TMI Blog2017 (10) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... n the earlier round of writ petitions, respondents therein have not articulated that the exporters have to offer security towards fine and penalty, in the form of a Bank Guarantee, that does not amount to a waiver of exercise of the powers conferred on the department by virtue of Clause No.4(a) of the Board's circular dated 04.01.2011. At the risk of repetition, when condition Nos.6(ii) & 6(iii) remain unaltered, as per the earlier orders made in W.P.Nos.43062 to 43070 of 2016 dated 22.12.2016, it cannot be contended that the department has erred in directing the exporters to offer Bank Guarantee as an appropriate security, in order to cover redemption, fine and penalty. In our view, the department cannot be compelled to follow an earlier interim order, which has merged with a simple closure of writ petitioner, without there being any adjudication on the merits. In State of Orissa Vs. Madan Gopal Rungta [1951 (10) TMI 19 - SUPREME COURT] the Hon'ble Apex Court held that interim orders are passed in aid of the main relief. The common orders passed in W.P.Nos.7429 and 7430 of 2017 dated 18.07.2017, requires interference - impugned orders set aside - appeal allowed by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leather as per Drawback Schedule) and also by availing MEIS incentive of 2% on FOB value. Department has seized the goods under the provisions of Section 110 of the Customs Act, 1962 with effect from the date of examination i.e. 14.10.2016, vide Seizure Memo dated 16.11.2016. 5. Thereafter, by letter dated 21.02.2017, a request has been made by the exporters to the Commissioner of Customs (Export), Chennai IV Commissionerate, Customs House, Chennai, for provisional release of goods. Responding to the above, vide order dated 25.11.2016 the Principal Commissioner of Customs-III (SIIB), Customs House, Chennai -1, recommended for provisional release of the subject goods, pertaining to the exporters vide Table-I, as per the provisions of Section 110A of the Customs Act, 1962 and in terms of the CBEC Circular No.01/2011 dated 04.01.2011, subject to the following conditions. (i) On payment of applicable export duty. (ii) On execution of bond for the value of the goods and appropriate security for fine and penalty leviable. (iii) After drawal of adequate number of samples as required including for possible prosecution before such provisional release. (iv) Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of provisional release dated 23.11.2016, are as hereunder. 6. The Principal Commissioner of Customs (III) has recommended for provisional release of the said consignments in respect of the above ten shipping bills as above in terms of Board Circular No.01/2011-Cus dated 04.01.2011 (copy enclosed) with the following conditions:- (i) on payment of applicable export duty; (ii) on execution of bond for the value of the goods and appropriate security for fine and penalty leviable; (iii) after adequate number of samples as required including for possible prosecution may be taken/collected before such provisional release. 7. In view of the Pr.Commr-III's instructions, it is informed that if the exporters avail the option of Provisional release of the goods, the same may be communicated to SIIB before according 'Let Export Order' to enable the SIIB to draw samples as instructed. 8. The copies of relevant shipping bills and other connected documents are hereby forwarded to you for taking further action. Further, additional bond may also be taken from the exporters that they shall not claim the benefits of Chapter 3 of Foreign Trade Policy (copy en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive Hundred and Forty Only - 30% of 60% of Export duty - ₹ 5,98,513/- + 40% on FOB towards the security for Fine and Penalty - ₹ 13,30,027/-) as per the provisions of the CBEC circular No.01/2011-Cus dated 04.01.2011 and the Hon'ble High Court's order for the provisional release of the subject cargo covered under above referred shipping bill filed in the name of M/s.Sri Vijayalakshmi Leathers. It is also directed by the Principal Commissioner (Chennai III) that a separate bond may be executed containing the clause that you will not be claiming any MEIS benefits for the subject consignment. It is also hereby advised that the description of the goods may be amended as Unfinished Leather since the SIIB unit had finalized the identity of the goods as Unfinished Leather. Upon the receipt