2019 (8) TMI 339 - HC - Customs

Advance authorization - export obligation - belated issue of redemption certificates as poof - Violation of Condition (ix) of Customs Notification No.96 of 2009 dated 11.09.2009 - imports made by the petitioner during the financial year 2010-2011 - HELD THAT - The Foreign Trade Policy, 2009-2014, permitted a manufacturer of excisable goods to import raw materials, packaging materials and consumables without payment of customs duty by obtaining an advance authorisation from the Director General of Foreign Trade, Government of India, subject to conditions. Notification No.96/2009-Cus. dated 11.09.2009 was issued by the Ministry of Finance, Government of India, granting exemption from payment of customs duty on such imported materials. Condition (ix) therein stipulated that such an importer must produce evidence of discharge of its export obligations to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs within a period of sixty days of the expiry of the period allowed for fulfilment of such export obligations or within such extended period as may be allowed by the customs authorities. It is an admitted fact that the petitioner obtained Advance Authorizations bearing Nos.0910040870, 0910040652 and 0910040522 in January/February, 2010 from the Assistant Director General of Foreign Trade, Hyderabad Regional Office, for duty-free import of raw materials for use in the manufacture of its finished products for export. The export obligations in this regard were to be fulfilled within three years from the date of issuance of such advance authorizations. It is an admitted fact that the petitioner completed and complied with its export obligations as per the aforestated condition within the stipulated period of three years. However, the redemption certificates in proof of fulfilment of such export obligations by the petitioner were issued and filed belatedly. Advance Authorization Scheme - HELD THAT - It was therefore for the authorities themselves to put in place necessary machinery to see that such certificates were issued promptly, so that they could be produced within the time stipulated in Condition (ix) of Notification No.96 of 2009 dated 11.09.2009. An importer who duly complied with such export obligations in terms of the exemption granted under the Foreign Trade Policy cannot be penalised for delay on the part of the authorities in processing the necessary documentation. Petition allowed - decided in favor of appellant.

Summary

Issues:
1. Jurisdiction of the court in relation to impugned orders passed at Chennai.
2. Delay in filing writ petitions and availability of alternative remedy under Section 128 of the Customs Act, 1962.
3. Service of impugned orders on the petitioner at the correct address.
4. Compliance with Condition (ix) of Customs Notification No.96 of 2009 regarding export obligations.
5. Penalty imposed by the first respondent for delay in submission of redemption certificates.
6. Onus on the petitioner to prove satisfaction of conditions for exemption notification.

Issue 1: The court addressed the jurisdictional challenge raised by the respondent, emphasizing that the cause of action partially arose within the court's territorial jurisdiction, allowing the petitioner to choose the High Court for approaching. The court rejected the contention citing relevant case law and upheld its jurisdiction.

Issue 2: The court considered the delay in filing writ petitions and the availability of an alternative remedy under Section 128 of the Customs Act, 1962. The petitioner argued that it was informed about the duty arrears only in March 2018, leading to the delay in filing. The court refused to non-suit the petitioner on technical grounds, emphasizing the authorities' lapses in communication.

Issue 3: The court examined the service of impugned orders on the petitioner at the correct address. The petitioner claimed that despite updating its address, the authorities sent notices and orders to the old address. The court noted the authorities' failure to communicate at the correct address, which hindered the petitioner's right of statutory appeal.

Issue 4: The court analyzed the petitioner's compliance with Condition (ix) of Customs Notification No.96 of 2009 regarding export obligations. The petitioner fulfilled its export obligations within the stipulated period but faced delays in obtaining and submitting redemption certificates. The court held that penalizing the petitioner for delays caused by the issuing authority was unjust.

Issue 5: The court addressed the penalty imposed by the first respondent for the delay in submission of redemption certificates. It emphasized that the delay was not attributable to the petitioner, and the authorities should have ensured timely issuance of certificates. The court found the respondent's approach hidebound and set aside the impugned orders as unsustainable.

Issue 6: The court discussed the onus on the petitioner to prove satisfaction of conditions for exemption notification. Despite the petitioner's compliance with export obligations, the respondent penalized it for delays beyond its control. Citing relevant case law, the court ruled in favor of the petitioner, setting aside the impugned orders.

In conclusion, the court found the impugned orders unsustainable on facts and in law, setting them aside and allowing the writ petitions. The court highlighted the authorities' lapses in communication and unjust penalization of the petitioner for delays not attributable to it.