2021 (10) TMI 139 - HC - Customs

Seeking to re-export the Gold Dore Bars, on their furnishing shipping bills - warehoused goods - Order XLVII Rule 1 of the Code of Civil Procedure, 1908 (CPC) - HELD THAT - The review petition does not make out any case of either of an error apparent on the record of the impugned order which merely records the consent of learned Counsel for the respondent and disposes of the petition on that basis or of the order meriting a re-consideration owing to any new material which has come to the notice of the respondent, i.e. the petitioner in the present review petition. Nonetheless, given the fact that the matter involves public revenue, we have deigned to hear the review petitioner, invoking, for the said purpose, the any other sufficient reason clause in Order XLVII Rule 1 CPC - there are no ground, whatsoever, to review the order or to accede to the submissions advanced by the review petitioner - No Bill of Entry having been filed in respect of the Gold Dore Bars in the present case, and as they still remained within Customs bond, the factum of import of the bars is, as yet, incomplete. It cannot be said that the import of the Gold Dore Bars into India is completed at this point of time. They cannot, therefore, be said to be in the nature of imported goods, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus. Compliance with the actual user condition - HELD THAT - The question of compliance with the actual user condition would arise only if the goods were released for home consumption, as it was obviously impossible for the importer to comply with the actual user condition when the goods were still in Customs bond. Admittedly, the Bill of Entry, in respect of one remaining consignment, is yet to be filed. The consignment is yet, therefore, to be released for home consignment. There can be no question, therefore, of the importer having to comply with any actual user condition at this point of time. The right of the importer to re-export the imported goods, even after clearance and removal to its factory premises, for bona fide grounds, stands acknowledged by the Supreme Court. One such permissible consideration is the fact that the use and sale of the goods in India, has become financially unremunerative. Every businessman works, axiomatically, for profit and that, if the tax authorities impose unrealistic restrictions, unsupported by statutory prescription or proscription, in the way of legitimate trade, it would, in the ultimate eventuate, discourage international trade and commerce, and would, therefore, be detrimental to the national economic interest. The petitioner sought a clarification from the DGFT. We have reproduced the query raised by the petitioner specifically to indicate that, in raising the query, the petitioner was candid regarding the real factual position. The petitioner disclosed the fact that the import was made against a license which contained an actual user condition and that the goods still remained in Customs bonded area. The nature of the objections raised by Customs authorities were also disclosed to the DGFT. Despite this, the DGFT clearly clarified that export of gold not being prohibited, the petitioner was entitled to re-export of the Gold Dore Bars - No justifiable reason, for the Customs authorities to contend otherwise, commends itself. We do not feel that, in acceding to the request of the petitioner to re-export the Gold Dore Bars, the learned Standing Counsel, on 4th September, 2019 committed any error apparent from the record - review petition dismissed.

Issues Involved:
1. Review of the High Court's order dated 4th September 2019.
2. Grounds for seeking review under Order XLVII Rule 1 of the CPC.
3. Interpretation of the terms "for any other sufficient reason" in review petitions.
4. Compliance with the conditions of the Import License and relevant Notifications.
5. Eligibility for re-export of imported goods under the Foreign Trade Policy and Customs Act.
6. Clarification from DGFT regarding the re-export of Gold Dore Bars.
7. Legal precedents and their applicability to the case.

Issue-wise Detailed Analysis:

1. Review of the High Court's Order Dated 4th September 2019:
The Union of India sought a review of the High Court's order dated 4th September 2019, which allowed the petitioner to re-export Gold Dore Bars based on a concession extended by the respondents' counsel. The order disposed of the writ petition and granted liberty to the petitioner to challenge any action regarding demurrage charges before the appropriate forum.

2. Grounds for Seeking Review under Order XLVII Rule 1 of the CPC:
The application for review was based on the grounds envisaged by Order XLVII Rule 1 of the CPC, which permits review on account of:
(i) Discovery of new and important matter or evidence.
(ii) Some mistake or error apparent on the face of the record.
(iii) Any other sufficient reason analogous to those specified.

3. Interpretation of "For Any Other Sufficient Reason":
The interpretation of "for any other sufficient reason" was discussed with reference to the decision of the Privy Council in Chhajju Ram v. Neki and the Supreme Court's approval in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius, Kamlesh Verma v. Mayawati, and Kantaru Rajeevaru v. Indian Young Lawyers Association.

4. Compliance with Conditions of Import License and Relevant Notifications:
The respondents contended that the petitioner imported Gold Dore Bars under an Import License issued by the DGFT, which permitted import only for refinery, subject to actual user condition. The import was also subject to Notification 50/2017-Cus, which required compliance with the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, and the actual user condition for refining and manufacturing of standard gold bars.

5. Eligibility for Re-export of Imported Goods:
The petitioner argued that the Gold Dore Bars were still lying in the Customs port and that the actual user condition was a post-import condition. The petitioner relied on para 2.46 of the Foreign Trade Policy, 2015-2020, which allows re-export of imported goods under certain conditions. The DGFT clarified that gold is freely exportable, and there were no restrictions on its re-export.

6. Clarification from DGFT:
The petitioner sought a clarification from the DGFT regarding the re-export of Gold Dore Bars. The DGFT confirmed that gold is free for export, and there were no restrictions on its re-export, provided the goods are cleared under Customs Bond and the export is against freely convertible currency.

7. Legal Precedents:
The judgment referred to several legal precedents, including:
- Garden Silk Mills Ltd v. U.O.I., which clarified the point at which goods are considered "imported into India."
- M. J. Exports Ltd v. C.E.G.A.T., which discussed the permissibility of re-exporting imported goods.
- Atul Commodities Pvt. Ltd. v. Commissioner of Customs, which established that the DGFT's interpretation of the FTP is final and binding.

Analysis and Decision:
The court found no ground to review its order dated 4th September 2019. It held that the import of the Gold Dore Bars was not complete as they were still within Customs bond, and the actual user condition did not apply at this stage. The DGFT's clarification supported the petitioner's case for re-export. The court dismissed the review petition, stating that the learned Standing Counsel's concession on 4th September 2019 was not erroneous.

Conclusion:
The review petition was dismissed, and the court upheld its original order allowing the petitioner to re-export the Gold Dore Bars. The court emphasized the importance of adhering to the DGFT's interpretation and the legal precedents supporting the petitioner's right to re-export.

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