Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Guj) 33

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
S.R.BRAHMBHATT, A. P. THAKER, JJ.
Rajhans Impex Pvt Ltd & Ors - Appellant
Versus
Union of India & Ors - Respondent
Special Civil Application No. 12550, 12708, 13222 of 2017
Decided On : 09-01-2020

Advocates:
Advocate Appeared:
For the Appellant :Mr. Mihir Joshi, Senior Advocate With Mr. Paresh V Sheth(3998)
For the Respondent: Ms Shruti S Pathak(5619)

Point of Law:
Export Oriented Unit (EODC) stipulates and provides that the custom authority is empowered to take action against the licensee at any stage for misuse of the scheme.

Headnote:
Constitution of India - Article 226 - Special Civil Application - Petitioners seek a writ of mandamus quashing and setting aside the order issued by respondent No.2 confirming duty with interest and imposing penalty. Petitioner No.1 is engaged in manufacturing of brass rods / hollow rods etc. classified under Chapter 74 of the Schedule to the Central Excise Tariff Act and is under the control of Superintendent of Central Excise, Jamnagar. That the petitioner is regularly exporting its final product as also supplying to 100% EOU (Export Oriented Unit) by following the procedure prescribed under the law. That during the period, the petitioner – company supplied material to 100% EOU under the law against the application made for Advance Authorization with payment of duty and without Form CT-3 certificate. That on completion of such deemed export and receipt of Export Obligation Discharged Certificate, a request was made to issue Advance Authorization with the office of Joint Director General of Foreign Trade. Held - As such, initiation of proceedings by the customs is nothing but an exercise of power in excess of jurisdiction. When the Custom Department has exercised power in excess of jurisdiction, than, this Court can exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India. Therefore, considering peculiar facts of this case, the impugned order-in-original is required to be set aside- Petition allowed. (Para 35)
Facts of the Case:
Petitioners seek a writ of mandamus quashing and setting aside the order issued by respondent No.2 confirming duty with interest and imposing penalty. Petitioner No.1 is engaged in manufacturing of brass rods / hollow rods etc. classified under Chapter 74 of the Schedule to the Central Excise Tariff Act and is under the control of Superintendent of Central Excise, Jamnagar. That the petitioner is regularly exporting its final product as also supplying to 100% EOU (Export Oriented Unit) by following the procedure prescribed under the law.
Finding of the Court:
As such, initiation of proceedings by the customs is nothing but an exercise of power in excess of jurisdiction. When the Custom Department has exercised power in excess of jurisdiction, than, this Court can exercise its extraordinary writ jurisdiction.
Result: Petition allowed.

JUDGMENT :

A. P. THAKER, J.

1. As all the three petitions are arising out of the same order which the same is challenged by the petitioners by filing separate petitions, the matters were heard together and they are being disposed of by this common judgment.

2. Considering the facts that the order challenged in the matters are similar, the facts of Special Civil Application No.12550 of 2017 are taken as lead matter.

3. By way of present petitions under Article 226 of the Constitution of India, the petitioners seek a writ of mandamus quashing and setting aside the Order No. MUN-CUSM-000-COM-030-16-17 issued by respondent No.2 confirming duty with interest and imposing penalty, with the following prayers:-

a. Your Lordships be pleased to issue a writ mandamus of or in the nature of mandamus quashing and setting aside the order passed by the Respondent No. 2 bearing No. MUN-CUSTM-)))-COM- 030-2016-17 Dated 31.03.2017 issued on 05.04.2017.

b. Your Lordships be pleased to issue a writ of Prohibition or in the nature of Prohibition thereby completely and permanently prohibiting Respondent No. 2 & its subordinate officers from taking any action against the petitioner, for disturbing the benefits allowed, in view of Order In Original No. MUN-CUSM-000-COM-030-16-17 dated 31.03.2017 issued on 05.04.2017.

c. Pending admission, hearing and final disposal of the petition Your Lordships be pleased to stay further proceedings pursuant to the Order No. MUN-CUSM-000-COM-030-16-17 dated 31.03.2017 issued on 05.04.2017 by the Respondents including therein the stay of recovery of duty confirmed and the penalty imposed.

d. Such other and further reliefs as deemed just and expedient be granted.

4. Brief facts of the present case are as under:-

4.1 The petitioner No.1 is engaged in manufacturing of brass rods / hollow rods etc. classified under Chapter 74 of the Schedule to the Central Excise Tariff Act and is under the control of Superintendent of Central Excise, Jamnagar. That the petitioner is regularly exporting its final product as also supplying to 100% EOU (Export Oriented Unit) by following the procedure prescribed under the law. That during the period from May 2010 to January 2013, the petitioner – company supplied material to 100% EOU under the law against the application made for Advance Authorization with payment of duty and without Form CT-3 certificate. That on completion of such deemed export and receipt of Export Obligation Discharged Certificate, a request was made to issue Advance Authorization with the office of Joint Director General of Foreign Trade.

4.2 That on receipt of such authorization, the petitioner – company imported material during the period from February 2011 to August 2013 without payment of duty against such authorization, by claiming an exemption under Notification No.96/2009 which was duly accounted for and utilized in manufacturing of final product and the same was cleared with payment of duty in domestic market in terms of para 4.1.5 of the Foreign Trade Policy. It is alleged that at the time of import, a copy of Advance Authorization was produced before the Customs Authority and had claimed benefit of Notification No.96/2009-CUS and No. 98/2009-CUS.

4.3 That the petitioner – company has supplied some material with payment of duty, over and above, the material supplied against CT-3 certificate to M/s. Apple International (100% EOU), Jamnagar, M/s. Jakap Metind Pvt. Ltd. (100% EOU), Jamnagar, M/s. Shriji Krupa Export (100% EOU), Surendranagar and M/s. Srijan Exports (100% EOU), Chandigardh during the period from May 2010 to January 2013. It is further alleged that the petitioner – company had prepared Form ARE 3 at the time of removal of duty paid goods to the said 100% EOU’s which were returned by the said recipient duly endorsed by their jurisdictional Range Superintendent.

4.4 It is alleged that on 05.09.2013, the officers from the Office of Directorate of Revenue Intelligence (hereinafter be referred to as “DRI”) visited

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2020 Supreme(Guj) 33

IN THE HIGH COURT OF GUJARAT AT AHMEDABADS.R.BRAHMBHATT, A. P. THAKER, JJ.Rajhans Impex Pvt Ltd & Ors - AppellantVersusUnion of India & Ors - RespondentSpecial Civil Application No. 12550, 12708, 13222 of 2017Decided On : 09-01-2020

Point of Law: Export Oriented Unit (EODC) stipulates and provides that the custom authority is empowered to take action against the licensee at any stage for misuse of the scheme.

Cases Referred (4)

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
S.R.BRAHMBHATT, A. P. THAKER, JJ.
Rajhans Impex Pvt Ltd & Ors - Appellant
Versus
Union of India & Ors - Respondent
Special Civil Application No. 12550, 12708, 13222 of 2017
Decided On : 09-01-2020

Point of Law:
Export Oriented Unit (EODC) stipulates and provides that the custom authority is empowered to take action against the licensee at any stage for misuse of the scheme.