2014 (3) TMI 136 - HC - Customs

Permission to re-export Synchronous Digital Hierarchy (SDH) Transmission Equipment - abandoned goods - Held that - It is clear from Dugar (1992 (1) TMI 103 - SUPREME COURT OF INDIA) that when the goods are virtually abandoned by the importer/purchaser, as in this case, so long as ownership continues with the supplier, his request for their return through re-export cannot be turned down. In the present case, the order impugned by the petitioner does not allege that the goods were either mis-declared or wrongly classified or valued. In fact the revised PO supports the petitioner s grievance that the importer was categorical in its intention not to take the goods and incur further anti-dumping duty liability. The importer- like in Dugar (1992 (1) TMI 103 - SUPREME COURT OF INDIA), abandoned the matter and even withdrew the appeal which it appeared to have filed before the CESTAT, primarily to aid the petitioner. There is nothing on the record indicative of mis-declaration or suppression or wrongful valuation of the goods at the time they were brought in. Clearly the importer in effect abandoned them once it became aware of the liability to pay anti-dumping duty. The importer also averred positively that the petitioner is the owner of the goods. - the goods in question here are entitled to be treated and cleared for re-export - Decided in favor of petitioner.

Summary

Issues Involved:
1. Whether the petitioner has the right to re-export the Synchronous Digital Hierarchy (SDH) Transmission Equipment.
2. Whether the imposition of anti-dumping duties affected the contractual obligations.
3. Whether the refusal by the Commissioner of Customs to allow re-export was justified.
4. The applicability of the CBEC circular and relevant legal precedents.

Detailed Analysis:

1. Right to Re-export:
The petitioner sought directions under Article 226 of the Constitution of India to permit the re-export of SDH Transmission Equipment. The petitioner argued that the title to the goods continued to vest in it since the Purchase Order (PO) by Etisalat was cancelled due to unforeseen anti-dumping duties. The petitioner emphasized that it had not received consideration for the goods and thus retained ownership.

2. Imposition of Anti-dumping Duties:
The anti-dumping duties were imposed by a Central Government Notification dated 08.12.2009, which became public on 11.12.2009. This duty rendered the contract unviable for Etisalat, leading to the cancellation of the SDH line items from the PO. The petitioner argued that this unforeseen event should not penalize it since the goods were shipped before the notification was known.

3. Refusal by Commissioner of Customs:
The Commissioner of Customs refused permission for re-export by an order dated 08.06.2010. Etisalat's subsequent appeal was withdrawn, and no further action was taken due to Etisalat's winding-up proceedings. The petitioner contended that the refusal was inconsistent, especially given a similar case where re-export was allowed by the Kolkata Commissioner without Customs Duty.

4. CBEC Circular and Legal Precedents:
The petitioner relied on the CBEC circular No. 100/2003, which supports re-export without the need for a "No Objection Certificate" from RBI if the goods were imported due to a bona fide mistake. Additionally, the petitioner cited the Supreme Court judgment in Union of India v. Sampat Raj Dugar, which established that an exporter retains ownership and the right to re-export if the importer abandons the goods.

Judgment:
The court held that the petitioner's request for re-export could not be denied as the importer, Etisalat, had abandoned the goods due to the unforeseen imposition of anti-dumping duties. The court noted that the impugned order did not allege any mis-declaration or wrongful valuation of the goods. The CBEC circular and the precedent set in Sampat Raj Dugar supported the petitioner's claim.

The court directed the petitioner to file an application to the Commissioner seeking re-export. The Commissioner was instructed to verify the petitioner's ownership and title to the goods and grant the necessary permission in line with the Kolkata Commissioner's order dated 01.07.2010. The petition was allowed, and the Commissioner was given three months to make an order upon receiving the application. No costs were ordered.