WP (C) 7276/2011

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IN THE HIGH COURT OF DELHI AT NEW DELHI

DECIDED ON: 06.8.2012

+

WP (C) 7276/2011

CM APPL.16512/2011

FEDERATION OF INDIAN CHAMBERS OF COMMERCE

AND INDUSTRY

..... Appellant

Through: Mr. Sushil Kr. Sharma,

Advocate.

versus

UOI AND ORS.

..... Respondent

Through: Mr. Satish Kumar, Sr. Standing

Counsel for CIT.

CORAM:

MR. JUSTICE S. RAVINDRA BHAT

MR. JUSTICE R.V. EASWAR

MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)

%

This writ petition challenges an order dated 15.2.2011 by

the Department of Revenue (the first respondent), the appellate

order dated 21.8.2009 by Commissioner of Customs (Appeals) (the

second respondent), and the order-in-original dated 29.4.2009 by

Deputy Commissioner of Customs (the third respondent). All three

authorities held that the petitioner (“FICCI”) is liable for payment

of Rs. 4,85,735/- as Customs Duty and Rs. 9,714/- as Education

Cess, and interest thereon as applicable under section 28AB of the

Customs Act, 1962 (the Act).

2. In exercise of the powers conferred by section 25(1) of the

Customs Act, the Central government by Notification No. 157/90-

2012:DHC:4824-DB

WP (C) 7276/2011

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Customs dated 28th March, 1990, gave effect to the “ATA Carnet

System” in terms of the ATA Convention. The ATA Carnet system

is an international customs document that allows the holder to

temporarily (up to one year) import goods without payment of

normally applicable duties and taxes, including value-added taxes.

The Carnet eliminates the need to purchase temporary import

bonds. As long as the goods are re-exported within the allotted

time frame, no duties or taxes are due. Failure to re-export all

goods listed on the Carnet results in the need to pay the applicable

duties. Failure to remit those duties results in a claim from the

foreign customs service to the importer’s home country. As per the

relevant notification in this case, the movement of goods covered

under the ATA Carnet System is controlled by endorsements made

on the ATA Carnet by the guaranteeing association for ATA

Carnet in India. The petitioner is the guaranteeing association for

ATA Carnet in India. The notification exempts the goods covered

under the ATA Carnet system which are imported into India, from

the whole of the duty of customs leviable thereon. The notification

issued by the Central Government requires that the said goods be

re-exported back within a period of six months from the date of

importation. In case of failure to do so, the customs duty leviable

on the goods as on the date of clearance shall be paid by the

guaranteeing association i.e. the petitioner.

3. The present case relates an ATA Carnet, i.e., No. US 89/05-

64919 issued by the United States Council for International

2012:DHC:4824-DB

WP (C) 7276/2011

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Business (USCIB), the national issuing and guaranteeing

association for in the US, to M/s. B.G. Lawrence Inc. One Mr. D.

Cowen, representative of the Carnet holder, entered into India with

the goods on 13.08.2006 through the IGI Airport, New Delhi and

returned on 15.09.2006. On 13.4.2007, the petitioner received a

letter from Customs Department stating that they had no record of

re-exportation of the goods imported under the said Carnet. After

considering

the

petitioner’s

representation,

the

Deputy

Commissioner of Customs by order dated 29.4.2009 levied the

impugned customs duty along with education cess and interest on

the petitioner. Being aggrieved with this order, the petitioner filed

an appeal before the Commissioner of Customs (Appeals), New

Delhi which also rejected the same. Thereafter, the petitioner filed

a revision application under section 129DD of the Act with the

Department of Revenue, Ministry of Finance, Government of

India, which also was unsuccessful. Thus, this writ petition.

4. The petitioner claimed that after having received the show

cause notice, it t