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High Court Of Calcutta
Y. R. MEENA, MALAY KUMAR BASU
M.M.EXPORTS - Appellant
Versus
ZONAL DIRECTOR GENERAL OF FOREIGN TRADE - Respondent
G. A. 489 Of 2001
Decided On : 07/12/2001
FOREIGN TRADE - DUTY ENTITLEMENT PASS BOOK (DEPB) - REASSESSMENT OF EXPORTED GOODS - JURISDICTION - CUSTOMS DEPARTMENT - FOREIGN TRADE DEPARTMENT - SCOPE OF AUTHORITY - REOPENING OF FINAL ASSESSMENTS - APPLICABILITY OF CIRCULAR 23/99 - INTERPRETATION - DEEMING PROVISION - RETROSPECTIVE EFFECT - VALIDITY - POWER OF COMMISSIONER OF CUSTOMS TO EXTEND ENQUIRY PERIOD - CIRCULAR 23/99 PARA 7 - APPLICABILITY - CONDITIONS FOR REOPENING FINAL ASSESSMENTS - SHOW CAUSE NOTICE - REQUIREMENT - JURISDICTION OF COMMISSIONER OF CUSTOMS TO REOPEN FINAL ASSESSMENTS - CIRCULAR 23/99 PARA 7 - APPLICABILITY - CONDITIONS FOR REOPENING FINAL ASSESSMENTS - SHOW CAUSE NOTICE - REQUIREMENT.
Fact of the Case:
The petitioner, a registered partnership firm, exported 33 consignments of finished glass beads under the DEPB Scheme to a foreign buyer. The Customs Department made the final assessment of the exported goods, and the petitioner filed applications for issuance of DEPB. The respondent, the Zonal Director General of Foreign Trade, issued DEPB for consignments 1 to 24 but not for consignments 25 to 29. The petitioner challenged the refusal to issue DEPB for consignments 25 to 29 and also sought a direction to accept and process the applications for consignments 30 to 33, which were returned by the respondent on the ground that the value cap for DEPB was being fixed.
Finding of the Court:
The Court held that the Customs Department is the sole authority competent to make the assessment for valuation of exported goods. The Foreign Trade Department has no power to question the value assessed by the Customs Department. The Court further held that Circular 23/99, which provides that the Commissioner of Customs can extend the enquiry period for determining the present market value of the goods, is not applicable to cases where the final assessment has been made after market enquiry by the Customs Department. The Court also held that the Commissioner of Customs cannot reopen a case where the final assessment is made by the Customs Department after 11.5.1999.
Issues: 1. Whether the Foreign Trade Department has the authority to reassess the value of exported goods after the Customs Department has made the final assessment? 2. Whether Circular 23/99, which provides for the extension of the enquiry period for determining the present market value of the goods, is applicable to cases where the final assessment has been made after market enquiry by the Customs Department? 3. Whether the Commissioner of Customs can reopen a case where the final assessment is made by the Customs Department after 11.5.1999?
Ratio Decidendi: 1. The Customs Department is the sole authority competent to make the assessment for valuation of exported goods. The Foreign Trade Department has no power to question the value assessed by the Customs Department. 2. Circular 23/99, which provides that the Commissioner of Customs can extend the enquiry period for determining the present market value of the goods, is not applicable to cases where the final assessment has been made after market enquiry by the Customs Department. 3. The Commissioner of Customs cannot reopen a case where the final assessment is made by the Customs Department after 11.5.1999.
Final Decision: The Court directed the respondent to issue DEPB for consignments 25 to 29 within 10 days and to process the applications for consignments 30 to 33 and issue DEPB within 6 weeks from the date of receipt of the applications.
( 1 ) THESE two cross appeals are directed against the impugned judgment dated 8th December, 2000 of learned single Judge.
( 2 ) THE petitioner No. 1 is a Registered Partnership Firm and Petitioner No. 2 is one of the partners in that firm.
( 3 ) PETITIONER No. 1 carries on business of export and import. The main business of petitioner is to export silk fabric and finished glass beads.
( 4 ) THE Government of India published an Export and Import Policy for the years 1997-2002. The scheme called Duty Exemption Scheme. In that scheme on export the exporter gets duty free licence for import of goods i. e. called Duty Entitlement Pass Book (DEPB ). The duty credit under the scheme is calculated on the basis of the value of the goods exported. The exporter is eligible to claim the duty free import goods at a specified percentage of value of export made by the exporter. The import licence that is DEPB is valid for a period of 12 months from the date of issuance of that import licence. The DEPB under the said policy may be issued either on post-export or on pre-export basis.
( 5 ) WHAT will be the value of the exported goods that is a subject matter of Customs Department after valuation of the goods exported by the Customs Department. The licensing authority is the Director General of Foreign Trade, which issues the Duty Free Import Licence to the exporter.
( 6 ) LEARNED counsel for petitioner Shri Bazoria has submitted that between June and July, 1999 the petitioner effected export of 33 consignments of finished Glass Beads under the DEPB Scheme to foreign buyer namely M/s Chang Zeng Exporters, Singapore. The Shipping bills filed by the petitioners were finally assessed by the Customs Authorities and goods were exported. The details of the goods exported and assessed are given at page 36 of the Paper Book.
( 7 ) M/s. Chang Zeng Exporters have received and accepted the goods exported and also the payment has been made of all the invoices through the banker No. 1.
( 8 ) THE petitioner after export filed shipping bills along with application and other required documents as provided under the Hand Book of Procedure. The petitioners filed 29 applications to respondent No. 1 for issuance of DEPB, which were scrutinized by the department and found to be in order in all respect and file number was also given to the petitioner by respondents that means all applications were scrutinized and found in order for grant of DEPB. Thereafter, DEPB was to be issued within 5 days that is per procedure and practice of the department.
( 9 ) THE respondent No. 1 issued DEPB to the petitioner in respect of 1 to 24 consignments mentioned in the chart at page 37 of the Paper Book without raising any dispute whatsoever. But he has not issued the DEPB in respect of serial Nos. 25 to 29 of the said chart, though the final assessment has been made in case of these 5 shipping bills also and the purchaser has also remitted the amount of price to the petitioner. In October 1999 the petitioner was informed as value cap has been fixed at Rs. 150/- per kg. The Duty Free Import Licence cannot be issued on the basis of the assessment of exported goods made by the Customs Department.
( 10 ) FOR item Nos. 30 to 33 the applications was filed after the assessment to respondent No. 1 but those were returned on the ground that the fixed rate of goods, in the form of value cap will be issued by the department shortly. Therefore, the duty free import licence cannot be issued on the basis of valuation assessed by the Customs Department. The application can be submitted after the rates fixed by the Government of Export Goods under value cap. Rates fixed of export goods under value cap issued on 15. 10. 1999.
( 11 ) THE writ petition filed and the petitioner prayed before learned single Judge that respondents be directed to issue DEPB at the notified rate of the FOB value of export in respect of items Nos. 25 to 29. For the item Nos. 30 to 33 the respon
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