TMI Blog2019 (3) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The scope of judicial review on the exercise of such discretionary power is undoubtedly limited. This Court, in several decisions, have granted orders directing provisional release of the cargo subject to certain conditions. However, there can be no universal rule as to what would be the appropriate directions to be issued while granting provisional release bearing in mind the interest of the stake holders, namely, the importer/exporter and the revenue. Therefore, we have to examine each case on its own merits and come to a correct conclusion - In the instant case, the task of establishing that the petitioner is entitled to clearance of the goods on furnishing of a simple bond is an uphill task. This is so because the petitioner claims the benefit of an exemption notification, whereby the benefit of treaties entered into between the Government of Sri Lanka and the Government of India is pressed into service. If such benefit is extended to the petitioner, then the petitioner would be entitled to clear the goods at concessional/NIL rate of duty. In the case on hand, the petitioner has produced certificates of origin stating that the goods imported are of Sri Lankan origin. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .S. Sivagnanam And Mrs. Justice V. Bhavani Subbaroyan For the Appellant and for R1 in W.A.Nos.236, 237, 240 329 of 2019 : Mr.Vijay Narayan Senior Counsel assisted by Dr.S.Krishnanandh For the Appellant in W.A.No.329 of 2019 for R1 in W.A.Nos.236 237 of 2019 : Mr.V.Sundareswaran For the Appellant in W.A.No.355 of 2019 for R3 in W.A.Nos.236 237 of 2019 for Respondent in W.A.No.240 of 2019 for R2 in W.A.No.329/2019 : Mrs.R.Hemalatha COMMON JUDGMENT T. S. SIVAGNANAM, J. These appeals have been filed challenging the common order passed in W.P.No.540 of 2019 W.P.No.33269 33276 of 2018. The appellants in the appeals are three in number namely, the Writ Petitioner, the Directorate of Revenue Intelligence (DRI) and the Customs Department. Since all the appeals question the correctness of common order dated 22.01.2019 passed in the Writ Petitions, they were heard together and are disposed of by this common judgment. For easy reference, the parties shall be referred as the petitioner, the DRI and the Customs. 2. W.A.Nos.236, 237 240 of 2019 have been filed by the Writ Petitioner. W.A.Nos.236 237 of 2019 are directed against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing Writ Petitions in W.P.Nos.33269 33276 of 2018 challenging the seizure memorandum dated 01.12.2018 and sought for release of the goods. The learned Writ Court by an interim order, dated 18.12.2018, granted liberty to the petitioner to approach the Adjudicating Authority and file an application under Section 110A of the Customs Act, 1962 (the Act) for provisional release of the goods. On such application being filed, the Adjudicating Authority was directed to pass appropriate orders at the earliest point of time, in any event, within five days from the date of receipt of such application, since it was stated that the goods under detention are perishable in nature. Accordingly, the petitioner through their counsels filed an application under Section 110A of the Act on 19.12.2018, requesting for provisional release of the goods. In the said application, the petitioner stated that under similar circumstances, goods were released on execution of a bond and detention certificate for waiver of demurrage and container detention charges were also granted. Similar request was made by the petitioner in the said application under Section 110A of the Act. The Adjudicating Authority nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FTA entered into between the Government of India and the Government of Sri Lanka. It is submitted that the detention/seizure was per se illegal in the light of the imports being covered by the certificates of origin issued by the competent authority at Sri Lanka. The learned counsel referred to the decisions of the Division Bench of this Court, where the goods which were detained by the department and provisionally released on execution of bond without the need of furnishing any bank guarantee/security deposit and there is no reason as to why the petitioner should be directed to furnish a bank guarantee to cover 30% of the differential duty. Further, it is submitted that the certificates of origin were further certified by the Sri Lankan authorities and there is no reason for the DRI to detain the consignment and grant provisional release imposing onerous conditions when similarly placed persons were permitted to clear the goods provisionally on furnishing of a simple bond. Reference was made to the circular No.35/2017-CUS., dated 16.08.2018, wherein the Central Board of Excise and Customs observed that depending on the specific nature of a case, the competent authority may, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. Therefore, it