TMI Blog2019 (7) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... elf) for the purpose of mode of implementation of treaties. In the light of section 151B(5) of Customs Act, this Court has no hesitation in coming to the conclusion that CMA agreement dated 13.3.2015 will prevail over the procedure for verification of COO adumbrated in SAFTA Rules and ISFTA Rules as this CMA agreement also has been signed by two sovereign States. This court deems it appropriate to not to interfere with the impugned SCN by holding that it is open to respondents 1 and 2 to issue an addendum or corrigendum to impugned SCN adverting to CMA agreement and mentioning as to how COOs were verified and as to why they are unacceptable, in an appropriate manner without disclosing the contents of aforesaid communications dated 23.4.2018 and 15.5.2018 (immunity / privilege for which has been sustained) - The reason why this court refrains from interfering with the impugned SCN is owing to the principle that writ jurisdiction being a discretionary jurisdiction will ordinarily not be exercised for quashing a SCN and that it will be done only in rare and exceptional cases, if a SCN is found to be wholly without jurisdiction or wholly illegal for one reason or the other. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al rate of duty for Black pepper and ISFTA provides for concessional rate of duty for Aracknut, if consignments originate from Sri Lanka. (e) Raising doubts about 'Certificates of Origin' ('COO' for brevity) produced by the writ petitioner to demonstrate the said consignment originates from Sri Lanka, said consignment was seized inter-alia vide a Seizure Memorandum dated 01.12.2018. Aggrieved by the seizure, writ petitioner moved this Court by way of writ petitions being W.P.Nos.540 of 2019 etc., Suffice to say that these writ petitions were disposed of by Hon'ble Single Judge of this court in and by order dated 22.01.2019 interalia ordering provisional release of said consignment of writ petitioner on furnishing bank guarantee or security deposit to the extent of 30% of differential duty. (f) Aforesaid order of Hon'ble Single Judge was carried in appeal by both sides, i.e., by writ petitioner as well as official respondents. This is vide W.A.Nos.236 of 2019 etc., All writ appeals, i.e., writ appeals filed by writ petitioner as well as State appeals came to be disposed of by a common order dated 25.02.2019 made by Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitioner in assailing the impugned SCN. 10.6.2019 proceedings of this court reads as follows : Mr.P.Chidambaram, learned Senior Counsel, leading the counsel on record for the sole writ petitioner, is before this Court. 2. This writ petition pertains to import of Black Pepper and Arecanuts (Betelnuts). 3. The crux and gravamen of the entire dispute is that while the writ petitioner contends that aforesaid consignment is of Sri Lankan origin and claims certain benefits qua duty, that the consignment is of Sri Lankan origin is disputed by the Customs Department. 4. To be noted, this is the second round of litigation. 5. Suffice to say that consignments have been seized and this Court was moved assailing such seizure. 6. A Hon'ble Single Judge of this Court, vide order dated 18.12.2018, directed release of seized consignments on certain terms. The writ petitioner as well as the Revenue carried the matter in appeal by way of an Intra Court Appeal and the Intra Court Appeal came to be disposed of by an order dated 25.02.2019 made by a Hon'ble Division Bench of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the case on hand falls within well carved out exceptions adumbrated in a long line of authorities where writ petition will be entertained against a SCN. To be noted, learned Senior Counsel submitted that there can be no disputation that aforesaid order of Hon'ble Supreme Court dated 8.5.2019 and more particularly, the underlined portion is subject to writ petitioner making out a case for interference qua writ jurisdiction at SCN stage. 11. In this backdrop, it was submitted by the learned Senior Counsel for writ petitioner, that pivotal ground, on which impugned SCN is assailed, is that the same has been issued by the first respondent without jurisdiction. It was also argued that both respondents 1 and 2 do not have jurisdiction qua impugned SCN. It was further argued that besides jurisdiction, there is a procedure to be followed in cases of this nature and that the procedure has also not been followed. 12. Be that as it may, with regard to the pivotal submission regarding jurisdiction qua impugned SCN, learned Senior Counsel referred to an instruction, being Instruction No.31/2016, dated 12.9.2016, issued by the Central Board of Excise a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Customs Division) is now part of a Directorate, which is headed by a Principal Commissioner Headquartered in Delhi. Specific reference was drawn to paragraph 2.1.C. captioned (FTA) and subclause (iv) thereto of the Office Memorandum dated 11.7.2017 in this regard. 