Calcutta High Court
Anvil Investments Pvt. Ltd. vs Union Of India (Uoi) on 23 July, 2004
Equivalent citations: 2004(173)ELT122(CAL)
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
ORDER Bhaskar Bhattacharya, J.
1. These two writ applications were heard together as those were interlinked to some extent.
2. In the first writ application, being WP No. 2573 of 2001, the writ petitioners have prayed for declaration that they are entitled to get "duty-free clearance" of four consignments by virtue of their Advance License. The case made out by the writ petitioners in the first matter may be summarized thus :
(a) The petitioners entered into four contracts for purchase of aluminium ingots from various foreign parties of Singapore. Those were purchased from the warehouses of London Metal Exchange and were of Indian origin. The vessel carrying aluminium ingots arrived at Calcutta Port in November, 2000.
(b) The goods were in four consignments and the petitioners filed two Bills of Entries for the two of those consignments on the basis of the non-negotiable copies of Bill of Lading. The Customs Authority, however, did not allow release of the aforesaid consignments under duty-free scheme on the ground that those goods were of Indian origin and were necessarily dutiable. Since those two consignments for which Bills of Entry were filed were not released, the petitioners did not file Bills of Entry in respect of the third and fourth consignment but decided to approach this Court.
3. After filing of the first writ application, the petitioners filed an application for interim order thereby praying for release of the two consignments for which Bills of Entry had already been filed. In respect of the second consignment, however, the petitioner had only the non-negotiable copy of Bill of Lading and the negotiable copy could not be collected as the banker of the foreign exporter had returned the same for non-payment by the petitioner.
4. A learned Single Judge of this Court having passed an interim order directing release of the first two consignments on giving a bond by the petitioners, the first consignment was released in favour of the writ petitioners on the basis of the Bill of Entry. So far the second consignment was concerned, as pointed out earlier, the petitioners could not get hold of the negotiable Bill of Lading and as such they could not acquire title to the goods for non-payment and consequently, could not take out the goods in spite of having an interim order.
5. The second writ petition has been filed by one Agrim Sampada Limited, (hereinafter referred to as the "second writ petitioner") alleging that they purchased the second consignment, which is one of the subject matters of the first writ application from the foreign exporter by virtue of a subsequent contract with the overseas exporter. When the second writ petitioner presented the Bill of Entry with original Bill of Lading, the Customs Authority refused to release the goods in favour of the second writ petitioner on the ground of pendency of the first writ application over the said subject matter. Hence, the second writ application was filed by the second writ petitioner praying a direction for release of the goods in its favour.
6. Therefore, so far the first writ application is concerned the question is whether the writ petitioners are entitled to release of the consignments without payment of duty by virtue of Advance License in their favour.
7. There is no dispute that the writ petitioners had been importing aluminium ingots duty-free against the Advance License. On llth January, 2002, the writ petitioners filed Bills of Entry for clearance of the first two consignments and at that stage the respondent contended that by virtue of Public Notice dated 10th January, 2002, the goods cannot be released duty-free against Advance License when those are of Indian origin.
8. The question that falls for determination in this application is whether by virtue of Policy Circular dated 10th January, 2002, the right of the writ petitioners can be affected when such goods were imported by virtue of Advance License at a point of time when the circular did not come into force.
9. Dr. Pal, learned Advocate appearing on behalf of the writ petitioners, has contended that import-export policy is made under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 which replaced the Import and Export (Control) Act, 1947. According to him, Para 7.3 of Exim Policy dealing with the Advance License does not suffer from any ambiguity and does not stand in the way of importing goods which are not of Indian origin on the basis of advance license. He further relies upon Section 20 of the Customs Act which indicates that goods of Indian origin imported in India would be treated at par with other imports. Dr. Pal also contends that the valuable right of an importer under Exim Policy cannot be taken away by a policy circular in the garb of a clarification and in support of such contention he relies upon the following decisions :
(i) East India Commercial Co. Ltd, v. Collector of Customs ,
(ii) Sandeep Agarwal v. Collector of Customs reported in 1992 (62) E.L.T. 528,
(iii) Enterprise International Limited v. Collector of Customs, 1994 (69) E.L.T. 453,
(iv) Motisons Internationals v. CC, Cochin reported in 1998 (74) ECR 63,
(v) Bengal Iron Corporation v. Commercial Tax Officer reported in 1993 (66) E.L.T. 13,
(vi) Arviva Industries Ltd. v. Union of India reported in 2004 (167) E.L.T. 135.
10. This application is opposed by the Customs Authority and according to Mr. Ghosh, the learned Advocate appearing on behalf of the respondent, the Policy Circular dated 10th January, 2002, issued under Para 11.11 of Exim Policy 1997-2002 is binding upon the petitioners and such policy affects the existing right of the parties.
