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The Commissioner of Customs Versus M/s. Spectra Fashions & Ors.

2016 (3) TMI 390 - CALCUTTA HIGH COURT

Writ petition - Validity of Tribunal's order - Tenability of claim for interest under Section 28AA - Period of limitation in relation to amount receivable upon forfeiture of the bond - Held that:- there appears to be at lest prima facie some substance in the submission advanced by Mr. Saraf that the claim for ₹ 20,21,378/- arose out of forfeiture of the bond. - there are some questions of fact like Whether the claim is barred by limitation? Whether the importer in fact made any misrepresen .....

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d Dutta And Mr. Souvik Sen ORDER 1. It is not in dispute that the writ petitioners availed the benefit of duty exemption/remission scheme, which appears to have been propounded in order to facilitate export of the finished fabrics, raw materials whereof might have been imported from abroad. The obligation of the importer is however to export the goods without changing their contents. In this case fabric was imported. The writ petitioners allegedly used that fabric for the purpose of making pants .....

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e purpose of making those pants. The imported goods might have been utilised for the purpose of sale in the domestic market and some other goods purchased from the domestic market might have been utilised for the purpose of making pants which were ultimately exported. The revenue in the circumstances, issued a notice dated 11th July, 2011 claiming and contending inter alia as follows: The importer submitted a bond at the time of importation and agreed with conditions mentioned in the said bond. .....

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g Bill No. 3450 dated 27.12.2002 has been drawn by you and the said shipping Bill has been finally assessed by your office as per photocopy attached. Here we would like to point out that we have exported garments made out of the same fabric that we imported under the said advance license and the export obligation has been 100% fulfilled. We are enclosing a copy of the certificate issued by the Office of the joint DGFT confirming the same. Under the above circumstances you are requested to kindly .....

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action against the licence holder for any misrepresentation/misdeclaration and default detected subsequently. 6. The authorities passed an order dated 24th Februany, 2014 confirming demand of a sum of ₹ 20,21,378/- and also interest under section 28AA. 7. Challenging the aforesaid order, the writ petition was filed. 8. A challenge to the show-cause notice dated 11th July, 2011 was also thrown in the writ petition. The learned Trial Court held as follows: The date of the last of the shippi .....

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material that had been imported on the basis of the advance licence obtained. There are only two scenarios possible: that the first petitioner had duly exported the goods and had complied with the conditions of the advance licence; or, the first petitioner had acted in derogation of the conditions appended to the licence and, as such, was liable to refund the duty exemption obtained. In the second case, it was mandatory for the department to issue a notice to the petitioner within five years of .....

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n at page 60 thereof, is set aside as being without jurisdiction. As a consequence, all steps taken pursuant to the show-cause notice, including the order-in-original dated February 26, 2014, are also set aside. W.P.12999 (W) of 2014 is allowed but without any order as to costs. The Registrar (Judicial) of this Court will forward a copy of this order to the secretary in the Ministry of Finance for the matter to be referred to the Central Vigilance Commission for an inquiry as to whether the issu .....

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has been claimed by the revenue by reason of forfeiture of bond on the ground that the importer had failed to comply with the terms and conditions thereon. Only the interest was claimed pursuant to section 28 of the Customs Act. He contended that the amount receivable upon forfeiture of the bond is not subject to any period of limitation. He added that in any case limitation is a mixed question of law and fact which the learned writ court should not have entertained regard being had to the fact .....

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bility of the claim for ₹ 20,21,378/- by virtue of forfeiture of the bond is concerned there can be no contention. The learned Judge did not realise this fact and passed the order under challenge which according to him, is totally bad in law. The learned Trial Judge should have left the parties to avail their remedies before the statutory forum rather than admitting and allowing the writ petition. He added further that the writ petitioners after having submitted to the jurisdiction of the .....

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