Madras High Court
M/S. Odyssey Impex vs The Commissioner Of Customs (Imports) on 28 October, 2011
Author: Chitra Venkataraman
Bench: Chitra Venkataraman
In the High Court of Judicature at Madras
Dated: 28.10.2011
Coram
The Honourable Mrs.JUSTICE CHITRA VENKATARAMAN
Writ Petition No.23923 of 2011
1 M/S. ODYSSEY IMPEX
NO.524 MAIN DHEERPUR ROAD
2ND FLOOR NIRANKAR COLONY
DELHI-110009 REP. BY ITS
PROPRIETOR ABHISHEK RAJAN. ... Petitioner
Vs
1 THE COMMISSIONER OF CUSTOMS (IMPORTS)
SPECIAL INTELLIGENCE AND
INVESTIGATION BRANCH (SEA PORT)
60 RAJAJI SALAI CUSTOM HOUSE
CHENNAI-1.
2 THE SUPERINTENDENT OF CUSTOMS
SPECIAL INTELLIGENCE AND INVESTIGATION
BRANCH (SEA PORT) KRISHNA BLOCK III FLOOR
60 RAJAJI SALAI CUSTOM HOUSE CHENNAI-1.
3 THE DEPUTY COMMISSIONER OF
CUSTOMS (SIIB) KRISHNA BLOCK
60 RAJAJI SALAI CUSTOM HOUSE
CHENNAI-1. ... Respondents
PETITION under Article 226 of The Constitution of India praying for the issuance of Writ of certiorarified mandamus calling for the records on the file of the Third Respondent and quash the letter bearing F.No. S.Misc.103/2011 SIIB (SEA) dated 19.9.2011 issued by the Third Respondent and direct the Respondents to send the samples taken from the consignment which were imported vide Bill of Entry No.4169359 dated 25.07.2011 which are in the custody of the 2nd Respondent once again for retest at any of the following laboratories: a)Central Revenue Control Laboratory New Delhi
b)Textile Committee Mumbai
c)Textile Committee Delhi
as per the Petitioner letters dated 12.8.2011 23.8.2011 and 25.8.2011 and that on confirmation that the materials imported are 100% Remi woven dyed fabric, direct the Respondents to release consignment immediately as per law.
For Petitioner : Mr.Habibulla Batcha, Senior Counsel for M/s.V.S.Venkatesh
For Respondents: Mr.V.Ravi Anandha Padmanabhan
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O R D E R
The petitioner seek issue of a writ of certiorarified mandamus to quash the letter bearing F.No.S.Misc.103/2011 SIIB (SEA) dated 19.9.2011 issued by the third respondent and direct the respondents to send the samples taken from the consignment which were imported vide Bill of Entry No.4169359 dated 25.07.2011 which are in the custody of the second respondent once again for retest at any of the following laboratories:
a)Central Revenue Control Laboratory, New Delhi
b)Textile Committee, Mumbai
c)Textile Committee, Delhi as per the Petitioner letters dated 12.8.2011, 23.8.2011 and 25.8.2011 and that on confirmation that the materials imported are 100% Remi woven dyed fabric, direct the Respondents to release consignment immediately as per law.
2. The petitioner herein placed indent with M/s. Shaoxing Yetco Textile Company limited, China for supply of 60,000 meter of 100% dyed woven fabric with specification made from RAMIE material. Based on the indent placed, the petitioner received sample materials. The assessee got the same was tested at Regional Laboratory, Textile Committee, New Delhi, Ministry of Textiles, Government of India. The testing showed the material as 100% Remi Woven dyed fabric classifiable under the Customs Tariff Heading 'woven fabric of other vegetables fibres under H.S. Heading 53.11."
