2018 (11) TMI 1592 - HC - Customs

Request for reexport of the cargo not considered - request not considered as it was a case of misdeclaration and the request for reexporting be considered only after adjudication of show cause notice - Held that - We are conscious of the fact that we are not rendering any final findings nor are we making any final orders in this petition. However, the unequivocal and indisputed facts and the provision of law shall not dissuade this Court from granting appropriate interim relief in a case like this else it would result into miscarriage of justice. We are of the considered view that the close perusal of the entire reply affidavit filed on behalf of the respondent, the respondent has not shown any cogent provision of law, which can be said to be entitled them to withhold the permission to reexport as sought by the petitioners. The fine distinction between the proceedings pursuant to the show cause notice and the challenge in the present petition have been loss sight of by the respondents else there would have been no hesitation on the part of the authorities in proceeding in accordance with law as the provision of Section 74 clearly envisages permissible grounds for reexport and there is not a single ground embedded therein, which may be considered as a ground militating against the prayer for permission for reexport. This fact needs appreciation so far as the prayer for reexport and the interest of respondents are concerned - petition allowed by way of remand.

Summary

Issues Involved:
1. Validity of the communication dated 24th April 2018 by the Assistant Commissioner, Customs.
2. Petitioners' right to reexport goods under Section 74 of the Customs Act.
3. Interim relief and provisional release of goods pending adjudication.
4. Confiscation and penalty imposed by the adjudicatory authority.

Detailed Analysis:

1. Validity of the Communication Dated 24th April 2018:
The petitioners challenged the communication dated 24th April 2018 from the Assistant Commissioner, Customs, which refused their request for reexport of the cargo, citing misdeclaration and pending adjudication of a show cause notice. The petitioners argued that there were no specific provisions preventing their right to reexport, and withholding permission was unjustified and violated their constitutional rights.

2. Petitioners' Right to Reexport Goods under Section 74 of the Customs Act:
The petitioners contended that the imported goods were correctly classified under "Custom Tariff Heading 84779000" as "Spare Parts for Injection Moulding Machines" and not as whole machines subject to anti-dumping duty. They repeatedly requested permission to reexport the goods to avoid prohibitory anti-dumping duty. The authorities issued a seizure order and show cause notice instead of considering the reexport request. The petitioners highlighted that Section 74 of the Customs Act allowed for reexport of goods, and the authorities had no valid grounds to deny permission.

3. Interim Relief and Provisional Release of Goods Pending Adjudication:
The petitioners availed the provisional release of goods under Section 110A of the Customs Act by furnishing a bank guarantee and executing a bond. However, they persisted in their request for reexport and did not clear the goods, leading to a notice for auction by the warehouse custodian. The court restrained the authorities from taking further action and considered the petition for interim relief. The petitioners argued that withholding reexport permission on the grounds of potential duty evasion was not justified as Section 74 permitted reexport, and the bond and bank guarantee provided sufficient security.

4. Confiscation and Penalty Imposed by the Adjudicatory Authority:
During the pendency of the petition, the adjudicatory authority issued an order on 31st October 2018, imposing a penalty and confiscation of the goods. The petitioners chose not to challenge this order in the present proceedings but reserved the right to do so in accordance with the law. The respondents argued that the adjudicatory order precluded the petitioners from seeking relief in the current petition, as the order included penalties and confiscation, and the petitioners' active participation in the adjudicatory process estopped them from seeking interim relief.

Court's Decision:
The court, while not rendering final findings, granted interim relief, noting that the respondents failed to show any cogent provision of law justifying the withholding of reexport permission. The court directed the respondents to process the petitioners' reexport request under Section 74 within six weeks, subject to the petitioners filing an undertaking and maintaining the bank guarantee and bond. The court clarified that this order would not affect any future adjudicatory processes or the petitioners' right to challenge the adjudicatory order dated 31st October 2018.

Conclusion:
The court granted interim relief to the petitioners, directing the respondents to process the reexport request while maintaining the existing security measures. The court emphasized that the order was limited to the reexport issue and would not impact other adjudicatory proceedings or the petitioners' rights to challenge the adjudicatory order.