Bombay High Court
M/S. C.J. Shah And Co. And Anr vs The Union Of India And Anr on 4 August, 2017
Bench: Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10245 OF 2016
1 M/s. C. J. Shah & Co,
a partnership firm having its office at
105, Bajaj Bhavan, 10th Floor,
Nariman Point, Mumbai 400021
2 Apurva M. Shah,
hving his office at 105,
Bajaj Bhavan, 10th Floor,
Nariman Point, Mumbai 400021 .... Petitioners
vs
1 The Union of India,
Joint Secretary, Ministry of Law and
Justice, Department of Legal Affairs,
Branch Secretariat Ayakar Bhavan,
Annexe, 2nd Floor, New Marine Lines,
Mumbai 400 020
2 The Commissioner of Customs (Import)
NS-V, Mumbai-Zonal-II, Nhava Sheva,
hving his office at Jawaharlal Nehru
Custom House, Tal Uran, Dist. Raigad,
Maharashtra-400 707
3 The Settlement Commission, Customs &
Central Excise, Addl. Bench Mumbai
6th floor, Plot No. C-24, Utpad Shulk
Bhavan, Bandra-Kurla Complex,
Bandra (East), Mumbai 4000051 .... Respondents
Mr. Prakash Shah i/by PDS Legal for the petitioners.
Mr. Pradeep S. Jetly for respondents.
1/17
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CORAM: ANOOP V. MOHTA AND
SMT.ANUJA PRABHUDESSAI, JJ.
JUDGMENT RESERVED ON: July 24, 2017
JUDGMENT PRONOUNCED ON:August 04, 2017
JUDGMENT (Per Anoop V. Mohta, J.):
1 The matter is arising out of Customs Act, 1962 (for short,
Customs Act).
2 The Petitioners have filed the present Petition and prayed
to quash and set aside impugned order dated 30.05.2016 passed by
Respondent No.3-The Settlement Commission, to the extent it
purported to allow adjustment of Rs.16,99,781/- towards anti-
dumping duty on the imported goods covered under Bill of Entry
dated 3.4.2007 and imposed penalty of Rs.50,000/- on Petitioner
No.2.
3 The facts of this case are as under:
Petitioner No.1 is a partnership firm duly registered under
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the Indian Partnership Act and is carrying on business of importing
and dealing in various solvents and chemicals. Petitioner No.2 is a
partner of Petitioner No.1. The Petitioners import the said goods
mainly from USA, Taiwan and Israel. The Petitioners had imported
various consignments of Sodium Saccharin during the period 2007 to
2011 from High Trans Corporation of Taiwan. The said goods were
ordered / purchased from High Trans Corporation of Taiwan through
their two Indenters in India, Messrs. Pluto International and Messrs.
S. Nihar & Co. The Petitioners had ordered Sodium Saccharin of
"Taiwan Origin" and the said orders had been confirmed by the said
Indenters on behalf of the foreign Supplier High Trans Corporation,
Taiwan. Pursuant to the said Indents, the Petitioners had established
irrevocable Letters of Credit in favour of the said foreign Supplier for
payment of price of the said goods. The said foreign Supplier shipped
the goods from the port "Kaohsiung" in Taiwan and the import
documents such as the Invoice, Bill of Lading and Certificate of Origin
were received by the Petitioners through the Bank. The Certificates of
Origin received from the foreign supplier through the Bank showed
the goods to be of Taiwan origin. Upon arrival of the goods in India
at the Port of Nhava Sheva, the Petitioners filed Bills of Entry to seek
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clearance of the said goods. The said Bills of entry were assessed by
the proper officer of customs and the Petitioners cleared the goods on
payment of duty as assessed by the proper officer of customs. No
anti-dumping duty was assessed on the said goods.
4 During March 2012 to May, 2012, the officers of DRI,
Mumbai, recorded statements of Petitioner No.2, partner of the
Messrs. Indenter Pluto International, Mr. Rajan Joshi and partner of
the Indenter Messrs. S. Nihar & Co., Mr. Samit Mehta in connection
with the said imports of Sodium Saccharin made by the Petitioners
from the said High Trans Corporation, Taiwan as according to the DRI
the Sodium Saccharin supplied by the said High Trans Corporation
was not of Taiwan origin but was of China origin and that the same
accordingly attracted antidumping duty under notification no.
