TMI Blog2016 (9) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... RI could not have proceeded on the footing and in the facts and circumstances of the present case that there is a definite evasion. It is their duty to bring such cases of alleged evasion to the notice of the customs, which they have after the outcome of the investigation, whenever they are concluded. It is thereafter for the Commissioner of the Customs and all authorities under the Customs Act to take appropriate steps and measures. Provisional release of goods permitted - petitioners to furnish a Bond for securing differential duty payable, on the licence fees and Special Additional Duty so as to secure the redetermined value - petitioners to furnish a Bank Guarantee to the extent of 25 %, to secure the amount of the alleged differential duty, on licence fees - petition disposed off - decided partly in favor of petitioner. - Writ Petition (L) No. 2136, 2137 of 2016 - - - Dated:- 8-9-2016 - S. C. Dharmadhikari And B. P. Colabawalla, JJ. Mr Darius Shroff, Sr. Counsel a/w Mr Gaurav Joshi, Sr. Counsel, Mr Akshay Kolse Patil, Mr. Naishadh Bhatia, Ms. Bulbul Singh Raj Purohit, Mr Brendon P. i/b M/s Crawford Bayley Co. for the Petitioners Mr Pradeep S. Jetly for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sky (HITS) operator. Above technology enables all pay channels to be received at the central facility and uploaded by the operators to its satellite after encryption of the channels. The petitioners have obtained several licences and permission as more particularly enlisted in para 1 of the petition. The petitioners state that the infrastructure was installed and it connects the set-top boxes. The petitioners provide the details of all such steps and then contend that the Union of India through the Directorate of Revenue Intelligence has caused an investigation to be made into certain importations. The petitioners have stated that the said set-top boxes are required to meet certain standards, which have been now evolved and made applicable by the Union of India in terms of its policies. The petitioners had an agreement and for importing the set-top boxes from various vendors. The petitioners in para 12 have pointed out as to how the imported set-top boxes are stored in a bonded warehouse and cleared for home consumption. 3 The petitioners then state that the service tax on the activation / licence fee has been paid and thereafter the petitioners obtained another agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require to be answered. Similarly, the summons was also issued to the representative of that petitioner. The petitioners herein then point out as to how another representative of the petitioner was summoned for giving a statement in terms of Section 108 of the Customs Act, 1962. The petitioners were also apprehensive that the recovery by coercive means would be made, that is why on that apprehension they moved the Writ Petition in this court. 5 The Writ Petition was amended after the development and events of 3 August, 2016. The petitioners have stated in the memo of this Writ Petition that though the respondents assured this court that they would proceed in accordance with law, when such statement was made before this court, the officers of respondent No.3 visited the Custom Bonded Warehouse at Kalamboli, Navi Mumbai, where the petitioners' goods were stored. They were about to illegally seize 3.48 lacs set-top boxes valued at ₹ 37 crores, and claimed that they are required to draw samples. The respondents proceeded on the footing that these goods were cleared for home consumption after avoiding appropriate payments of the Customs Duty and by giving wrong declarations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove conditions and as clarified by them in their advocate's letter dated 26 August, 2016. 7 Mr Shroff has taken us through the petition and annexures thereto. He submits that at page Nos.109 to 111 of the paper book, there are three communications of April 2016, wherein the petitioners clarified that though imported set-top boxes are intended for retail sale, they availed of 4 % Special Additional Duty ( SAD ) exemption, but as against the Bills of Entry in respect of which this exemption was availed of, the petitioners do not wish to take it. They wish to pay 4 % SAD and as detailed in said letters. Essentially, the contention of Mr Shroff is that the Deputy Director and particularly the Directorate of Revenue Intelligence (for short DRI ) has completely taken over the functions of the authorities under the Customs Act, 1962, as far as this seizure is concerned. The Customs Officials are acting at the behest of the Directorate. It is the Directorate, who is undertaking the task of redetermining the value. It is not permissible for that Directorate as it is the duty and the function of the Customs Authorities while assessing Customs Duty, if any payable to take into conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of entry for warehousing does not take into consideration the licence fee etc. Hence, the payment of Service Tax which is a independent issue cannot control the exercise of jurisdiction by the authorities under the Customs Act. For these reasons and when there is prima facie material establishing evasion of duty, this Court should not interfere in writ jurisdiction with the order of provisional release. He submits that the Writ Petitions be dismissed. Mr Jetly submits that no orders passed and relied upon by Mr Shroff can be taken as a binding principle for exercise of writ jurisdiction by this Court. The discretion has to be exercised on case to case basis and no general rule can be laid down insofar as imposing of conditions is concerned. 11 With the assistance of Mr Shroff and Mr Jetly, we have perused the Writ Petitions and all annexures thereto. Now what is before us is the order of provisional release of the goods. That order was passed pursuant to the request made by the petitioners themselves. The petitioners are really aggrieved by the conditions imposed. It is submitted that the release is ordered provisionally on the condition of furnishing of Bond for re-determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanamas. They also refer to all the events. They assure yet that due process of law will be followed. It is, under these circumstances, that we are not inclined to accept the arguments of Mr Jetly that the court must sustain the conditions as imposed. We are clear in our mind that it would be ultimately for the customs authority to take into consideration the issues on merits. 16 On 6 August, 2016, the investigation into the import of Conditional Access System ( CAS ) embedded card-less set-top boxes by the petitioners were investigated. The preliminary investigations were carried out. The DRI was of the prima facie opinion that the petitioners are indulged in mis-declaration of value, they are not including the value of the licence fee paid/ payable separately to a third party in respect of CAS software in the imported set-top boxes. The DRI seems to be of the opinion that the licence fee is required to be added in the transaction value of the set-top boxes in terms of Rule 10(1) Clause (c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The petitioners are also, according to DRI, wrongfully claiming exemption from payment of Special Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be served if we modify the order of provisional release of the goods in the following terms: (i) We direct the petitioners to furnish a Bond for securing differential duty payable, if any, on the licence fees and Special Additional Duty so as to secure the redetermined value. That would secure the sum of ₹ 54 Crores. Let this be done within two weeks from today; (ii) We also direct the petitioners to furnish a Bank Guarantee to the extent of 25 %, to secure the amount of the alleged differential duty, on licence fees. This would be in addition to the payments pro-rata detailed particularly in para 12 above. This amount would be paid as and when the goods are cleared. This would be also an condition incorporated in the provisional release order; (iii) In addition to this and when the petitioners are going to pay Special Additional Duty pro-rata, we do not think that there is any justification for imposing of condition of furnishing the Bank Guarantee of 25 % to secure the redetermined value and as arrived at by the Directorate of Revenue Intelligence and communicated to the Commissioner of Customs. The imposition of that condition in the provisional release order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
