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2008 DIGILAW 2369 (ALL)

BHAWANI ENTERPRISES, NEW DELHI v. UNION OF INDIA

2008-12-01

A.P.SAHI, AMITAVA LALA

body2008
JUDGMENT Honble Amitava Lala, J.—The petitioner has filed this writ petition for quashing of the communication dated 17th July, 2008, issued by the respondent No. 2 so far as the same is inconsistent with the provisions of Section 18 of the Customs Act, 1962 read with Customs (Provisional Duty Assessment) Regulations, 1963, and further for directing the respondents to release the consignment imported vide Bill of Entry No. 001860 dated 23rd May, 2008 on provisional basis under the provisions of above section and regulations thereof. 2. By the interim order dated 3rd September, 2008, the petitioner was directed to appear personally before the Assistant Commissioner of Customs, I.C.D. Loni, District Ghaziabad, on 16th September, 2008 and if that date is not convenient to the Assistant Commissioner concerned, he shall fix another date in presence of the petitioner. The petitioner was permitted to be accompanied by an Advocate of his choice, who shall, however, sit at a distance and not interfere with the proceedings, thereby the Court directed him to become an observer. In any event, the Assistant Commissioner was pleased to pass the appropriate order in accordance with law without being influenced with other orders. 3. Subsequently, on 26th September, 2008, the petitioner was directed to appear before the adjudicating authority in terms of the above interim order. The adjudicating authority was directed to pass an order so that if the petitioner is aggrieved, he may approach the higher authority in accordance with law. 4. As and when the matter was called out for the purposes of hearing, Mr. G.L. Rawal, learned Sr. Advocate appearing on behalf of the petitioner, contended before this Court that the order was ultimately passed by the Assistant Commissioner of Customs, I.C.D. Loni, District Ghaziabad on 16th October, 2008. The operative part of the order is as follows : “I have considered the submission made by the importer as well as the facts on record available with the department. In the light of the appropriate sections of the Customs Act, 1962, I find evidence suggesting gross under invoicing of goods in question which makes these goods offending and hence liable for fine and penalty. In the light of the appropriate sections of the Customs Act, 1962, I find evidence suggesting gross under invoicing of goods in question which makes these goods offending and hence liable for fine and penalty. However pending completion of adjudication process and imposition of fine and penalty goods can be released provisionally under Section 110 (A) of Customs Act, 1962 by the appropriate authority, that is, the Commissioner of Customs, Ghaziabad and hence not within the power of Assistant Commissioner, ICD Loni. Thus in my opinion, this case of provisional release, would be covered under Section 110 (A) of Customs Act, 1962 for which Assistant Commissioner, lCD, Loni is not the competent authority. In the particular circumstance of this case therefore release of the goods provisionally is not covered under Section 18 of Customs Act, 1962 and is liable to be rejected. Accordingly, the importer may file an application under Section 110 (A) of Customs Act, 1962 before the appropriate authority, that is, the Commissioner of Customs, Ghaziabad, for provisional release of the goods." 5. He further submitted that the order, which has been passed as above, is not in accordance with the direction of the High Court or on merit but only on the technical ground, as such the authority has no jurisdiction whatsoever in respect of the matter in question regarding provisional release of the goods. Learned counsel appearing for the petitioner has relied upon an unreported judgment of Delhi High Court passed in W.P. (C) 8787/2007, M/s Bhaiya Fibres Ltd., 3007, Bahadur Garh Road, Saini Building, 2nd Floor, Delhi v. Addl. Director General, Director of Revenue Intelligence, New Delhi. He further submitted that the affidavit annexing the communication order was filed by the Addl. Commissioner (Customs) Ghaziabad on 6th November, 2008. He supported the order, which has been passed by the Assistant Commissioner, and further said on merit that as per the appropriate instruction/circular, the importer is required to submit bond of full value of goods amounting to Rs. 97,91,435/- approx. supported by the bank guarantee amounting to Rs. 79,77,794.40 approx. covering fine, which can be 100% on differential duty and covering penalty, which can be up to 100% differential duty and difference between duty likely to be assessed and the admitted value of USD 3600. The aforesaid amount of Rs. 79,77,794.40 is to be secured by way of bank guarantee. supported by the bank guarantee amounting to Rs. 79,77,794.40 approx. covering fine, which can be 100% on differential duty and covering penalty, which can be up to 100% differential duty and difference between duty likely to be assessed and the admitted value of USD 3600. The aforesaid amount of Rs. 79,77,794.40 is to be secured by way of bank guarantee. As per the circular, the value of bank guarantee shall not exceed twice the amount of duty, therefore, bank guarantee was restricted to Rs. 57,47,301.60. However, actual fine, penalty and assessable value will be determined by the Commissioner at the time of adjudication. 