Madras High Court
Goyal Impex And Industries Ltd vs Commissioner Of Customs on 8 April, 2022
Author: C.Saravanan
Bench: C.Saravanan
W.P.No.26299 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 13.12.2021
Pronounced On 08.04.2022
CORAM
THE HON'BLE MR.JUSTICE C.SARAVANAN
W.P.No.26299 of 2021
and
W.M.P.Nos.27755 & 27757 of 2021
(Through Video Conferencing)
1.Goyal Impex and Industries Ltd.,
represented through its Director
Shri Hira Lal Goyal,
S/o.Late Jagat Ram Goyal,
Space “E”, 3rd Floor,
Surya Kiran Complex, 92,
The Mall, Ludhiana, Punjab.
2.Shri Hira Lal Goyal ... Petitioners
Vs.
1.Commissioner of Customs,
Chennai – II Commissionerate,
Custom House, 60, Rajaji Salai,
Chennai – 600 001.
2.Assistant Commissioner of Customs
(Refunds)
Office of Commissioner of Customs
(Chennai – IV)
Custom House, 60, Rajaji Salai,
Chennai – 600 001. ... Respondents
______________
https://www.mhc.tn.gov.in/judis
Page No 1 of 12
W.P.No.26299 of 2021
Writ Petition filed under Article 226 of the Constitution of India,
for issuance of a Writ of Certiorari, to call for the records of the first
respondent in and connected with F.No.SR.No.2177/2017 (Pt.II), dated
19.06.2021 and quash the same.
For Petitioners : Mr.Taurn Gulati, Senior Counsel
for Mr.B.Sathish Kumar
For Respondents : Mr.H.Siddharth
Junior Standing Counsel
ORDER
The petitioners have challenged the impugned Show Cause Notice dated 19.06.2021 of the first respondent bearing reference F.No.SR.No.2177/2017 (Pt.II).
2. By the impugned Show Cause Notice, the petitioners were called upon to show cause as to why the refund amount of Rs.2,26,75,276/-
sanctioned to the petitioners should not be recovered from them in terms of Section 28(4) along with applicable interest under Section 28AA of the Customs Act, 1962, and as to why the penalty should not be imposed on them under Section 114A and 114AA of the Customs Act, 1962.
______________ https://www.mhc.tn.gov.in/judis Page No 2 of 12 W.P.No.26299 of 2021
3. It is case of the petitioners that the first petitioner was involved in import of yarn, polyester yarn and fabric, polyester film and other industrial items from various countries through various customs ports into India including the Chennai Seaport. It is submitted that during the Financial Years 2007-2008 to 2015-2016, the first petitioner imported goods under 162 Bills of Entry through the Chennai Seaport. These goods were classified under Chapter Heading No.5509.
4. It is submitted that the Central Government issued Notification No.30/2004 – CE, dated 09.07.2004 and exempted the levy of excise duty on all the goods falling under Chapter Heading No.5509 and consequently, the countervailing duty levied under Section 3 of the Customs Tariff Act, 1975 which is equal to the Central Excise Duty on like goods if produced or manufactured in India, was exempted on all the goods falling under Chapter Heading No.5509.
5. It is submitted that the Hon'ble Supreme Court in S.R.F. Ltd. Vs. Commissioner of Customs, 2015 (318) E.L.T. 607 (SC), while dealing ______________ https://www.mhc.tn.gov.in/judis Page No 3 of 12 W.P.No.26299 of 2021 with the Notification No.6/2002-CE, dated 01.03.2002 containing similar conditions as in Notification No.30/2004 – Central Excise, dated 09.07.2004, held that the assessee therein was entitled to exemption from payment of countervailing duty in terms of the said notification. It is therefore submitted that the petitioners are entitled to exemption.
6. It is submitted that in respect of 162 Bills of Entry, various Chartered Accountants issued Certificates to the first petitioner certifying that it did not pass on the incidence of countervailing duty to the buyer of the goods or any other persons and therefore the first petitioner filed Refund Applications before the second respondent which were allowed vide respective Order in Original. The details of the same read as under:-
Sl. Name of Chartered No. of Refund Order in Refund Amount No Accountant / date Bills of Application Original No. of Certificate Entry No. / date / date 1 Inderpal Marwah 58 2177/16 48037/16 & Co. Rs.71,07,735/-
(05.05.2016) (26.05.2016 (22.06.2016
) )
2 Arun Vishwamitter 2 2250/17 55853/17
& Associates Rs.2,16,583/-
(13.05.2016) (19.05.2017 (07.06.2017
) )
______________
https://www.mhc.tn.gov.in/judis Page No 4 of 12 W.P.No.26299 of 2021 3 Inderpal Marwah 5 2976/16 48888/16 & Co. Rs.6,64,427/-
(12.07.2016) (14.07.2016 (28.07.2016
) )
4 Arun Vishwamitter 49 3885/16
& Associates
(02.09.2016) (09.09.2016) 56832/17 Rs.1,46,86,531/
-
5 Arun Vishwamitter 3904/16 (15.02.2017
& Associates 48 )
(09.09.2016) (09.09.2016)
Total Rs.2,26,75,276/
-
7. It is submitted that in respect of refund of 97 (49 + 48) Bills of Entry in Sl.Nos.5 & 6, the first petitioner company filed refund applications dated 09.09.2016 before the second respondent which were rejected vide order dated 15.02.2017 on the ground that the protest payment communication on behalf of the first petitioner was not registered with the Department.
