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IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Kundan Care Products Limited & Ors. - Appellants
Versus
Union Of India & Ors. - Respondents
Review Pet. 376 of 2019 and CM Appls. 40691 of 2019, 45573 of 2019 and 33270 of 2020 in W.P.(C) 9662 of 2019
Decided On : 30-09-2021
CUSTOMS ACT - IMPORT OF GOLD DORE BARS - RE-EXPORT - REVIEW PETITION - GROUNDS - IMPORT OF GOLD DORE BARS UNDER IMPORT LICENSE ISSUED BY DGFT - PERMISSION TO RE-EXPORT THE GOLD DORE BARS - REVIEW PETITION FILED BY REVENUE - CONTENTIONS OF REVENUE - IMPORT OF GOLD DORE BARS IN VIOLATION OF CONDITIONS IN NOTIFICATION 50/2017-CUS - ACTUAL USER CONDITION - GOODS STILL REMAINED WITHIN CUSTOMS BOND - IMPORT NOT COMPLETED - ACTUAL USER CONDITION NOT APPLICABLE - RE-EXPORT PERMISSIBLE - DGFT CLARIFICATION - EXPORT OF GOLD NOT PROHIBITED - REVIEW PETITION DISMISSED.
Fact of the Case:
Petitioner, an importer of Gold Dore Bars, surrendered Warehouse License No. 147/2016, issued under Section 58 of the Customs Act, 1962, and applied for grant of a Special Warehouse License under Section 58A. The petitioner specified a vault, taken on lease in the premises of M/s Securitrans India Pvt. Ltd, as the warehouse. In the interregnum, 11 consignments of Gold Dore Bars of the petitioner landed at the Customs Port in New Delhi. Before they could be cleared for home consumption, the rate of Customs duty payable on gold increased, w.e.f. 6th July, 2019. The petitioner contends that, with this increase, clearance of the consignments for home consumption was no longer economically viable and that, therefore, the only options available with the petitioner were to either warehouse the goods and export them under Section 69 of the Customs Act, or re-export the goods to a country outside India. The petitioner avers that repeated representations were addressed by the petitioner to the respondents, for grant of Special Warehouse License under Section 58A. It was also pointed out that, in the meanwhile, the landed consignments of Gold Dore Bars were incurring demurrage. It is further averred, in the writ petition, that the petitioner was made to understand that the hesitation, on the part of the respondent, in granting a Special Warehouse License to the petitioner under Section 58A was only because of a doubt as to whether a vault could qualify as a "site" or "building" and, therefore, a "warehouse", for the purposes of Section 58A. The petitioner claims to have addressed the further communications, dated 12th August, 2019, to Respondent 2, clarifying that a vault was also a "site" within the meaning of Section 58A. The fact that similar Special Warehouse Licenses had been granted to other applicants was also emphasised. Vide communication dated 13th August, 2019, Respondent No. 2 rejected the petitioner's application for Special Warehouse License under Section 58A. The reasons cited were that (i) the petitioner, while surrendering its earlier licenses No. 147/2016 (under Section 58) and 25/2016 (under Section 58A), had not followed due procedure and (ii) small lockers did not qualify as "sites" or "buildings", for the purposes of the Licensing Regulations. The petitioner responded on 14th August, 2019, with the request to Respondent No. 2 to reconsider its decision. It was pointed out, by the petitioner, that it had duly surrendered its earlier licences on 11th July, 2016 and 12th July, 2018 under specific covering letters, and that the Bank Guarantee furnished by the petitioner in respect of License No. 147/2016 was returned to the petitioner. Asserting that small lockers also qualified as "sites" for the purposes of the Licensing Regulations, the petitioner pointed out that other similarly placed exporters had been granted Special Warehouse Licenses for similar vaults. As a stalemate had been reached in respect of the petitioner's application for grant of Special Warehouse License under Section 58A, the petitioner applied, on 14th August, 2019, to Respondent No. 5 [the Principal Commissioner of Customs (Imports), New Delhi], for permission to re-export the goods to another country. On 23rd August, 2019, Respondent No. 2 rejected the petitioner's request for reconsideration of its earlier decision not to grant the petitioner a Special Warehouse License under Section 58A. It is in these circumstances that the petitioner approached this Court, under Article 226 of the Constitution of India, essentially for a writ of mandamus, to the respondents, to either grant a Special Warehouse License to the petitioner under Section 58A or to permit the petitioner to re-export the Gold Dore Bars to another country.