of the Indemnity Bond, Bond for non-claiming of the MEIS benefits and the required Bank Guarantee the permission for export process will be granted. Sd/- (T.NALINA SOFIA) DEPUTY COMMISSIONER OF CUSTOMS (Exports) 11. Material on record discloses that the subsequent provisional orders dated 10.01.2017, issued to the exporters, were again challenged in W.P.Nos.16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 to 1628 of 2017, came up for further hearing on 30.01.2017, both the learned counsel appearing for the parties submitted that subject goods were released in terms of the orders made in W.P.Nos.43062 to 43070 of 2016 and W.P.Nos.1620 to 1628 of 2017, respectively dated 22.12.2016 and 25.01.2017. Both the counsel also seemed to have submitted that the writ petitions can be closed. Placing on record the above submission, by common order dated 30.01.2017, W.P.Nos.1620 to 1628 of 2017, have been closed. 15. When W.P.Nos.7429 7430 of 2017, came up for hearing on 18.07.2017, the writ Court disposed of W.P.Nos.7429 and 7430 of 2017, directing provisional release of the goods, subject to the petitioners therein, complying with the conditions imposed in the earlier writ petitions ie. W.P.Nos.43062 to 43070 of 2016 and W.P.Nos.1620 to 1628 of 2017, dated 22.12.2016 and 25.01.2017, respectively. 16. Today, alongwith the instant W.A.Nos.1019 1020 of 2017 filed against the orders made in W.P.Nos.7429 and 7430 of 2017 filed by petitioners herein, dated 18.07.2017, other appeals filed by the department viz., W.A.Nos.1097 to 1105 of 2017 filed against the interim orders made in W.M.P.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to the following orders, in the subsequent writ petitions viz., W.P.Nos.7429 7430 of 2017, filed by M/s.Sri G.P.R.Leathers, Chennai and M/s.Parveen Leather Exports, Chennai, respectively. 23. Prayer sought for in the above writ petitions, is for an issuance of a writ of mandamus to direct the respondents therein, to release the goods covered by shipping bill Nos.1415092 and 1415135, respectively, both dated 03.10.2016, forthwith, for export. Before the writ Court, contentions have been made that when the petitioners therein, sought for provisional release of the goods, pursuant to the orders passed by the writ Court dated 22.12.2016 in W.P.Nos.43062 to 43070 of 2016, the department is still insisting upon furnishing of bank guarantee for the penalty and fine amount. Reliance has also been made on the interim order dated 25.01.2017 passed in the subsequent batch of writ petitions viz., W.P.Nos.1620 to 1628 of 2017, which were closed vide order dated 30.01.2017. 24. Before the writ Court, department has contended that as against the order passed in W.P.Nos.1620 to 1628 of 2017 dated 25.07.2017, writ appeals were preferred, and that there was a delay in filing the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 43070 of 2016, the condition imposed in paragraph 6.1 of the order dated 23.11.2016 alone was modified and the conditions prescribed, in para 6, 7 and 8 except in para 6.1 were upheld. (f) the learned Judge ought to have seen that in pursuance to the order dated 22.12.2016 the adjudicating authority, in those cases issued a communication dated 10.01.2017 and directed the exporters therein, to furnish bank guarantee for 30% of export duty, indemnity bond for the value of the goods, bank guarantee for 40% of the FOB value, towards security for the fine and penalty and bond for not claiming any MEIS benefit for the goods to be exported. (g) the learned Judge ought to have seen that the communication dated 10.01.2017 by the concerned authority was not set aside in the common order dated 25.01.2017 passed in W.P.No.1620 to 1628 of 2017, but against the said order, the revenue has filed Writ Appeals on 28.04.2017 and that the same were pending for condoning delay in filing, in CMP No.9301 to 9309 of 2017, which came up for hearing on 28.06.2017 and that the Hon'ble Division Bench, has ordered the same to be posted before other bench. (h) the learned Judge ought to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ordered by the writ Court is an option to seek for release of the subject goods/consignment by furnishing the bank guarantee from a nationalised bank equivalent to 30% of the export duty, instead of 60% applicable to unfinished goods. Dispute is only whether the goods are finished goods or unfinished goods and that the time for issuance of show cause notice has already been extended up to 13.10.2017. He further submitted that condition Nos. 6(ii) and 6(iii) contained in the provisional release order dated 23.11.2016, has only been reiterated, by mentioning the monetary value. He further submitted that when misdeclaration is sought to be adjudicated, the department is empowered to release the goods provisionally, on execution of a bond of an amount equivalent to the value of the goods alongwith furnishing an appropriate security in order to cover the redemption, fine and penalty. 