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TMI Blog2015 (8) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... CUS in this behalf was correct and plausible – Burden of proof was on appellant to establish that machine imported by it generates more than 35,000 composite impressions or copies per hour which appellant failed to do so – Appeal dismissed – Decided against Assesse. - Civil Appeal No. 4417 of 2003 - - - Dated:- 12-8-2015 - A. K. Sikri And N. V. Ramana,JJ. For the Appellant : Ms. Praveena Gautam, Adv. Mr. L.K. Asthana, Adv. Ms. Reena Khair Asthana, Adv. Mr. Deepak Tyagi, Adv. For the Respondent : Mr. Ashok Kumar Panda, Sr. Adv. Mr. B.K. Prasad, AOR Mr. A.V. Rangam, Adv. Mr. B.A. Ranganadhan, Adv. Mr. D.V. Raghuvamsy, Adv. JUDGMENT A. K. Sikri, J. The appellant herein is aggrieved by the impugned judgment of the High Court whereby the High Court has refused to allow the appellant import of Web Printing Machine on concessional rate of custom duty. The appellant had endeavored to avail the concessional rate of custom duty on the import of the aforesaid machine under Open General Allowance (for short, 'OGL') with the aid of Notification No. 114/80-CUS, dated 19.06.1980. The High Court has held that the said Notification is not applicable in the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy themselves that the machine in question was capable of giving output of 36,000 copies per hour. However, no action was taken by the customs authorities thereafter. 7) Taking note of the inaction of the customs authorities to get the imported consignment physically inspected and proceeding with the clearance of the same, on 24.04.1988, the appellant filed a writ petition before the Bombay High Court (being Civil Writ No. 2229/1988) praying for a declaration that the imported machine was covered by OGL and was entitled to the concessional rate of customs duty under Notification No. 114/80-CUS and for directing the respondents to permit clearance of the same. Interim relief of release of the machinery was also prayed for. 8) The Assistant Commissioner of Customs (S.I.I.B.), Bombay, filed an affidavit opposing the admission of the petition and grant of interim relief. 9) On 10.08.1988, the High Court passed an order directing the respondents to submit a list of relevant material required by them to the appellant on or before 17.08.1988 and directed the appellant to comply with those requirements on or before 26.08.1988 and further directed the customs authorities to pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice to the importer and after giving opportunity to the importer to meet the allegations contained in show cause notice, the Adjudicating Officer is to pass an Order-in-Original deciding the case stated in the show cause notice. He pointed out that against the order of the Adjudicating Authority there is a provision for appeal before the Customs, Excise and Service Tax Appellate Tribunal (for short, 'CESTAT'). Against the order of the CESTAT, appeal is provided to the Supreme Court. He further submitted that the Authority and Tribunal are the fact finding authorities, which are supposed to take evidence/material on record and arrive at a finding on that basis. Mr. Rao, in this backdrop, submitted that not only this procedure was sidelined thereby causing great prejudice to the appellant, even otherwise, the High Court, while exercising its extraordinary writ jurisdiction under Article 226 of the Constitution, was not competent to decide the disputed questions of facts. (ii) Mr. Rao also impressed upon the fact that it was not open to the Department now to contend that the machine in question was incapable of producing 36,000 copies per hour and have the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction and competence of the High Court to go into the issue when the High Court was requested and persuaded by the appellant itself to decide the issue, as is reflected in the impugned judgment itself. He, thus, argued that the appellant was estopped from raising such an issue when the appellant itself invited the judgment on merits. According to Mr. Panda, this fact would also negate the contention of the appellant predicated on limitation. His submission in this behalf was that the appellant had itself raised this issue in the High Court in its petition which was pending adjudication. That was a reason that the Revenue authorities did not initiate any action as per the adjudicatory mechanism provided in the Act. Therefore, the appellant was not entitled to rake up the issue of limitation as well. On merits, the learned senior counsel submitted that once the High Court was invited to decide the issue on the basis of material that was placed on record by both the sides, the High Court had looked into the said material in its entirety and has found that the machine in question imported by the appellant does not meet the requirement of Notification No. 114/80-CUS as its output ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was still kept pending for the obvious reason that the appellant had sought the main relief of declaration that it was, in law, entitled to import and clear the said machine as the same was covered by the Bill of Entry for Home Consumption, as filed, as an actual user under OGL. Thus, the appellant had raised the dispute in the said writ petition on merits as well. 16) No doubt, when the High Court passed the interim order in favour of the appellant, the High Court could dispose of the writ petition with the observation that the aforesaid issue involved on merit can be gone into by the appropriate authority by putting the machinery of adjudication in motion via Section 28 route. For some reason, that was not done and it was more so as the appellant had itself prayed for declaration to this effect in the writ petition, which means it called upon the High Court to decide this issue. 