Finding of the Court:
The Court held that the import of the Gold Dore Bars into India is, as yet, incomplete. They cannot, therefore, be said to be in the nature of "imported" goods, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus. The second reason is that the question of compliance with the actual user condition would arise only if the goods were released for home consumption, as it was obviously impossible for the importer to comply with the actual user condition when the goods were still in Customs bond. Admittedly, the Bill of Entry, in respect of one remaining consignment, is yet to be filed. The consignment is yet, therefore, to be released for home consignment. There can be no question, therefore, of the importer having to comply with any actual user condition at this point of time.
Issues: Whether the import of Gold Dore Bars into India is completed, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus?
Ratio Decidendi: The Court held that the import of the Gold Dore Bars into India is, as yet, incomplete. They cannot, therefore, be said to be in the nature of "imported" goods, for the purposes of enforcing the actual user condition contained in Notification 50/2017-Cus. The second reason is that the question of compliance with the actual user condition would arise only if the goods were released for home consumption, as it was obviously impossible for the importer to comply with the actual user condition when the goods were still in Customs bond. Admittedly, the Bill of Entry, in respect of one remaining consignment, is yet to be filed. The consignment is yet, therefore, to be released for home consignment. There can be no question, therefore, of the importer having to comply with any actual user condition at this point of time.
Final Decision: The Court dismissed the review petition filed by the Revenue.
JUDGMENT
C. Hari Shankar, J. - The Union of India seeks, by means of the present petition, review of our order dated 4th September, 2019, which reads thus:
"1. Before the learned senior counsel appearing for the petitioner argues in detail about the re-export of Gold Dore Bars which was initially not allowed by the respondents, it is fairly submitted by the learned counsel for the respondents No. 2 to 5, upon instructions from her client, that the respondents are allowing the petitioner to re-export the Gold Dore Bars, on their furnishing shipping bills and in accordance with law.
2. In view of the aforesaid submission by the learned counsel for the respondents No. 2 to 5, the main grievance of the petitioner has been brought to an end. This writ petition is accordingly disposed of along with the pending application.
3. Liberty is, however, granted to the petitioner to challenge the action to be initiated by the respondents with regard to payment of demurrage charges etc. before the appropriate forum in accordance with law."
2. An application for review, even in a writ petition, it is well settled, can rely only on the grounds envisaged by Order XL VII Rule 1 of the Code of Civil Procedure, 1908 (CPC). Order XL VII Rule 1 permits an applicant to apply for review where
(i) from the discovery of new and important matter of evidence which even after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or
(ii) on account of some mistake or error apparent on the face of the record, or
(iii) for any other sufficient reason, the applicant desires to obtain a review of the order made against it.
3. The interpretation of the words "for any other sufficient reason", in the decision of the Privy Council in Chhajju Ram v. Neki, AIR 1922 PC 112, as meaning "a reason sufficient on grounds at least analogous to those specified in the rule" was expressly approved by the Supreme Court in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius, AIR 1954 SC 526, Kamlesh Verma v. Mayawati, (2013) 8 SCC 320 and Kantaru Rajeevaru v. Indian Young Lawyers Association, (2020) 2 SCC 1.
Facts, Grounds for seeking review and response of petitioner thereto
4. In order to understand the grounds on which the Union of India ("the Revenue", in short) seeks review of our order dated 4th September, 2019, which was clearly passed on a concession extended by learned Counsel for the Revenue, it is necessary to briefly appreciate the case of the petitioner in the writ petition.
5. The petitioner is an importer of Gold Dore Bars. It was also the holder of Warehouse License No. 147/2016, dated 30th March, 2016, issued under Section 58 of the Customs Act, 1962 ("the Act")[5], for a vault of dimensions 3.3' x 2.4' x 1.6'. The license, as granted, initially permitted the petitioner to stock Gold of value upto Rs. 30 crores, which was later enhanced to ? 120 crores.
[5] "58. Licensing of private warehouses. - The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, licence a private warehouse wherein dutiable goods imported by or on behalf of the licensee may be deposited."
6. Provisions for grant of Special Warehouse License were introduced in the Customs Act by the Finance Act, 2016, by way of Section 58A[6]. Vide Notification 66/2016-Cus dated 14th May, 2016, gold, silver, other precious metals and semi-precious metals and articles thereof were notified as goods for which Special Warehouse License under Section 58A was required. The procedure for grant of license was provided in the Special Warehouse Licensing Regulations, 2016 ("the Licensing Regulations", in short), notified vide Notification 72/2016-Cus dated 14th May, 2016, and the procedure for removal and export of goods from such Special Warehouses was provided in the Special Warehouse (Custody and Handling of Goods) Regulations, 2016 ("the Handling of Goods Reg
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