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2010 DIGILAW 363 (GUJ)

Noble Clean Fuels Limited v. Union of India

2010-08-12

D.A.MEHTA, H.N.DEVANI

body2010
Judgment H.N. Devani, J.—By this petition under Article 226 of the Constitution of India, the petitioner seeks the following substantive reliefs : “[37] The petitioners therefore, pray: [a] that this Hon’ble Court be pleased to issue a Writ of Certiorari, or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, leading to the issuance of the impugned show cause notice dated 27th May 2010 (Annexure-P hereto), the seizure vide Panchnama dated 26th April, 2010 (Annexure-L hereto) and the impugned provisional Order dated 26th April, 2010 (Annexure-M) and after going into the legality, validity and propriety thereof, to quash and set aside the same; [b] that this Hon’ble Court be pleased to issue a Writ of Mandamus, or a Writ in the nature of Mandamus, or any other appropriate Writ, Order or direction, directing the Respondents to forthwith allow the said goods to be shipped unconditionally to Fujirah or any other port outside India; [c] that this Hon’ble Court be pleased to issue a Writ of Prohibition, or a Writ in the nature of Prohibition, or any other appropriate Writ, Order or prohibition, prohibiting the Respondents from giving effect and/or implementing the impugned show cause notice dated 27th May, 2010 (Annexure-P hereto);” 2. The facts of the case as appearing in the petition are that the petitioner is a Company incorporated under the laws of United Kingdom and are, inter alia, engaged in the business of trading in petroleum products. On 11.09.2009, the petitioner brought 34,272.066 MTs of Gas Oil (HSD) per vessel “MT Rainbow Start” and filed Cargo Declaration in Form-III, i.e., IGM No. 14672 with the declaration that the said goods are transshipment cargo to be transshipped to any foreign port. Vide letter dated 11.9.2009, the petitioner requested to discharge the cargo for transshipment, which was granted by the proper officer. On 24.11.2009, the petitioner brought 5,100 MTs of Gas Oil (HSD) covered by Bill of Lading with the same endorsement and filed Cargo Declaration in Form-III, i.e., IGM No. 14906 dated 1st December 2009 for discharge at Mundra along with the covering letter also dated 1.12.2009. On 3.12.2009, the petitioner was granted permission to discharge the cargo and since then the said goods were lying in the warehouse tanks within the customs notified area at Mundra. On 3.12.2009, the petitioner was granted permission to discharge the cargo and since then the said goods were lying in the warehouse tanks within the customs notified area at Mundra. On 6.4.2010, M/s ACT Shipping Ltd., Customs Agent (CHA), on behalf of the petitioner, made a request for permission for transshipment of the said goods and discharge of the same at Fujirah. Transshipment permits No. 20 and 21 came to be filed by the Customs House Agent on behalf of the petitioner on 2.4.2010 for shipment of the said goods out of India, for which the vessel had also arrived at Mundra. Vide letters dated 8.4.2010 and 9.4.2010 addressed to the Director General of Foreign Trade, the petitioner sought clarification regarding applicability of restriction of canalization and permissibility of import of the said goods for transshipment. Vide communication dated 15.4.2010, the DGFT clarified that the said goods are transshipment cargo and hence, the transshipment of the said goods should be allowed. On 16.4.2010, the petitioner requested the respondents to provisionally allow the cargo to be loaded to avoid vessel demurrage charges. On 26.4.2010, the respondents instead of permitting the shipment of the said goods to Fujirah, seized the same under panchnama. On 24.4.2010, the second respondent passed a provisional release order which was communicated to the petitioner vide letter dated 26.4.2010 whereby the second respondent directed the petitioner to execute a bond for full value of the said goods and furnish a bank guarantee for Rs. 20 crores. On 30.4.2010, the petitioner once again represented to the respondents for immediate release of the said goods for shipment to Fujirah. Vide letter dated 11.5.2010, the petitioner requested for reduction of the amount of bank guarantee, and on 26.5.2010, the request was made to the Commissioner of Customs, Ahmedabad who was holding additional charge in absence of the second respondent for reduction of the bank guarantee amount through the advocate for the petitioner, but the request came to be turned down. 3. Vide show cause notice dated 21.5.2010, the petitioner was called upon to show cause as to why the goods brought through MT Rainbow Star at Mundra Port for transshipment received under Bill of Lading No. PP519/09 dated 5.9.2009 and Bill of Lading No. P4965 dated 24.11.2009, valued at Rs. 1,08,49,39,322=74 (price at the time of import) and Rs. 3. Vide show cause notice dated 21.5.2010, the petitioner was called upon to show cause as to why the goods brought through MT Rainbow Star at Mundra Port for transshipment received under Bill of Lading No. PP519/09 dated 5.9.2009 and Bill of Lading No. P4965 dated 24.11.2009, valued at Rs. 1,08,49,39,322=74 (price at the time of import) and Rs. 12,70,22,812=58 (present market price cum sale price), should not be confiscated under Section 111(d) and Section 111(f) of the Customs Act, 1962 (the Act), and as to why the penalty should not be imposed upon it under Section 112 and Section 114AA of the Act. Being aggrieved, the petitioner has moved the present petition seeking the reliefs noted hereinabove. 