is submitted that even putting the worst case against the petitioner, bank guarantee to the extent of 10% of the differential duty could have been adopted and if the same had been done, it would be an uniform application of the circular in respect of clearance of the identical goods in identical circumstances. Further it is submitted that the Writ Court did not grant any relief in W.P.Nos.33269 and 33276 of 2018 and both the Writ Petitions were closed without considering the prayer sought for by the petitioner for issuance of detention certificate for waiver of demurrage and container detention charges in terms of Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. To substantiate the arguments advanced , the learned counsel referred to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Lexus Exports Pvt. Ltd. [1994 (71) ELT 348 (SC)] and Commissioner of Customs, New Dehli vs. Euroasia Global [2009 (236) ELT 627 (SC)] . 6. It is further submitted that identical imports were effected through the Tuticorin Port and the goods were detained on similar grounds and such imports were effected by one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods have been imported by the petitioner also finds place in the verification list and there is no reason as to why the communication dated 06.12.2018 from the Sri Lankan Customs should not be taken into consideration for the goods imported by the petitioner when the same was taken into consideration for clearance of identical goods from the same supplier by the Tuticorin Customs. On the above grounds, the learned senior counsel submitted that the Court may direct the petitioner to furnish a bond and necessary directions may be issued for clearance of the goods and for issuance of detention/waiver certificates. 7. Mr.V.Sundareswaran, learned counsel for DRI contended that the Department is aggrieved by the order passed by the learned Writ Court modifying the conditions imposed in the order dated 01.01.2019, more so when the matter is still under investigation. It is further submitted that in W.P.No.540 of 2019, the DRI was not impleaded as a respondent and therefore, they had no occasion to file a counter affidavit and hence, they have filed an appeal challenging the correctness of the order passed in the Writ Petitions. It is submitted that the Customs Department had filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then the petitioner could have very well furnished the export documents/declaration in the Automated System for Customs Data (ASYCUDA). In fact the petitioner was issued summons dated 07.01.2019 and 14.01.2019 calling upon them to provide the export documents/declarations filed by the exporter in Sri Lanka as the petitioner claimed that the goods were of Sri Lankan origin and exported from Sri Lanka which has not been complied with till date. It is further submitted that the petitioner has claimed exemption and the onus is on the petitioner to prove that he is entitled to exemption and in this regard, reliance was placed on certain decisions. 9. It is further submitted that the contentions putforth by the petitioner that they are not in a position to produce the export documents filed by the Sri Lankan exporter as they are not parties to the document, is a statement which should be rejected, since the value of the transaction is huge and nothing prevented the petitioner from requesting their exporter to furnish copies of those export documents filed in the Customs Information System of Sri Lanka and produce the same before the DRI/Customs. The fact that they have not produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial has thus far been procured by DRI and propose to decide the correctness of the order passed in the writ petition, modifying the conditions imposed by the Customs for provisional release as imposed in its order dated 01.01.2019. Since the Department was confronted with the order passed by the Tuticorin Customs releasing the goods on furnishing of a simple bond, we directed the Deputy Director of DRI to file an affidavit setting out the factual position as to under what circumstances the consignments were released by Tuticorin Customs, as it prima facie appeared that it is pursuant to the communication sent by the DRI to the Additional Commissioner of Customs, Tuticorin, dated 29.01.2019. Accordingly, an affidavit dated 12.02.2019 was filed by the Deputy Director of DRI, Chennai. 