6. It appears to us that the Court made no difference between provisional assessment and provisional release of goods and there cannot be any difference in proposition in general because unless the provisional assessment is carried out, there is no question of provisional release of goods because on the basis of provisional assessment a security will have to be furnished for release of goods in the interest of revenue. 7. Switching over his arguments, he submitted before this Court that the realisation in respect of provisional assessments as made under Customs (Provisional Duty Assessment) Regulations, 1963 dated 13th July, 1963 cannot have overriding effect over the statute and in support of his contention he cited two judgments reported in 2003 (154) E.L.T. 37 (Guj), Inter Continental (India) v. Union of India and 2008 (157) ECR 0101 (SC), Sandur Micro Circuits Ltd. v. Commissioner of Central Excise, Belgaum. First judgment speaks about notification under Section 25 of Customs Act, 1962, which requires publication in the official Gazette before tabling in both the Houses of Parliament and if that exercise has been carried out, it would not be permissible to permit Revenue to impose condition by way of circular. Similarly, in respect of second judgment, it has been stated that the circular cannot take away the effect of notification statutorily issued. 8. We are of the view that the submission, which has been made by the petitioner in this respect, cannot have any much say in respect of the matter. 9. Dr. A.K. Nigam, learned Addl. Similarly, in respect of second judgment, it has been stated that the circular cannot take away the effect of notification statutorily issued. 8. We are of the view that the submission, which has been made by the petitioner in this respect, cannot have any much say in respect of the matter. 9. Dr. A.K. Nigam, learned Addl. Solicitor General of India, strongly opposed the contention of the petitioner by saying that the Assistant Commissioner is not empowered to pass an order and it has been rightly directed that an application under Section 110 (A) of the Customs Act, 1962, should be laid before the Commissioner of Customs, Ghaziabad, for provisional release of goods. The provisional release of goods is not covered under Section 18 of Customs Act, 1962. We again find and say that the provisional release of goods is obviously dependable upon the provisional assessment, similarly with the Division Bench judgment of the Delhi High Court in M/s Bhaiya Fibres Ltd. (supra). It is immaterial to construe otherwise since Section 110 of such Act requires to be dealt with the provisional release when Section 18 deals with provisional assessment of the duty. According to us, the relevant question before us is whether by the order impugned sending the matter by the Assistant Commissioner to the Commissioner of Customs was justifiable or not? We have gone through the definition and found under Section 2 (8) of the Customs Act, 1962 that the “Commissioner of Customs” except for the purposes of Chapter XV includes an Additional Commissioner of Customs. Therefore, either if the facts and figures have wrongly been placed before the Court to direct the Assistant Commissioner to decide the cause or out of inadvertent mistake the same has been directed to the Assistant Commissioner. Having so, we do not find any genuine cause not to dispose of the matter by sending the dispute amongst the parties to the appropriate Commissioner of Customs, Ghaziabad-respondent No. 3, for its disposal upon taking into consideration all aspects of the matter as aforesaid, and to pass an order giving adequate opportunity of hearing to the parties preferably within a period of one month from the date of communication of the order. The copy of the writ petition, affidavits and the papers on record can be treated to be part and parcel of the application. The copy of the writ petition, affidavits and the papers on record can be treated to be part and parcel of the application. The necessary application/s will be made within a week from the date of getting the certified copy of the order. 10. The writ petition is thus, disposed of. No order is passed as to costs. Honble A.P. Sahi, J.—I agree. ————