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TMI Blog2021 (10) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the bars is, as yet, incomplete. It cannot be said that the import of the Gold Dore Bars into India is completed at this point of time. They cannot, therefore, be said to be in the nature of imported goods, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus. Compliance with the actual user condition - HELD THAT:- The question of compliance with the actual user condition would arise only if the goods were released for home consumption, as it was obviously impossible for the importer to comply with the actual user condition when the goods were still in Customs bond. Admittedly, the Bill of Entry, in respect of one remaining consignment, is yet to be filed. The consignment is yet, therefore, to be released for home consignment. There can be no question, therefore, of the importer having to comply with any actual user condition at this point of time. The right of the importer to re-export the imported goods, even after clearance and removal to its factory premises, for bona fide grounds, stands acknowledged by the Supreme Court. One such permissible consideration is the fact that the use and sale of the goods in India, has becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with law. 2. In view of the aforesaid submission by the learned counsel for the respondents No. 2 to 5, the main grievance of the petitioner has been brought to an end. This writ petition is accordingly disposed of along with the pending application. 3. Liberty is, however, granted to the petitioner to challenge the action to be initiated by the respondents with regard to payment of demurrage charges etc. before the appropriate forum in accordance with law. 2. An application for review, even in a writ petition, it is well settled, can rely only on the grounds envisaged by Order XLVII Rule 1 of the Code of Civil Procedure, 1908 (CPC). Order XLVII Rule 1 permits an applicant to apply for review where (i) from the discovery of new and important matter of evidence which even after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or (ii) on account of some mistake or error apparent on the face of the record, or (iii) for any other sufficient reason, the applicant desires to obtain a review of the order made against it. 3. The interpretation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st November, 2016, with the stipulation that the petitioner was permitted to store dutiable gold and silver jewellery worth up to ₹ 300 crores. This Special Warehouse License was also surrendered by the petitioner on 12th July, 2018. 8. Subsequently, the petitioner again applied, on 8th July, 2019 to Respondent No. 2 [the Commissioner of Customs (Export), New Customs House, New Delhi] for grant of a fresh Special Warehouse License under Section 58A. The petitioner specified a vault, taken on lease in the premises of M/s Securitrans India Pvt. Ltd ( Securitrans , hereafter), as the warehouse. 9. In the interregnum, 11 consignments of Gold Dore Bars of the petitioner landed at the Customs Port in New Delhi. Before they could be cleared for home consumption, the rate of Customs duty payable on gold increased, w.e.f. 6th July, 2019. The petitioner contends that, with this increase, clearance of the consignments for home consumption was no longer economically viable and that, therefore, the only options available with the petitioner were to either warehouse the goods and export them under Section 69 of the Customs Act 3 , or re-export the goods to a country outside India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 2 rejected the petitioner s request for reconsideration of its earlier decision not to grant the petitioner a Special Warehouse License under Section 58A. 15. It is in these circumstances that the petitioner approached this Court, under Article 226 of the Constitution of India, essentially for a writ of mandamus, to the respondents, to either grant a Special Warehouse License to the petitioner under Section 58A or to permit the petitioner to re-export the Gold Dore Bars to another country. 16. As already noted at the commencement of this order, learned Counsel for Respondent Nos 2 to 5, on instructions, stated, on 4th September, 2019, that the respondents were willing to allow the petitioner to re-export the Gold Dore Bars. Observing that, by this concession, the prayer in the petition stood satisfied, we had disposed of the petition on the said date. 17. The respondents contend, in the present Review Petition, that, in compliance of the Court s directions dated 4th September, 2019, the Bills of Entry, relating to the imported Gold Dore Pass were examined, wherein additional information was brought to the notice of the Department . As to what this additional infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n but to clear 10 out of the 11 consignments of Gold Dore Bars sought to be imported by it. Apropos the grounds urged by the respondents, to support their stand that the imported Gold Dore Bars were not eligible for re-export, the petitioner has pointed out that the Gold Dore Bars