2001 (5) TMI 59 - HC - Customs

Summary

Issues Involved:
1. Quashing of Circular No. 23/99 dated 11th May 1999.
2. Return of DEPB Licences to the petitioner.
3. Verification and refusal to return DEPB Licences by Customs Authority.
4. Jurisdiction and statutory force of the Circulars.
5. Alleged suppression of material facts by the petitioner.
6. Violation of Articles 19(1)(g) and 301 of the Constitution of India.

Summary:

1. Quashing of Circular No. 23/99 dated 11th May 1999:
The petitioner sought to quash Circular No. 23/99 dated 11th May 1999, arguing that it lacked statutory force and could not override the benefits granted under the Foreign Trade (Development & Regulation) Act, 1992. The court noted that the Act is a complete code governing the issuance, suspension, and cancellation of licences, and the impugned circular could not amend legislative provisions.

2. Return of DEPB Licences to the petitioner:
The petitioner requested the return of DEPB Licences, which were withheld by the Customs Authority beyond the period prescribed for verification. The court held that the Customs Authority must follow the procedure for verification as laid down in Circular No. 14/99-Cus., dated 15th March 1999, and return the licences within the stipulated time.

3. Verification and refusal to return DEPB Licences by Customs Authority:
The Customs Authority withheld the DEPB Licences for verification due to instances of forgery. The court found that the authority failed to return the licences within the prescribed period and acted beyond their jurisdiction by indefinitely withholding the licences, violating Articles 19(1)(g) and 301 of the Constitution of India.

4. Jurisdiction and statutory force of the Circulars:
The court emphasized that Customs Authorities and Licensing Authorities operate in distinct fields and one cannot encroach upon the jurisdiction of the other. The impugned Circular No. 23/99-Cus., dated 11th May 1999, did not have statutory force and could not override the legislative enactment of the Foreign Trade (Development & Regulation) Act, 1992.

5. Alleged suppression of material facts by the petitioner:
The Customs Authority alleged that the petitioner misrepresented the value of the goods. The court found no suppression of material facts, as the goods were described as "Steel Welding Electrodes" and the value was declared accordingly. The Customs Authority had verified and accepted the goods for export, and any failure on their part could not be attributed to the petitioner.

6. Violation of Articles 19(1)(g) and 301 of the Constitution of India:
The court held that the indefinite withholding of DEPB Licences by the Customs Authority violated the petitioner's right to carry on business under Articles 19(1)(g) and 301 of the Constitution of India. The court directed the Customs Authority to release the DEPB Licences and the bank guarantee furnished by the petitioner.

Conclusion:
The writ petition was allowed, and the Customs Authority was directed to release the DEPB Licences and the bank guarantee immediately. The court emphasized that administrative actions must comply with statutory provisions and constitutional mandates.