4. Heard the learned Advocates for the respective parties. 5. Vide order dated 15.7.2010, the Court had granted interim relief in the following terms : “[3] By way of interim relief, the petitioner is directed to file an undertaking setting out the outer limit which shall be not later than 31.7.2010, within which the goods in question shall be transshipped outside India. The undertaking shall also state that in the event the petitioner is unsuccessful in the petition, the petitioner shall pay customs duty on the market value of the goods as of today, subject to the right of the petitioner to carry the matter further. Original undertaking shall be tendered on or before 19th July 2010 before respondent No. 2, with a copy of the undertaking to come on record of this petition. The respondent Nos. 2 and 3 authority are directed to permit transshipment of goods within the period stated in the undertaking which shall not be later than 31st July 2010. The petitioner shall also give an undertaking to the tune of Rs. 5,00,00,000/- [Rupees five crores only], which shall be kept valid till the final disposal of the petition without any further orders to be made in this regard. The bank guarantee shall be accompanied by a corporate bond of the full amount of the value of goods which is stated by the petitioner to be Rs. 127 crores.” 6. Pursuant to the said order, the petitioner has been permitted transshipment of the goods in question. In the circumstances, the relief prayed for vide Paragraph 37[b] of the petition stands substantially granted subject to the conditions imposed vide the interim order. 7. 127 crores.” 6. Pursuant to the said order, the petitioner has been permitted transshipment of the goods in question. In the circumstances, the relief prayed for vide Paragraph 37[b] of the petition stands substantially granted subject to the conditions imposed vide the interim order. 7. Insofar as the reliefs prayed for vide Paragraph 37[a] and [c] are concerned, considering the fact that the petitioner has approached this Court at the stage of show cause notice, the Court is not inclined to entertain the petition qua the said reliefs. 8. In the light of the aforesaid, nothing further remains to be done in the present petition. However, considering the fact that vide order dated 26.4.2010, provisional release of the goods has been ordered subject to the conditions stipulated therein, the respondent No. 3 is directed to frame final assessment within a period of four months from today. 9. By way of interim order dated 15.7.2010, the petitioner had been directed to furnish bank guarantee of Rs. 5 crores which was to be kept valid till the final disposal of the petition. In the light of the fact that the present petition is being disposed of, the petitioner is directed to continue the bank guarantee and keep it valid till the final assessment order is passed. 10. Learned Advocate for the petitioner has invited attention to the order dated 15.7.2010, to submit that through inadvertence in the said order, it had been stated that the undertaking to be filed by the petitioner shall also state that in the event the petitioner is unsuccessful in the petition, the petitioner shall pay customs duty on the market value of the goods as of today. It is submitted that since the goods in question have never been imported and have already been transshippted, if at all, the petitioner is liable to pay any amount, it would be by way of penalty and that the question of payment of customs duty would not arise. Having regard to the aforesaid, the petitioner is directed to file a fresh undertaking before the adjudicating authority to the effect that the petitioner shall pay the amount assessed under the final assessment order as may be framed by the respondent No. 3 subject to its right to appeal. The directions contained in the order dated 15.07.2010 shall stand modified to the said extent. The directions contained in the order dated 15.07.2010 shall stand modified to the said extent. The right of the petitioner to claim refund under Section 18 of the Act shall be subject to the order of final assessment. 11. The petition is, accordingly, disposed of in the above referred terms. Rule is discharged.