16. In sum and substance, it was contended that the impugned SCN has been issued without jurisdiction by the first respondent. To be noted, it is the specific submission of learned Senior Counsel for writ petitioner that both respondents 1 and 2 do not have jurisdiction to issue the impugned SCN, as it pertains to a disputation qua COO. Impugned SCN is inter alia primarily under section 124 of 'The Customs Act, 1962' ('said Act' for brevity). For issuing of SCN under section 124 of said Act, it is imperative that the goods should prima facie be confiscatable under section 111 of said Act is learned Senior Counsel's say. In the instant case, the only ground on which the consignment is said to be confiscatable pertains to disputation qua COO and any disputation pertaining to COO, i.e., Country of Origin can be decided only by the Principal Commissioner vide afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17.6.2019 under the caption 'NOTICE REGARDING ADMISSION'. 6 It is important to note that learned Senior counsel for writ petitioner fairly submitted that there is no disputation that though instant writ petition has been filed pursuant to aforementioned order of Hon'ble Supreme Court dated 08.05.2019, it is subject to writ petitioner making out a case for interference qua writ jurisdiction at SCN stage. This is captured in the last few lines / last sentence in paragraph 10 of the aforesaid order / proceedings of this Court dated 10.06.2019. Likewise, the crux and gravamen of writ petitioner's submission or in other words, primordial and pivotal submission of learned Senior Counsel for writ petitioner is captured in paragraph 16. 7 It is also to be noted that along with instant writ petition, more than one writ miscellaneous petitions have been taken out. To be precise, four writ miscellaneous petitions have been taken out and they are W.M.P.Nos.15476, 15479, 15481 and 15484 of 2019. Notice was issued in main writ petition, however, owing to limited notice being issued, in W.M.P.No.15476 of 2019 with a prayer for interim stay of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim at the time of importation .- The importer of the product shall, at the time of importation- (a)make a claim that the products are the produce or manufacture of the country from which they are imported and such products are eligible for preferential treatment under the India-Sri Lanka Free Trade Agreement, (hereinafter referred to as the Agreement), and (b)produce the evidence specified in these rules. Explanation:- For the purposes of this notification, Preferential treatment in relation to any product means the exemption granted under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.26/2000- Customs dated 1st March, 2000 and includes preferential concessions. 11. Certificates of origin .- Products eligible for a Certificate of origin in the form annexed shall support Preferential treatment issued by an authority designated by the Government of the exporting country and notified to the other country in accordance with the certification procedures to be devised and approved by both the Contracting Parties. 12. Prohibitions .- Either country m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra. 11 Furthering his submission in this direction, it was submitted that SAFTA and ISFTA rules are treaties between two sovereign States and therefore they have to be treated with utmost sanctity and should be regarded as sacrosanct. 12 Responding to the aforesaid submissions, learned Solicitor submitted that there is an agreement styled 'Agreement between the Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka on Co-operation and Mutual Assistance in Customs matters' ('CMA Agreement' for brevity) dated 13.3.2015 between the Governments of India and Sri Lanka, vide two communications dated 23.04.2018 and 15.05.2018, officers have been appointed by name (not designation) inter-alia for exchange of information qua COO under CMA Agreement. Learned Solicitor submitted that this CMA agreement is traceable to section 151B of Customs Act. 13 Adverting to sub-section (5) of section 151B of Customs Act, it was submitted by learned Solicitor that post 29.3.2018 when section 151B was brought into statute books, i.e., Customs Act, any action taken in pursuance of any agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to public injury. If there are a series of documents included in a file it should appear from the affidavit that each one of the documents, whose disclosure is objected to, has been duly considered by the authority concerned. The affidavit should also indicate briefly within permissible limits the reason why it is apprehended that their disclosure would lead to injury to public interest. This last requirement would be very important when privilege is claimed in regard to documents which prima facie suggest that they are documents of a commercial character having relation only to commercial activities of the State. If the document clearly falls within the category of privileged documents no serious dispute generally arises; it is only when courts are dealing with marginal or borderline documents that difficulties are experienced in deciding whether the privilege should be upheld or not, and it is particularly in respect of such documents that it is expedient and desirable that the affidavit should give some indication about the reasons why it is apprehended that public interest may be injured by their disclosure. 