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TMI Blog2013 (8) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... note with reference to the earlier press note dated 15-9-2010 that process of registration of company to export of raw cotton (5201), cotton waste (5202), and cotton carded or combed (5203) for export authorisation will be made. The Ministry of Textile has conveyed decision taken by group of ministers in their meeting dated 28-9-2010 to the effect that actual export i.e. shipment would commence from 1-11-2010. The exportable surplus was identified as 55 lac bales in respect of raw cotton (5201). No registration to be made after the exportable surplus is reached. It was also mentioned that the 45 days of shipment period allowed, would be reckoned from the date of issue of EARC or 15-12-2010 whichever is later. This shipment period could not have been later than 15-12-2010. 3. The petitioner admittedly applied for registration and Export Authorisation Registration Certificate, in short EARC was issued to him on 12-10-2010 and 13-10-2010 with respect of raw cotton 5201. For the purpose of export the registration was valid up to 15-12-2010. Thus the last date by which export was to be completed under the EARC was 15-12-2010. 4. The petitioner admittedly presented bill of export betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner has referred certain newspaper reports. 6. It is further averred in the petition that EARC issued by concerned authorities were duly debited upon passing of the relative shipping/bills of export by the concerned Superintendent of Customs Petropol Land Customs Station and the documents in respect of such export was lying ready. The goods were also ready in trucks for export to Bangladesh. However, soon after expiry of 15th December, 2010 the respondent Customs Authorities refused to allow consignment to pass Bangladesh through Petropol Land Customs Station. Such action of the respondent authorities is absolutely arbitrary and it was due to heavy congestion at the Petropol Land Customs Station the Goods could not cross the border by 15-12-2010. Thus, in spite of petitioner having valid documents, there was a refusal to permit export of raw cottons. 7. Section 51 of the Customs Act empowers the Proper Officer to allow the clearance and loading of goods for exportation if the said goods are not prohibited goods and otherwise exportable in every sense. However, the export was refused illegally in spite of valid documents. The petitioner came to know that a fax message was sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so as to deny the export. It has to be taken that there was no specific denial. 12. The Single Bench allowed the writ application mainly on the ground that goods are to be deemed to have been exported as soon as the goods are cleared for export and loaded into vessels and are outside the control of the exporter. The bills of export were presented from 4-12-2010 to 14-12-2012 the single judge observed that it was not necessary to adjudicate the factual issue of whether the goods could not cross the Indo-Bangladesh border within 15th December, 2010 by reason of congestion as alleged by the petitioners. On the ground that the goods had been entered and cleared for exportation under Sections 50 and 51 of the Customs Act within the validity period of EARCs. It has been observed that goods covered by EARCs had been cleared for export under Section 51 subject however to checking to see whether the goods were as per declaration in the invoice, packing list and bill of export etc. Thereafter the single Judge has not adverted to the issue when goods were in fact presented for the purpose of physical verification, to ensure whether the goods were as per declaration in the invoice, packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to congestion goods could not cross the border/check-post, the petitioner could not have been held responsible as whatever was in his capacity/control was done. 16. He has relied upon the decision of the Hon'ble Supreme Court in the case of Collector of Customs, Calcutta v. Sun Industries, reported in 1988 (35) E.L.T. 241 (S.C.) and decision of the High Court of Madras in the case of Lucas TVS, Madras v. Assistant Collector of Customs, Madras & Ors., reported in 1987 (28) E.L.T. 266 (Mad.). He has further submitted that in view of the findings recorded by the Single Bench in the order passed by the Single Bench, no case for interference in the appeal is made out. He has also referred to the provisions contained in Sections 16, 17, 50 and 51 of the Customs Act, 1962 (hereinafter referred to as the Act). 17. When we consider the relevant provisions contained in the Act, Section 16(1)(a) provides that in case of duty is leviable, the rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force, in the case of goods entered for export under Section 50, on the date on which the proper officer makes an order permitting clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation. (4) Notwithstanding anything contained in this section, imported goods or export goods may, prior to the examination of testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. (5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefore under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation." 