were still lying in the Customs port. It has been further pointed out that the communications dated 13th and 23rd August, 2019, against which the petitioner had filed the writ petition, never raised any objection to the re-exportability of the imported Gold Dore Bars on the ground that they were restricted for import. Such a contention, therefore, it was submitted, could not be urged in the pleadings before the Court, opposing the petition of the petitioner, least of all in a review petition, for which purpose reliance has been placed, by the petitioner, on the well-known decision in Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405. On merits, the petitioner points out that import of the Gold Dore Bars is yet to be completed, as they are still lying in the Customs port, the question of their violating any actual user condition which, by its very nature, is a post-import condition ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Port, for which proposition reliance has been placed on the judgments of the Supreme Court in Garden Silk Mills Ltd v. U.O.I. (1999) 8 SCC 744 and Kiran Spinning Mills v. Collector of Customs (2000) 10 SCC 228. Further, relying on M. J. Exports Ltd v. C.E.G.A.T. 1993 Supp (1) SCC 169 ( M. J. Exports-I , hereinafter), State of Kerala v. Fr. William Fernandez 2017 SCC OnLine SC 129 and U.O.I. v. Sampat Raj Dugar (1992) 2 SCC 66, the petitioner contends that Notification 50/2017-Cus supra would not apply to goods which are yet to be imported into India. Reliance has also been placed, in the written submissions, on clauses (b) and (c) of para 2.46 of the Foreign Trade Policy, 2015-2020 ( the FTP , in short) and the clarification, dated 24th January, 2020, provided by the DGFT. Rival Submissions 21. We have heard, at length, Mr. Arvind Datar, learned Senior Counsel for the petitioner and Mr. Zoheb Hussain, learned Standing Counsel for the respondent/review petitioner. 22. Mr. Zoheb Hussain relies on the following passages from M. J. Exports-I : 21. We have considered this aspect of the matter carefully. The relevant OGL is the one dated May 20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrol. No such item can be exported unless it is covered by a valid licence issued by a licensing authority competent to grant an export licence for that item. Goods which are not included in this Schedule can be shipped without any export licence unless their export is controlled under any other law for the time being in force. Thus, the Exports (Control) Order, 1988 is not applicable to photographic film (colour). 6. If reference is made to Section 74 of the Act, it appears that when any goods capable of being easily identified which have been imported into India upon which any duty has been paid on importation, are to be re-exported and the goods are not prohibited goods, then clearance for exportation can be given by the proper officer (Section 51) and on such exportation 98% of the duty paid on importation is to be re-paid as drawback. We have not been shown which are those goods which can thus be re-exported and where import duty already paid is to be claimed as drawback. We have also not been shown any provision of law stating that the goods which have been imported could be sold only in the country itself. The clarification given by the CCI E does not appear to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the goods so permitted are not meant for re-export. An indication to a similar effect is also seen in the foreword issued by the Government while publishing Vol. I of the Import-Export Policy (1988-91), Vol. I. Para 3 of the foreword says: The Open General Licence lists have been expanded by inclusion of more items. In particular, the lists of lifesaving equipment and drugs have been substantially enlarged to facilitate easy access to imported equipment and drugs which are not available in the country. 22. We are, therefore, of the opinion that, although there is no express prohibition, the re-export as such of items of goods specified in List 2 and imported into India is prohibited by necessary implication by the language of, and the scheme underlying, the grant of OGL in regard to them. It is difficult to agree that the import-export policy envisages the re-export of goods belonging to this category. The opinion of the CCIE is also to the same effect. This opinion also derives some binding effect from para 24(1) of the Import Policy read with paras 22 and 23 of the Export Policy, which say: Para 24(1): The interpretation given by the Chief Controller of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or export in ITC (HS). (b) Goods, including capital goods (both new and second-hand), may be imported for export provided: (i) Importer clears goods under Customs Bond; (ii) Goods are freely exportable, i.e., are not Restricted / Prohibited / subject to exclusive trading through State Trading Enterprises or any conditionality/requirement as may be required under the Schedule 2 Export Policy of the ITC (HS); (iii) Export is against freely Convertible currency. (c) Goods in (b) above will include Restricted goods for import (except Prohibited items). 