Karnataka High Court
M/S Givudan India Pvt Ltd vs Union Of India on 27 March, 2018
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MARCH, 2018
BEFORE:
THE HON'BLE MRS. JUSTICE S.SUJATHA
WRIT PETITION No.41837/2016 (T - TAR)
BETWEEN:
M/s GIVUDAN INDIA PVT. LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT,
HAVING ITS REGISTERED OFFICE AT
PLOT NO.26, 2ND CROSS,
JIGANI INDUSTRIAL AREA
ANEKAL TALUK-562106,
KARNATAKA
(REP. BY ITS AUTHORISED SIGNATORY
SRI MOHAN C. SUVARNA
AGED ABOUT 58 YEARS) ... PETITIONER
[BY SRI S.S.NAGANANDA, SENIOR COUNSEL A/W
SRI B.VENUGOPAL, ADV.]
AND:
1. UNION OF INDIA
REP. BY ITS SECRETARY,
MINISTRY OF FINANCE,
NORTH BLOCK, NEW DELHI-110 001
2. THE CENTRAL BOARD OF
EXCISE & CUSTOMS
NORTH BLOCK, NEW DELHI-110 001
3. THE COMMISSIONER OF CUSTOMS
CR BUILDINGS, QUEENS ROAD,
BANGALORE-560001.
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4. THE ASSISTANT COMMISSIONER
OF CUSTOMS
SPECIAL VALUATION BRANCH
AIRPORT & AIR CARGO COMPLEX,
DEVANAHALLI, BANGALORE-560 300
5. THE ASSISTANT COMMISSIONER
OF CUSTOMS (GROUP 2)
CUSTOM HOUSE, NO.60, RAJAJI SALAI,
CHENNAI-600 001
6. THE ASSISTANT COMMISSIONER
OF CUSTOMS (GROUP 2)
AIRPORT & AIR CARGO COMPLEX,
DEVANAHALLI,
BANGALORE-560 300 ...RESPONDENTS
[BY SRI Y.HARIPRASAD, ADV. FOR R-1;
SRI K.V.ARAVIND, ADV. FOR R-2 TO R-6.)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT
THE R-4 TO ACCEPT THE ANNEX-1 DECLARATION FILED BY
THE PETITIONER VIDE ANNEX-U AND TREAT THE PROCESS OF
RENEWAL OF SVB ORDER AS DISPENSED WITH AND FURTHER
FOLLOW THE INSTRUCTIONS CONTAINED IN CIRCULAR DATED
09.02.2016 VIDE ANNEX-S.
THIS PETITION COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:-
ORDER
Heard the learned Senior Counsel appearing for the petitioner as well as learned counsel appearing for the respondents.
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2. Petitioner has sought for the following reliefs:
[a] issue a writ of mandamus or such other writ or order or direction directing the 4th Respondent to accept the Annexure- 1 declaration filed by the petitioner enclosed as Annexure-U and treat the process of renewal of SVB Order as dispensed with and further follow the instructions contained in Circular No.4/2016-Customs dated 9.2.2016 herewith enclosed as Annexure-S and grant such other relief as this Hon'ble Court deems fit to grant in the interest of justice including allowing this writ petition.
[b] The petitioner therefore prays that this Hon'ble Court may be pleased to issue a writ of mandamus or such other writ or order or direction directing the respondent Nos. 5 and 6 to not collect any extra duty deposit in respect of the imports to be made by the petitioner save as otherwise contemplated in -4- Circular Nos.4 and 5/2016-Customs dated 9.2.2016 herewith enclosed as Annexures-S & S1 and grant such other relief as this Hon'ble Court deems fit to grant in the interest of justice including allowing this writ petition.
[c] The petitioner therefore prays that this Hon'ble Court may be pleased to issue a writ of mandamus or such other writ or order or direction directing the Respondent Nos. 5 and 6 to refund the extra duty deposit of Rs.7,61,04,066/- illegally collected during the financial years 2007 to 2016 along with interest and grant such other relief as this Hon'ble Court deems fit to grant in the interest of justice including allowing this writ petition."
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3. The first prayer sought in the writ petition does not survive for consideration in view of the order passed by the Respondent No.4 on 5.11.2016, whereby -5- Annexure-1 application dated 14.03.2016 filed by the petitioner has been rejected for the reasons recorded therein and the importer/petitioner is directed to follow the instructions in terms of Board Circular No.4/2016 dated 9.2.2016.
4. The Board Circular No.4/2016-Customs at Clause 2.2 contemplates that the Special Valuation Branch [SVBs] are promptly scrutinized the declarations and in cases where the importer files declaration in Annexure-1, the process of renewal would be treated as dispensed with. The SVB shall immediately inform the Custom stations where provisional assessments have re-started due to the process of renewal to immediately discontinue obtaining EDD and finalize the related provisional assessments, without any further reference to the importer.
