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2018 DIGILAW 2073 (BOM)

Jade Marketing v. Union Of India

2018-08-23

M.S.SANKLECHA, RIYAZ I.CHAGLA

body2018
ORDER M.S. Sanklecha, J. - At the very outset, Mr. Balani, Learned Counsel appearing for the petitioner seeks to amend the petition by deleting reference to the order dated 8th October, 2017 and 25th January, 2018 referred to in the prayer clause of the appeal. Amendment allowed and be carried out forthwith. Re-verification dispensed with. 2. At the request of the parties, petition itself is being disposed of finally at the stage of admission. 3. This petition under Article 226 of the Constitution of India, challenge communication/orders dated 18th October, 2016 and 2nd November, 2016 passed by the [Customs], Excise & Service Tax Settlement Commission (Commission). The communication dated 18th October, 2016 from the office of the Commission informed the petitioner that in the absence of paying interest within the 30 days as provided in the order dated 22nd April, 2016 under Section 127C(5) of the Customs Act, 1962 (the Act), the application for settlement stands rejected. The Communication dated 2nd November, 2016 from the office of the Commission informed the petitioner that its application dated 25th October, 2016 for restoration of its application by recall of order dated 18th October, 2916 was rejected. 4. Briefly, the facts leading to this petition, are as under :- (a) In the year 2009, the petitioner had imported vitrified tiles (said goods) from China. The said goods were liable to anti-dumping duty in India, unless manufactured by specified units and/or exported by specified exporters. The petitioner sought to evade anti-dumping duty by misdeclaring in its 3 bills of entry, the actual source of the said goods, so as to avail benefit of Notification No. 82 of 2008, dated 27th June, 2008. Out of the 3 bills of entry, the respondent was allowed clearance of the said goods on payment of duties in respect of two bills of entry dated 19th June, 2009 and 20th August, 2009. However, in respect of third bill of entry dated 24th August, 2009, the goods was not cleared as they were warehoused under Section 49 of the Act, and thereafter, abandoned by the petitioner. (b) Thereafter, on 7th November, 2013, show cause notice were issued by the respondent, alleging short levy of anti-dumping duty. However, in respect of third bill of entry dated 24th August, 2009, the goods was not cleared as they were warehoused under Section 49 of the Act, and thereafter, abandoned by the petitioner. (b) Thereafter, on 7th November, 2013, show cause notice were issued by the respondent, alleging short levy of anti-dumping duty. This on the basis of it not being entitled to the benefit of Notification No. 82 of 2008, dated 22nd June, 2008 in respect of all the three bills of entry dated 19th June, 2009, 20th August, 2009 and 24th August, 2009. (c) During the pendency of the above adjudication proceedings, the petitioner approached the Settlement Commission by filing an application under Section 127B of the Act. This with a view to settle the dispute with the respondent. (d) However, the Commission was of the view that entire amounts due i.e. duty and interest thereon, as required under the proviso to Section 127B of the Act was not satisfied. Therefore, notice was issued to the petitioners with regard to the maintainability of the application for settlement. The petitioner responded to the notice and was heard by the Commission on its stand that no further duty and/or interest is payable. (e) On 22nd April, 2016, the Commission passed an order, not accepting the contention of the petitioner. Nevertheless, it gave an opportunity to the petitioner to make good the deficiency of short payment of duty and interest within 30 days of its order. In fact, the order dated 22nd April, 2016, records as under :- "6.6 However, the Bench, instead of rejecting the application filed by the applicant would like to give an opportunity to him, to make good the deficiency. Accordingly, it passes the following order : ORDER If the applicant deposits Rs. 4,97,262/- towards the admitted additional duty liability on the two concerned Bills of Entry along with applicable interest thereon and produces evidences thereof within 30 days from the receipt of this order, the application shall stand restored to the original file of the Bench, failing which, it would be deemed to have been rejected for non-compliance of the provisions of Section 127B(1)(c) of the Customs Act, 1962 and Revenue would be free to proceed as per law." (f) The order dated 22nd April, 2016 of the Commission passed under Section 127C (5) of the Act, was received by the petitioner on 2nd May, 2016. Petitioner deposited/paid the duties of customs aggregating to Rs. 4,97,262/- as directed within the stipulated period of 30 days by order dated 22nd April, 2016. (g) On 2nd June, 2016, the Superintendent in the Office of the Commission addressed a communication to the petitioner recording the fact that duty as required by order dated 22nd April, 2016 has been paid but the interest on the same has not yet been deposited. Thus, the communication called upon the petitioner to deposit the interest immediately and inform the same to the Commission. (h) The petitioner by letter dated 16th June, 2016, addressed to the Commission contended that no interest was payable by it. This in view of the fact that an amount of Rs. 4,97,262/- (paid in respect of third bill of entry - abandoned goods) was with the Department for the entire period. Thus, the Revenue was not deprived of the above amount for any period. (i) However, the Superintendent in the office of the Commission did not accept the above contention of the petitioner. In fact, by a letter dated 22nd June, 2016, the Superintendent in the office of the Commission, directed the petitioners to deposit the amount of interest attributable in respect of the two bills of entry immediately. It further, directed the petitioner to inform the Commission of the due payment of interest. (j) Consequent to the above, petitioner on 8th July, 2016 addressed a letter to the Commission, pointing out that the interest as directed by letter dated 22nd June, 2016, is deposited. The above communication also enclosed challan, evidencing payment of interest on 7th July, 2016 in respect of the two bills of entry referred to in the order dated 22nd April, 2016 of the Commission. (k) In spite of the aforesaid payments, on 18th October, 2016, the Superintendent in the office of the Commission communicated the decision of the Commission that as the interest had not been paid within the 30 days period granted by order dated 22nd April, 2016, the application for settlement stands rejected. This, by virtue of the self operating order dated 22nd April, 2016. (l) Thereafter, on 25th October, 2016, petitioner filed a miscellaneous application before the Commission for recall of the communication dated 18th October, 2016. However, the same was also rejected by the communication dated 2nd November, 2016. 