12. We have elaborately heard the learned counsels for the parties and given our anxious consideration to the facts and circumstances of the case. 13. The power under Section 110A of the Customs Act is a discretionary power vested with the adjudicating authority. The petitioner approached this Court challenging the seizure mahazar contending that the same is illegal. In the said Writ Petition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter and the revenue. Therefore, we have to examine each case on its own merits and come to a correct conclusion. In the instant case, the task of establishing that the petitioner is entitled to clearance of the goods on furnishing of a simple bond is an uphill task. This is so because the petitioner claims the benefit of an exemption notification, whereby the benefit of treaties entered into between the Government of Sri Lanka and the Government of India is pressed into service. If such benefit is extended to the petitioner, then the petitioner would be entitled to clear the goods at concessional/NIL rate of duty. Therefore the DRI is right in contending that the onus is on the petitioner to establish that he is entitled to the benefit of the notification which is pursuant to the treaty entered into between the two countries. The benefit of exemption notification can be extended, if the goods in question are of Sri Lankan origin. The document which is vital to establish the same is the certificate of origin. The controversy in the present case revolves around the genuineness of the certificates of origin produced by the petitioner. 14. Notification No.19/2000-Cus (NT), dated 06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director of Export, Sri Lankan Customs and it is not in response to a communication sent by DRI to Sri Lankan Customs. It is interesting to note that in the letter dated 06.12.2018, the Director of Exports, Sri Lankan Customs states that the word transshipment used in the earlier e-mail was in inadvertent error. Thus, it is prima facie clear that there has been a communication from the Nodal officer at Sri Lanka that the containers were transshipped and the goods are not of Sri Lankan origin. However, another authority namely, the Director of Export states that this is an inadvertent error. The correctness of the respective stand cannot be tested by us in a Writ proceedings and it is for the investigating authorities to take forward the matter. The petitioner heavily placed reliance on the orders based on which the cargo which was permitted to be cleared by the Tuticorin Customs. Infact, the communication dated 29.01.2019, from the Additional Director, DRI Chennai to the Additional Commissioner of Customs, Tuticorin appears to be the trumpcard of the petitioner. We directed the Deputy Director, DRI to explain and he has taken a stand in the affidavit dated 12.02.2019. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 17. As mentioned by us earlier, we do not wish to record anything which we have seen in the original files, as the matter is only in the stage of investigation and it is for the DRI to take forward the investigation in the manner known to law. As pointed out earlier, DRI has not accepted the validity of the certificates of origin in its letter to the Additional Commissioner of Customs, Tuticorin, dated 29.01.2019. The letter qualifies the stand taken by them. 18. With regard to the plea raised by the petitioner that they are not in a position to produce the export document from their Sri Lankan Exporter stating that they are not parties to the document is a stand which is not convincing. Admittedly, the transaction runs to several crores of rupees and any prudent businessman, if he is of the firm view that the actions done by him are genuine, he will leave no stone unturned to vindicate his cause. The Deputy Director, DRI, Chennai during the course of his submission stated that statement has been recorded from the importer who appears to have stated that they have no agreements entered into between the petitioner and the Sri Lankan Exporter. We were rather surprised to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, we find that the petitioner would be entitled to the same, because the consignment has been detained at the instance of the DRI for undertaking the investigation. In the event, the petitioner complies with the conditions contained in the order of provisional release dated 01.01.2019, the competent authority is directed to issue detention certificate for the purpose of waiver of demurrage and container detention charges from the date of detention till the date of release. 22. So far as the challenge to the seizure memorandum, dated 01.12.2018, is concerned, the same cannot be a subject matter of challenge in a Writ proceedings, because a seizure mahazar is a document which is drawn to justify as to why the goods are to be seized. Therefore, the question of entertaining a Writ Petition against the seizure mahazar does not arise. Hence, the challenge to the seizure mahazar has to necessarily fail, subject to the rider that the petitioner would be entitled a detention certificate for waiver of demurrage and container detention charges, as observed above. For the above reasons, (i) W.A.Nos.329 355 of 2019, are allowed; (ii) W.A.No.240 of 2019 is dismissed; and (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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