24. Mr. Datar further drew attention to Condition 9 in Notification 50/2017-Cus supra, which required the importer to follow the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. He submits that there is no allegation of violation, by the petitioner, of this condition. Insofar as Condition 40(d) of the said Notification is concerned, Mr. Datar submits that the condition only requires that the Gold Dore bars are imported by the actual user for the purpose of refining and manufacturing of standard gold bars of purity 99.5% and above. Inasmuch as the Gold D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order which merely records the consent of learned Counsel for the respondent and disposes of the petition on that basis or of the order meriting a re-consideration owing to any new material which has come to the notice of the respondent, i.e. the petitioner in the present review petition. Nonetheless, given the fact that the matter involves public revenue, we have deigned to hear the review petitioner, invoking, for the said purpose, the any other sufficient reason clause in Order XLVII Rule 1 CPC. 30. Having done so, we find no ground, whatsoever, to review our order or to accede to the submissions advanced by the review petitioner. 31. The contention, of Mr. Zoheb Hussain, that re-import of the Gold Dore Bars could not be permitted as they have been imported in violation of the conditions in Notification 50/2017-Cus supra, merely requires to be stated to be rejected. Mr. Hussain s contention is that the notification, whereunder the Gold Dore Bars were imported, contained an actual user condition, which the imports effected by the petitioner failed to fulfil. 32. The submissions of Mr Zoheb Hussain cannot sustain legal scrutiny, for several reasons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods within the country. 18. It would appear to us that the import of goods into India would commence when the same cross into the territorial waters but continues and is completed when the goods become part of the mass of goods within the country; the taxable event being reached at the time when the goods reach the customs barriers and the bill of entry for home consumption is filed. (Italics and underscoring supplied) No Bill of Entry having been filed in respect of the Gold Dore Bars in the present case, and as they still remained within Customs bond, the factum of import of the bars is, as yet, incomplete. It cannot be said that the import of the Gold Dore Bars into India is completed at this point of time. They cannot, therefore, be said to be in the nature of imported goods, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus. 34. The second reason is that the question of compliance with the actual user condition would arise only if the goods were released for home consumption, as it was obviously impossible for the importer to comply with the actual user condition when the goods were still in Customs bond. Admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition imposed by or under this Act or any other law for the time being in force . This, it was contended, was because (i) the OGL, whereunder the import of the haemodialyzers had been permitted, specifically provided that the goods be used in India and not exported and (ii) import clearance had been granted, similarly, for home consumption , and not for export. In appreciating the rival submissions of learned Counsel, before us, predicated on M. J. Exports, the distinction between these two submissions with which the Supreme Court dealt, individually is of stellar significance. 35.3 The Supreme Court chose to examine, first, the second contention of the Revenue, regarding re-export of the haemodialyzers being prohibited as they were permitted to be cleared, consequent on import, for home consumption. Paras 15 to 18 of the report dealt with and rejected this contention, thus: 15. The second point may be considered first. Section 45 of the Act provides that all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Collector of Customs until they are cleared for home consumption or are warehoused or are transh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance for warehousing. The presentation of a bill of entry for home consumption only means that the importer does not intend to warehouse the goods; in the latter case, he is not required to pay the import duties, if any, immediately (Sections 59 and 59-A). The form of the bill of entry prescribed under the Act does not require any declaration from the importer as to the purpose for which the imported goods are required or that they will be used or sold only in India. The expression home consumption has also, in the context, no clear or definite meaning and raises a lot of conundrums if literally interpreted to mean that imported goods should always be consumed in India. Is it home consumption if the importer does not use the goods himself but sells them? At what point of time should the importer make up his mind whether he proposes to sell the imported goods in India or wishes to export them outside? Is the condition infringed if a purchaser of goods from the importer