5. Mr. This, by virtue of the self operating order dated 22nd April, 2016. (l) Thereafter, on 25th October, 2016, petitioner filed a miscellaneous application before the Commission for recall of the communication dated 18th October, 2016. However, the same was also rejected by the communication dated 2nd November, 2016. 5. Mr. Balani, Learned Counsel in support of the petition submits that there is a defect/flaw in the decision making process adopted by the Commission. This in view of the fact that the Commission did not hear the petitioners in respect of its contention that the order dated 22nd April, 2016, has been complied with and yet rejected it. Moreover, it is submitted that the Commission itself by a letter dated 22nd June, 2016 i.e. much after time provided by the order dated 22nd April, 2016 to pay the interest, called upon the petitioner to pay the interest and report the same to the Commission. Thus, the time of 30 days provided in the order dated 22nd June, 2018 stood extended. Petitioner did pay the interest and thus satisfied requirements of the order dated 22nd April, 2016 of the Commission. 6. As against the above, Mr. Adik, Learned Counsel for the Revenue states that the order dated 22nd April, 2016 is a self operating order. Therefore, once the petitioner has not complied with the payment of interest within the time provided in order dated 22nd April, 2016, the application for settlement stand rejected. It is submitted that the communication dated 22nd June, 2018 from the office of the Commission cannot lead to modification of the order dated 22nd April, 2016 passed by the Commission. 7. We have considered the rival submissions. We find that the order dated 22nd April, 2016 gave the petitioner an opportunity to make good the deficiency of not having paid an appropriate additional duties and interest payable thereon in support of its application for settlement. Thus, providing the petitioner a 30 days period to make good the deficiency to deposit the duties and interest. It is an undisputed position before us that the duty of Rs. 4,97,262/- was paid within 30 days period from the receipt of the order dated 22nd April, 2016. It was the petitioner''s contention that no interest was payable as the Revenue was in possession of an amount of Rs. It is an undisputed position before us that the duty of Rs. 4,97,262/- was paid within 30 days period from the receipt of the order dated 22nd April, 2016. It was the petitioner''s contention that no interest was payable as the Revenue was in possession of an amount of Rs. 4,97,262/- paid in respect of third bill of entry in respect of the said goods which had not been cleared, but, in fact, abandoned. This, contention was not acceptable to the Commission. Nevertheless, by letter dated 22nd June, 2018, the Superintendent in the office of the Commission called upon the petitioner to pay the deficit interest and report compliance to Commission. In response, petitioner paid the interest immediately on 7th July, 2018 and communicated the same to the Commission on 8th July, 2018. Thus, there was prima facie, a compliance with the directions contained in the communication dated 22nd June, 2018 of the Commission. 8. In the aforesaid circumstances, the impugned order dated 18th October, 2016, informing the petitioner that its application for settlement stands rejected in view of the order dated 22nd April, [2016] of the Commission, is without taking into account the letter dated 22nd June, 2016 addressed by the office of the Commission to the petitioner, directing them to deposit interest immediately. Petitioner, in compliance thereof paid the interest. These were issues which required the Commission to hear the petitioner, before holding/communicating that there is non-compliance with the order dated 22nd April, 2016. 9. In fact, miscellaneous application dated 25th October, 2016 to recall/reconsider the communication dated 18th October, 2018 was also rejected on 2nd November, 2016 without any hearing or taking into account the events subsequent to 22nd April, 2016, particularly, the letter dated 22nd June, 2018 of the Commission. Thus, there is undisputedly a flaw in the decision making process. The Commission is entitled to come to a view that the petitioner has not complied with the order dated 22nd April, 2016 within the time frame provided therein and there is no justification for extension of time. However, the same can only be so held after considering and taking a view on the petitioner''s above submissions/contentions. This can be only after hearing the petitioner. 10. Therefore, in the above peculiar facts of this case, we set aside the orders/communications dated 18th October, 2016 and 2nd November, 2016 from the office of the Commission. However, the same can only be so held after considering and taking a view on the petitioner''s above submissions/contentions. This can be only after hearing the petitioner. 10. Therefore, in the above peculiar facts of this case, we set aside the orders/communications dated 18th October, 2016 and 2nd November, 2016 from the office of the Commission. We direct the Commission to hear that petitioner on its plea that the order dated 22nd April, 2016 passed by the Commission, has been complied with and pass appropriate order thereon, in accordance with law. 11. It is made clear that the Commission would decide the petitioner''s rectification application dated 25th October, 2017 in accordance with law, after hearing the petitioner. It is further made clear that we have not examined the issue whether quantum of interest paid is in accordance with the order dated 22nd April, 2016. This would be a matter for the Commission to decide while considering the petitioner''s application dated 25th October, 2016. 12. Writ Petition disposed of in the above terms. No order as to costs.