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2016 (5) TMI 1237 - HC - CustomsValidity of Customs Notifiaction No. 91/2009 dated 11th September 2009 - restricting the transfer/sale of goods imported using the Served From India Scheme ('SFIS') duty certificates/scrips for the purpose of payment of customs duty - Held that:- it is obvious in the instant case that the impugned notification dated 11th September 2009 issued by the DoR under Section 25(1) of the CA on the one hand and the amendment to the FTP 2009-2014 with effect from 1st August 2013 and the HBP cannot co-exist. The notification dated 11th September 2009 issued by the DoR takes away what the amended para of the FTP 2009-14 and the HBP permits. It also takes away what para 3.6.4.6 of the FTP 2004-09 read with para 2.43 of the HBP permits. On the contrary, the DoR should have on its own have issued a fresh notification consistent with the changes brought about to FTP 2009-14. In the event of conflict of views between two ministries of the central government, the view taken by the ministry that is primarily responsible for the policy in question, which in this case is the FTP, should prevail. The SFIS was introduced by the Ministry of Commerce and its instrumentality, i.e. the DGFT has been statutorily entrusted with the final word on the interpretation of the FTP. The letter dated 6th September 2013 from the Commerce Secretary to the Revenue Secretary is instructive. It refers to Circular No. 837/14/2006 dated 3rd November 2006 issued by the CBEC under the Ministry of Finance which acknowledged that payment of customs duty could be made by using the duty credit scrips. The Court posed a query to the learned ASG whether denying permission to alienate goods imported under the SFIS when the FTP 2004-09 was operational while permitting such alienation if goods were imported under the SFIS under FTP 2009-14 was based on any rational criteria or was designed to achieve any legitimate objective. The learned ASG was unable point out any. Indeed denial of permission to transfer vessels imported more than three years ago only because they were imported under FTP 2004-09 serves no useful or rational purpose. The stand taken by the DoR appears to be unjustified. The result of such a stand would be that while the transfer of vessels that were imported three years after 1st August 2013 do not require any permission, vessels that were imported more than three years earlier to 1st August 2013 would not be permitted to be transferred except by way of re-export or within the group or to managed hotels, come what may. While it is not clear what revenue is sought to be protected in that process, it surely subjects the importer of goods that fall in the latter category to discrimination. Such denial of permission would attract the vice of impermissible discrimination in terms of Article 14 of the Constitution particularly since it is based on no rational criteria. In fact it contradicts the intent expressed in the relevant paras of the FTP 2004-09 and the HBP which have been adverted to. There is also nothing in the FTP which prohibits the sale of vessels that have completed more than three years after import from being sold in the domestic market. In other words, there is no justification for the DoR to insist that the vessels of the Petitioner that have completed more than three years after import should be transferred only by sale within group companies or managed hotels or be re-exported. Therefore, the impugned Customs Notification No. 91/2009 dated 11th September 2009 under Section 25(1) of the CA to the extent it restricts the transfer/sale of goods imported using the SFIS duty certificates/scrips for the purpose of payment of customs duty, even where such goods satisfy the criteria for transferability under the FTP and HBP, is in violation of the FTDR Act, the FTR Rules as well as FTP 2004-2009 and FTP 2009-2014. It is further held that the letter dated 12th June 2013 issued by the DoR asking the DGFT to keep in abeyance the NOC granted by the PRC is contrary to the legal position explained above and can have no binding effect on the DGFT. On questions of interpretation of the FTP, it is the DGFT whose views will prevail. For the same reason, the stand of the DoR conveyed to the Court through the letter to the DoR, and recorded in the Court's order cannot prevail. Hence, the DoR is restrained from objecting to the transfer/sale of the vessels Greatship Aarti, Greatship Ahalya, Greatship Amrita, Greatship Anjali and Greatship Asmi belonging to the Petitioner since each of the said vessels has been imported more than five years ago. - Petition disposed of
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