2018 (9) TMI 1525 - HC - Customs

Recovery of Government dues - issue is pending adjudication - Benefit of N/N. 24 of 2015 Cus - duty free scrips under the Merchandise Exports from India Scheme (MEIS) - Held that - The respondents will not adopt any coercive proceedings for recovery till the passing of the adjudication order on the show-cause notice to be issued. However, this will not restrain the respondents from accepting any payments made by the petitioner in discharge of the likely demand - Petition disposed off.

Summary

Issues:
Challenge to communication by Deputy Commissioner of Customs regarding misclassification of goods and benefit claimed under Notification No. 24 of 2015 Cus. for MEIS, jurisdiction of communication, pressure tactics for payment before show-cause notice issuance, acceptance of payment under protest, assurance from Revenue not to initiate recovery proceedings until adjudication order.

Analysis:
1. The petition challenged a communication dated 20th July, 2018 by the Deputy Commissioner of Customs regarding misclassification of goods after an audit following export by the petitioner. The audit suggested that due to misclassification, the petitioner could claim higher benefits under the Merchandise Exports from India Scheme (MEIS) using Notification No. 24 of 2015 Cus. The petitioner exported furnishing fabrics classified under Chapter 63 heading 63.07 but was later found that they should have been under Chapter 63 Heading 63.04. No show-cause notice had been issued, but the communication directed the petitioner to pay back the benefits claimed within 10 days.

2. The petitioner contended that the communication was without jurisdiction and demanded that the amount be paid without any adjudication proceedings. The petitioner expressed willingness to respond appropriately if a show-cause notice was issued. The Revenue assured that no recovery proceedings would be initiated until an adjudication order was passed on the show-cause notice. The petitioner had already paid a substantial amount under protest due to alleged pressure tactics by the Revenue.

3. The Revenue agreed not to take any recovery actions until the adjudication order was passed on the show-cause notice. The petitioner's counsel raised concerns about pressure tactics for payment before the issuance of the show-cause notice. The court accepted the Revenue's assurance and disposed of the petition accordingly, stating that no interference was required at that stage. The respondents were allowed to accept any payments made by the petitioner towards the likely demand without initiating coercive recovery proceedings.

This detailed analysis covers the issues raised in the legal judgment, including the challenge to the communication, jurisdiction concerns, pressure tactics for payment, assurance from the Revenue, and the court's decision to dispose of the petition based on the assurances provided.