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TMI Blog2009 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in collecting from the petitioners Rs.1,83,46,210/- towards differential duty on the 11 consignments of OFC cleared in the past on assessment under tariff Heading 85.44 on the footing that the said goods were liable to be assessed under tariff Heading 90.01 of the Customs Tariff Act. 3. The petitioners are engaged in the business of providing telecommunication services in various states in India. For their business the petitioners have been importing OFC from time to time. Since 2006 there is dispute regarding the classification of the OFC. According to the petitioners, OFC are classifiable under tariff Heading 85.44, whereas, according to the revenue, OFC are classifiable under heading 90.01 of the Customs Tariff Act. 4. It may be noted that the Commissioner of Central Excise, Chennai by various orders passed in Jan / Feb., 2008 had adjudicated the classification issue and by relying upon a decision of the Authority for Advance Ruling held that OFC are classifiable under tariff Heading 90.01. The said orders have been set aside by CESTAT, Chennai Bench vide order dated 22/9/2008 by way of remand and the matters are pending for fresh adjudication before the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llegedly payable on the third consignment. 9. Mr.Shridharan, learned counsel appearing on behalf of the petitioners submitted that once the goods are cleared on payment of duty as assessed, then, unless the said assessment order is set aside by initiating proceedings in accordance with the provisions of the Customs Act, it is not open to the respondents to seize the said goods. He submitted that in the present case, the assessment orders passed have not been set aside and in fact not even a show cause notice has been issued to the petitioners. If the assessment orders are not set aside there is no question of paying or collecting any differential duty. Therefore, the amount of Rs.1.83 crores collected under threat and coercion without there being any enforceable demand is liable to be refunded to the petitioners or in the alternative the respondents must be directed to deposit the entire amount of Rs.1.83 crores in this Court. Mr. Shridharan in this connection relied upon the decisions reported in 19 STC 52 (A.P.), 110 STC 73 (A.P.), 102 STC 506 (A.P.) and 123 ELT 448 (A.P.). 10. Mr.Sethna, learned senior Advocate appearing on behalf of the respondents, on the other hand su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hna vehemently argued that the said amount has been voluntarily paid by the petitioners towards the differential duty payable on the imported goods, and therefore, there is no question of refunding the said amount. He submitted that the respondents are willing to issue show cause notice within two weeks and adjudicate the matter as expeditiously as possible. However, no refund should be ordered at this stage because the petitioners are guilty of misclassifying the goods in the Bills of Entry filed under the Risk Management System and have voluntarily paid the differential duty. In this connection, he relied upon decisions of the Apex Court in the case of Suganmal V/s. State of M.P. reported in AIR 1965 S.C. 1740 and Dhanyalaxmi Rice Mills & Others V/s. The Commissioner of Civil Supplies reported in (1976) 4 SCC 723. Accordingly, Mr.Sethna submitted that the writ petition is wholly misconceived and is liable to be dismissed. 16. Having heard the counsel on both sides, we are of the opinion that the action of the D.R.I. officers in the Customs Department in seizing the goods and collecting money from the petitioners is wholly unjustified and uncalled for, because, firstly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious authorities have opined that the OFC imported by the petitioners are liable to be classified under Heading 90.01 and the fact that the petitioners themselves were clearing the goods under Heading 90.01 may be a good ground for setting aside the assessment orders and the order passed by Commissioner of Customs (A). However, till the order of Commissioner of Customs (A) is set aside, the petitioners cannot said to be guilty of misclassifying the imported goods under Heading 85.44 as the action of the petitioners is in conformity with the order passed by Commissioner of Customs (A). 19. The argument of the revenue that the goods in question were seized under the bonafide belief that the same are liable to be confiscated under Section 110 r/w Section 111(d) and (m) of the Customs Act is also without any merit, because neither the goods imported by the petitioners are prohibited under the Customs Act nor the declaration made on the Bills of Entry to the effect that the goods are classifiable under Heading 85.44 is contrary to the classification upheld by the Commissioner of Customs (A) on 25/3/2008. The fact that the petitioners themselves were classifying the goods in the past un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... threat and coercion is liable to be refunded. 22. In these circumstances, we are clearly of the opinion that in the present case, the conduct of the D.R.I. officers is not only high handed but it is in gross abuse of the powers vested in them under the Customs Act. It is apparent that the D.R.I. officers in utter disregard to the order passed by the Commissioner of Customs (A), Mumbai have forced the petitioners to pay the amount by threat and coercion which is not permissible in law. Thus, the conduct of the D.R.I. officers in the present case in collecting the amount from the petitioners towards the alleged differential duty is wholly arbitrary, illegal and contrary to law. Having terrorised the petitioners with the threat of arrest, it is not open to the D.R.I. officers to contend that the amount has been paid by the petitioners voluntarily. We strongly condemn the high handed action of the D.R.I. officers in totally flouting the norms laid down under the Customs Act in relation to reassessment proceedings and purporting to collect the amount even before reassessment. We hope that such incidents do not occur in the future. 23. We make it clear that we are not expressing any op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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