9911796707
TMI Blog2006 (3) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... tory at Mohone in Thane District, Maharashtra. The petitioner has been importing from time-to-time an input called Caprolactum for use in the manufacture of Nylon Tyre Cord / fabrics. 3. In respect of the consignments of Caprolactum imported in the year 1986, the Customs Authorities wanted to levy additional duty under the Customs Tariff Act, 1975 in excess of 15% ad-valorem by including the basic customs duty and stevedoring and landing charges in the assessable value of the goods imported by the petitioner. Challenging the aforesaid action, the petitioner had filed a writ petition bearing No.1174 of 1986 in this Court. On 2nd May, 1986, the said writ petition was admitted and Caprolactum which was subject matter of the petition as well as Caprolactum to be imported in future were permitted to be cleared on the petitioner furnishing a bank guarantee of a nationalised bank in favour of the Collector of Customs for 100% of the differential duty. By the said order the respondents were restrained from recovering and/or levying additional duty under the Customs Tariff Act, 1975 in excess of 15% ad-valorem on the CIF value of Caprolactum already imported and which may thereafter be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1994 permitting the revenue to encash the bank guarantees to the extent of ₹ 3.25 crores and that the remaining bank guarantees shall continue to be kept alive pending the appeal. In terms of the said order dated 14th November, 1994, the petitioners paid ₹ 3.25 crores and got released the bank guarantees for an equivalent amount furnished to the Customs Department. It is not in dispute that the bank guarantees for the remaining amount of ₹ 3.10 crores has been kept alive by the petitioner. 8. While the above Civil Appeal No.5974 of 1994 was pending before the Apex Court, the Central Government introduced the KVSS in Finance (No.2) Act, 1998 thereby inviting tax-payers to settle their tax arrears by availing substantial discount and immunity from prosecution. Under the KVSS, the tax-payer could file declaration between 1st September, 1998 and 31st January, 1999 in respect of the tax arrear determined on or before 31st March, 1998 but remaining unpaid on the date of declaration. 9. With a view to avail the benefit of KVSS in respect of the import of Caprolactum which was the subject matter of Civil Appeal No.5974 of 1994 pending before the Apex Court, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the said order, the differential duty has been quantified at ₹ 6,34,87,079.00 and after appropriating the already paid amount of ₹ 4,80,13,189.00, the petitioner has been called upon to pay the balance amount of ₹ 1,54,73,890.00 with 12% interest. We are informed that the appeal filed against the said order has been dismissed by the Commissioner of Central Excise (Appeals) and further appeal filed by the petitioner is pending before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai. 14. Mr.Sreedharan, learned advocate for the petitioner advanced three fold arguments. The first argument is that in the present case, in terms of the interim order passed by this Court, the department had determined the exact disputed amount payable by the petitioner and endorsed the same on each of the bills of entry and on furnishing bank guarantee for the disputed amount precisely quantified by the department the petitioner was permitted to clear the goods. It is not in dispute that the amount quantified on each of the bills of entries is the amount of duty recoverable by the department. Thus, the endorsement made on each of the bills of entries constituted determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor of Customs on 28th July, 1994 calling upon the petitioner to pay the precise amount of duty quantified on the bill of entry. The demand notice issued on 28th July, 1994 satisfies the criteria prescribed under Section 95(ii)(b) and, hence rejection of the declaration is erroneous. Accordingly, Mr.Sreedharan submitted that the impugned order passed by the Commissioner of Central Excise dated 14th June, 2001 suffers from serious infirmities and the same is liable to be quashed and set aside. 17. Mr.Jetly, learned counsel appearing on behalf of the revenue, on the other hand, supported the order passed by the Commissioner of Central Excise. Mr.Jetly submitted that in the present case specific endorsements have been made on each of the bills of entries to the effect that the goods have been assessed provisionally and allowed clearance as per the interim order passed by this Court. He submitted that unless the assessment order as contemplated under section 17 of the Customs Act was passed in respect of each of the bills of entries, the endorsement made on the bills of entries quantifying the disputed amount would not constitute determination of tax arrear within the meaning of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under section 88; or ( b) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty which constitutes the subject matter of a demand notice or a show cause notice issued on or before the 31st day of March, 1998 under that enactment but remaining unpaid on the date of making a declaration under section 88, but does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include the duties on such seized goods where such duties on the seized goods have not been quantified. Explanation. - Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause, on or before the date of making a declaration by him under section 88 which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er there was determination of tax due or payable on various consignments of caprolactum on the date of filing of the declaration under Section 88 of the KVSS. In the present case, the petitioner had moved the Court even before the assessment orders were passed on the bills of entry under Section 17 of the Customs Act. Even though the goods were cleared on the petitioner furnishing 100% bank guarantee for the disputed amount, endorsed on the bills of entry, there were no assessment order passed on the bills of entry. In fact there was categorical endorsement made on each of the bills of entry to the effect that the same are assessed provisionally as per the interim order passed by this Court in Writ Petition No. 1174 of 1986 on 2nd May, 1986. Moreover, the interim order passed 2/8/86 in Writ Petition No.1174 of 1986 prohibited the respondents from levying additional duty in excess of 15% ad valorem on the CIF value. In the light of the above interim order passed by this Court on 2/8/86, the respondents could not have assessed the bills of entries and determine the duty liability on caprolactum under the provisions of the Customs Act, 1962. Admittedly, all the bills of entry have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is distinguishable on facts. It is true that in that case also the assessee therein had filed a writ petition before the Delhi High Court challenging the constitutional validity of levy of additional duties of excise duty on the processed fabrics. The said writ petition was admitted and the goods were allowed to be cleared on the petitioner paying 50% of the disputed duty and furnishing a bank guarantee for the remaining 50% of the duty. During the pendency of the said writ petition, the assessee had filed monthly return of RT-12 but the same were not assessed by the Assessing Officer. After the disposal of the above writ petition upholding levy of additional duties of excise on the processed fabrics, the Assessing Officer had assessed the RT-12 returns and issued the demand notice so as to enforce the bank guarantee furnished by the assessee as per the order passed by the Delhi High Court. In that background it was held that the demand on RT 12 assessment was nothing but a step in the execution of the order of the Delhi High Court which had attained finality. Accordingly, it was held that there was no dispute warranting any settlement under KVSS and, therefore, the endorsement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not demand any duty from the petitioner. In fact by the interim order passed by this Court on 2/5/1986 in Writ Petition No.1174 of 1986 the respondents were restrained from recovering and / or levying additional duty under the Customs Tariff Act, 1975 in excess of 15% ad-valorem on the C.I.F. value. In the absence of any assessment, demand notice could not be issued. Therefore, the contention of the petitioner that the endorsements made on the bills of entries constituted demand notice cannot be accepted. 27. The third argument of the petitioner that the demand notice dated 28th July, 1994 issued by the Assistant Collector of Customs falls within the category of Section 95(ii)(b) is also without any merit because, firstly the said demand notice pertained to one bill of entry bearing NO.1175/164 dated 28th May, 1986 for a sum of ₹ 5,08,300/-, whereas the declaration was in respect of 939 bills of entry and the disputed amount was ₹ 6,34,87,079/- Secondly, the Assistant Commissioner by his letter dated 12th August, 1994 had himself kept the demand contained in the letter dated 28th July, 1994 in abeyance as there was no enforceable demand in view of the stay order g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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