3. On the arrival of the materials, the petitioner filed Bill of Entry for clearance through their clearing agent on 25.7.2011. On the first check, the customs authorities drew sample from the imported materials and the same was sent for testing toRegional Laboratory, Textile Committee, (Ministry of Textiles, Government of India), Textile Testing & Technical Services, North Wing, 1st floor TNSC Board Complex, 212 R.K.Mutt Road, Mylapore, Chennai 4. The test report of the sample drawn from the imported consignment opined that the imported fabrics is 100% Linen (Flax) Woven dyed fabric classifiable under Customs Tariff 53.09. Based on this, the Appraising Section of Customs Department handed over the matter to the Special Intelligence and Investigation Branch (Sea Port), as the goods attracted Anti Dumping Duty as per the Customs Notification No. 142/2009 dated 21.12.2009 and the duty evation came to Rs.1,07,70,666/-. Since the said report contradicted the report obtained by the petitioner, the petitioner made representation for retesting the same. The petitioner made representation on 12.8.2011 pointing out that the suppliers are the biggest exporters of Ramie fabrics to India. Since the suppliers had assured that the impugned consignment contained only Ramie fabrics, the petitioner sought for retest to reconfirm whether the imported fabrics are flax or Ramie fabric. The importer expressed his willingness to pay the difference of duty or re-export the cargo in the event of the retesting report confirming the earlier report. Subsequently thereto, the petitioner again entered into correspondence with the Revenue through the counsel. On 19.9.2011, the Deputy Commissioner [SIIB], the third respondent herein passed an order rejecting the plea of the petitioner by taking a view that the samples were tested by an independent authority viz., Textile Committee, which is a specialised agency which renders textile testing and technical services in this field. In view of the categorical opinion given by the said Committee that the imported fabrics is 100% Linen (Flax), the question of sending it for retesting could not be acceded to. Aggrieved by the same, the petitioner has come before this Court by way of writ petition.
4. Learned senior counsel appearing for the petitioner drew my attention to the Customs Appraising Manual particularly to Rule 19, wherein the Board had viewed that whenever the party dis-satisfied with the results of the original test makes a request for retest, such request for retest normally be complied with. Learned senior counsel appearing for the petitioner pointed out to the order of the Supreme Court on similar circumstances in the case of SHREE GANESH STEEL ROLLING MILLS LTD. v. ASSTT. COMMNR. OF CUSTOMS, considering the above circular issued by the CBEC dated 21.5.1955 on retesting and permitted the petitioner therein to withdraw the petition and to approach the High Court. Based on the same, this Court passed an order in W.A.Nos. 832 to 835 of 2005 dated 1st December 2006 directing resting of the sample materials taken from the detained goods in accordance with Notification dated 21.5.1955. In the light of the understanding thus given by the Board on re-testing and the facts of the case on hand demanding retest, on the mere score that the testing was done by specialized agency per se may not be a good ground to reject the plea.
5. On notice, the respondents filed a counter wherein it is stated that the imported material was tested by the Textile Committee, which is an independent body functions under the Ministry of Textiles. Since the Textile Committee is a statutory body approved by the Government of India, which has given the test report on the samples taken from the imported materials, there is no need for sending the samples taken from the imported consignments once again for retesting. Supporting the said line of reasoning, learned standing counsel for the Revenue submitted that having regard to the fact that as against the impugned order, the assessee has a right of appeal remedy, the writ petition has to be dismissed by this Court. In support of the same, he placed reliance on the decision of the Apex court reported in 2005-TIOL-96-SC-CT-LB [STATE OF H.P. v. GUJARAT AMBUJA CEMENT LTD.,], particularly paragraphs 23 and 24, that in the light of the appeal remedy thus available, this Court need not interfere with the order.
6. Learned counsel for the Revenue further relied on the decision of the Delhi High Court reported in 2010 (258) E.L.T. 356 [PLASTO INDIA PVT. LTD v. UNION OF INDIA] that in the event of ordering retest, the petitioner will not be entitled to be informed about the laboratory to which sample is sent.
