affidavit-in-reply that from the time of permission of provisional release of the goods in the month of June, 2018, the goods have been released to the petitioner and are at their disposal. It is also stated that the petitioner had paid the applicable duty, submitted the bond for a sum of Rs.44,22,024/- and furnished a bank guarantee of Rs.16,00,000/- and accordingly, the goods have been provisionally released as per order dated 1.6.2018 issued by the Principal Commissioner of Customs, Ahmedabad.

7. Evidently therefore, the goods have been cleared for home consumption. In terms of sub-section (25) of section 2 of the Customs Act, once the goods are cleared for home consumption, they no longer retain the identity of the imported goods. Under the circumstances, once the goods have been cleared, such goods no longer remain to be imported goods and hence, there is no question of re-exporting the goods as has been stated in the affidavit-in-reply filed on behalf of the respondents. It is true that prior to the provisional release of the goods and payment of the relevant duties, the petitioner had sought re-export of such goods, which request came to be turned down. However, now, what the petitioner seeks is to export of goods after the same have been cleared for home consumption. On behalf of the respondents, the only contention raised is that in order to deter the petitioner from committing the same irregularities again, the permission to export the goods does not deserve to be granted. In the opinion of this court, unless there is a statutory bar against export of such goods or the petitioner otherwise does not satisfy any statutory requirement for export of such goods, it is not permissible for the respondent authorities to deny the request of the petitioner for granting permission to export the goods.

8. On behalf of the respondents, the learned senior standing counsel has not been able to point out any statutory provision under which, with a view to deter the petitioner from repeating any similar irregularities in future, the respondents can prevent the petitioner from exporting the goods in question, which are no longer imported goods and are otherwise freely exportable goods. Under the circumstances, the impugned communication dated 29.11.2018 informing the petitioner that its request for re-export of the goods has been rejected, cannot be sustained. In fact the use of the expression “re­export” is contrary to the request made by the petitioner, inasmuch as what the petitioner had requested was for permission to export and not for re-export. Besides, in absence of existence of any statutory bar preventing the petitioner from exporting the goods in question, the respondents are not justified in denying the request of the petitioner.

9. It has been contended on behalf of the respondents that the description of goods shown in the Shipping Bill is the same as shown in the Bill of Entry which was mis-description, inasmuch as the goods in question are not Aluminium P. S. Plates, but are Computer to Conventional Plates.

10. In this regard, the learned advocate for the petitioner has submitted that if that is the only objection by the respondents, the petitioner is ready and willing to change the description of the goods in question in the Shipping Bill, without prejudice to the rights and contentions of the petitioner, as Computer to Conventional Plates.

11. Paresh Dave, learned advocate for the petitioner states that the petitioner would file a fresh shipping bill describing the goods as Computer to Conventional Plates, by tomorrow itself.

12. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned communication dated 29.11.2018 of the third respondent ‘Assistant Commissioner of Customs, Valvada informing the petitioner that its request for re-export of goods has been rejected by the Principal Commissioner, Customs, Ahmedabad, is hereby quashed and set aside. The respondents are directed to forthwith permit the petitioner to process the Shipping Bill of the petitioner for export of the goods in question. Rule is made absolute accordingly with no order as to costs.

Direct Service is permitted.

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