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2022 Supreme(Online)(Guj) 12970
HIGH COURT OF GUJARAT
N.V.ANJARIA, BHARGAV D. KARIA, JJ
AGARWALLA TIMBERS PVT LTD – Appellant
Versus
UNION OF INDIA – Respondent
R/SPECIAL CIVIL APPLICATION NO. 15296 of 2013 | R/SPECIAL CIVIL APPLICATION NO. 3286 of 2014
For the Appellants/Petitioners: MR HARDIK P MODH
For the Respondents: MR DEVANG VYAS, MR IH SYED, MR UTKARSH R SHARMA, MR. PARTH H BHATT, MS TRUSHA K PATEL
Policy circulars cannot impose additional conditions or restrictions on statutory exemption notifications as they lack legal authority, rendering such restrictions invalid.
Headnote:(A) Foreign Trade Development and Regulation Act, 1992 - Sections 3, 5; Customs Act, 1962 - Section 25(1); Notification No. 102/2007-Cus - Refund of Special Additional Duty (SAD). The petitioners challenged public notice and circular limiting the transfer and utilization of Duty Entitlement Passbook scrips related to SAD refund. The court found that the restrictions imposed were ultra vires and invalid. (Paras 10, 16)
(B) Judicial Authority - The authority cannot amend a notification by circulars as they do not hold statutory power to change conditions of the exemption notification. (Paras 10, 11)
Facts of the case:
The petitioner questioned the denial of SAD refund due to the imposition of additional restrictions via policy circulars despite satisfying the conditions of the original notification. Respondent authorities delayed refund processing causing loss of entitlement.
Findings of Court:
The restrictions in the public notice and circular are declared invalid as they cannot supersede the statutory notification conditions. The petitioners are entitled to a refund of SAD paid through DEPB/Reward Scrips or its equivalent amount through RTGS if scrips are unavailable.
Issues: Whether public notices or departmental circulars can introduce additional restrictions to a statutory exemption notification? The validity of such constraints in light of the statutory provisions.
Ratio Decidendi: The court held that amendments or conditions to a notification under the Customs Act must comply with statutory processes and cannot be modified through administrative circulars. Additional restrictions imposed by circulars are invalid.
Result: Petitions allowed; Refund shall be processed with interest.
| Table of Content |
|---|
| 1. controversy involves customs duty refund. (Para 1 , 2) |
| 2. claims relate to depb and sad duties. (Para 3 , 4 , 5 , 6) |
| 3. amendments to policies questioned. (Para 7 , 8) |
| 4. court observes procedural delays in refunds. (Para 9 , 10) |
| 5. court emphasizes legality of notification amendments. (Para 14 , 15) |
| 6. invalidity of restrictions on refund claims. (Para 16 , 17) |
| 7. court's directive for processing refunds. (Para 18 , 19) |
JUDGEMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.Heard learned advocate Mr. Hardik Modh for the petitioners, learned advocate Mr.Utkarsh Sharma for the respondent nos. 2 to 7 and learned Additional Solicitor General Mr.
Devang Vyas for respondent no.1 - Union of India.
2.Having regard to the controversy involved in these petitions which is in a narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing and would be disposed of by this common judgment.
3.By these petitions, the petitioners have challenged the public notice No.6(RE-2013)/2009-14 dated 18.04.2013 issued by respondent no.3 - Director General of Foreign Trade (for short “DGFT”) and Circular No.18/2013-Cus dated 29.04.2013 issued by respondent no.2-Central Board of Excise and Customs, Ministry of Finance(for short “CBEC”) and letter dated 23.08.2013 issued by respondent no.4 - the Assistant Commissioner of Customs for denial of transfer of re- credited DEPB (Duty Entitlement Passbook) scrips and/or Reward Scheme scrips and has also prayed for consequential reliefs. In Special Civil Application No.3286/2014, Order-in-Appeal dated 10.04.2014 passed by the Commissioner Appeals is also under challenge.
4.In order to consider the reliefs prayed for by the petitioners, it would be necessary to consider the scheme of Foreign Trade Development and Regulation Act, 1992 (For short “FTDR Act”), the provisions of Foreign Trade Policy (For short “FTP”)under which the DEPB benefits are available to the importers and and various policy circulars in relation to re-credit of SAD as under :
- : FTDR Act : I) The FTDR Act was enacted to provide for development and regulation of Foreign Trade by facilitating imports into and augmenting exports from India.
- II) Under Section 3 of the FTDR Act, respondent no.1-Union of India is empowered to publish in the Official Gazette to make provision for the development and regulation and of foreign trade. Under sub-section (2) of Section 3, the Central Government may by order, publish in the Official Gazette, prohibit, restrict or otherwise regulate import/export of goods subject to such exceptions as it may deem fit.
- III) Under Section 5, the Central Government is empowered to formulate and announce by notification in the Official Gazette, the Exim Policy which may be amended from time to time and FTP is also issued which is generally formulated for 5 years and the same is revised/amended by means of Annual Supplement each year.
- : FTP : IV) Under Para 2.3 of the FTP, the Director General Of Foreign Trade (DGFT) is empowered to interpret the policy and in case of any doubt or question which emerges thereof or in the matter of classification of any item in the ITC(HS) or in the Handbook, the decision of DGFT shall be final and binding.
- V) Chapter 4 of the FTP deals with Duty Exemption and Remission Schemes. Para. 4.1 of the FTP deals with Duty Entitlement Passbook (DEPB) Scheme which enables duty free import of inputs required for export production.
- Duty Exemption Schemes consist of (a) Advance Authorisation scheme and (b) Duty Free Import Authorisation (DFIA) scheme. A Duty Remission Scheme enables post export replenishment/remission of duty on inputs used in export product. Duty Remission Schemes consist of (a) DEPB Scheme and (b) Duty Drawback (DBK) Scheme.
- VI) Para. 4.3.4 of the FT
