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High Court Of Calcutta
Amitava Lala
TRISAKTI ELECTRONICS AND INDUSTRIES LTD. - Appellant
Versus
UNION OF INDIA - Respondent
Writ Petition 2251 Of 1999
Decided On : 05/18/2001
CUSTOMS - IMPORT DUTY - EXEMPTION - RE-IMPORTED GOODS - EXPORT-CUM-REIMPORTATION - CENTRAL EXCISE DUTY - REFUND - ENTITLEMENT - INTERPRETATION OF NOTIFICATION - LEGAL FRAMEWORK - APPLICABILITY - JUDICIAL SCRUTINY - WRITS - JURISDICTION - PUBLIC LAW ELEMENT - QUADRANGULAR DISPUTE - CENTRAL EXCISE ACT, 1944 - CENTRAL EXCISE RULES, 1944 - CUSTOMS ACT, 1962 - GENERAL EXEMPTION NOS. 95 AND 95A.
Fact of the Case:
The petitioner, a public limited company, and its director exported eight diesel hydraulic truck-mounted cranes to Bangladesh under an agreement with ONGC Ltd. for the completion of a project. The goods were registered with the appropriate motor vehicles authority in India and permission was obtained from the Reserve Bank of India for export-cum-reimportation. The manufacturer of the goods executed bonds in favor of the Central Excise authorities for a total sum of Rs. 75,00,000/- to secure the excise duty payable by them. The Central Excise authorities certified that duty had been paid on the goods by furnishing bonds, while the Customs authorities certified that the bonds were to be released on production of a reimportation certificate from the Customs authorities or realization of duty. However, the Central Excise authorities released the bonds in favor of the manufacturer without waiting for reimportation or giving any intimation to the petitioner company. As a result, when the petitioner wanted to bring back the goods to India, the Customs authorities disallowed the same without payment of customs duty equivalent to the Central Excise duty due to the release of bonds in favor of the manufacturer.
Finding of the Court:
1. The Central Excise authorities and the manufacturer cannot be allowed to take a double stand of defense that the bonds are rightly released on export because it is unconnected with the re-importation but the petitioners are liable to pay customs duty similar to the amount of Central Excise duty as per Clause 1 (d) of the General Exemption No. 95a. 2. The discharge of the bond securing the amount of Central Excise duties on the said eight cranes is wrongful and therefore, the same is treated as canceled. 3. The interim order of reimportation of the eight cranes to India by the petitioners stands confirmed. Conditions for such reimportation imposed by the Court under the interim order stand vacated. 4. Customs duty as deposited by the petitioners as a condition for reimportation of the cranes stands released in view of the cancellation of discharge of bond securing the amount of Central Excise duties in respect of self-same goods. 5. The Secretary, Ministry of Finance, Department of Revenue, Government of India is directed to adjudicate upon the dispute between the petitioners and the respondent No. 6 and pass an appropriate reasoned order within two months from the date of communication of this order.
Issues: 1. Whether the Customs authorities can impose customs duties upon the petitioners for the re-imported goods. 2. Whether the discharge of the bond securing the amount of Central Excise duties on the said eight cranes is wrongful. 3. Whether the interim order of reimportation of the eight cranes to India by the petitioners stands confirmed. 4. Whether the conditions for such reimportation imposed by the Court under the interim order stand vacated. 5. Whether the customs duty as deposited by the petitioners as a condition for reimportation of the cranes stands released in view of the cancellation of discharge of bond securing the amount of Central Excise duties in respect of self-same goods. 6. Whether the Secretary, Ministry of Finance, Department of Revenue, Government of India is directed to adjudicate upon the dispute between the petitioners and the respondent No. 6 and pass an appropriate reasoned order within two months from the date of communication of this order.
Ratio Decidendi: 1. The bonds on export are unconnected with the reimport of goods by the petitioner No. 1 being a merchant-exporter. Therefore, the same has got nothing to do in connection with the benefits of exemption to be given to the petitioners either under the General Exemption No. 95 and/or 95a. 2. The Central Excise authorities and the manufacturer, in the writ petition of the merchant-exporters, cannot be allowed to take a double stand of defense that the bonds are rightly released on export because it is unconnected with the re-importation but the petitioners are liable to pay customs duty similar to the amount of Central Excise duty as per Clause 1 (d) of the General Exemption No. 95a. 3. The discharge of the bond being No. B-l (GEN)/18/kdh/98, dated 26th October, 1998 for Rs. 75,00,000/- as executed by the respondent No. 6 securing the amount of Central Excise duties on the said eight cranes is wrongful and therefore, the same is treated as canceled.
