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TMI Blog2009 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule made returnable forthwith. By consent of the parties, the petition is taken up for filing hearing. 2. The basic question raised in this petition is, whether the customs authorities are justified in seizing three consignments of 48F optic fibre cables ('OFC' for short) imported by the petitioners and cleared on assessment under tariff Heading 85.44 with the benefit of exemption notification No.24/05 dated 1/3/2005 and whether the customs authorities are justified in collecting from the petitioners Rs.1,83,46,210/- towards differential duty on the 11 consignments of OFC cleared in the past on assessment under tariff Heading 85.44 on the footing that the said goods were liable to be assessed under tariff Heading 90.01 of the Customs Tariff Act. 3. The petitioners are engaged in the business of providing telecommunication services in various states in India. For their business the petitioners have been importing OFC from time to time. Since 2006 there is dispute regarding the classification of the OFC. According to the petitioners, OFC are classifiable under tariff Heading 85.44, whereas, according to the revenue, OFC are classifiable under heading 90.01 of the Customs Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 8. Immediately, thereafter the petitioners filed the present writ petition and moved the Court for various reliefs. By an interim order dated 25/12/2008 this Court permitted release of three seized consignments of OFC, on the petitioners furnishing bank guarantee for the disputed amount in respect of the two consignments. As regards the third consignment no bank guarantee was directed because the amount of Rs.1.83 crores paid on 19/12/2008 included the differential duty allegedly payable on the third consignment. 9. Mr.Shridharan, learned counsel appearing on behalf of the petitioners submitted that once the goods are cleared on payment of duty as assessed, then, unless the said assessment order is set aside by initiating proceedings in accordance with the provisions of the Customs Act, it is not open to the respondents to seize the said goods. He submitted that in the present case, the assessment orders passed have not been set aside and in fact not even a show cause notice has been issued to the petitioners. If the assessment orders are not set aside there is no question of paying or collecting any differential duty. Therefore, the amount of Rs.1.83 crores collected u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods under Heading 90.01 and voluntarily paid the differential duty. Therefore, seizure as well as receiving the differential duty is justified. 14. Relying on the decision of CESTAT, Northern Bench, New Delhi in the case of Optel Telecommunication Limited V/s. Commissioner of Central Excise, Bhopal reported in 2005 (186) E.L.T. 109, Mr. Sethna submitted that OFC are classifiable under tariff heading 90.01. 15. As regards the refund claim of the petitioners is concerned, Mr.Sethna vehemently argued that the said amount has been voluntarily paid by the petitioners towards the differential duty payable on the imported goods, and therefore, there is no question of refunding the said amount. He submitted that the respondents are willing to issue show cause notice within two weeks and adjudicate the matter as expeditiously as possible. However, no refund should be ordered at this stage because the petitioners are guilty of misclassifying the goods in the Bills of Entry filed under the Risk Management System and have voluntarily paid the differential duty. In this connection, he relied upon decisions of the Apex Court in the case of Suganmal V/s. State of M.P. rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly the order passed by the Commissioner of Customs (A) has not been stayed by the CESTAT and till the appeal filed by the revenue against the order of Commisioner of Customs (A) is disposed of, both the revenue as well as the petitioners are bound by the order passed by Commissioner of Customs (A). Therefore, the petitioners could not be faulted for classifying the goods imported after 25/3/2008 under Heading 85.44 as per the order passed by Commissioner of Customs (A). 18. The fact that various authorities have opined that the OFC imported by the petitioners are liable to be classified under Heading 90.01 and the fact that the petitioners themselves were clearing the goods under Heading 90.01 may be a good ground for setting aside the assessment orders and the order passed by Commissioner of Customs (A). However, till the order of Commissioner of Customs (A) is set aside, the petitioners cannot said to be guilty of misclassifying the imported goods under Heading 85.44 as the action of the petitioners is in conformity with the order passed by Commissioner of Customs (A). 19. The argument of the revenue that the goods in question were seized under the bonafide belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in that behalf. The fact that the search took place on 18-12-2008 and the fact that on 19-12-2008 the petitioners paid the amount of Rs.1,83,46,210/- specifically stating that in view of the threat to arrest the directors / employees, clearly belies the contention of the revenue that the amounts were paid voluntarily. Moreover, the petitioners immediately thereafter filed the present writ petition on 24-12-2008 stating that the amount has not been paid voluntarily and that the amount collected under threat and coercion is liable to be refunded. 22. In these circumstances, we are clearly of the opinion that in the present case, the conduct of the D.R.I. officers is not only high handed but it is in gross abuse of the powers vested in them under the Customs Act. It is apparent that the D.R.I. officers in utter disregard to the order passed by the Commissioner of Customs (A), Mumbai have forced the petitioners to pay the amount by threat and coercion which is not permissible in law. Thus, the conduct of the D.R.I. officers in the present case in collecting the amount from the petitioners towards the alleged differential duty is wholly arbitrary, illegal and contrary to law. Hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty as assessed under Heading 85.44 and the conduct of the D.R.I. officers in collecting Rs.1,83,46,210/- towards differential duty on the footing that the said goods were liable to be assessed under Heading 90.01, even before initiating reassessment proceedings is totally high handed and in gross abuse of the process of law. b) However, in the circumstances set out hereinabove, instead of directing refund of Rs.1,83,46,210/- and return of the two bank guarantees, we direct the respondents to issue show cause notices for reassessment within two weeks from today, failing which the amount of Rs.1,83,46,210/- as well as the two bank guarantees furnished pursuant to the interim orders of this Court shall be refunded / returned to the petitioners with interest @ 8% per annum on Rs.1,83,46,210/- from 20-12-2008 till the date of refund. c) If the show cause notices are issued within two weeks from today, then the petitioners are at liberty to file their reply within two weeks thereafter and the respondents shall complete the proceedings and pass appropriate orders within a period of four weeks from the date of petitioners filing their reply to the show cause notices. d) In t ..... 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