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2016 Supreme(Mad) 2296
IN THE HIGH COURT OF JUDICATURE AT MADRAS
HULUVADI G. RAMESH AND M.V.MURALIDARAN, JJ.
M/s. Binny Limited rep. by its Managing Director, Arvind Nandagopal - Appellant
Vs.
The Commissioner of Customs (Imports) - Respondent
Writ Appeal No.723 of 2015 and MP.No.1 of 2015
Decided on : 27-07-2016
For the Appellant : Mr. Vijay Narayan, SC for M/s. P.Saravana Sowmiyan
For the Respondent: Mr. K.Mohanamurali
The main legal point established in the judgment is that continuous efforts to re-export goods, along with the cancellation of auction proceedings, can justify granting permission to re-export goods bonded in a Customs Bonded Warehouse. The court also emphasized the importance of considering relevant circulars and legal provisions in such cases.
Headnote:
Customs Act - Import of Textile Machineries - Circular dated 14.01.2003, Customs Act, 1962 - Section 72(1) - Section 72(2) - Section 61 - Section 69
Fact of the Case:
The appellant company imported textile machineries and bonded them in a Customs Bonded Warehouse due to financial crisis. They sought permission to re-export the goods, but the request was rejected. The goods were later put up for e-auction, but the proceedings were cancelled. The appellant filed a writ petition seeking permission to re-export the remaining goods, which was dismissed by the Single Judge.
Finding of the Court:
The court found that the appellant had continuously sought permission to re-export the goods and had made efforts to stabilize their financial position. The court also noted that the e-auction proceedings were cancelled, and the goods were not put to auction. The court held that the appellant should be given an opportunity to re-export the goods to reduce their burden.
Issues: The main issue was whether the appellant should be permitted to re-export the goods that were bonded in a Customs Bonded Warehouse, considering the financial crisis and the rejection of the request for re-export.
Ratio Decidendi: The court held that the appellant's continuous efforts to re-export the goods and the cancellation of the e-auction proceedings justified giving them an opportunity to re-export the goods. The court also relied on the Circular dated 14.01.2003, which allows re-export of goods even after the permitted period for bonding has expired.
Final Decision: The Writ Appeal was allowed, setting aside the Single Judge's order. The appellant was permitted to make a representation to the respondents seeking permission to re-export the goods, and the respondents were directed to consider the same and pass necessary orders within one year.
HULUVADI G. RAMESH, J.
Being aggrieved over the order passed by the learned Single Judge of this Court, the writ petitioner has filed the present Writ Appeal.
2. The facts leading to filing of this Writ Appeal are as follows:
2.1 The Appellant Company, during the course of its business, imported textile machineries along with auxiliary equipments and spares consisting of 200 containers during the year 1996 from Germany. At that point of time, the Company was in great financial crunch and the machinery imported was also not immediately required for production. Hence, taking into consideration of both the factors, the Appellant Company decided to bond the imported goods as per the provisions of Customs Act, 1962, in Customs Bonded Warehouse without payment of duty pending clearance.
2.2 As the Appellant Company was put to several crisis, they were constrained to approach the Board for Industrial and Financial Reconstruction (BIFR) to declare it as a Sick Company under the Sick Industrial Companies (Special Provisions) Act, 1995. While the proceedings are pending before the BIFR, the appellant Company could not make any arrangement for clearing the imported goods on payment of customs duty and interest. Thus, the goods imported continued to remain in the warehouse without being cleared. Thereafter, to overcome the financial crisis, the Appellant Company took strenuous efforts to re-export the imported goods.
2.3 On the basis of the Circular dated 14.01.2003 in F.No.473/25/2002-LC of Government of India, Ministry of Finance and Company Affairs, Department of Revenue, the respondents granted permission to re-export the imported goods. Accordingly, out of 200 containers, 139 containers were re-exported in the year 2005. Thereafter, by order dated 28.05.2007, the warehouse license was extended upto 24.03.2008.
2.4 While so, the second respondent issued a notice dated 25.03.2008 under Section 72(1) of the Customs Act, demanding payment of duty and interest on the warehoused goods. On the failure of the appellant Company to discharge the demanded amount, notice under Section 72(2) of the Act came to be issued, thereby detaining the warehoused goods with a view to recovery of the duty and other charges. Pursuant to the same, the appellant Company submitted a letter dated 02.06.2008 to the second respondent, requesting to drop all further proceedings on the ground that they would re-export the goods lying in the remaining containers, once they get clearance from the proceedings pending before the BIFR.
2.5 Thereafter, BIFR proceedings came to an end and the appellant Company was declared as a Sick Industrial Undertaking. The Appellant Company has continuously taken efforts to find suitable buyer for exporting their goods, which have become obsolete. In the mean while, they came to know that the respondents were taking steps to auction the goods and hence, they filed a writ petition in WP.No.736 of 2012, which was disposed of by order dated 11.01.2012 by permitting the appellant to submit a representation and thereafter, the same was directed to be disposed of by the third respondent therein.
2.6 Pursuant to the order of this Court, the third respondent by proceedings dated 25.01.2012, rejected the request of the Appellant Company to re-export the goods in balance containers. Challenging the same, the Appellant Company preferred W.P. No.15103 of 2014, which was by order dated 04.03.2015, dismissed by the learned Single Judge. Hence, this Writ Appeal.
3. Learned senior counsel appearing for the Appellant submits that the appellant made strenuous efforts to re-export the imported goods and out of 200 containers, 139 containers were re-exported in the year 2005 itself and thereafter, they have taken vigorous steps to re-export the goods lying in the balance containers and the same could not be achieved due to lack of permission from the respondents, despite having prospective buyers. Learned senior counsel further submits that the Circular