Final Decision: 1. The writ petition is allowed. 2. The discharge of the bond securing the amount of Central Excise duties on the said eight cranes is wrongful and therefore, the same is treated as canceled. 3. The interim order of reimportation of the eight cranes to India by the petitioners stands confirmed. Conditions for such reimportation imposed by the Court under the interim order stand vacated. 4. Customs duty as deposited by the petitioners as a condition for reimportation of the cranes stands released in view of the cancellation of discharge of bond securing the amount of Central Excise duties in respect of self-same goods. 5. The Secretary, Ministry of Finance, Department of Revenue, Government of India is directed to adjudicate upon the dispute between the petitioners and the respondent No. 6 and pass an appropriate reasoned order within two months from the date of communication of this order.
( 1 ) THE case is unique one. The petitioner No. 1 is a public limited company. The petitioner No. 2 is a director and representative of such company. They are the merchant-exporters of eight diesel hydraulic truck mounted cranes (hereinafter called as the goods) to Bangladesh. The party respondents are basically (a) Central Excise Authorities; (b) Customs Authorities; (c) manufacturer; and (d) financiers of the goods. Financiers are not contesting the dispute. Therefore, there is existence of quadrangular dispute in between others which are inseparable in nature. A Division Bench of this Court is disposing an appeal from an interim order passed by a Single Bench of this Court also observed the same. Therefore, the dispute cannot be said to be dispute of a private nature which cannot be taken into account in the writ jurisdiction of this Court. Public law element is involved herein.
( 2 ) THE short compass of the dispute is that the petitioners with the help of the financiers, purchased the aforesaid goods from the respondent No. 6, a manufacturing company of India. According to them, the price includes excise duties. Therefore, the respondent No. 6 is liable to pay excise duties, if any, to the Central Excise Authorities. The goods were registered under the appropriate motor vehicles, authority in India. The Oil and Natural Gas Commission Limited (hereinafter called as 'ongc Ltd. ') a Government company made an agreement with the petitioners in India to deploy such goods for the completion of a project of M/s. Bangladesh Gas Fields Co. Ltd. (a company of Petro-Bangla) in Bangladesh, which will be brought back to India after completion of the contractual work. Necessary permission was sought from the Reserve Bank of India which was duly granted by them. Such type of movement of goods from India to a country and coming back is called 'export-cum-reimport' as per technical nomenclature of the customs authorities. Such words in the nature of export-cum-reimportation will be available in every necessary documents for movement i. e. permission of Reserve Bank of India, proforma invoices for purchase, bills of export, etc.
( 3 ) THE respondent No. 6, the manufacturer of the goods did not pay the excise duty before the removal of the goods from the factory but executed bonds in favour of the Central Excise Authority for a total sum of Rs. 75,00,0007- to secure the excise duty payable by them. Such respondent supposed to execute and submit and accordingly submitted necessary applications under prescribed forms known as AR 4 forms to be respondent No. 7 i. e. the Superintendent of Central Excise describing the petitioner company as merchant-exporter and themselves as manufacturer with particulars of goods and giving their appropriate Central Excise registration number. Such AR 4 forms prescribed certain modalities which are required to be fulfilled when the goods are to be taken to a different country for the purpose of doing the needful. Under AR forms there are two columns for the purpose of certification of the Central Excise authorities and the Customs authorities. The Central Excise authorities have certified that duty has been paid on the goods by furnishing bonds by them. The Customs authorities certified that such bonds are to be released on production of reimportation certificate from the Customs authorities or realisation of duty.
( 4 ) AS per the Bill of Export, the petitioners being merchant-exporters obtained permission for export-cum-reimportation for the purpose of execution of overseas project by the petitioners. From the Bill of Export it appears that Central Excise duty will be paid on reimportation of goods from Bangladesh and export was allowed on AR 4 bond without payment of Central Excise duty. The Bill of Export also contained a declaration that the goods were exported to Bangladesh for execution of contract with ONGC Ltd. , India on monthly hiring basis and the said goods will be brought back
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