Meghalaya High Court
Border Trade And Chamber Of Commerce vs Union Of India on 7 December, 2016
Author: Dinesh Maheshwari
Bench: Dinesh Maheshwari
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THE HIGH COURT OF MEGHALAYA AT
SHILLONG
: ORDER :
MC[WP(C)] No. 163 of 2016 IN WP (C) NO. 308 OF 2016 Border Trade And Chamber of Commerce, Moreh Town, Chandel District, Manipur, represented by its General Secretary, Shri Surinder Singh Patheja Versus The Union of India and 3 Others Date of Order: :: 07.12.2016 HON'BLE THE CHIEF JUSTICE SHRI DINESH MAHESHWARI HON'BLE SHRI JUSTICE VED PRAKASH VAISH Shri VK Jindal, Sr. Advocate with Shri N Das Gupta, for the petitioners-applicants.
Shri N. Mozika, for the respondents.
BY THE COURT: (per Hon'ble the Chief Justice) (Oral) The petitioner, said to be an Association of the persons engaged in export and import trade with Myanmar through Moreh Land Custom Station (Manipur), has questioned by way of this writ petition the directions issued by the Commissioner of Custom (Preventive), North Eastern Region, Shillong (respondent No.2), as contained in the letter dated 06.10.2016 (Annexure-6), whereby the members of the petitioner- Association have been directed to furnish Bank Guarantee to the tune of 40% of the duty allegedly leviable in relation to the import of Areca Nuts/Betel Nuts. The contents of the said letter dated 06.10.2016, specifying the subject matter of this writ petition, are as under:-
"At the outset, it may be pointed out that the import of Areca Nuts/Betel Nuts has not been suspended at Moreh LCS. Areca Nuts/Betel Nuts were cleared at Nil BCD. However on re-examination of the issue by the Central Board of Excise & Customs it was pointed out that Betel Nuts attract 40% BCD in terms of entry at Sl. No. 14 of Notification No. 96/2008-Cus dated 2 13.08.08 (as amended). Accordingly instructions were issued to levy/collect 40% BCD on Areca Nut/Betel Nut. However as the matter is pending with the Board for a final decision, revised instructions have been issued to the field formations to allow clearance of Areca Nuts/Betel Nuts provisionally at Nil Basic Customs Duty alongwith submission of Bank Guarantee for the differential duty i.e. 40% {rate of duty applicable in terms of Appendix I of Notification No. 96/2008-Cus dated 13.08.08 (as amended)}."
It is submitted on behalf of the petitioner that the import of Areca Nuts (Betel Nuts), falling under Customs Harmonized System Code (HS Code) No. 08028010 and 08028020 of Customs Tarriff Act, 1975 from Myanmar under Notification No. 96/2008-Customs, dated 13.08.2008 (as amended), attracts NIL rate of Basic Customs Duty („BCD‟) without any condition; and accordingly, import was allowed by the respondents until first week of the month of September, 2016 but thereafter, the respondent No. 2 has directed, without any authority of law, that Bank Guarantee to the tune of 40% of the normal duty for import of the said goods be furnished. According to the petitioners, the said Notification dated 13.08.2008 (as amended) does not mandate any such Bank Guarantee for import of the goods covered under HS Code No. 08028010 and 08028020.
It is also submitted that the respondent No. 2 had earlier issued the clarifications/directions dated 20.01.2016, to the effect that the import of Areca Nuts (Betel Nuts) under HS Code No. 08028010 and 08028020 attracted NIL rate of BCD under the said Notification No. 96/2008-Customs dated 13.08.2008 (as amended) without imposing any condition. According to the petitioner, there is no change of facts or law but then, all of a sudden, different interpretation of the said exemption Notification with regard to Areca Nut (Betel Nuts) under HS Code 08028010 and 08028020, other than the meaning already assigned, is totally unwarranted, unlawful and is violative of Articles 19 (1) (g), 20 (2) and 301 of the Constitution of India.
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The respondents have filed their counter affidavit opposing the writ petition with reference to the contents of the aforesaid Notification No. 96/2008-Customs dated 13.08.2008 (as amended). It is submitted that under the said Notification, goods falling under the First Schedule to the Customs Tariff Act, 1975, other than those specified in Appendix I and Appendix II appended hereto, have been exempted from whole of the duty of customs as specified in the First Schedule to the Customs Tariff Act, 1975; and as the said Notification does not list HS Code 080280 or any of the sub-classifications in Appendix I or Appendix II, going by its contents, exemption had earlier been allowed to the imports of such goods.
