2015 (1) TMI 1285 - HC - Customs

Import under SFIS Scheme - permitted to be sold/ reexport/ alienated inasmuch as three years have elapsed from the date of import/ procurement in terms of the foreign trade policy of 2009-2014 - Held that - this is being permitted on the specific condition that the petitioner shall furnish a bank guarantee in favour of the respondent for an amount of ₹ 12 crores. This amount is being taken because, according to the petitioner, the assessed customs duty was ₹ 9.18 crores approximately at the time of importation which was exempted because of the SFIS Scheme. There may be other incidental charges and, therefore, to cover the same, the figure of ₹ 12 crores has been arrived at. The vessel may be sold/ re-exported/ alienated only after furnishing of the bank guarantee for ₹ 12 crores.

Summary

Issues:
- Permission to sell/re-export/alienate a vessel imported under the SFIS Scheme after three years.
- Requirement of furnishing a bank guarantee in favor of the respondent.
- Clarification on duty payment based on entitlement under the Foreign Trade Policy of 2009-14.

Analysis:
The judgment by the Delhi High Court addressed the issue of permitting the sale/re-export/alienation of a vessel, Greatship Akhila, imported under the SFIS Scheme after three years. The court allowed the sale/re-export/alienation of the vessel, despite the absence of a sequel notification by the Ministry of Finance, Government of India. However, this permission was subject to a specific condition that the petitioner must furnish a bank guarantee in favor of the respondent for an amount of Rs. 12 crores. This amount was determined based on the assessed customs duty of approximately Rs. 9.18 crores at the time of importation, which was exempted under the SFIS Scheme. The additional amount was intended to cover any other incidental charges that may arise.

Furthermore, the judgment clarified that if the petitioner was entitled to sell/re-export/alienate under the Foreign Trade Policy of 2009-14, no duty would be payable. However, in case the petitioner was not entitled to do so, the duty along with other incidental charges would become payable. The court emphasized that the order to furnish the bank guarantee was passed to safeguard the interest of revenue in the eventuality that duty and other charges become payable.

The court set a deadline for the filing of counter-affidavits and rejoinder/affidavits, with a subsequent renotification date. The judgment highlighted the importance of the bank guarantee in ensuring compliance with duty payment obligations and protecting the revenue's interests. The order provided a clear framework for the sale/re-export/alienation of the vessel while balancing the petitioner's rights under the Foreign Trade Policy with the revenue considerations.