2016 (1) TMI 515 - HC - Customs

Writ petition - Demand of 100% Bank Guarantee towards the customs duty of 16% leviable in the normal course of import - import of unbranded gold jewellery. - clearance of the goods by accepting the Special Additional Customs Duty of 1% as per the Malasiya-India Comprehensive Economic Co-operation Agreement. - The learned Additional Solicitor General appearing for the respondents, who filed the counter affidavit, submitted that the writ petition is premature in nature i.e., without approaching the authorities, the petitioner has filed this writ petition. Held that - The learned Additional Solicitor General in reply submitted that those representations, if submitted, would be considered followed by necessary orders. The said submission made by the learned Additional Solicitor General is recorded. The counsel for the petitioner also submitted that the petitioner will appear before the respondents with materials. The petitioner is directed to approach the authorities for the purpose of clearance of goods by proper representation within a week from the date of receipt of a copy of this order and the respondents are directed to hear the petitioner and pass necessary orders within a period of two weeks thereafter. - writ petition is disposed of

Summary

Issues:
Challenge to impugned proceedings in Bill of Entry, demand for 100% Bank Guarantee, compliance with Malaysia-India Comprehensive Economic Co-operation Agreement, legality of demand for Bank Guarantee, premature filing of writ petition, approach to authorities for clearance of goods.

Analysis:

Challenge to Impugned Proceedings in Bill of Entry:
The petitioner challenged the impugned proceedings related to Bill of Entry No.INMAA4 9934208 dated 17.7.2015, seeking to quash the demand for 100% Bank Guarantee towards customs duty of 16% leviable in the normal course of import. The petitioner aimed to direct the respondents to allow clearance of goods by accepting the Special Additional Customs Duty of 1% under the Malaysia-India Comprehensive Economic Co-operation Agreement (MICECA).

Compliance with Malaysia-India Comprehensive Economic Co-operation Agreement:
The petitioner, a registered company under the Companies Act, 1956, possessed Import Export Code for importation of unbranded gold jewellery. The petitioner claimed full compliance with statutory formalities to import specified goods from Malaysia under MICECA. However, despite compliance, the respondents had not assessed the goods, leading to the dispute.

Legality of Demand for Bank Guarantee:
The petitioner argued that the demand for 100% Bank Guarantee was illegal and beyond jurisdiction. The petitioner's counsel contended that the demand violated the agreement between India and Malaysia, which formed the basis of the transaction. The petitioner cited relevant judgments to support the contention that such demands were contrary to law.

Premature Filing of Writ Petition and Approach to Authorities:
The respondents argued that the writ petition was premature as the petitioner had not approached the authorities for resolution. The authorities were required to safeguard revenue and ensure compliance with stipulated conditions before releasing consignments. The respondents cited judgments to support their position and emphasized the need for the petitioner to engage with the authorities for necessary assessment and orders.

Direction to Approach Authorities for Clearance of Goods:
In the final judgment, the court directed the petitioner to approach the authorities for clearance of goods through proper representation within a week. The respondents were instructed to hear the petitioner and pass necessary orders within two weeks thereafter, aiming to resolve the issue effectively.

This comprehensive analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the court's directions to address the dispute regarding the demand for Bank Guarantee and clearance of goods under the MICECA.