41/2007 dated 19-3-2007.
5 On 22.03.2012, Petitioner No.1 forwarded 8 Pay Orders,
the particular whereof are set out in the said letter, aggregating to Rs.
1,98,11,000/-, without prejudice to the rights and contentions of the
Petitioners along with statement of Bills of Entry Nos and dates in
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respect of which the said amount was deposited. On 26.03.2012, the
Deputy Director (F-Cell), DRI MZU, Mumbai forwarded the said Pay
Orders aggregating to Rs.1,98,11,000/- to the Cashier, Accounts
Department, JNPT, Nhava Sheva Accounts the Petitioners for
depositing in the Government Treasury towards customs duty. On
16.05.2012, vide without prejudice letter, the Petitioners informed the
Additional Director General, that the Petitioners had deposited
Rs.1,98,11,000/- towards the duty amount against the import of
Sodium Saccharin under the Bills of Entry mentioned therein.
6 On 17.05.2012, the Additional Director General, DRI,
Mumbai, thereafter issued to Petitioner No.1 Show Cause Notice, inter
alia, seeking to charge Antidumping Duty on various consignments of
Sodium Saccharin imported by Petitioner No.1, adjust an amount of
Rs.16,99,981/- towards the antidumping duty, confiscation of the
imported goods and impose penalties on the Petitioners. The
Petitioners showed cause by their letter dated 20.10.2012. By the said
letter, the Petitioners, inter alia, contended that no antidumping is
short paid by them and in any event demand is time barred.
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7 On 14.10.2015, subsequent to the hearing held in May,
2015, the DRI again recorded statements and thereafter issued an
Addendum dated 14.10.2015 to the Show Cause Notice dated
17.5.2012. On 16.11.2015, the Petitioners filed an application,
under Chapter XIVA of the Customs Act, seeking the settlement of the
case of the Petitioners on payment of anti-dumping duty amounting to
Rs.1,82,85,233/- with interest thereon of Rs.33,95,530/-. The
Petitioners prayed for grant of immunity from penalty and
prosecution.
8 Vide letter F. No. S/26-43/2012-13/Adj(I), JNCH dated
19.01.2016, received by the office of Respondent No.3 on 25 January,
2016, the office of Respondent No.2 submitted the report in terms of
Section 127 C(3) of the Customs Act, in response to the application
filed by the Petitioners. In the said report, Respondent No.2, after
referring to the errors in calculation of duty and error in quantity in
respect of Bill of Entry No. 4693667, calculated and worked out the
duty of Rs. 1,82,85,223/- payable by the Petitioners as against the
demand for Rs. 2,15,73,371/- made in the show cause notice. In
paragraph 11 of the said report, Respondent No.2 stated that his office
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has no objection to settlement subject to, inter alia, confirmation and
adjustment of the Anti-dumping duty of Rs. 1,82,85,223/- along with
interest of Rs.49,21,313/- from and out of Rs. 1,82,85,223/- paid by
the Petitioners.
9 By its Order No. 92/FINAL ORDER/CUS/SBR/2016 dated
30.05.2016, the Settlement Commission (Respondent No.3) settled
the Petitioner's case on the following terms:
a) Differential Duty in respect of 9 Bills of Entry (within five years)
is settled at Rs.1,82,85,223/-. Apart from adjusting the said amount
of Rs. 1,82,85,223/- from the amount of Rs.2,32,06,530/- paid by the
Petitioners, the revenue is allowed adjust the duty of Rs. 16,99,981.00
on the goods covered by Bill of Entry 710462 dated 3.4.2007, which
was beyond the period of five years. After adjusting the said amounts
of Rs.1,82,85,223/- and Rs. 16,99,981/- = Rs. 1,99,85,204/- out of
the amount of Rs.2,32,06,530/- paid by the Applicants, the balance
Rs.32,21,326/- has been ordered to be appropriated towards interest
liability. The Revenue was directed to calculate the balance due
interest and communicate the same to the Applicants.
b) Penalty of Rs.7,00,000/- was imposed on Petitioner No.1 and
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penalty of Rs.50,000/- has been imposed on Petitioner No.2. The
penalties of Rs.50,000.00 each was imposed on the intending agents.
