2016 (3) TMI 390 - HC - Customs

Writ petition - Validity of Tribunal s order - Tenability of claim for interest under Section 28AA - Period of limitation in relation to amount receivable upon forfeiture of the bond - Held that - there appears to be at lest prima facie some substance in the submission advanced by Mr. Saraf that the claim for ₹ 20,21,378/- arose out of forfeiture of the bond. - there are some questions of fact like Whether the claim is barred by limitation? Whether the importer in fact made any misrepresentation? Whether the goods exported contained 98% of cotton, which are better to be left with the appellate authority to deal with. Therefore, Tribunal s order is set aside and it is open to the writ petitioners to prefer an appeal in accordance with law. - Decided in favour of revenue i.e. writ petitioners

Summary

Issues:
1. Duty exemption scheme utilization for export of goods
2. Discrepancy in fabric composition between imported goods and exported pants
3. Notice claiming duty concession recovery under Customs Act
4. Writ petition challenging the notice and subsequent order
5. Trial court's decision on the notice issuance timeline and compliance
6. Appeal by revenue against trial court's decision
7. Arguments regarding forfeiture of bond, limitation, and misrepresentation
8. Consideration of submissions by both parties
9. Prima facie substance in the claim for forfeiture of bond
10. Order setting aside the challenge and allowing appeal

Detailed Analysis:

1. The judgment revolves around the utilization of a duty exemption scheme for exporting goods, where the importer is obligated to export goods without altering their content. In this case, fabric was imported to make pants for export, but a discrepancy was found in the fabric composition between the imported goods and the exported pants.

2. The revenue claimed duty concession recovery under the Customs Act due to the alleged non-compliance with the export obligation. A notice was issued to this effect, leading to a writ petition challenging the notice and subsequent order demanding the duty amount.

3. The trial court analyzed the timeline of notice issuance and compliance, highlighting the importance of issuing notices within the statutory limitation period. It concluded that the delay in realizing non-compliance raised questions about the validity of the notice and subsequent actions.

4. The revenue appealed against the trial court's decision, arguing that the claim for duty amount forfeiture was not subject to limitation and that the writ petitioners' misrepresentation was evident from the test report.

5. The writ petitioners countered, citing a certificate from the Director General of Foreign Trade confirming export compliance. They contended that any further inquiry was impermissible after the certificate was issued and that the entire claim was subject to the limitation under the Customs Act.

6. The High Court considered both parties' submissions and found prima facie substance in the argument regarding the forfeiture of the bond. It held that factual questions should be left to the appellate authority and set aside the order under challenge.

7. The judgment allowed the writ petitioners to appeal in accordance with the law, excluding the time spent on the writ petition and appeal from the limitation period calculation. The appeal and application were both allowed, emphasizing the need for a thorough examination of factual aspects by the appellate authority.