20. The aforesaid provisions have to be read in conjunction with Sections 16 and 17 of the Act and the Procedure of Export provided in CBEC Customs Manual. Paragraph 38 whereof provides that the shipping bill or as the case may be, bills of export are required to be filed in format as prescribed in the Shipping Bill and Bill of Export (Form) Regulations, 1991. The bills of export is to be used if clearance of the export is taken at the land customs stations. 21. Similar procedure for clearance by land customs stations is adopted as prescribed for the purpose of shipping. Paragraphs 38, 40, 41, 42, 43, 44 and 45 are quoted below :- "38. Under manual system, shipping bills or, as the case may be, bills of export are required to be filled in format as prescribed in the Shipping Bill and Bill of Export (Form) Regulations, 1991. The bills of export are being used if clearance of export goods is taken at the Land Customs Stations. Different forms of shipping bill/bill of export have been prescribed for export of duty free goods, export of dutiable goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... System. In EDI System at Delhi Air cargo, the quota information is automatically verified from the AEPC/TEXPROCIL system. 44. Since the shipping bill is generated only after the 'let export order' is given by Customs, the exporter may make use of export invoice or such other document as required by the Octroi authorities for the purpose of Octroi exemption. 45. The goods brought for the purpose of examination and subsequent 'let export' is allowed entry to the Dock on the strength of the checklist and other declarations filed by the exporter in the Service Center. The Port authorities have to endorse the quantity of goods actually received on the reverse of the Check List." (Emphasis applied by us) 22. It is apparent from the aforesaid procedure that physical examination is sine qua non for ultimate clearance of the goods, without that goods cannot be permitted to be loaded for the purpose of shipment or transportation by road. 23. In the instance case, it is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner had expired and goods were inspected only after they arrived at Customs Station on 16th December, 2010. On that date licence of the petitioner had expired. When goods were presented on 16-12-2010 when validity of EARCs had expired even if physical verification is made after expiry of validity period by export authorities, export could not have been permitted as per provisions contained in the Act. 24. It is apparent from the certificate of authorisation that various registrations for export of goods were valid upto 15th December, 2010. Even as per the Scheme under which export of aforesaid Raw Cotton (5201) was allowed provided for 45 days of shipment period to be reckoned from the date of issue of EARC or 15th December, 2010, whichever is later and shipment was permitted with effect from 1st November, 2010 for a period of 45 days and otherwise also 15th December, 2010 was the terminal date for the purpose of export under export authorisation registration certificates. Thus export had not taken place within validity of EARCs by 15th December, 2010. Thus when the goods were presented for physical verification on 16th December, 2010 and as the validity of EARCs had expired, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. The assessment is also not final without examination or testing of the goods. That attains the finality on satisfaction having been reached with respect to the correctness of the entries made in the bills of export or the bills of shipping, as the case may be. 29. The EARCs validity period admittedly had expired, in the instant case, on December 15, 2010 and no export could be made after that date. The goods were not even physically verified before expiry of EARCs for the purpose of the export and thus there was no final clearance undertaken as envisaged in Section 17 read with Section 51 of the Act. As such, export was rightly disallowed. 30. Reliance has been placed on the decision of the Hon'ble Supreme Court in the case of The Collector of Customs, Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cs. 33. The decision of the Madras High Court in the case of Lucas TVS v. The Assistant Collector of Customs (supra), has also been relied upon wherein in the factual matrix, the goods were assessed for export duty and "examined" by the Customs Authorities. However, after the cargo was loaded in the vessel, there was a fire in the ship and some of the goods were destroyed. The High Court of Madras had held that the export was complete. The provisions of Sections 50 and 51 of the Act are determinative of time when the process of export commences and when the goods are loaded into the ship after clearance by the proper officer; they must be treated as having been exported so far as the exporter is concerned. 34. When we consider that in the instant case, the goods were not "examined" by the Customs Authorities, hence we are unable to apply the ratio of the aforesaid decision moreover in the aforesaid case; the case was not that of the expiration of the validity of the EARCs. Thus, the decision of Lucas TVS (supra) is of no help to the exporter. 35. In view of the aforesaid discussion, we are of the considered opinion that the Customs Authorities were right in not clearing the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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