sells it to a buyer in a foreign country? Will it be permissible for the importer to use the imported goods in the manufacture of other goods which he proposes to export? All these uncertainties in the connotation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms area. There is nothing in the provisions of the Act to compel an importer even before or when importing the goods, to make up his mind whether he is going to use or sell them in India or whether he proposes to re-export them. Again, there may be cases where he has imported the goods for use or sale in India but subsequently receives an attractive offer which necessitates an export. It would make export trade difficult to say that he cannot accept the export offer as the goods, when imported, had been cleared for home consumption. Section 69, therefore, should be only read as a provision setting out the procedure for export of warehoused goods and not as a provision which makes warehousing an imperative pre-condition for exporting the imported goods. The second reason for not reading Sections 68 and 69 as supporting the Revenue's interpretation is even more weighty. That interpretation would mean that imported goods can be re-exported after being warehoused for sometime (even a day or a few hours) but that they cannot be exported otherwise. Such an interpretation has no basis in logic or sense and makes mincemeat of the broader principle contended for by the Revenue that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, axiomatically, for profit and that, if the tax authorities impose unrealistic restrictions, unsupported by statutory prescription or proscription, in the way of legitimate trade, it would, in the ultimate eventuate, discourage international trade and commerce, and would, therefore, be detrimental to the national economic interest. 35.5 Paras 21, 22 and 24 of M. J. Exports-I, on which Mr Zoheb Hussain placed reliance, dealt with the first contention of the Revenue, as advanced before the Supreme Court. It is not necessary to dwell, in detail, with the findings in the said paras. We need only notice that (i) Order 15 of 1988-91, under which the haemodialysers were imported into India, covered life-saving equipment appearing in List 2 of Appendix 6 of Import and Export Policy, 1988-91 (Vol. I) and their spares , and that (ii) one of the conditions specified in the OGL, for import of the goods covered by List 2 was that they may be imported by any person for stock and sale purposes . The Revenue sought to contend that the expression for stock and sale purposes impliedly excluded export. The Supreme Court, significantly, rejected this contention of the Revenue, holding that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccess to imported equipment and drugs which are not available in the country. 22. We are, therefore, of the opinion that, although there is no express prohibition, the re-export as such of items of goods specified in List 2 and imported into India is prohibited by necessary implication by the language of, and the scheme underlying, the grant of OGL in regard to them. It is difficult to agree that the import-export policy envisages the re-export of goods belonging to this category. 35.6 It needs no great legal insight to see that these findings of the Supreme Court on which Mr Zoheb Hussain places considerable reliance are rendered in the specific context of the nature of the goods being imported by MJE, viz. life-saving equipment, and the specific dispensations, in respect thereof, as found place in the OGL and the Export-Import Policy itself. We fully agree with the submissions of Mr Datar in that regard. 35.7 M. J. Exports-I, therefore, does not help the Revenue. Rather, it supports Mr Datar s stand. M. J. Exports-II merely followed M. J. Exports-I and does not, therefore, advance the case sought to be set up by Mr Zoheb Hussain. 36. There is a third reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Customs may, subject to such conditions as may be prescribed, licence a private warehouse wherein dutiable goods imported by or on behalf of the licensee may be deposited. 2. 58-A. Licensing of special warehouses. (1) The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, licence a special warehouse wherein dutiable goods may be deposited and such warehouse shall be caused to be locked by the proper officer and no person shall enter the warehouse or remove any goods therefrom without the permission of the proper officer. (2) The Board may, by notification in the Official Gazette, specify the class of goods which shall be deposited in the special warehouse licensed under sub-section (1). 2. 69. Clearance of warehoused goods for export. (1) Any warehoused goods may be exported to a place outside India without payment of import duty if (a) a shipping bill or a bill of export or the form as prescribed under Section 84 has been presented in respect of such goods; (b) the export duty, fine and penalties payable in respect of such goods have been paid; and (c) an order for clearance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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