However, according to the respondents, the Central Board of Excise and Customs („the Board‟) has taken a view that an entry "Betel Nut", which is presently eligible to tariff concession of 60% of duty (thus chargeable duty being 40%) occurs in Appendix I of the Notification No. 96/2008-Customs dated 13.08.2008 (as amended); and hence, all imports of Areca Nuts (Betel Nuts) from Myanmar are to be assessed while granting tariff concession to the extent as mentioned alongside the said entry. The respondents do admit that no amendment to the said Notification has been carried out till date but submit that in view of some degree of confusion as to the quantum of duty leviable, instructions have been issued to allow imports with Nil BCD, but with furnishing of Bank Guarantees so as to protect the interest of revenue. The respondents further submit that these Bank Guarantees would be subject to encashment if it is held that 40% duty is leviable on the imported items in question and if not, the same would be released; and, as the goods are proposed to be assessed provisionally, and differential duty can be estimated, Bank Guarantees are sought to be obtained in terms of para 6
(b) of CBEC Circular No. 38/16-Cus dated 22.08.2016. 4
Thus, according to the respondents, the issue having been referred to the Board for suitable clarification/decision, field formations have been directed under the letter dated 05.10.2016 to clear the goods provisionally at Nil BCD along with Bank Guarantee for the differential duty i.e., 40%, in terms of entry at Sl. No. 14 of Notification No. 96/2008-Cus dated 13.08.08 (as amended).
We have broadly taken note of the basic features of this case and the stand of the respective parties but need not elaborate on the same as the matter is being considered at this stage only on the prayer for interim relief. Learned counsel for the petitioners has strenuously contended that the impugned directions for submission of Bank Guarantee being wholly unjustified and wholly uncalled for, deserve to be stayed because in view of such directions, substantial number of vehicles carrying the goods in question are stranded at Moreh, and the goods in question being perishable in nature, the members of the petitioner-Association are incurring substantial loss. The learned counsel has emphasized that there had not been any ambiguity in the exemption Notification; and import of Areca Nuts/Betel Nuts by the members of the petitioner-Association, being referable to HS Code 08028010 and 08028020, had all through been rightly allowed with NIL rate of duty. It is submitted that mere reference to some baseless doubts on the Notification cannot be a reason justifying imposition of such an onerous conditions, like that of Bank Guarantee.
Per contra, it is submitted by the learned counsel for the respondents that the issue cropped up because of occurrence of entry of "Betel Nut" in the Notification in question and as the matter remains pending with the Board for clarification, the authorities have rightly issued the directions for allowing such imports with NIL duty but with submission of PD Bond and Bank Guarantee, so as to safeguard the interest of 5 revenue, in case ultimately 40% duty is found leviable on the goods in question.
We have given anxious consideration to the rival submissions and have examined the record.
In the totality of circumstances, even while finding a prima facie case worth consideration in this writ petition, we are not inclined to pass an interim order in favour of the petitioner because of the basic reason that the arrangement in question cannot be said to be leading to any irreparable injury to the petitioner or its members.
As noticed, for the doubts as regards the true interpretation of the exemption Notification, the matter is pending with the Board and until a final decision by the Board, the authorities concerned have made the arrangement to allow the imports with NIL duty, but with furnishing of PD Bond and Bank Guarantee to the tune of leviable duty, if ultimately any such requirement would arise from the decision of the Board. The respondents have consciously chosen not to enforce any recovery of duty from the members of the petitioner-Association but have only asked them to furnish the Personal Bond and Bank Guarantee so that the imports may continue and at the same time, the interest of revenue is also safeguarded. In the totality of circumstances, it cannot be said that the requirements in question would lead to irreparable injury to the importers concerned. On this ground alone, we are not inclined to grant the interim relief as prayed for.
However, we are clearly of the view that the matter as regards clarification/decision cannot be kept pending by the Board for an indefinite length of time. It would, therefore, be expected of the Board to take a final decision in the matter at the earliest and preferably before this petition is taken up for final hearing. In this regard, it is made clear that pendency of 6 this writ petition shall not be of any impediment in the Board taking the requisite decision in accordance with law.
With the observations foregoing, the prayer for interim relief is declined at this stage but all other aspects of the matter are left open to be considered at the time of final hearing of the writ petition.
The stay application, MC [WP(C)] No. 163 of 2016, stands disposed of accordingly.
The writ petition be posted for hearing on 13.02.2017, as prayed.
JUDGE CHIEF JUSTICE
Sylvana
Item No. 2