2016 (2) TMI 860 - HC - Customs

Import of old dore bars with impurity - claim of benefit of concessional rate of customs duty - the Central Government granted exemption from payment of duty in excess of BCD NIL and CVD @ 2% ad valorem, for imports upto 20.01.2013 and in excess of BCD NIL and CVD @ 4% for imports w.e.f 21.01.2013 on gold dore bars having gold content not exceeding 95% vide Sl.No.318 of Notification No.12/ 2012 dated 17.03.2012, subject to fulfillment of condition No.5 and 34 of the said notification by the importer. Held that - A reading of the aforesaid condition requires two fold compliance firstly, goods must be imported, which the petitioner has done. Secondly, the goods should be in accordance with the packing list issued by the mining company by whom they were produced. If regard is had to Annexure-B, list of goods , apparently goods were imported in accordance with the packing list issued by the mining company by whom the goods were produced, since assay certificate is issued by the Perth Mint, a government company constituted by the Government of Australia under the statute known as Gold Corporation Act, 1987 . The words in accordance requires a literal interpretation and should not be confused with the use of words along with goods . Both of them would give different meanings. Learned counsel for the petitioner is correct in his submission that the words in accordance when inserted in the condition 34(b) in the Notification No.12/2012, the requirement was to furnish the packing list and if so done, it cannot be said that there is non compliance with condition No.34(b). If the words along with is placed by removing the words in accordance , then a different meaning could be attached to compliance of Section 34(b); that is the goods will have to be necessarily accompanied by packing list . Admittedly, petitioner produced the assay certificate and the 2nd respondent accepted the same on the date when it came to the Airport, Cargo Division and was permitted to be released while granting exemption from duty under the relevant Notification. Therefore, in my opinion, exfacie, petitioner did comply with the requirements of condition No.34(c) in the matter of import of gold dore bars from Australia and the mines from Australia. From the material on record, more appropriately the packing list, Annexure-B and the assay certificate, Annexure-C of Perth Mint relating to import of gold dore bars mentioned therein, at the time of import, petitioner complied with condition Nos.34(a), 34(b) and 34(c) of the Customs Notification No.12/2012 dated 17.3.2012. Benefit of exemption / concessional rate of duty allowed - Decided partly in favor of assessee.

Issues Involved:
1. Compliance with conditions 34(a), 34(b), and 34(c) of Customs Notification No.12/2012.
2. Validity of the requirement to furnish the packing list from the mining company.
3. Jurisdiction of the High Court to entertain the petition.
4. Procedural propriety in the issuance of show cause notices.

Detailed Analysis:

1. Compliance with Conditions 34(a), 34(b), and 34(c) of Customs Notification No.12/2012:

The petitioner, an importer of gold dore bars, claimed compliance with conditions 34(a), 34(b), and 34(c) of Notification No.12/2012. The conditions required that:
- Condition 34(a): Gold dore bars must be directly shipped from the country of production and each bar must weigh 5 kg or more.
- Condition 34(b): Gold dore bars must be imported in accordance with the packing list issued by the mining company.
- Condition 34(c): An assay certificate must be issued by the mining company or a laboratory attached to it, detailing the precious metal content.

The court found that:
- The gold dore bars were produced and shipped from Australia, satisfying condition 34(a).
- The term "in accordance with" in condition 34(b) was interpreted to mean that the goods must match the packing list issued by the mining company. The court accepted the petitioner's argument that the packing list from Perth Mint complied with this condition.
- The assay certificate issued by Perth Mint, a government entity in Australia, was accepted as satisfying condition 34(c), despite not disclosing the specific mining company due to legal constraints.

2. Validity of the Requirement to Furnish the Packing List from the Mining Company:

The respondent's demand for the packing list from the mining company was challenged. The court noted that the term "in accordance with" does not necessitate the physical accompaniment of the packing list with the goods. The court found that the self-certification by Perth Mint, supported by the assay certificate, was sufficient to meet the requirements of condition 34(b).

3. Jurisdiction of the High Court to Entertain the Petition:

The respondents argued that the petition was not maintainable under Article 226 of the Constitution due to territorial jurisdiction issues. However, the court held that it had jurisdiction to entertain the petition, as the issues involved were within its purview. The court referenced previous orders and judgments to support this conclusion.

4. Procedural Propriety in the Issuance of Show Cause Notices:

The court acknowledged that during the pendency of the petition, show cause notices were issued to the petitioner. The court directed that the adjudication of these notices should proceed, allowing the petitioner to present their case and evidence. The court emphasized the need for the authorities to consider the doctrine of "substantial compliance and intended use" as observed by the Supreme Court in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal and Others (2011) 1 SCC 236.

Conclusion:

The court partially allowed the petition, declaring that the petitioner had complied with conditions 34(a), 34(b), and 34(c) of Notification No.12/2012 based on the provided documents. The court did not quash the letter dated 18.06.2013 but allowed the continuation of proceedings pursuant to the show cause notices. The authorities were advised to consider the doctrine of substantial compliance in their adjudication.

← Previous Next →