11. After hearing the learned Counsel for the parties and after going through the aforesaid materials on record, I find, that in the case before us, Advance License was issued in favour of the writ petitioners on 17th April, 1998. The policy circular relied upon the Customs Authority is dated 10th January, 2002. I find substance in the contention of Dr. Pal, that by virtue of such policy circular, the substantive right conferred upon an Advance License Holder cannot be taken away. In the Advance License there is no stipulation that duty should be payable in respect of import of goods of Indian origin. Such being the position, on the basis of Advance License, the writ petitioner having imported those aluminium ingots, now they cannot be denied the benefit of duty-free import on the basis of subsequent circular issued by the Customs Authority.
12. I, thus, hold that Customs Authority cannot impose duty upon the writ petitioners in the first writ application on the ground that imported goods are of the Indian origin.
13. The writ petitioners in the first application are, therefore, entitled to get the release of first, Third and fourth consignments duty-free in terms of the Advance License as they are in possession of the negotiable Bills of Lading in respect of those consignments.
14. So far the second writ application is concerned, the question is whether the second writ petitioner has acquired title to the second consignment which is the subject matter of the first writ application by virtue of subsequent Bill of Lading acquired by such petitioner. There is no dispute that initially agreement was entered into between the foreign exporter and the first writ petitioners over the second consignment. The private respondent in the second writ application, which is a unit of the writ petitioners in the first writ application has admitted that when they offered the price of the goods before the bank for getting negotiable Bill of Entry, by that time the bank had already returned the original document, as a result, the writ petitioners could not get the negotiable Bill of Lading. Therefore, it is clear that although an agreement was entered into between the writ petitioners of the first writ application and the foreign exporter for purchase of the second consignment, as the petitioners did not make any payment to the banker of the foreign exporter in India within time, the document was returned. Subsequently, there was a fresh agreement between the foreign exporter and the second writ petitioner and the second writ petitioner on payment of money through the banker of the exporters in India has obtained the negotiable Bill of Lading and has presented the Bill of Entry for release. Both the Customs Authority and the private respondent No. 5 in the second writ application tried to create an impression that, in the mean time, the foreign exporter has gone into liquidation and as such, the second writ petitioner could not get title on basis of the Bill of Lading. In my view, the second writ petitioner having made full payment of the goods through the banker of the foreign exporter and having obtained the original negotiable Bill of Lading has acquired title to the property.
15. Although, Dr. Pal appearing on behalf of the private respondent in the second writ application submitted that these are disputed questions of fact and should not be adjudicated in this writ application, I am not impressed by such submission.
16. It appears that during the pendency of the second writ application, the private respondent No. 5, a unit of writ petitioners in first writ application has filed a civil suit but merely by filing a civil suit the right of the second writ petitioner cannot be taken away. Admittedly, those writ petitioners did not make payment of the money by virtue of agreement and as such, they had no title to the property. The foreign exporter has subsequently transferred the goods in favour of the second writ petitioner. The moment original Bill of Lading has been placed before the Customs Authority, it is its duty to release the goods if the second writ petitioner pays all customs duty in accordance with law. Even if the foreign exporter has gone under liquidation, it is for the official liquidator to collect the money paid by the second writ petitioner through the banker of the foreign exporter. Till today, the official liquidator has not lodged any claim over the second consignment before the Customs Authority. Therefore, as the second writ petitioner has produced the Bill of Lading, it is the duty of the Customs Authority to release the goods in favour of the second writ petitioner on payment of usual duly unless the foreign exporter comes forward, successfully establishes its title to the consignment and prays for re-export of the goods.
17. I, thus, find substance in the contention of the second writ petitioner that Customs Authority cannot withhold the second consignment when original Bill of Lading and other necessary papers have been submitted and when the alleged official liquidator or the exporter has not yet lodged any claim over the said goods. The private respondent No. 5 has no right to resist the delivery of goods in favour of the second wril petitioner as they refused payment to the banker of the foreign exporter.
18. I, thus, dispose of the writ applications by passing the following order :
(a) So far the first writ application is concerned, let it be declared that the writ petitioners are not required to make any payment of duty by virtue of Public Circular dated 10th January, 2002 and as such, the Customs Authority are directed release the third and fourth consignments to the writ petitioners immediately. It is needless to mention that the first consignment has already been released in their favour by the interim order,
(b) So far the second writ application is concerned, the Customs Authority is directed to release the disputed consignment which is also the subject matter of the first writ application in favour of the second writ petitioner, if the second writ petitioner pays the required Customs duty after complying with other formalities required under law. But claim of the respondent No. 5 will not stand in the way of the second writ petitioner in getting release of the consignment.
19. Both the writ applications, thus, are disposed of with the above directions.
20. In the facts and circumstances, there will be no order as to costs.