8. Thereafter, the first petitioner filed an appeal before the Commissioner of Customs (Appeals – II) to set aside the Order in Original No.56832/17 dated 15.02.2017 which was disposed vide Order ______________ https://www.mhc.tn.gov.in/judis Page No 5 of 12 W.P.No.26299 of 2021 in Appeal No.396/17 dated 25.05.2017 with a direction to the second respondent to process the refund claim as per law.
9. Pursuant the Order in Appeal No.396/17 dated 25.05.2017, the second respondent granted refund of countervailing duty vide Order in Original No.56832/17 dated 13.07.2017.
10. Thereafter, the first respondent issued impugned Show Cause Notice and called upon the petitioners to show cause as to why the refund amount of Rs.2,26,75,276/- sanctioned to the petitioners should not be recovered from them in terms of Section 28(4) along with applicable interest under Section 28AA of the Customs Act, 1962, and as to why the penalty should not be imposed on them under Section 114A and 114AA of the Customs Act, 1962.
11. It is submitted that the impugned Show Cause Notice was issued by the first respondent on the ground that the refund amount of Rs.2,26,75,276/- has been sanctioned erroneously based on the false and fabricated documents. It is submitted that a refund which has been ______________ https://www.mhc.tn.gov.in/judis Page No 6 of 12 W.P.No.26299 of 2021 granted pursuant to an appealable order cannot be said to have been erroneously refunded. It is therefore prayed for quashing the impugned Show Cause Notice as it has been issued without jurisdiction and without authority of law.
12. The learned counsel for the petitioner relied on the following decisions:-
i. Eveready Industries India Ltd. Vs. CESTAT, Chennai, 2016 (337) E.L.T. 189 (Mad); ii. Commissioner of Customs Vs. Millat Fibers, 2011 (271) E.L.T. 512 (Guj.).
iii. Madurai Power Corporation (P) Ltd. Vs. Deputy Commissioner of Central Excise, Madurai-1, 2008 (229) E.L.T. 521 (Mad.) iv. Honda Siel Power Products Vs. Union of India, 2020 (372) E.L.T. 30 (All.) v. C.C. & C.E., Tirupati Vs. Panyam Cements & Minnerals Industries Ltd., 2016 (331) E.L.T. 206 (A.P.) vi. Mafatlal Industries Ltd. Vs. Union of India, 1997 (89) E.L.T. 247 (S.C.) vii.I.T.C. Ltd. Vs. Commissioner of Central Excise, Kolkata – IV, 2019 (368) E.L.T. 216 (S.C) viii.Collector of Central Excise, Bhubaneswar Vs. Re-Rolling Mills, 1997 (94) E.L.T. 8 (S.C.).
ix. Shahnaz Ayrvedics Vs. Commissioner of Central Excise, Noida, 2004 (173) E.L.T. 337 (All.).
x. Deputy Commissioner of Income Tax and others Vs. Simplex Concrete Piles (India) Limited, (2013) 11 SCC 373.
xi. M/s.Samsung India Electronics Pvt. Ltd. Vs. ______________ https://www.mhc.tn.gov.in/judis Page No 7 of 12 W.P.No.26299 of 2021 State of U.P. And 2 others, 2016 SCC OnLine All 1539.