The penalties imposed by Respondent No.3 have been deposited by
the Petitioners.
10 On 13.07.2016, the Petitioners received a letter F No.
DRI/MZU/F/10/2011/Settlement dated 12.07.2016 from the
Assistant Director, DRI giving calculation of the balance amount which
according to the DRI is required to be paid by the Petitioners. The
Assistant Director, after referring to the paragraph 9.1 of the Order
No.92/Final Order/Cus/SBR/2016 of Respondent No.3, inter alia,
directed Petitioner No.1 to pay Rs. 28,72,835.41 immediately and if
already paid, submit the copy of the challan to his office. In view of
the error in the said order dated 30.5.2016 apparent on the face of the
record, the Petitioners filed an application for rectification before
Respondent No.3, seeking to correct the said mistake and for
consequential relief and directions.
11 On 29.07.2016, the Petitioners, vide their Advocate's letter,
inter alia, requested Respondent No.3 to correct the obvious error
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which are apparent on the face of the record in the order of
Respondent No.3 in ordering adjustment of the amount of
Rs.1,98,11,000/- paid on 22/26 March 2012.
12 The Superintendent, on behalf of Respondent No.3, vide
his letter F.No. 160/CUS/RB/2015-SC(MB)/5501 dated 8 August,
2016, in response to the Petitioners' Advocates aforesaid letter dated
29 July, 2016, inter alia, informed that the Bench has not acceded to
the Petitioners' request as prayed for vide the aforesaid letter dated
29.07.2016. Hence this Petition.
13 The relevant provisions of the Customs Act, 1962 (for
short, Customs Act) are Sections 28, 28AB, 28AA and 127-C(5).
Section 28 of the Customs Act, 1962 reads thus:
"SECTION 28. [Recovery of [duties not levied or not
paid or short-levied or short- paid] or erroneously
refunded. - (1) Where any [duty has not been levied or not
paid or short-levied or short-paid] or erroneously refunded,
or any interest payable has not been paid, part-paid or
erroneously refunded, for any reason other than the
reasons of collusion or any wilful mis-statement or
suppression of facts,-
(a) the proper officer shall, within [two years] from the
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relevant date, serve notice on the person chargeable with
the duty or interest which has not been so levied [or paid]
or which has been short-levied or short-paid or to whom
the refund has erroneously been made, requiring him to
show cause why he should not pay the amount specified in
the notice;
(b) the person chargeable with the duty or interest, may
pay before service of notice under clause (a) on the basis
of,-
(i) his own ascertainment of such duty; or
(ii) the duty ascertained by the proper officer,
the amount of duty along with the interest payable thereon
under section 28AA or the amount of interest which has not
been so paid or part-paid.
[Provided that the proper officer shall not serve such show
cause notice, where the amount involved is less than rupees
one hundred.]
(2) The person who has paid the duty along with interest
or amount of interest under clause (b) of sub-section (1)
shall inform the proper officer of such payment in writing,
who, on receipt of such information, shall not serve any
notice under clause (a) of that sub-section in respect of the
duty or interest so paid or any penalty leviable under the
provisions of this Act or the rules made thereunder in
respect of such duty or interest:
[Provided that where notice under clause (a) of sub-section
(1) has been served and the proper officer is of the opinion
that the amount of duty along with interest payable
thereon under section 28AA or the amount of interest, as
the case may be, as specified in the notice, has been paid in
full within thirty days from the date of receipt of the notice,
no penalty shall be levied and the proceedings against such
person or other persons to whom the said notice is served
under clause (a) of sub-section (1) shall be deemed to be
concluded.]