17) In the aforesaid scenario, when the writ petition was pending, wherein this issue was raised, probably for this reason the Department also stayed its hands off. No doubt, there was no stay of adjudication proceedings and the competent authority could go ahead with the adjudication proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atel Volkart Ltd. Vs. Collector of Central Excise, Belgaon reported in 1987 (28) ELT 53 (SC) so as to contend that show cause notice cannot be issued beyond six months under Section 11-A [(sic); Section 28] of the Act, and that after 14 years petitions cannot be asked to face the adjudication process. This is how the petitioners pressed for the decision on merits. 19) It shows that High Court was not oblivious of Section 28 of the Act and that determination of such an issue is to be more appropriately in the hands of Adjudicating Authority. It also appears that High Court might have disposed of the writ petition with liberty to the Adjudicating Authority to initiate proceedings under Section 28 of the Act. Curiously, such an action was not taken at the instance of the appellant which contended otherwise, as is clear from the following narration: The learned counsel for the petitioners contended that this Court would not be justified in dismissing the petition as not maintainable on the grounds of availability of alternate remedy especially when the petition was entertained, kept pending for 14 years and when it is being heard on merits. He also raised a contention that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this objection in the present appeal after pleading in the High Court that the matter be decided on merits. 22) For the same reason, the argument that the issue involved disputed question of fact is also not available. Order of the High Court clearly records that the appellant had requested the High Court to decide the issue on the basis of material on record. 23) We are not impressed with the argument of the appellant that the matter had become time barred. In fact, reasons for rejecting this argument have already surfaced while discussing the preceding submission. However, we would like to recapitulate them with focus on the issue at hand which is being addressed now. 24) The issue as to whether the import of Web Printing Machine was covered by Notification No. 114/80-CUS dated 19.06.1980 was pending in the High Court in respect of which petition was filed by the appellant itself way back in the year 1988 raising this issue. The appellant even got the interim order in its favour. When the writ petition came up for final hearing, the appellant impressed the Court to decide the said issue. In such a situation, question of limitation does not arise inasmuch as it is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself. 27) Thereafter, the High Court formulated the question as to whether the appellant had discharged its burden to prove that the subject printing machine imported by it under OGL was having an output of more than 35,000 copies per hour so as to entitle it to claim exemption under Notification No. 114/80-CUS, as amended from time to time. On that touchstone, the High Court has examined, appreciated and analyzed all the documents produced by both the parties. This detailed analysis runs into several pages. It is not necessary for us to go through this evidence and discuss the same as we find that the ultimate conclusion drawn by the High Court in this behalf is correct and plausible. We would, however, like to reproduce the following observations of the High Court wherein the certificates of manufacturer produced by the appellant vis-a-vis the leaflets giving technical details of the machine which were found along with the machine, are discussed: 38. The bare reading of the above certificate gives a picture that Model-15-H is with JF-25, JF-4, JF-10. If this certificate is read in the light of leaflets referred to hereinabove, the relevant portions of which are extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hour. The certificate and the letter of M/s S.L. Kulkarni Co., therefore, cannot be relied upon. The same cannot be given any credence. The said evidence, for the aforesaid reasons, is not acceptable to us. 39. One more aspect of the above certificate needs to be noticed. This certificate of the manufacturer is dated 3rd June 1986. The contract to purchase machine in question has been shown to be dated 24th March, 1987. The copy of the contract dated 24th March, 1987 as already observed hereinabove has not been produced on record. One more document styled as agreement dated 24th April 1986 (Exh. G) is produced on record. Both these documents are prior to the date of formation of contract i.e. 24th March, 1987. No evidence is on record to connect these documents with the subject contract dated 24th March, 1987 or with the machine in question. It is not known whether the same agreement culminated in the final contract dated 24th March, 1987 or the same was modified or a new contract has taken place. It is settled principle of law of contract that the document prior to formation of contract cannot be taken into account to interpret or to understand the contract in question unl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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