7. Heard learned senior counsel appearing for the petitioner as well as learned standing counsel for the Revenue.
8. It is no doubt true that samples drawn from the imported consignments were tested by an independent authority which is specialized agency in the field of textile testing. But it is equally true that the petitioner also has a test result on the materials which was to be imported by him, which confirmed the petitioner's requirement and the test report emanates from the very same agency, but situated in Delhi. Thus, the petitioner has on hand, a test report on the sample drawn from the imported materials done at the instance of Revenue by the Regional Laboratory, Textile Committee, (Ministry of Textiles, Government of India), Textile Testing & Technical Services, North Wing, 1st floor TNSC Board Complex, 212 R.K.Mutt Road, Mylapore, Chennai 4, as holding that the imported material 100% Linen (Flax) Woven dyed fabric, and a test report done at his instance on the sample materials supplied by the foreign supplier from the Textile Committee, New Delhi.
9. Whatever be the correctness of the claim of the petitioner based on the test report that the imported item was not 100% Linen, when the petitioner sought for retesting, I do not think that the mere score that the Revenue had already obtained a report from a specialised agency, should stand in the way of the Revenue to consider the request for retesting. This is more so, in the context of how the Central Board of Excise and Customs viewed such requests. Clause 19 of the Customs Appraising Manual reads as under:-
"19. Disposal The Board has decided that in cases where the test results (i) agree with the declarations, the samples should be returned soon after the goods have been cleared.
(ii) do not agree with the declaration of the parties who have a right of appeal against the order based on the test result, the remnants should be retained upto the expiry of the appeal period.
(iii) and in cases where the test result are disputed, the remnants should be retained till the dispute is finally settled.
(iv) in certain other cases where the remnants will be of some use to the Custom House they may be retained.
(C.B.R.Lr. No. 70/13/53-Cus. I of 16.1.54 F.C. 546/52) Note In amplification of the above the Board have issued the following instructions:-
1. When a party is dis-satisfied with the results of the original test for classification of any goods for tariff or Import Trade Control purposes, it is open to him to make a retest of the sample, on payment of the prescribed retest fee. Requests for such retest should normally be complied with. Such retests should, however, be made only on the remnants of the samples originally tested.
2. Where a sample has been retested, a further test at the request of the party should be made only if the result of the second test shows very large variations from that of the first and justifies the inference that an error has been there in carrying out one or the other of the test.
3. The requests for retests of samples on the ground that the original sample was not representative should be entertained only if the consignment is still in Customs control and if the request is made within one month of the communication of the results of the test to the party. At the time of drawing samples, the party's representative is required to be present and to endorse on the Bill of Entry that the samples drawn are representative. It follows that in the ordinary course it is not obligatory on the Customs authorities to allow fresh samples to be drawn in a particular case unless they are satisfied that sufficient grounds exist for holding that notwithstanding the presence of the party's representative on account of the nature of the consignment or for other reason it is necessary to do so.
4. It should be brought to the notice of all parties that a request for retest must be accompanied by the prescribed fees and that their letter should state clearly whether the retest should be by the Chemical Examiner or by the Chief Chemist.
(C.B.R.Lr. No. F. 70(13) Cus I/53 Cus. III of 21-5-55). "
10. Given the fact that the Board itself has viewed that the request for retesting has to be normally complied with, I do not find that the respondents herein, could water down such an understanding expressed by the Board on the premise that the first testing was done by the specialized agency which is a part of Ministry of Textiles, Government of India. Given the fact that the petitioner sought for retesting on the ground that what had been imported, even as per the foreign manufacturers, are only remi fabric and not flax materials, and the petitioner has given an undertaking that he will pay the difference of duty in the event of the second test report confirming that the imported fabrics are flax fabrics, I do not find any justification in resisting the plea for retest.
11. As far as the contention of the Revenue that the petitioner has an appeal remedy as against the impugned order is concerned, I do not think that the said contention could be accepted. The decision relied on by the learned counsel for the Revenue reported in 2005-TIOL-96-SC-CT-LB [STATE OF H.P. v. GUJARAT AMBUJA CEMENT LTD.,], does not support the case of the Revenue that wherever there is an appeal remedy, there should be an automatic dismissal of the writ petition. Consequently, I do not find any provision of law, which support the case of the Revenue that the writ petition has to be dismissed since the order impugned herein is an appealable one.