30. Material on record discloses the following: (i). It is informed that, initially for all these ten shipping bills wherein samples were drawn from these consignments by the CLRI at CWC Virugambakkam CFS, as per the procedures devised in the Facility Circular No.01/2014 dated 02.01.2014 issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule 2015]. Since the goods are liable for confiscation under Section 113(i)(ii) of the Customs Act, 1962 the same were seized in terms of Section 110 of the Customs Act, 1962 vide seizure Memos (10 Nos) all dated 16.11.2016 (w.e.f 14.10.2016 i.e. from the date of examination of the goods). 31. From the above, it is clear that the department has seized the goods in terms of Section 110 of the Customs Act, 1962 and that investigation is under progress and pending the same, the Principal Commissioner of Customs (III), has recommended for provisional release of consignments in respect of the shipping bills of the exporters, in terms of CBEC Circular No.01/2011 dated 04.01.2011, with the following conditions. (i) On payment of applicable export duty. (ii) On execution of bond for the value of the goods and appropriate security for fine and penalty leviable. (iii) After drawal of adequate number of samples as required including for possible prosecution before such provisional release. 32. According to the department, goods were declared as 'finished goods' by the exporter. Whereas, the reports indicate that they were 'unfinished'. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omotion / Reward Schemes, the finalization of export incentives should be done only after receipt of the test report / finalisation of enquiry and final decision in the matter. The Bond executed for provisional release shall contain a clause to this effect. (d) Export goods detained for purpose of tests etc. must be dealt with on priority and the export allowed expeditiously unless the prohibited nature of goods is confirmed. Continued detention of any expert goods in excess of 3 days must be brought to the notice of the Commissioner of Customs, who will safeguard the interest of the genuine exporters as well as the revenue. 35. As observed supra, in none of the final orders passed by the writ Court, there is a clear finding, as to whether the conditions imposed on 10.01.2017 are within the powers of the Customs department in terms of the Board's circular stated supra. 36. Clause No.4(a) of the circular, clearly states that, in case the export goods are found to be misdeclared in terms of quantity, value and description and are seized for being liable to confiscation under the Customs Act, 1962, the same may be ordered to be released provisionally, on execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of the expression, an amount equivalent to the value of goods stipulated in Condition No.6(ii), with due respect, we are unable to subscribe to the views of the learned Single Judge that monetary value mentioned in the subsequent communication dated 10.01.2017 is in a sense diluted the very essence of the order dated 22.12.2016. Even taking it for granted, that in the earlier round of writ petitions, respondents therein have not articulated that the exporters have to offer security towards fine and penalty, in the form of a Bank Guarantee, that does not amount to a waiver of exercise of the powers conferred on the department by virtue of Clause No.4(a) of the Board's circular dated 04.01.2011. 41. At the risk of repetition, when condition Nos.6(ii) 6(iii) remain unaltered, as per the earlier orders made in W.P.Nos.43062 to 43070 of 2016 dated 22.12.2016, it cannot be contended that the department has erred in directing the exporters to offer Bank Guarantee as an appropriate security, in order to cover redemption, fine and penalty. In our view, the department cannot be compelled to follow an earlier interim order, which has merged with a simple closure of writ peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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