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(3) Where the proper officer is of the opinion that the
amount paid under clause (b) of sub-section (1) falls short
of the amount actually payable, then, he shall proceed to
issue the notice as provided for in clause (a) of that sub-
section in respect of such amount which falls short of the
amount actually payable in the manner specified under that
sub-section and the period of [two years] shall be
computed from the date of receipt of information under
sub-section (2).
(4) Where any duty has not been [levied or not paid or has
been short-levied or short-paid] or erroneously refunded, or
interest payable has not been paid, part-paid or erroneously
refunded, by reason of,-
(a) collusion; or
(b) any wilful mis-statement; or
(c) suppression of facts,
by the importer or the exporter or the agent or employee of
the importer or exporter, the proper officer shall, within
five years from the relevant date, serve notice on the
person chargeable with duty or interest which has not been
[so levied or not paid] or which has been so short-levied or
short-paid or to whom the refund has erroneously been
made, requiring him to show cause why he should not pay
the amount specified in the notice.
(5) Where any [duty has not been levied or not paid or has
been short-levied or short paid] or the interest has not been
charged or has been part-paid or the duty or interest has
been erroneously refunded by reason of collusion or any
wilful mis-statement or suppression of facts by the importer
or the exporter or the agent or the employee of the
importer or the exporter, to whom a notice has been served
under sub- section (4) by the proper officer, such person
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may pay the duty in full or in part, as may be accepted by
him, and the interest payable thereon under section 28AA
and the penalty equal to [fifteen per cent.] of the duty
specified in the notice or the duty so accepted by that
person, within thirty days of the receipt of the notice and
inform the proper officer of such payment in writing.
(6) Where the importer or the exporter or the agent or the
employee of the importer or the exporter, as the case may
be, has paid duty with interest and penalty under sub-
section (5), the proper officer shall determine the amount
of duty or interest and on determination, if the proper
officer is of the opinion-
(i) that the duty with interest and penalty has been paid in
full, then, the proceedings in respect of such person or
other persons to whom the notice is served under sub-
section (1) or sub- section (4), shall, without prejudice to
the provisions of sections 135, 135A and 140 be deemed to
be conclusive as to the matters stated therein; or
(ii) that the duty with interest and penalty that has been
paid falls short of the amount actually payable, then, the
proper officer shall proceed to issue the notice as provided
for in clause (a) of sub-section (1) in respect of such
amount which falls short of the amount actually payable in
the manner specified under that sub-section and the period
of [two years] shall be computed from the date of receipt of
information under sub-section (5).
(7) In computing the period of [two years] referred to in
clause (a) of sub-section (1) or five years referred to in sub-
section (4), the period during which there was any stay by
an order of a court or tribunal in respect of payment of
such duty or interest shall be excluded.
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(8) The proper officer shall, after allowing the concerned
person an opportunity of being heard and after considering
the representation, if any, made by such person, determine
the amount of duty or interest due from such person not
being in excess of the amount specified in the notice.
(9) The proper officer shall determine the amount of duty
or interest under sub-section (8),-
(a) within six months from the date of notice, where it is
possible to do so, in respect of cases falling under clause (a)
of sub- section (1);
(b) within one year from the date of notice, where it is
possible to do so, in respect of cases falling under sub-
section (4).
(10) Where an order determining the duty is passed by the
proper officer under this section, the person liable to pay
the said duty shall pay the amount so determined along
with the interest due on such amount whether or not the
amount of interest is specified separately.
[(11) Notwithstanding anything to the contrary contained
in any judgement, decree or order of any court of law,
tribunal or other authority, all persons appointed as officers
of Customs under sub-section (1) of section 4 before the 6 th
day of July, 2011 shall be deemed to have and always had
the power of assessment under section 17 and shall be
deemed to have been and always had been the proper
officers for the purposes of this section.]