5. Paragraph-3 reads thus:
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"In cases where a change in circumstances surrounding the sale has been stated in the declaration [Annexure 2], the SVB inquiries shall be initiated in terms of the procedure stated in the circular 5/2016 dated 9th February 2016 by serving upon the importer questionnaires at Annexure A and Annexure B. If EDD is being obtained in such cases, the same shall be reviewed and the sequence provided in para 3.2 of the circular No.5/2016 dated 9th February 2016 shall be followed."
6. Paragraph-3.2 of Circular No.5/2016 reads thus:
"3.2. The Board has reviewed the practice relating to levy of 'Extra Duty Deposits' (EDD) in cases where SVB investigations are undertaken. It has been taken into consideration that 'Extra Duty Deposit' @ 1% of declared assessable value is being obtained from the importer for a period of 4 months during which time he is required to submit required documents and information -7- to the SVB. In the event of his failing to do so, the EDD can be increased to 5% till such time the importer complies. Upon the importer complying with the requisition for documents and information, Circular 11/2001 - Cus dated 23.2.2001 provides that EDD shall be discontinued, while imports will continue to be assessed provisionally till the completion of investigations. In other words, the imports were continued to be assessed provisionally on the basis of a PD Bond but without any EDD. It has also been noted that many importers have represented on delays in dispensing of EDD, even though they have provided the required information and a period of 4 months has passed without the case having been decided. Therefore, the Board has decided that while reference to SVB requires the assessments to be provisional, for the sake of reducing transaction cost and bringing uniformity across Customs Houses, no security in the form of EDD shall be obtained from the importers. However, if the importer fails to provide documents and information required -8- for SVB inquiries, within 60 days of such requisition, security deposit at a rate of 5% of the declared assessable value shall be imposed by the Commissioner for a period not exceeding the next three months. Simultaneously, the importer shall be granted a further period of 60 days to comply with the requisition for information & documents. If the importer fails to submit documents within this extended period, the Commissioner in charge of SVB may consider the use of other provisions of the Customs Act for obtaining documents / information from an importer for conducting investigations. In no case shall the imposition of Security Deposit exceed the period of three months specified above. Furthermore, the Board has also decided that the importer would be free to choose whether the Security Deposit to be provided for the purposes of provisional assessment shall be by way of cash deposit or a Bank Guarantee. The form of Bond to be initially furnished by the importer is attached as Annexure D. The form of Bond to be used in a case where -9- taking a Security Deposit becomes necessary is attached as Annexure E."
7. In terms of the order dated 05.11.2016 read with circular instructions referred to above, petitioner has to furnish the material documents. This order passed by the Respondent No.4 was challenged by the petitioner before the Commissioner of Customs [Appeals], whereby the Appellate Authority has confirmed the order of the Respondent No.4 dated 5.11.2016. This order of the Appellate Authority has been accepted by the petitioner and accordingly the documents are submitted before the Respondent No.4 in terms of the Board Circular Nos. 4/2016 and 5/2016. In view of the same, the first prayer does not survive for consideration.
8. As regards the second prayer, this Court while considering the petition on 27.10.2016 by way of an interim order, directed that no extra EDD shall be
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charged from the petitioner-Company in terms of clause 2.2 of the Board Circular No.4/2016-Customs, on the petitioner-Company for the imports to be made by it from then onwards, without the specific leave of the Court. Petitioner is having the benefit of this interim order as on date and this interim order is in conformity with the Board Circular No.4/2016.
9. As regards the third prayer, it is not in dispute that the petitioner has deposited EDD of Rs.7,61,04,066/- during the financial years 2007 to 2016 and the same requires to be adjudicated by the Respondent No.4 in terms of Board Circular Nos.4/2016 and 5/2016. As aforesaid, the proceedings are initiated and certain documents called for, by the Respondent No.4 is said to have been submitted. If so, the Respondent No.4 can proceed to adjudicate upon the matter and arrive at a decision in an expedite manner. This refund amount sought for by the petitioner
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depends on the result of the proceedings pending before the Respondent No.4. Hence, in order to meet the ends of justice, it would be appropriate to direct the Respondent No.4 to adjudicate upon the issue and take a decision in accordance with law, after hearing the petitioner in an expedite manner, in any event, not later than two months from the date of receipt of certified copy of the order.
10. However, it is made clear that the interim order granted by this Court on 27.10.2016 shall continue to operate until a decision is taken by the Respondent No.4.
11. With the aforesaid observations, writ petition stands disposed of. All rights and contentions of the parties are left open to be adjudicated before the Respondent No.4. It is needless to observe that the petitioner shall cooperate for early disposal of the proceedings before the Respondent No.4.
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With the aforesaid observations, writ petition stands disposed of.
In view of disposal of the writ petition, all pending applications are consigned to file.
Sd/-
JUDGE AN/-