12. Given the fact that the remedy under Section 226 of the Constitution of India is a discretionary remedy and that the highest administrative functionary viz., Central Board had itself viewed the request for retesting should normally be granted, I do not find any justification in the contention of the Revenue that the writ petition has to be dismissed.
13. As regards the contention of the Revenue that the assessee has a right of appeal as against the test results, as provided for under Clause 19(ii) of the Manual, a reading of the said sub clause (ii) of Clause 19 shows that the right of appeal referred therein is as regards the order passed based on the test results leading to the Revenue classifying the imported goods under the particular Entry with the corresponding duty rate which is adjudicatory in character. Hence, what goes for an appealable order is the classification and the duty rate adopted and not the test result. In an appeal filed as against the classification and rate of duty adopted on the imported goods, it is always open to the aggrieved party to challenge the test results. Thus there can exist no confusion between an adjudication order based on the test report and the test report itself in the matter of applying the appeal provisions. Being an opinion expressed by an expert body, whose help is sought for by the Revenue for the purpose of identifying the nature of goods imported to fix the duty liability, a test report and an adjudication order cannot be equated on the same footing. While adjudication order alone is an appelable order, the test report merely provides the basis for the adjudication. In the absence of any provision of law placed before this Court to support the contention that the test report is an appelable order, I do not find that the Revenue would be justified in its contention that the assessee has the right of appeal on the test report. Such line of reasoning by the Revenue only shows the confusion in the reading of the said provision.
14. As rightly pointed out by the learned senior counsel for the petitioner, in the order passed in W.A.Nos.832 to 835 of 2006 dated 1.12.2006, this Court referred to the circular issued by CBEC dated 21.5.1955 and an order on testing of the samples taken from the imported materials. Even though learned standing counsel for the Revenue placed reliance on the first order passed in the case of SHREE GANESH STEEL ROLLING MILLS LTD. v. ASSTT. COMMNR. OF CUSTOMS in W.A.Nos. 832 to 835 of 2005 dated 22.7.2005, it must be pointed out herein that the same was taken up on appeal before the Apex Court and by order dated 17.4.2006, the petitioner therein was granted liberty to approach the High Court. Thus, the first order in W.A.Nos. 832 to 835 of 2005 dated 22.7.2005 was modified in the order passed on 1.12.2006 and this Court ordered retesting.
15. In the light o the above stated facts and the Central Board's circular, I have no hesitation in quashing the order dated 19.9.2011 thereby directing the authorities to take up the retained sample for second test.
16. Learned senior counsel appearing for the petitioner sought for retesting of the materials in any of the three laboratories mentioned in the prayer of the writ petition. Learned Standing counsel for the Revenue submits that as the petitioner is resident of Delhi, the sample may not be sent to Delhi office but to the very same Textile committee at Chennai.
17. Given the fact that the first test had already been done by the Textile committee, Chennai, and the retest is for getting second opinion, the proper place for second test would be the Textile Committee, Mumbai. Hence, the respondents are hereby directed to send to retained sample to the Textile Committee, Mumbai for retesting the same and the Textile Committee, Mumbai is hereby directed to communicate the results as expeditiously as possible to the petitioner as well as to the respondents. Based on the report, it is open to the petitioner to work out its remedy in accordance with law.
18. With the above observation, the writ petition is disposed of. No costs.
bg To 1 THE COMMISSIONER OF CUSTOMS (IMPORTS) SPECIAL INTELLIGENCE AND INVESTIGATION BRANCH (SEA PORT) 60 RAJAJI SALAI CUSTOM HOUSE CHENNAI-1.
2 THE SUPERINTENDENT OF CUSTOMS SPECIAL INTELLIGENCE AND INVESTIGATION BRANCH (SEA PORT) KRISHNA BLOCK III FLOOR 60 RAJAJI SALAI CUSTOM HOUSE CHENNAI-1.
3 THE DEPUTY COMMISSIONER OF CUSTOMS (SIIB) KRISHNA BLOCK 60 RAJAJI SALAI CUSTOM HOUSE CHENNAI 1