Explanation 1- For the purposes of this section, "relevant
date" means,-
(a) in a case where duty is [not levied or not paid or short-
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levied or short-paid], or interest is not charged, the date on
which the proper officer makes an order for the clearance
of goods;
(b) in a case where duty is provisionally assessed under
section 18, the date of adjustment of duty after the final
assessment thereof or re-assessment, as the case may be;
(c) in a case where duty or interest has been erroneously
refunded, the date of refund;
(d) in any other case, the date of payment of duty or
interest.
Explanation 2. For the removal of doubts, it is hereby
declared that any non-levy, short-levy or erroneous refund
before the date on which the Finance Bill, 2011 receives the
assent of the President, shall continue to be governed by
the provisions of section 28 as it stood immediately before
the date on which such assent is received.]
[Explanation 3. For the removal of doubts, it is hereby
declared that the proceedings in respect of any case of non-
levy, short-levy, non-payment, short-payment or erroneous
refund where show cause notice has been issued under sub-
section (1) or sub-section (4), as the case may be, but an
order determining duty under sub-section (8) has not been
passed before the date on which the Finance Bill, 2015
receives the assent of the President, shall, without prejudice
to the provisions of sections 135, 135A and 140, as may be
applicable, be deemed to be concluded, if the payment of
duty, interest and penalty under the proviso to sub-section
(2) or under sub-section (5), as the case may be, is made in
full within thirty days from the date on which such assent is
received.]"
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14 We are inclined to consider the basic issue relating to
adjustment of an amount of Rs.16,99,981/- which is applicable to
goods cleared through Bill dated 3.4.2007. The demand is stated to
be time barred. Admittedly the said amount was adjusted by making
voluntary payment along with others by the Petitioner though it was
time barred. The law is settled that the Revenue
Department/Authorities are not required to issue a demand beyond 5
years period under Section 28 of the Customs Act. By impugned
order dated 30.05.2016, the said amount is adjusted towards anti-
dumping duty on goods imported apart from the other order.
15 The Settlement Commissioner, while passing the final
order on Petitioner's Application in para 2.2 referring to Chart even
noted the four bills of entry beyond the period of 5 years including the
issue in question. Therefore, having once noted, there was no
question of appropriation of this amount by the SNC. The Petitioner's
voluntary deposit, in no way, can bring the said amount within the
purview of 5 years period so prescribed. The position of law of Bill of
Entry beyond the period of 5 years is clear. Therefore, on this sole
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ground, we are inclined to consider the case of the Petitioner as
contended. This is in the background also that on 18.07.2016 before
the Customs and Central Excise Settlement Commission, Mumbai,
Misc. Application is filed for settlement on the terms whereby the
specific issue is again raised about the adjustment of the amount in
respect of the voluntary payment made on 3.4.2007 in question which
was beyond the period of 5 years. The said aspect has not been dealt
with and/or decided is the statement made by the learned counsel
appearing for the Petitioner.
16 The bar of Section 127-J needs to be considered from the
point of the authority in question. But, in view of above observation
on admitted position on record, as case is made out, we are inclined to
invoke Article 226 of the Constitution of India, in the present case.
The parties cannot be remedyless if case is made out.
17 For the reasons so recorded above, therefore, as the
Petitioner has no other alternative and efficacious remedy and as the
writ petition against such order passed by the Settlement
Commissioner in Settlement cases is maintainable, we are inclined to
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entertain the Petition and pass the order.
18 Therefore, at this stage, as restricted prayer is made
referring to the adjustment, we are inclined to interfere with the order
only to this extent as prayed. We direct the Respondent to consider
the prayer of the Petition and the Application filed by the Petitioner
dated 18.07.2016 in accordance with law on merit at the earliest
preferably within four months
19 Therefore, the following order :
ORDER
(a) Writ Petition is allowed on the following terms:
(i) Impugned Order dated 30 May 2016 is quashed and set aside
only to the extent as prayed.
(ii) The Respondents to decide the issue of adjustment of an amount
of Rs.16,99,981/- applicable to goods cleared through the Bill
dated 3.4.2007 and Application dated 18.07.2016 within
three months.
(iii) No costs.
(ANUJA PRABHUDESSAI,J.) (ANOOP V. MOHTA, J.)
