TMI Blog1983 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty was payable on the same. However, the consignee rejected in all 1210 cases as being unsuitable for the manufacture of cigarettes in the United Kingdom. Therefore, they were re-shipped to India, by `s.s. Jala Vishnu'. On 6th July, 1972, the petitioners addressed the Collector of Customs, Madras, explaining the circumstances under which the 1210 cases of the said tobacco were being re-imported. It was further stated that on clearance through Customs the 1210 cases of the said tobacco would be placed in Excise Bond in the petitioner's Excise Bonded Warehouse at Madras harbour. Thereafter, they were despatched to Bangalore by road under a bond issued under Chapter VII of the Central Excise Rules, 1944, to be warehoused at Bangalore in the Excise Warehouse of I.T.C. The tobacco arrived in Madras Port on 31st July, 1972. On 11th August, 1972, the petitioners requested the Assistant Collector of Customs to release the 1210 cases. On 18th August, 1972, competent officer allowed the cases to be cleared from the transit shed to the Excise Bonded Warehouse on payment of Rs. 2239.10, as the amount of drawback of Central Excise duty on the packing materials. Thereafter, the 1210 cases o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities by letter dated 19th March, 1977. It is, therefore, on 29th June, 1978, the petitioners received an undated show cause notice issued by the third respondent who was the Collector of Customs, Madras. It is in these circumstances W.P. 3025 of 1978 and 3026 of 1978 have been filed. 3. I may mention that though I have used the name of the petitioners in narrating the facts, it was really Indian Leaf Tobacco Development Co. Ltd., that had exported the tobacco in 1972 and that subsequently by an agreement dated 24th April, 1976, the I.T.C. has purchased the assets and liabilities of the I.L.T.D. as on 31st March, 1975. 4. Mr. Ashok Desai, the learned Counsel for the petitioners, in his lucid arguments before me, raised the following contentions - 1. The show cause notice is without jurisdiction in view of the order dated 19th March, 1977, passed by the first respondent Union of India, under Section 25(2) of the Customs Act. 2. The respondents are bound to give full credence to the Government order and cannot challenge their own order in these proceedings. 3. The show cause notice is barred by limitation under Section 130 read with Section 28 of the Customs Act. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms duty equal to the aggregate amount of all such duties calculated at the rates prevailing at the time and place of importation of the goods; (d) in any other case, without payment of duty." 6. It is also admitted that at the time of re-import, the petitioners paid the drawback amount on the packing materials. On 11th August, 1972, the petitioners informed the Assistant Collector of Customs that the 1210 cases of unmanufactured returned Indian stripped tobacco ex. s.s. `Jalavishnu' would be cleared by them to their warehouse in the Madras Harbour with the permission of the Superintendent of Central Excise, Madras, on obtaining Customs' `Pass Order'. It was further stated that the Central Excise certificate showing that these cases have been removed and re-warehoused in their Private Bonded warehouse in the Harbour premises would be furnished. It was on the basis of this, the release was ordered. Thereafter, the petitioners sent the certificate in original issued by the Inspector of Central Excise, MOR, Royapuram Range, Madras 1, stating that the above consignment has been re-warehoused in the petitioners' Private Excise Bonded warehouse in the Harbour premises. This was done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cigarettes only, and that as flue cured tobacco also finds use in the manufacture of smoking mixtures for pipe and cigarettes, the highest rate of Rs. 40 per kilogram would prevail. The further revision was also dismissed by the order dated 20th October, 1976. The revisional authority did not also dispute the fact stated by the petitioners regarding the re-importation of 1210 cases of tobacco, their being permitted to be cleared from the port with the permission of the Customs authorities and warehoused in their bonded warehouse at Madras, their being subsequently transported to Bangalore and stored in the bonded warehouse and their being used fully in the manufacture of cigarettes on payment of appropriate excise duty. However, the revisional authority observed thus :- "The Government of India observe that transport of the goods under a TP 2, and the re-warehousing and subsequent use in the manufacture of cigarettes was for the compliance with excise and not Customs formalities or procedure. A Customs duty was payable on the goods at the time of clearance through the docks and not after clearance from the warehouse licensed under the Excise Law and subsequent manufacture of ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-5-1975 of Assistant Collector of Customs, Madras - Request for exemption - Regarding." 10. This was followed by the letter No. S.30/3319/72-Gr, I., dated 12/16 April, 1977, sent by the Assistant Collector of Customs, Madras, to the petitioners, wherein it is stated as follows - "The demand (enforced) for extra duty made in this office letter of even number, dated 7th May, 1975 is hereby withdrawn. The document forwarded by you is returned herewith." 11. The above order, dated 19th March, 1977, has been passed by the first respondent in exercise of the power conferred under Section 25(2) of the Customs Act. Section 25(2) reads as follows - "If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable." Pursuant to this order, the demand of Rs. 90,76,680 made by the Collector of Customs, on 7th May, 1975 was withdrawn by the Assistant Collector of Customs on 12th April, 1977. The learned Standing Counsel did not argue that the order passed under Section 25(2) by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rettes. Before such utilisation, admittedly, the proper excise duty payable was paid by the petitioners. Consequently, the petitioners would have been put to great hardship if they had been asked to pay duty at the rate of Rs. 40 per kg. under the provisions of the Customs Act on the hypothesis that at the time of importation, the tobacco was capable of being used in the manufacture of smoking mixture for pipes and cigarettes. But that has not been done in this case. In fact, the appellate authority, as I have stated earlier, took notice of this, but has stated that the Customs authorities were not concerned with what was done by the Excise authorities, and that the petitioners could pay the Customs duty and ask for refund from the Excise authorities. When both the Central Excise department and the Customs department form different limbs of the first respondent, the first respondent acted properly in taking all facts and circumstances into consideration and granting exemption under Section 25(2). 14. Further, as rightly pointed out by Mr. Ashok Desai, having passed an order under Section 25(2), it would not be open for the Government to go before the court and say that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
