9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 441 - HC - CustomsJurisdiction - Advance Authorization - It is alleged that at the time of import, a copy of Advance Authorization was produced before the Customs Authority and had claimed benefit of Notification No.96/2009-CUS and No. 98/2009-CUS. - It is contended that such show-cause notice was replied and requested to cross-examine the owners of the trucks and cross-examination was carried out and during the course of such cross-examination, the transporters have accepted that the material was transported. Whether Custom Authority has no jurisdiction for issuing any notice or adjudicate as refund was given by the DGFT and advance authorization licence is still in existence? HELD THAT - The DRI has issued the impugned notice proposing recovery of excise duty refunded by the department of DGFT by way of TED for the material supplied to 100% EOU (deemed export) as well as proposing recovery of interest and imposition of penalty on the petitioners, as also on the conoticee. It also appears that during the adjudication proceedings, the department has sought for information from the concerned department Central Excise regarding examination of goods by it. It is further stated therein that no refund / rebate of the duty paid on their supplies to the EOUS has been granted to M/s. Rajhans Impex Pvt. Ltd., Jamnagar. It also reveals from the letter dated 28.08.2014 of the Superintendent (PI), Central Excise Division, Surendranagar that the goods were sent to M/s.Shrikrupa Exports and as per the affidavit filed on behalf of Srijan Exports, Chandigrh (page Nos.173-174 of the petition), the firm has received the consignment with form No. ARE-3 and the same has been examined by the jurisdictional Superintendent of Central Excise and the officer has visited the factory premises after verifying the contentions of the documents and the material received, has certified the facts of receipt of the goods. It is pertinent to note that in view of Rules 25 and 26 of the Central Excise Rules referred to hereinabove, it is admitted legal position that if there is any breach under the said Rules, the Central Excise Department has an authority to confiscate and impose penalty upon defaulting individual or the firm. Now, in this case, it is an admitted fact that the Excise Department has clearly informed the Custom Department that no refund was extended by it to the petitioners herein - the authority which may take action against the petitioners is DGFT. Of course, DRI can, after investigation, inform the concerned DGFT to take action against the present petitioners for breach of condition of Advance Authorization or deemed export or for wrongful taking TED. Now, admittedly, the petitioner is holding Advance Authorization and that Advance Authorization has not been cancelled by the competent authority. It is also admitted fact that whatever refund has been granted, is issued by the DGFT. It also appears from the correspondence between other department that the jurisdictional Excise Offices have certified the facts of receipt of the goods though the material was not physically verified. It also appears that DRI is demanding the amount which has been refunded by the DGFT. It is an admitted fact that the Advance Autorization Licence of the petitioners is still valid and no action is taken by the DGFT for breach of condition thereof. As such, initiation of proceedings by the customs is nothing but an exercise of power in excess of jurisdiction. When the Custom Department has exercised power in excess of jurisdiction, than, this Court can exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India. Therefore, considering peculiar facts of this case, the impugned order-in-original is required to be set aside. Petition allowed.
Issues:
1. Jurisdiction of the Customs Department to demand refund of Terminal Excise Duty (TED) sanctioned by DGFT. 2. Validity of the Advance Authorization issued by DGFT. 3. Alleged clandestine clearance of goods in the local market. 4. Physical verification of goods by Central Excise Officers. 5. Availability of alternative remedy. Analysis: 1. Jurisdiction of the Customs Department to demand refund of TED sanctioned by DGFT: The petitioners challenged the Customs Department's authority to demand the refund of TED, arguing that the refund was sanctioned by DGFT under different provisions, and thus, the Customs Department lacked jurisdiction. The court agreed, noting that the proper authority to initiate proceedings for any violation of the Advance Authorization or deemed export conditions is DGFT, not the Customs Department. The court cited several precedents, including *Titan Medical Systems Pvt. Ltd. Vs. Collector of Customs* and *Joint Director General of Foreign Trade Vs. IFGL Refractories Ltd.*, which established that customs authorities cannot refuse exemptions or demand refunds based on alleged misrepresentations without actions from the licensing authority (DGFT). 2. Validity of the Advance Authorization issued by DGFT: The court noted that the petitioners held a valid Advance Authorization issued by DGFT, which had neither been cancelled nor declared void. The court emphasized that as long as the Advance Authorization remains valid, the Customs Department cannot demand duties or penalties. The court referenced the case of *C. C. (Export Promotion), Mumbai Vs. Koatex Infrastructure Ltd.*, which held that parties are entitled to exemptions as long as the EODC (Export Obligation Discharge Certificate) is valid and not cancelled. 3. Alleged clandestine clearance of goods in the local market: The Customs Department alleged that the petitioners clandestinely cleared goods in the local market instead of exporting them to EOUs. The petitioners countered that the goods were duly transported and accounted for, supported by documentary evidence and statements from transporters. The court found that the Customs Department's allegations were primarily based on the lack of physical verification by Central Excise Officers, which cannot be used to penalize the petitioners for alleged clandestine activities. The court highlighted that the Central Excise Department had confirmed the receipt of goods by EOUs, albeit without physical verification. 4. Physical verification of goods by Central Excise Officers: The court observed that the lack of physical verification by Central Excise Officers cannot be grounds to initiate action against the petitioners. The court referenced the Central Excise Rules, which empower the Central Excise Department to take necessary actions for any breaches. However, in this case, the Central Excise Department had not sanctioned any refund or rebate to the petitioners, and the DGFT had issued the refund after due verification. The court emphasized that the failure of Central Excise Officers to perform their duties should not penalize the petitioners. 5. Availability of alternative remedy: The respondents argued that the petitioners should have availed themselves of the alternative remedy available under the Central Excise Act before approaching the High Court. The court acknowledged that while alternative remedies are available, it can exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India in cases where the authority has acted without jurisdiction or in excess of jurisdiction. The court found that the Customs Department had acted in excess of its jurisdiction by demanding the refund of TED sanctioned by DGFT, thus justifying the exercise of writ jurisdiction. Conclusion: The court allowed the petitions, quashing and setting aside the impugned order-in-original No. MUN-CUSM-000-COM-030-16-17 dated 31.03.2017 issued by the Customs Department. The court held that the Customs Department had acted in excess of its jurisdiction and that the proper authority to take action for any violations related to the Advance Authorization or deemed export conditions is DGFT.
|
