Calcutta High Court (Appellete Side)
Snandy vs (Disposed Of) on 3 December, 2014
Author: Harish Tandon
Bench: Harish Tandon
1
03.12.2014 WP 26087 (W) of 2014
Court No.14
Item No. ML-17 Neetu Rai
snandy
Vs.
(DISPOSED OF)
The Union of India & Ors.
Mr. Shyamal Kumar Mukherjee, Advocate
Mr. Atish Dipankar Roy, Advocate
Mr. Abhjijit Sarkar, Advocate
... for the Petitioner
Mr. Rajarshi Bhardwaj, Advocate
... for the Respondents
Alleging that the goods meant for export have been unnecessarily detained and challenging various summons issued by the excise authorities, the petitioner has come up before this Court.
The petitioner says that the authorities have wrongly and illegally not allowed the export to be effected on the grounds which are unconnected and/or unrelated to the said export. The attention of this Court is drawn to the summons issued to the petitioner, by which the petitioner has been called to depose verbally and to submit the return of M/s Texol Chemicals, a proprietorship concern of Mr. S.K. Rai and other documents vig. Balance Sheet, Sales, Purchase, Production of excisable goods of M/s S. S. Corporation (India).
In reply to the summons the petitioner indicates that there is no manufacturing activity in the said company and in fact the imports are made from U.A.E. in bulk and is exported 2 in a small package. The petitioner further relied upon a Notification dated March 1, 2003 to contend that S.S.I exemption is available upto Rs.1.5 Crore. Ultimately the authority issued an order of detention under Section 110 of the Customs Act. It is not disputed that the petitioner has been given a certificate of Import/Export Code (IEC) on May 5, 2005.
The learned Advocate appearing for the Customs Authority submits that the detention can be made under Section 110 of the Customs Act if the proper officer has reason to believe that the goods are liable to confiscation. The incidence of confiscation is provided under Section 111 of the Customs Act, which has its restricted applicability to the imported goods.
It is not the case of the Customs Authority that prohibited or restricted goods is attempted to be exported and/or a person without having an IEC is attempting to export the goods. According to the learned Advocate appearing for the authority, the petitioner has failed to pay the excise duty and, therefore, the excise officer has issued the detention memo.
This Court must record firstly that the seizure under Section 110 can be made if the ingredients for a confiscation as provided under Section 111 are satisfied. It cannot be 3 stretched or extended to such eventuality, which the legislators never conceived of and have not been incorporated in the statute book. So for as the non-payment of the excise duty is concerned the excise authority are certainly within their authority to take action for seizure and issuance of the goods provided the said officer has reason to believe that the manufacturing unit or the person is attempted to evade the payment of excise duty.
Such power can be traced through Section 12F of the Central Excise Act. The power under Section 12F of the Act can be invoked by the authority named therein provided the said goods are liable to confiscation or any documents or books or things which in his opinion shall be useful or relevant for proceeding under the Act and/or secreted in any place. These powers can be utilized and/or exercised in a case where the authority has formed the opinion that the goods are liable to confiscation and thus would be useful and relevant in any proceedings.
It has come out from the respondents that the goods are attempted to be exported upon undertaking manufacturing process which attracts the excise duty and because of the non-payment of the excise duty and non-obtainment of the excise licence, the authority is within their competence to detain the goods which in fact have been done by issuing the 4 summons.
From the stand of the petitioner, it appears that they have firstly said that they are the S.S.I. Unit and, therefore, enjoys certain exemptions and secondly they are simply importing the lubricating oil in bulk and refilling them in small packages for export. There is no manufacturing process involved therein.
From the respective stands of the department and the petitioner, it appears that if the department is correct then the petitioner is liable to pay the duty with other consequential obligations in the form of penalty and otherwise. Even Section 110A of the Customs Act permits the provisional release of the goods despite the shortcomings and, therefore, this Court does not find any justification in keeping the exported goods in detention for all time to come. The export generates foreign currency and helps in strengthening the economic condition of the country.
It is discernable from the Foreign Trade Policy 2009- 2014 that in paragraph 2.4.2 the consignment of items meant for exports shall not be withheld/delayed for any reason by any agency of Central/State Government. In case of any doubt, the authorities concerned may ask for an undertaking from exporter. Even paragraph 2.42.1 mandates - no seizure of stock shall be made by any agency so as to disrupt 5 manufacturing activity and delivery schedule of exports. In exceptional cases, concerned agency may seize the stock on the basis of prima facie evidence. However, such seizure should be lifted within seven days.
Therefore, in case of an export, the authority should not unreasonably withheld the export unless the export is made to a prohibited goods or to a restricted goods and have not been permitted to leave the country. An exporter is obliged to adhere to the schedule to the export and if any disruption to such schedule is made by any such agency it may invite the cancellation of the said order and ultimately have the resultant effect on the economy of the country.
If the Foreign Trade Policy itself provides for an export to be made upon obtaining the undertaking, this Court does not find that there is any justification on the part of the authority to continue with the order of detention.
Accordingly, this Court directs the appropriate authority to allow the export to be made provided the other formalities are complied with and an undertaking is given by the exporter to the satisfaction of the said authority for remedying whatever breaches that has been committed and to pay the duties in the event, Section 110A of the Customs Act is invoked. Such undertaking shall be given within seven days from date. 6
The appropriate authority shall thereafter allow the export to be effected and shall proceed with the investigation and/or the proceedings already initiated against the petitioner and it will never be construed that there is any observations made in this order touching the merit or demerit of the case of the respective parties.
With these observations, the writ-petition is disposed of. No order as to costs.
Urgent Photostat Certified copy of this order be given to the parties, if applied for, upon compliance of necessary formalities.
(Harish Tandon, J.)