14 In the aforesaid backdrop, immunity / privilege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to seek a review before Hon'ble Division Bench. Admittedly, no such review has been filed before Hon'ble Division Bench. Therefore, such a submission ought not to have been made that too on a sworn affidavit before a Single Judge, i.e., this Court and this court as a matter of judicial discipline refrains from examining this aspect and this court eschews this submission of respondents 1 and 2. In this regard, this court considers it appropriate to extract relevant portion of paragraph 6 of this affidavit, which reads as follows: 6... It is further submitted that the two communications referred to above whereby the nodal officers were nominated are appointed under the agreement of the year 2015 and not under rule 11 of the Notification No.19/2000-Cus NT dated 06/03/2000 as observed by the Division Bench in WA No.329/2019 and in the circumstances this Hon'ble Court may be pleased to record the objection for disclosure and thus render justice. In other words, the issue of immunity / privilege has been decided by this Court on the basis that it is not desirable to disclose officers appointed by name irrespective of whether they have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per the letter the 62 containers had arrived to Sri Lanka for transshipment in four vessels namely Northern Jupiter, Em Astoria, City of Beijing and Ever Dynamic and got loaded onto three vessels namely MSC Maria Laura, Ever Delight OEL Shravan (voyage no.18060) destined to India. For ease of understanding, the details furnished by Sri Lanka Customs for the 62 containers is shown in Table 1 below in respect of one of the 62 containers Table 1 S/N Container No. Status Discharge vessel/voyage Loading vessel/voyage Load Date 1 XINU1366335 Transshipment Northern Jupiter/803E Ever Delight V.124E 16-10-18 ii. Director of Customs, Central Intelligence Unit, Sri Lankan Customs vide further letter CIU/DRI/INF/08/2018 dated 19/11/2018 (RUD-12) in respect of 26 (88-62) contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the export declaration filed by the exporter with Sri Lankan Customs in their Automated System For Customs Data (ASYCUDA) system. The letter further added that Customs declaration bearing number E 92004 dated 10/10/2018 had been made wherein the exporter was shown as Hayleys Free Zone Ltd, Colombo and the country of origin of goods in the said document has been shown as Vietnam. On scrutiny of the said Customs declaration E 92004 dated 10/10/2018 it is seen that the consignee is M/s.Unik Traders, No.140, Old Tharagupet, Ground Floor, Bangalore-560 053, commodity is black pepper, Country of Export is Sri Lanka, Country of Origin is Vietnam, Country of destination is India, Vessel is OEL Shravan, Voyage No./Date is 18060 14/10/2018, 1080 Bags of black pepper, quantity as 54000 Kg and in 40 ft containers TCNU3476980 TLLU5204024. The system generated Cargo Dispatch Notes bearing numbers C26325 and C26324 enclosed along with them show the seal numbers of the containers as G4266296 and G4266295 respectively. 11. In pursuance of the above as well as the independent evidences mustered (discussed in subsequent paragraphs below at paras 19 to 32), all the 44 consignm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA certificates issued by the Ministry of Commerce are genuine . [underlining made by this Court to supply emphasis and highlight] 18 To be noted, aforesaid differing communications does not apply to Black pepper consignment. In other words, it applies only to Aracknut consignment. 19 In the considered view of this Court, the most critical question which constitutes the crux and gravamen of this instant lis is whether CMA agreement dated 13.3.2015 will substitute SAFTA and ISFTA rules qua verification of COO. 20 Though SAFTA and ISFTA agreements go by the nomenclature of 'Free Trade Agreement' ('FTA' for brevity), for all practical purposes, they are treaties within the meaning of Article 73(1)(b) of the Constitution of India and they are traceable to Entry 14 of List I of Seventh Schedule to the Constitution of India. In this regard, Article 51(c) of the Constitution of India is also of relevance. SAFTA rules and ISFTA rules in contradistinction are municipal laws in international law parlance. Be that as it may, the same cannot be said of CMA agreement dated 13.3.2015 between Governments of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Notwithstanding anything contained in sub-section (1) or sub-section (2) or sub-section (3), anything done or any action taken or purported to have been done or taken, in pursuance to any agreement entered into or any other arrangement made by the Central Government prior to the date on which the Finance Bill, 2018 receives the assent of the President, shall be deemed to have been done or taken under the provisions of this section. Explanation .-For the purposes of this section, the expressions,- (i) contracting State means any country outside India in respect of which agreement or arrangements have been made by the Central Government with the Government or authority of such country through an agreement or otherwise; (ii) corresponding law means any law in force in the contracting State corresponding to any of the provisions of this Act or dealing with offences in that country corresponding to any of the offences under this Act.] 21 Therefore, this court deems it appropriate to not to interfere with the impugned SCN by holding that it is open to respondents 1 and 2 to issue an addendum or corrigendum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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