TMI Blog2020 (2) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... 15388 of 2018 - - - Dated:- 29-1-2020 - MR. J.B. PARDIWALA AND MR. JUSTICE BHARGAV D. KARIA JJ. Appearance: Mr. Dhaval Shah(2354) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 Jaimin A. Gandhi(8065) for the Respondent(s) No. 2,3 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Rule returnable forthwith. Mr. Jaimin Gandhi, the learned counsel waives service of notice of rule for and on behalf of the respondents. 2. By this writ -application under Article 226 of the Constitution of India, the the petitioner has prayed for the following reliefs: 9(A) be pleased to issue a writ of Certiorari or writ in the nature of certiorari calling for the records of the case and after examining legality and validity of the communications dated 7.9.2018 (Annexure A ) and be pleased to quash and set aside to the extent it seeks to demand from the petitioner bank guarantee of 25 per cent of the IGST; (B) be pleased to issue a writ of mandamus or writ in the nature of mandamus ordering and directing the respondents their subordinates, servants and agents to forthwith (I) permit the petitioner to export/re-export the goods without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts on the condition that the petitioner furnish the bond for the re determined value of seized goods by DRI with security of 25% of the bank guarantee of the re-determined/enhanced value of the goods. 3.6 The petitioner, thereafter, by letter dated 04th July, 2018, requested the respondent no.2 to waive the condition of the bank guarantee, as it was not possible for the petitioner to meet with such condition of furnishing the bank guarantee at the rate of 25% of the redetermined/enhanced value of the goods, 3.7 The petitioner, thereafter, approached this Court by preferring Special Civil Application No.11209 of 2018 with a prayer to permit the petitioner to furnish the bank guarantee at the rate of 25% of the customs duty that may be leviable on the re determined/enhanced value of the goods. The order dated 09th August, 2018 passed in the Special Civil Application No.11209 of 2018 reads as under: 1. The petitioner has challenged a condition contained in the communication dated 03.07.2018 to enable the petitioner to re-export the consignment of goods which the petitioner desired to import. The litigation has longish history. We may record only relevant facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. To evade customs duty, since part of the imported goods would be diverted, DRI undervaluation would lead to loss of customs duty. 6. We have considered the relevant facts. Since investigation is still going on, the petitioner would also have full liberty to defend its position in adjudication that may be initiated. We would not make any observations as to prejudice one side or the other. Nevertheless, what prima facie appears is that now that the goods are allowed to be re- exported, the question of payment of customs duty, on revised valuation even if it were to be ultimately established, would not survive. Of course there would be question of penalty and personal penalties in case the charges of mis declaration while attempting to import the goods are established. Section 112 of the Act Customs Act prescribes different penalties under different situations. The prescription of penalties is by maximum permissible ceiling. It is not necessary to impose maximum possible penalties in every case. 7. Considering such facts and circumstances of the case, we modify the condition of Bank Guarantee to 25% of the customs duty that may be leviable on the re determined value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e re determined value of the goods. The condition for providing bond for the remaining value of the goods remains unchanged upon which condition being fulfilled within three weeks, the petitioner may be permitted to re -export the goods. However, vide letter dated 28.08.2018, you have sought for re-export of the goods by way of furnishing Bank Guarantee of ₹ 9,18,723/ . It is further submitted that you are being a SEZ Unit, you are not liable to IGST and also informed that in any case, the goods being re exported, there is no question of levy of IGST. Whereas as per the Order of the Hon ble High Court of Gujarat, you are required to furnish Bank Guarantee of 25% of the Custom Duty that may be leviable on the re determined value of the goods for re -export. The re determined Custom Duty comes to ₹ 97,55,625/ for Sr. No.1 to 6 o the Annexure B to the seizure memo dated 07.03.18 and its 25% comes to ₹ 24,38,906/ , however, you have furnished Bank Guarantee of ₹ 9,18,723/ by way of not adding the element of IGST part which makes them short of ₹ 15,20,183/ . The said Bank Guarantee submitted by you does not contain the necessary auto renewal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains unchanged upon which condition being fulfilled within three weeks, the petitioner may be permitted to re-export the goods. Petition is disposed of. 2. Pursuant to such order, the petitioner furnished Bank Guarantee of ₹ 9,18,723/, which, the Deputy Commissioner of Customs thought was inadequate. According to him, the Customs Duty on the re-determined value of goods comes to ₹ 97,55,625/and therefore, 25% thereof would come to ₹ 24,38,906/. According to him, thus, the petitioner had to provide further Bank Guarantee of the difference amount of ₹ 15,20,183/. On 07.09.2018, therefore, he passed the impugned order asking the petitioner to provide further Bank Guarantee for the said sum. 3. Learned counsel for the petitioner submitted that on the import of goods, no IGST was to be levied since the petitioner Unit was situated in a SEZ. The competent authority has completely ignored this aspect of the matter while computing the Customs Duty on the re-determined value of goods. Hence, the difference. He further submitted that the goods are lying unutilized since long and are fast deteriorating. 4. Considering the issues arising, let there be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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