2022 (5) TMI 592 - ANDHRA PRADESH HIGH COURT - Customs

Head Note / Extract:
Power of DRI officials to seize goods though found outside SEZ area - property is in SEZ zone or not - Maintainability of the Writ Petition - availability of alternative remedy of appeal - HELD THAT:- It is not in dispute that a remedy of appeal is available, but here is a case where jurisdiction of the authority in issuing the Show Cause Notice is questioned. The Hon’ble Supreme Court in M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH & ORS. [2021 (4) TMI 837 - SUPREME COURT] has laid down certain guidelines as to when a Writ Petition would lie before the Court though there is a remedy of appeal - From the judgment of the Hon’ble Supreme Court, it is very much clear that a Writ Petition can be entertained by this Court though an alternate remedy is available when the authority issuing the Show Cause Notice has no jurisdiction to issue the same. Hence, there are no hesitation in coming to the conclusion that in the given set of circumstances, Writ Petition can be entertained. Whether the DRI officials have jurisdiction to seize goods though found outside SEZ area but in relation to a SEZ unit? - HELD THAT:- A reading of Section 53 of Customs Act, provisions makes it clear that the Customs authorities (DRI officials) have no power or jurisdiction to inspect or seize goods in respect of units situated in SEZ area. The power to investigate in respect of any offence committed in SEZ unit is conferred on Officers empowered under Section 22 of the SEZ Act - the Central Government in exercise of powers conferred under Sections 21 and 22 of the Act issued a Notification dated 05.08.2016, authorizing the Additional Director General, Directorate of Revenue Intelligence to investigate into offences under Customs Act committed in a SEZ - But, the same cannot be invoked in the instant case as the alleged violation was prior to 2016. Whether the property can be said to be in Special Economic Zone? - HELD THAT:- The fact that the goods were imported from U.S.A. is not in dispute. Even assuming that the goods imported were not subjected to physical process in view of the report of the Analyst, but, as observed by us earlier, the petitioner has licence to import and trade in Bio Diesel as well, which fact is not disputed. Therefore, processing of the imported material is not mandatory as the petitioner has licence to trade - the passage of goods from SEZ to a Port has to necessarily take place for the purpose of export, more so, when there is no enough space for storage of these goods in SEZ area, which is also an admitted fact. Merely, because, the goods were taken out from SEZ area to be transported to Port or to a storage unit before they are exported cannot be brought within the purview of Customs authority. A reading of the undertaking issued in the year 2010 would makes it clear that the goods can be moved from SEZ to bonded warehouse which shall be informed to Customs Department within 45 days. The delivery challans show that the goods were moved after filing shipping and delivery challans [not disputed]. The endorsement made by the Preventive Officer of SEZ Customs also evidences the same. The delivery was at East India Petroleum Private Limited, which is a bonded warehouse. Therefore, removal of the goods from SEZ area or storage of goods in bonded warehouse for the purpose of export, imported under a licence issued for the said purpose as and when vessel is available or otherwise, cannot be brought within the purview of DRI officials under the Customs Act and it is only officials under SEZ Act, who would be bestowed with jurisdiction to initiate the proceedings. As the petitioner is having licence to trade, storage of goods outside the SEZ area namely in a bonded warehouse, for the reasons stated earlier, cannot automatically confer power on the DRI Officers to initiate proceedings under the Customs Act - The judgment of the Hon’ble Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] squarely applies to the facts in issue, but however, learned Assistant Solicitor General would contend that a Bill is being introduced in the Parliament making suitable amendments, but no information about the same is placed before this Court. The DRI officials have no jurisdiction to issue the impugned show cause notice - Petition allowed.