xii.P & B Pharmaceuticals (P) Ltd. Vs. Collector of Central Excise, 2003 (153) E.L.T. 14 (S.C.) xiii.ECE Industries Limited Vs. Commissioner of Central Excise, New Delhi, 2004 (164) E.L.T. 236 (S.C.) xiv.Hyderabad Polymers (P) Ltd. Vs. Commissioner of Central Excise, Hyderabad, 2004 (166) E.L.T. 151 (S.C.) xv. Gufic Pharma Pvt. Ltd. Vs. Collector of Central Excise, Vadodra, 1996 (85) E.L.T. 67 (Tribunal) xvi.Apex Electricals Pvt. Ltd. Vs. Union of India, 1992 (61) E.L.T. 413 (Guj.) xvii.Prolite Engineering Co. Vs. Union of India, 1995 (75) E.L.T. 257 (Guj.) xviii.Commissioner of Customs, C. Ex. & S.T., Indore Vs. ZYG Pharma Pvt. Ltd., 2017 (358) E.L.T. 101 (M.P.) xix.Anand Nishikawa Co. Ltd. Vs. Commissioner of Central Excise, Meerut, 2005 (188) E.L.T. 149 (S.C.) xx.Simplex Infrastructures Ltd. Vs. Commissioner of S.T., Kolkata, 2016 (42) S.T.R.634 (Cal.) xxi.State of Punjab Vs. Bhatinda District Co-Op. MilK P. Union Ltd., 2007 (217) E.L.T. 325 (S.C.) xxii.Culcutta Discount Co. Ltd. Vs. Income Tax Officer, Companies District 1 Calcutta and Another, (1961) 2 SCR 241 : AIR 1961 SC 372 xxiii.East India Commercial Co. Ltd., Calcutta Vs. Collector of Customs, Calcutta, 1983 (13) E.L.T. 1342 (S.C.) xxiv.Spirotech Heat Exchangers Pvt. Ltd. Vs. Union of India, 2016 (341) E.L.T. 110 (Del.) ______________ https://www.mhc.tn.gov.in/judis Page No 8 of 12 W.P.No.26299 of 2021 xxv.E.I.Dupont India Pvt. Ltd. Vs. Union of India, 2014 (305) E.L.T. 282 (Guj.) xxvi.Kesoram Cements, Basantnagar Vs. Union of India and others, 1982 (10) E.L.T. 214 (A.P.) xxvii.Ebiz.com Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & S.T., 2017 (49) S.T.R.389 (All.) xxviii.Adarsh Metal Corporation Vs. Union of India, 1993 (67) E.L.T. 483 (Raj.) xxix.Yu Televentures Pvt. Ltd. Vs. Union of India, 2017 (358) E.L.T. 81 (Del.)
13. The learned Junior Standing Counsel for the respondents submits that the refund claims were filed by way of wilful mis-declaration and suppression of facts. It is submitted that Certificates were issued by both the Chartered Accountants without proper verification of the statutory documents and the said Certificates was issued to avail refund of countervailing duty, but, during the investigation, it was found that the said certificates were manipulated to fraudulently refund of countervailing duty and therefore, the impugned Show Cause Notice was issued. It is submitted that instead of replying to the said Show Cause Notice, the petitioners have challenged the same. It is therefore prayed for dismissal of this Writ Petition.
14. I have considered the arguments advanced by the learned ______________ https://www.mhc.tn.gov.in/judis Page No 9 of 12 W.P.No.26299 of 2021 Senior Counsel for the petitioners and the learned Junior Standing Counsel for the respondents. I have examined the allegations contained in the impugned Show Cause Notice.
15. This Writ Petition is premature. It cannot be said that the impugned Show Cause Notice is without jurisdiction. Whether the petitioners have indeed indulged in submitting fraudulent and fabricated documents / certificates to wrongly claim refund of duty paid, is the subject matter of evidence. A Writ Court under Article 226 of the Constitution of India cannot examine the factual aspects.
16. The petitioners have to submit to the jurisdiction of the respondents by filing suitable reply to the impugned Show Cause Notice.
If the petitioners suffer an adverse order, there is a hierarchy of the Appellate Authority under the Customs Act, 1962. Therefore, the petitioners have to work out their remedy before the Authorities under the Act. There is no merit in the present Writ Petition.
17. The first respondent is therefore directed to complete the ______________ https://www.mhc.tn.gov.in/judis Page No 10 of 12 W.P.No.26299 of 2021 proceedings initiated pursuant to the impugned Show Cause Notice after following the principles of natural justice and affording an opportunity of personal hearing, preferably within a period of six months from the date of receipt of a copy of this order . The petitioner is at liberty to file suitable reply before the first respondent. In case the petitioner suffers an adverse order, an appellate remedy is available under the provisions of the Customs Act, 1962 and therefore, it is for the petitioners to take advantage of the same.
18. This Writ Petition is dismissed with the above observations. No cost. Consequently, connected Miscellaneous Petitions are closed.
08.04.2022 Internet : Yes/No Index : Yes / No jen C.SARAVANAN, J.
jen ______________ https://www.mhc.tn.gov.in/judis Page No 11 of 12 W.P.No.26299 of 2021 To
1.Commissioner of Customs, Chennai – II Commissionerate, Custom House, 60, Rajaji Salai, Chennai – 600 001.
2.Assistant Commissioner of Customs (Refunds), Office of Commissioner of Customs (Chennai – IV), Custom House, 60, Rajaji Salai, Chennai – 600 001.
Pre-Delivery Order made in W.P.No.26299 of 2021 and W.M.P.Nos.27755 & 27757 of 2021 08.04.2022 ______________ https://www.mhc.tn.gov.in/judis Page No 12 of 12